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                                                                   EXHIBIT 10.25

                             COLLABORATION AGREEMENT

                                     between

                               GENZYME CORPORATION

                                       and

                                   DYAX CORP.

                           dated as of October 1, 1998
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                             COLLABORATION AGREEMENT

         THIS COLLABORATION AGREEMENT dated as of October 1, 1998 (the
"Agreement") is made between Genzyme Corporation, a Massachusetts corporation
having its principal place of business at One Kendall Square, Cambridge,
Massachusetts 02139 ("Genzyme") and Dyax Corp., a Delaware corporation having
its principal place of business at One Kendall Square, Cambridge, Massachusetts
02139 ("Dyax"). Genzyme and Dyax are sometimes referred to herein individually
as a "Party" and collectively as the "Parties."

                                 R E C I T A L S

         A. Dyax is developing EPI-KAL-2 ("EPI-KAL-2"), a 58-amino acid
polypeptide human plasma Kallikrein inhibitor. Kallikrein inhibition may have
therapeutic benefit in the prevention and/or treatment of hereditary angioedema
("HAE") and other inflammatory diseases. Dyax is currently developing EPI-KAL-2
for the treatment of HAE and other inflammatory diseases.

         B. Genzyme has expertise in the areas of development, manufacturing and
marketing of bio-pharmaceutical products.

         C. Dyax and Genzyme desire to collaborate in developing EPI-KAL-2 for
the treatment of HAE and other inflammatory diseases.

         NOW THEREFORE, in consideration of the premises and of the covenants
herein contained, 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 control of another
corporation or entity if it owns or directly or indirectly controls more than
fifty percent (50%) 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 more than fifty percent (50%)
of the members of the governing body of the corporation or other entity.

         1.2 "Collaboration Product" shall mean EPI-KAL-2 and any
protein/peptide analogs, derivatives or improvements thereof (other than "small
molecule" drugs) that inhibit the activity of human plasma Kallikrein or any
combination products, delivery systems and dosage forms related thereto,
together with any process developed for use in the Field by a Party utilizing,

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based upon or arising out of the Genzyme Patent Rights, the Dyax Patent Rights,
the Joint Patent Rights, the Genzyme Technology, the Dyax Technology, the Joint
Technology or the Manufacturing Know-How owned or controlled by either Party.
For purposes of this Agreement, "small molecule" drugs shall mean compounds that
have a molecular weight of less than one thousand (1,000) daltons and which have
activity as inhibitors of human plasma kallikrein.

         1.3 "Commercialization Costs" with respect to a Collaboration Product
shall mean the variable costs and fixed costs incurred by the Parties or by
Kallikrein LLC with respect to work performed by the Parties and their
Affiliates and subcontractors in connection with the performance of the
Commercialization Plan for such Collaboration Product, including without
limitation, sales and marketing costs related to performing market research,
post-marketing studies, advertising, producing promotional literature,
sponsoring seminars and symposia, sales training meetings and seminars,
originating sales, providing reimbursement and other patient support services
and such other expenses described in Section 6.4 hereof. For purposes of this
Section 1.3, "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. For
purposes of Section 1.3, "fixed costs" shall be deemed to be the cost of
facilities, utilities, insurance, 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 the
support or performance 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.
Commercialization Costs shall exclude all costs otherwise reimbursed pursuant to
this Agreement. All cost determinations made hereunder shall be made in
accordance with GAAP.

         1.4 "Commercialization Plan" shall mean, with respect to a particular
Collaboration Product, the comprehensive plan for the commercialization of such
Collaboration Product, as more specifically described in Section 6.1 hereof.

         1.5 "Commercially reasonable and diligent efforts" shall have the
meaning ascribed to it in Section 5.1.1.

         1.6 "Development Costs" with respect to a Collaboration Product shall
mean the variable costs and fixed costs incurred by the Parties or by Kallikrein
LLC 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 paid to Genzyme by Dyax
prior to satisfaction by Dyax of the Initial Funding Commitment (as defined
herein), or to Genzyme and Dyax by Kallikrein LLC after satisfaction by Dyax of
the Initial Funding Commitment, with respect to research and development and
pre-commercialization sales and marketing efforts as set forth in the
Development Plan for such Collaboration Product,

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including without limitation the efforts of the Parties to develop and document
process methods and procedures for the manufacture, characterization and release
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, including quality
control and quality assurance, (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 and (e) the PRO RATA share of license fees and other
amounts payable to Third Party licensors and costs relating to the prosecution
and maintenance of Patent Rights, allocated based on the proportion of such
costs directly attributable to such Collaboration Product. For purposes of this
Section 1.6, "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 1.6, "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 preclinical 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. Development Costs shall
exclude all costs otherwise reimbursed pursuant to this Agreement. All cost
determinations made hereunder shall be made in accordance with GAAP.

         1.7 "Development Plan" shall mean, with respect to a particular
Collaboration Product, the comprehensive plan and budget for the development of
such Collaboration Product under the Development Program, as more specifically
described in Section 5.1 hereof.

         1.8 "Development Program" shall mean, with respect to a particular
Collaboration Product, the preclinical and clinical development of such
Collaboration Product including the preparation and filing of all applications
for Regulatory Approvals for such Collaboration Product.

         1.9 "Dyax Companies" shall mean Dyax and a wholly-owned subsidiary of
Dyax ("Subsidiary") to be formed prior to the LLC Formation Date for the purpose
of holding a one percent (1%) interest in Kallikrein LLC.

         1.10 "Dyax Patent Rights" shall mean all Patent Rights owned or
controlled by, or licensed (to the extent licensed and if there is the right to
sublicense) to, Dyax, to the extent that such Patent Rights claim Collaboration
Products or are necessary for the research, development, manufacture or
commercialization of Collaboration Products in the Field. The Dyax Patent Rights
in existence on the Effective Date are set forth on Schedule 1.10. This schedule
will be updated by Dyax on the LLC Formation Date to include all Dyax Patent
Rights owned or controlled by Dyax as of such date.

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         1.11 "Dyax Technology" shall mean all Technology owned or controlled
by, or licensed (to the extent licensed and if there is the right to sublicense)
to, Dyax that is necessary for, or specifically relates or is specifically
useful to, the research, development, manufacture or commercialization of
Collaboration Products for use in the Field.

         1.12 "Effective Date" shall mean the date first above written.

         1.13 "FDA" shall mean the United States Food and Drug Administration,
any successor agency, or the regulatory authority of any country other than the
United States with responsibilities comparable to those of the United States
Food and Drug Administration.

         1.14 "Field" shall mean any and all therapeutic uses of a Collaboration
Product.

         1.15 "Fully Absorbed Cost of Goods" with respect to a Collaboration
Product shall mean (a) the variable costs and fixed costs incurred by a Party
associated with the manufacture (inclusive of finishing processes) of batches of
such Collaboration Product or (b) if such Collaboration Product is not
manufactured by the Parties, the transfer price for batches of such
Collaboration Product purchased from Third Party manufacturers. For purposes of
this Section 1.15, "variable costs" shall be deemed to be the cost of labor, raw
materials, supplies and other resources directly consumed in the manufacture of
batches of such Collaboration Product, including quality control and quality
assurance. For purposes of this Section 1.15, "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 of
batches of such Collaboration Product, as well as royalties payable to Third
Parties in connection with the manufacture, use or sale of a Collaboration
Product. Fixed costs shall be allocated to such Collaboration Product based upon
the proportion of such costs directly attributable to support of the
manufacturing process for such Collaboration Product. If a facility is used to
manufacture Collaboration Products and products for other programs of either
Genzyme or Dyax, 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. In the event that either Dyax or Genzyme
subcontracts with the other Party to perform any work on its behalf in
connection with the manufacturing responsibilities assigned to Dyax or Genzyme,
respectively, pursuant to Section 7.2.1 hereof, Dyax and Genzyme (i) shall each
directly charge Kallikrein LLC their respective Fully Absorbed Cost of Goods and
(ii) shall not include any part of the other Party's Fully Absorbed Cost of
Goods in the amount so charged to Kallikrein LLC. Except as otherwise provided
in this Agreement, all cost determinations made hereunder shall be made in
accordance with GAAP.

         1.16 "GAAP" shall mean United States generally accepted accounting
principles, consistently applied, except when different accounting principles
are required under the terms of the Operating Agreement, in which case the
accounting principles mandated under the Operating Agreement shall control.

         1.17 "Genzyme Patent Rights" shall mean all Patent Rights owned or
controlled by, or licensed (to the extent licensed and if there is the right to
sublicense) to, Genzyme, to the extent that such Patent Rights claim
Collaboration Products or are necessary for the research,

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development, manufacture or commercialization of Collaboration Products in the
Field. The Genzyme Patent Rights in existence on the Effective Date are set
forth on Schedule 1.17. This schedule will be updated by Genzyme on the LLC
Formation Date to include all Genzyme Patent Rights owned or controlled by
Genzyme as of such date.

         1.18 "Genzyme Technology" shall mean all Technology owned or controlled
by, or licensed (to the extent licensed and if there is the right to sublicense)
to, Genzyme that is necessary for or specifically relates or is specifically
useful to, the research, development, manufacture or commercialization of
Collaboration Products for use in the Field.

         1.19 "Joint Patent Rights" shall mean the Patent Rights that claim
Joint Inventions (as such term is defined in Section 9.1.1 hereof) that are
jointly discovered, made or conceived during and in connection with the Program
to the extent that such Patent Rights relate to or are useful for the research,
development, manufacture or commercialization of Collaboration Products for use
in the Field.

         1.20 "Joint Technology" shall mean all Technology discovered, made or
conceived during and in connection with the Program, and future Technology owned
or controlled by, or licensed (with the right to sublicense where possible) to,
either Genzyme or Dyax relating to or useful for the research, development,
manufacture or commercialization of Collaboration Products for use in the Field.

         1.21 "Kallikrein LLC" shall mean the Delaware limited liability company
to be organized by Dyax in accordance with Section 2.1 hereof for the purpose of
developing and commercializing Collaboration Products in the Territory and in
the Field.

         1.22 "LLC Formation Date" shall mean the date the Certificate of
Formation of Kallikrein LLC is filed with the Secretary of State of Delaware.

         1.23 "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 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, process validation
reports, environmental monitoring processes, test data including
pharmacological, toxicological and clinical test data, cost data and employee
training materials.

         1.24 "Manufacturing Party" shall have the meaning set forth in Section
7.3.

         1.25 "Member" shall have the meaning set forth in the Operating
Agreement.

         1.26 "NDA" shall mean a New Drug Application, Biologics License
Application, or similar application filed with the FDA after completion of human
clinical trials to obtain marketing approval for a Collaboration Product.

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         1.27 "Net Profit" of Kallikrein LLC for any period shall be equal to
(a) the sum during such period of all revenues recognized and recorded by
Kallikrein LLC during such period, including without limitation (i) revenues
from sales of all Collaboration Products sold by Kallikrein LLC and (ii) all
revenues received by Kallikrein LLC from Third Parties as consideration for
sublicensing the manufacture, use, distribution or sale of Collaboration
Products, LESS (b) all expenses incurred by Kallikrein LLC during such period,
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.

         1.28 "Operating Agreement" shall mean the Operating Agreement of
Kallikrein LLC in substantially the form attached hereto as Schedule 1.28 to be
entered into by Dyax, Subsidiary and Genzyme on the LLC Formation Date.

         1.29 "Patent Rights" shall mean any patents, patent applications,
certificates of invention, or applications for certificates of invention,
together with any extensions, registrations, confirmations, reissues, divisions,
continuations or continuations-in-part, re-examinations or renewals thereof,
that may be sought throughout the world.

         1.30 "Percentage Interest" shall have the meaning set forth in the
Operating Agreement; PROVIDED, HOWEVER, prior to the execution of the Operating
Agreement, the Percentage Interest of both Genzyme and Dyax shall be fifty
percent (50%).

         1.31 "Program" shall mean the collaboration described in this
Agreement.

         1.32 "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 by the Parties or by Kallikrein LLC on or
after the Effective Date.

         1.33 "Program Management Team" shall mean the joint team composed of
representatives of Genzyme and Dyax described in Section 8.1.1 hereof.

         1.34 "Purchase Agreement" shall mean the Purchase Agreement in
substantially the form attached hereto as Schedule 1.34 to be entered into by
Dyax and Genzyme on the LLC Formation Date.

         1.35 "Regulatory Approvals" shall mean all approvals from regulatory
authorities in any country required lawfully to manufacture and market
Collaboration Products in any such country, including without limitation any
NDA, any establishment license application filed with the FDA to obtain approval
of the facilities and equipment to be used to manufacture a Collaboration
Product, and any product pricing approvals where applicable. Regulatory
Approvals shall also include "orphan drug" designations granted by the FDA for a
Collaboration Product.

         1.36 "Regulatory Scheme" shall mean the United States Public Health
Service Act, the United States Food, Drug and Cosmetics Act, and the
regulations, interpretations and guidelines promulgated thereunder by the FDA or
the regulatory scheme applicable to the Collaboration

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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.

         1.37 "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. Copies of such Specifications shall be
maintained by both Dyax and Genzyme and shall become a part of this Agreement as
if incorporated herein.

         1.38 "Steering Committee" shall mean the joint team composed of
representatives of Dyax and Genzyme appointed as described in Section 8.2.1
hereof. The Steering Committee shall also be the governing body of Kallikrein
LLC following the LLC Formation Date.

         1.39 "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,
but not including Patent Rights).

         1.40 "Territory" shall mean all of the countries in the world.

         1.41 "Third Party" shall mean any entity other than Kallikrein LLC,
Dyax or Genzyme and their respective Affiliates.

               ARTICLE 2 SCOPE AND STRUCTURE OF THE COLLABORATION

         2.1 General. Genzyme and Dyax desire to collaborate in developing
Collaboration Products in the Field and in the Territory, with the initial focus
of the Program to be on the development of a Collaboration Product for the
treatment of HAE. Dyax shall initially be responsible for undertaking the
Development Program as described in the Development Plan. Because the Program is
at an early stage, the Parties intend to defer creating a third party vehicle
for the further development and commercialization of Collaboration Products
until the first Collaboration Product reaches an advanced stage of clinical
development. Accordingly, at a time to be mutually agreed upon by the Parties,
but in no event later than the satisfaction by Dyax of the Initial Funding
Commitment (as defined in Section 4.1), Dyax will form Kallikrein LLC as the
vehicle for a joint venture between Dyax and Genzyme to further develop and
commercialize Collaboration Products in the Field and in the Territory. Dyax
will be the sole initial member of Kallikrein LLC. Immediately following the
formation of Kallikrein LLC, Kallikrein LLC will execute and become a Party to
this Agreement. Immediately following the execution and delivery of this
Agreement by Kallikrein LLC, Dyax will transfer and assign one percent (1%) of
its interest to Subsidiary, and Subsidiary will be admitted as a member of
Kallikrein LLC. Immediately thereafter, Dyax will sell and assign to Genzyme a
fifty percent (50%) interest in Kallikrein LLC (subject to adjustment pursuant
to Section 4.2.1 hereof and pursuant to the Operating Agreement) pursuant to the
Purchase Agreement and Article 4 hereof and, upon execution and delivery of the
Operating Agreement, Genzyme will be admitted as a member of Kallikrein LLC.
Kallikrein LLC will then undertake the Development Program for

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each 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, the Manufacturing Party or Parties
will manufacture the Collaboration Products on behalf of Kallikrein LLC and
Genzyme will market and sell the Collaboration Products in the Field and in the
Territory as exclusive agent for Kallikrein LLC all on the terms and conditions
set forth in this Agreement or such other terms and conditions as the Parties
may agree upon.

         2.2 Exclusive Relationship. Subject to Section 3.2, neither Kallikrein
LLC, Genzyme, Dyax nor any of their respective Affiliates shall independently,
or with a Third Party, conduct research or development activities regarding, or
engage in the manufacture, marketing, sale or distribution of, EPI-KAL-2 and any
other protein/peptide product that inhibits the activity of human plasma
kallikrein during the term of this Agreement other than as part of the Program.
In addition, during the two-year period following termination of this Agreement,
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 or (c) the
non-terminating Party and its Affiliates in the case of termination pursuant to
Sections 13.2.3 and 13.2.4 hereof shall independently, or with a Third Party,
conduct research regarding, or engage in the manufacture, marketing, sale or
distribution of, protein/peptide products that inhibit the activity of human
plasma kallikrein; 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(a) hereof, then the restrictions
set forth in this sentence shall not apply. Notwithstanding the foregoing,
nothing herein is intended to restrict Genzyme, Dyax or their respective
Affiliates from conducting research or development activities regarding, or
engaging in the manufacture, marketing, sale or distribution of, "small
molecule" drugs (as defined in Section 1.2).

                  ARTICLE 3 GRANTS AND RESERVATIONS OF RIGHTS

         3.1 Licenses of Rights to Kallikrein LLC.

             3.1.1 Grants from Dyax. Except as otherwise expressly provided
herein, Dyax will grant to Kallikrein LLC on the LLC Formation Date a worldwide,
exclusive, royalty-free right and sublicense during the term of this Agreement,
with the right to grant further sublicenses, under Dyax Patent Rights, Dyax
Technology, the Joint Patent Rights and the Joint Technology and any
Manufacturing Know-How owned or held by Dyax to develop, make, have made, use,
offer for sale, sell, have sold, import and export Collaboration Products in the
Field.

             3.1.2 Grants from Genzyme. Except as otherwise expressly provided
herein, Genzyme will grant to Kallikrein LLC on the LLC Formation Date a
worldwide, exclusive, royalty-free right and sublicense during the term of this
Agreement, with the right to grant further sublicenses, under the Genzyme Patent
Rights, Genzyme Technology, Joint Patent Rights and the Joint Technology and any
Manufacturing Know-How owned or held by Genzyme to develop, make, have made,
use, offer for sale, sell, have sold, import and export Collaboration Products
in the Field.

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             3.1.3 Kallikrein LLC Undertakings; Sublicenses. In consideration of
the licenses to be granted under this Section 3.1, Kallikrein LLC will undertake
to pay all royalties, sublicense fees and other costs or expenses payable to
Third Parties associated with the acquisition or use of such licenses by
Kallikrein LLC for use in connection with the Program. Except as provided in
Section 3.2 below, all sublicenses granted by Kallikrein LLC shall be subject to
prior approval by the Steering Committee.

             3.1.4 Rights of Kallikrein LLC to Patent Rights or Technology
Developed Outside the Program. In the event that either Dyax or Genzyme
develops, acquires or otherwise comes to own or control or receives a license
with respect to Patent Rights, Technology or Manufacturing Know-How after the
LLC Formation Date other than in connection with the Program and such Patent
Rights, Technology or Manufacturing Know-How are useful in the Field and
licensable or sublicensable by Dyax or Genzyme ("Additional Technology"), as the
case may be, the Party owning or controlling such Additional Technology will
grant to Kallikrein LLC an option exercisable at the discretion of the Steering
Committee to obtain an exclusive right and license during the term of this
Agreement, with the right to grant sublicenses, to such Additional Technology to
the extent necessary or appropriate to enable Kallikrein LLC to develop, make,
have made, use, offer for sale, sell, have sold, import and export Collaboration
Products in the Field and in the Territory, in each case subject only to
Kallikrein LLC's undertaking to pay (a) a commercially reasonable portion of all
costs incurred by Dyax or Genzyme, as the case may be, to acquire or develop
such Additional Technology, (b) a commercially reasonable portion of any and all
development costs relating to the Additional Technology incurred by Dyax or
Genzyme, as the case may be, since the date such Party acquired or developed
such Additional Technology and (c) all royalties, sublicense fees and other
costs or expenses payable to Third Parties associated with the acquisition or
use of such license by Kallikrein LLC; PROVIDED, HOWEVER, that if Dyax or
Genzyme, as the case may be, has more limited rights to such Additional
Technology that those described above, the license subject to Kallikrein LLC's
option hereunder shall be consistent with the rights held by Dyax or Genzyme, as
the case may be, with respect to such Additional Technology.

         3.2 Proposals For Additional Indications. Genzyme and Dyax acknowledge
and agree that the initial focus of the Program shall be the use of a
Collaboration Product for the treatment of HAE. At any time during the term of
this Agreement, either Genzyme or Dyax (the "Proposing Party") may make a
proposal to the Steering Committee to develop a Collaboration Product for an
additional disease indication. If the Steering Committee accepts such proposal
within sixty (60) days of receipt thereof, the then-current Development Plan or
Commercialization Plan, as applicable, shall be amended accordingly. If the
Steering Committee fails or affirmatively declines to accept such proposal
within sixty (60) days of receipt thereof, the Proposing Party and/or its
Affiliates will be free to develop, manufacture and/or commercialize a
Collaboration Product for such disease indication (an "External Product")
independently of the other Party or Kallikrein LLC, either by itself or with a
Third Party, within or outside the Field, and such activities shall no longer be
considered to be part of the Program. An External Product shall not be
considered to be a Collaboration Product for purposes of this Agreement. All
up-front payments received by the Proposing Party and/or its Affiliates from a
Third Party with respect to the licensing of the Proposing Party's Patent
Rights, Technology or Manufacturing Know-How for use in developing,
manufacturing and/or commercializing such External Product will be shared by the
Parties in accordance with their Percentage Interests. All

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subsequent license fees, milestones and royalty payments relating to, or
revenues generated from the sale of, such External Product, and any proceeds
from the sale of all of the rights to such External Product, will be distributed
in accordance with the formula set forth on Schedule 3.2 hereto. The Parties
shall negotiate in good faith any license and royalty agreements necessary to
permit the Proposing Party to develop and commercialize an External Product in
accordance with this Section 3.2.

         3.3 Sublicenses of Rights from Kallikrein LLC to Dyax and Genzyme.
Kallikrein LLC will grant to each of Dyax and Genzyme a worldwide,
non-exclusive, royalty-free right and sublicense during the term of this
Agreement under the Patent Rights, Technology and Manufacturing Know-How
licenses granted to it pursuant to Section 3.1 solely to the extent required to
permit such Party to perform its duties under this Agreement. Kallikrein LLC
will also grant to each of Dyax and Genzyme a worldwide, non-exclusive,
royalty-free right and license during the term of this Agreement under any
Additional Technology as to which Kallikrein LLC elects to obtain a license
pursuant to Section 3.1.4 above solely to the extent required to permit such
Party to perform its obligations under this Agreement. Kallikrein LLC will
further grant to Genzyme a worldwide, non-exclusive, royalty-free right and
license during the term of this Agreement to use any and all trademarks owned or
licensed (with the right to sublicense) by Kallikrein LLC in connection with the
commercialization of Collaboration Products in the Field and in the Territory to
the extent required to permit Genzyme to perform its duties under this
Agreement.

         3.4 Reservation of Rights.

             3.4.1 Reservation by Dyax. Notwithstanding the license grants set
forth in Section 3.1, Dyax will at all times reserve the rights under the Dyax
Patent Rights, the Dyax Technology, the Joint Patent Rights, the Joint
Technology and the Manufacturing Know-How owned or controlled by Dyax (a) to
make, have made and use Collaboration Products for research and development
purposes only, (b) to develop, make, have made, use, offer for sale, sell, have
sold, import and export products outside the Field and (c) to grant licenses to
Third Parties for the foregoing purposes.

             3.4.2 Reservation by Genzyme. Notwithstanding the license grants
set forth in Section 3.1, Genzyme will at all times reserve the rights under the
Genzyme Patent Rights, the Genzyme Technology, the Joint Patent Rights, the
Joint Technology and Manufacturing Know-How owned or controlled by Genzyme (a)
to make, have made and use Collaboration Products for research and development
purposes only, (b) to develop, make, have made, use, offer for sale, sell, have
sold, import and export products outside the Field and (c) to grant licenses to
Third Parties for the foregoing purposes.

         3.5 Assignment of Orphan Drug Designation. Except to the extent
prohibited by the Regulatory Scheme, the Parties agree to assign to Kallikrein
LLC on the LLC Formation Date any "Orphan Drug" designations for any
Collaboration Product which Dyax or Genzyme may receive during the term of this
Agreement.

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                    ARTICLE 4 PROGRAM FUNDING; LLC INTEREST

         4.1 Initial Funding Commitment. Dyax hereby undertakes to fund the
first six million dollars ($6,000,000) in Program Costs (the "Initial Funding
Commitment"). At a time mutually agreed upon by the Parties, but in no event
later than the satisfaction by Dyax of the Initial Funding Commitment, Dyax will
form Kallikrein LLC in accordance with the provisions of Section 2.1.

         4.2 Program Funding Capital Contributions.

             4.2.1 General. Following satisfaction of the Initial Funding
Commitment, Genzyme and Dyax each undertakes to make capital contributions to
Kallikrein LLC in an amount equal to fifty percent (50%) of all Program Costs.
In the event that either Dyax, on behalf of the Dyax Companies, or Genzyme fails
to make a capital contribution to Kallikrein LLC as required by this Section
4.2.1, and the other Party does not elect to terminate this Agreement pursuant
to Section 13.2.1 hereof, then the Percentage Interests in Kallikrein LLC and
the future funding responsibility of the Members shall be adjusted as provided
in Section 4.1(b) of the Operating Agreement.

             4.2.2 Initial Capital Contributions. Within five (5) working days
after the LLC Formation Date, Dyax and Genzyme shall each make a capital
contribution to Kallikrein LLC in an amount equal to one-half of the Program
Costs budgeted to be incurred by Kallikrein LLC from the LLC Formation Date
through and including the end of the next calendar month after the LLC Formation
Date, less any amounts required to be funded solely by Dyax pursuant to the
Initial Funding Commitment.

             4.2.3 Monthly Capital Contributions. With respect to each calendar
month thereafter, Genzyme and Dyax, on behalf of the Dyax Companies, shall each
make capital contributions to Kallikrein LLC, monthly in advance, not later than
the fifteenth (15th) day of the prior calendar month, in an aggregate amount
equal to one-third of the Program Costs budgeted to be incurred by Kallikrein
LLC in any then-current Development Plan or Commercialization Plan for the
calendar quarter in which such calendar month occurs, allocated between such
Parties in accordance with the funding responsibility assumed by Genzyme and
Dyax, on behalf of the Dyax Companies, pursuant to Sections 4.1 and 4.2.1 above.
Upon receipt of each such capital contribution from Genzyme or Dyax, as the case
may be, Kallikrein LLC shall promptly pay each of the Parties an amount equal to
that portion of the budgeted Program Costs to which they are respectively
entitled.

             4.2.4 Quarterly Statements; Quarterly Reconciliation. Within thirty
(30) days after the end of each of the first three (3) calendar quarters of each
year and within sixty (60) days after the end of each calendar year, each of
Dyax and Genzyme shall provide Kallikrein LLC with a detailed itemization of its
Program Costs actually incurred during the previous quarter. Each of Dyax and
Genzyme 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) days following receipt of the quarterly statement of
actual Program Costs provided by each of Dyax and Genzyme, Dyax, on behalf of
the Dyax Companies, and Genzyme shall each make an additional capital
contribution to Kallikrein LLC in the amount of any actual Program

                                       11
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Costs shown thereon and not yet paid for which such Party has assumed funding
responsibility pursuant to Section 4.2 above but only to the extent that such
amount, together with all prior capital contributions to date during such year,
does not exceed one hundred ten percent (110%) 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
Kallikrein LLC in such quarterly statements for actual Program Costs is less
than the amount already contributed by the Parties to the capital of Kallikrein
LLC with respect to budgeted Program Costs for such calendar quarter, such
excess shall be credited pro rata against the next successive monthly capital
contribution due from Genzyme or Dyax hereunder.

         4.3 Distributions. Distributions shall be made quarterly to each Member
in amounts determined in accordance with the Operating Agreement. Amounts
available for distribution shall be calculated for each calendar quarter after
the date of the first sale of a Collaboration Product following Regulatory
Approval of such Collaboration Product and shall be reported to each of Dyax and
Genzyme within ninety (90) days following the end of each such quarter. All
distributions to the Parties will be accompanied by a report setting forth the
basis for such distribution. Such reports shall be subject to audit rights as
set forth in Section 4.5 below, MUTATIS MUTANDIS.

         4.4 Sale and Purchase of LLC Interest. Immediately after the assignment
by Dyax of one percent (1%) of its interest in Kallikrein LLC to Subsidiary, in
accordance with the terms and conditions of the Purchase Agreement, Dyax shall
sell, assign and transfer to Genzyme, and Genzyme shall purchase from Dyax, a
fifty percent (50%) interest in Kallikrein LLC (subject to adjustment pursuant
to Section 4.2.1 hereof and pursuant to the Operating Agreement) for an
aggregate amount of not more than twenty-five million ten dollars ($25,000,010)
payable as set forth below:

                 (a) Genzyme shall pay to Dyax an amount of ten dollars ($10)
upon execution of the Purchase Agreement;

                 (b) Genzyme shall pay to Dyax an amount of ten million dollars
($10,000,000) on the first full approval by the U.S. FDA of an NDA for the use
of a Collaboration Product for any therapeutic indication; and

                 (c) Genzyme shall pay to Dyax an amount of five million dollars
($5,000,000) on the full approval by the U.S. FDA of each subsequent NDA for the
use of a Collaboration Product for a new indication, up to a maximum of three
(3) such payments.

Each of the aforementioned payments shall be made in United States dollars by
certified or bank check or by wire transfer within thirty (30) days following
the occurrence and confirmation of each event.

         4.5 Books of Account; Audit. Genzyme shall keep and maintain proper and
complete books of account, and shall maintain a bank account, on behalf of
Kallikrein LLC. Dyax shall have reasonable access to such books of account and
bank records upon reasonable prior notice to Genzyme. In the event that either
Dyax or Genzyme reasonably deems the Program to be

                                       12
<PAGE>

material to Dyax or Genzyme, as the case may be, for financial accounting
purposes, then, upon such Party's request, audited financial statements of
Kallikrein LLC shall be prepared by an independent accounting firm to be
selected by the Steering Committee. Each of Dyax and Genzyme shall keep and
maintain proper and complete records and books of account documenting all
Program Costs incurred by it. Each of Kallikrein LLC, Dyax and Genzyme shall
permit independent accountants retained by the other Parties to have access to
its records and books for the sole purpose of determining the appropriateness of
Program Costs charged by the non-auditing Party hereunder. 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 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
of ten percent (10%) or more for the period examined, in which case the Party
who received such overpayment 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.

         4.6 Enforceability of Sections 4.1 and 4.2. The agreements regarding
funding commitments and capital contributions set forth in Sections 4.1 and 4.2
hereof are by and between, and for the benefit of, Genzyme and Dyax only, and
are not enforceable by Kallikrein LLC or any Third Party.

                       ARTICLE 5 THE DEVELOPMENT PROGRAM

         5.1 Conduct of the Development Program.

             5.1.1 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 Dyax nor Genzyme shall be required to undertake activities in
furtherance of the Development Plan or Commercialization Plan in the absence of
funding pursuant to the provisions of 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 applied by the Party in question to its other therapeutic products
at a similar stage of development and with similar commercial potential.

             5.1.2 Development Plan. Prior to the LLC Formation Date, the
Development Program shall be conducted by Dyax under a 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. Following the LLC Formation
Date, the Development Program shall be conducted by Genzyme and Dyax on behalf

                                       13
<PAGE>

of Kallikrein LLC under the Development Plan in effect as of such date. Pursuant
to the applicable Development Plan, development work may be subcontracted by
Dyax to Genzyme, or by Kallikrein LLC to Genzyme and Dyax, as applicable, at
fully absorbed costs determined by GAAP. The respective charges to Dyax or
Kallikrein LLC, as the case may be, shall be invoiced following completion of
the work, and shall be payable by Dyax or Kallikrein LLC, as applicable, within
a commercially reasonable time thereafter (but in no event later than forty-five
(45) days of the date of invoice therefor). The Development Plan shall include a
summary of estimated Development Costs expected during the development process
through obtaining such Regulatory Approvals and a detailed description of and
budget for all development activities proposed for each calendar year for each
Collaboration Product.

             5.1.3 Initial and Updated Development Plan. The Parties have agreed
to a preliminary Development Plan and initial budget for the Program for the
period beginning on the Effective Date and ending on December 31, 1998. The
Program Management Team shall submit an updated Development Plan and budget for
the period beginning on the Effective Date and ending on December 31, 1999 to
the Steering Committee for approval no later than December 1, 1998. The
Development Plan shall be updated annually by the Program Management Team and
submitted to the Steering Committee for review and approval not later than sixty
(60) days prior to January 1 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 and (b) a detailed description and budget for the development and
pre-commercialization activities proposed for the forthcoming calendar year. The
Project Management Team shall be primarily responsible for preparing the annual
updates to the Development Plan and, in connection with the preparation of such
updates, shall consult with Genzyme and Dyax regarding the identification,
timing and execution of and budget for the major tasks and detailed activities
required to perform the updated Development Plan. Each such updated Development
Plan approved by the Steering Committee shall be signed by an authorized
representative of each of Dyax and Genzyme. The members of the Program
Management Team shall actively consult with one 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 of the work and
any changes in funding exceeding one hundred ten percent (110%) 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 shall remain in effect.

             5.1.4 Execution and Performance. The Development Program shall
allocate among the Parties responsibility for each of the activities described
therein. The Parties shall use commercially reasonable and diligent efforts to
conduct the activities described in the Development Plan. The Development Plan
shall be supervised by the Program Management Team. The Program Management Team
will coordinate preclinical and clinical testing of the Collaboration Products
and work with designated individuals at Dyax and Genzyme in the preparation of
Regulatory Approval filings for the Collaboration Products.

                                       14
<PAGE>

             5.1.5 Attendance at Regulatory Meetings. Each Party shall provide
the others with prior notice of all meetings and teleconferences between
representatives of the notifying Party and regulatory authorities regarding any
Collaboration Product. Except as otherwise provided herein, the Party receiving
such notice shall have the right to have representatives participate in all such
meetings and teleconferences. Each Party shall keep a reasonably detailed record
of each contact between such Party and all regulatory authorities regarding any
Collaboration Product and deliver a copy of such record to the other Party
within three (3) business days of such contact.

         5.2 Development Information.

             5.2.1 Ownership of Pre-Clinical and Clinical Data. The Parties
shall jointly own all pre-clinical and clinical trial data generated as part of
the Program or otherwise funded or partially funded by the Parties. Upon the
formation of Kallikrein LLC, the Parties shall assign their respective interests
in such data to Kallikrein LLC and Kallikrein LLC shall thereafter own such
data.

             5.2.2 Reports and Information Exchange. Each of Dyax and Genzyme
shall use commercially reasonable and diligent efforts to disclose to the other
Party and, if applicable, Kallikrein LLC, 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, on behalf
and in the name of the owner of the clinical trial data accumulated from all
clinical trials of Collaboration Products, maintain the database of such data
and of adverse reaction information for all such Collaboration Products. Each
Party shall also keep the Program Management Team informed as to its progress in
the Development Plan. Within sixty (60) days following the end of each calendar
quarter during the Development Program, each of Dyax and Genzyme shall provide
the other Parties with a reasonably detailed written report describing the
progress to date of all activities for which such Party was allocated
responsibility during such quarter under the Development Plan.

             5.2.3 Adverse Reaction Reporting. Each of Dyax and Genzyme shall
notify the other Parties of any adverse reaction information relating to any
Collaboration Product within twenty-four (24) hours of the receipt of such
information and as necessary for compliance with regulatory requirements.
"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, cancer or overdose 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.

             5.2.4 Clinical and Regulatory Audits. Each of Dyax and Genzyme
shall permit Kallikrein LLC and the other Party, or the representatives of
Kallikrein LLC or the other Party, to have access during regular business hours
and upon reasonable advance notice, at the auditing Party's own expense and no
more than once in each calendar year during the term of this Agreement, to the
non-auditing Party's records and facilities relating to the Development

                                       15
<PAGE>

Program for the purpose of monitoring compliance with Good Clinical Practice and
other applicable requirements of the Regulatory Scheme.

         5.3 Regulatory Approval Filings. 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 an entity
determined by the Steering Committee. The entity in whose name such Regulatory
Approval filings are filed shall give each of the Parties a right of reference
in such filings if such right is not prohibited under the applicable Regulatory
Scheme. Prior to submission to the FDA, the Parties, through the Program
Management Team, shall consult, cooperate in preparing and mutually agree on the
content and scope of the Regulatory Approval filings. In the event that
Regulatory Approvals are required to be filed in the name of an entity other
than Dyax, Genzyme or Kallikrein LLC, the Steering Committee shall ensure that a
duly authorized officer of such entity agrees in writing that (a) such entity
shall hold the licenses issued in respect of such Regulatory Approval filings,
maintain control over the manufacturing facilities, equipment and personnel, and
engage in pharmacovigilence to the extent required by the Regulatory Scheme, (b)
such entity shall maintain compliance with applicable Regulatory Schemes, (c)
such entity shall provide manufacturing and supply services at the Fully
Absorbed Cost of Goods of Collaboration Products so manufactured and supplied,
(d) the Parties shall have an irrevocable right of access and reference to such
Regulatory Approval filings, licenses and facilities and (e) such entity agrees
to comply with the provisions of Article 13 hereof with respect to the ownership
and/or disposition of such Regulatory Approvals in the event this Agreement is
terminated and to provide the level of cooperation described in Section 14.1
hereof in connection therewith.

         5.4 Facilities Visits. Representatives of Dyax and Genzyme may visit
all manufacturing sites and the sites of any clinical trials or other
experiments being conducted by the other Party, Kallikrein LLC or a Third Party
in connection with the Development Program. If requested by the other Party,
Dyax and Genzyme shall cause appropriate individuals working on the Development
Program 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 6 SALES, MARKETING AND ADMINISTRATIVE SERVICES

         6.1 Commercialization Plans.

             6.1.1 General. 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
limitation (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, (d) reasonable due diligence
obligations to be met by Genzyme with respect to

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<PAGE>

commercialization objectives to be achieved during the calendar year to which
the Commercialization Plan relates (such as minimum annual sales objectives) and
(e) a detailed manufacturing plan.

             6.1.2 Initial and Updated Commercialization Plans. No later than
immediately prior to the completion of the submission of all Regulatory Approval
filings for a Collaboration Product in any given country, Genzyme shall develop
and submit to the Steering Committee for review and approval an initial
Commercialization Plan in accordance with its customary standard for a product
of comparable market potential, taking into consideration factors such as market
conditions, regulatory factors, competition and the costs and profits of such
Collaboration Product. Genzyme shall be primarily responsible for developing
each Commercialization Plan and, in connection therewith, shall consult with
Dyax regarding the identification, timing and execution of and budget for the
major commercialization tasks required to perform the Commercialization Plan.
Each Commercialization Plan shall be updated annually by Genzyme, in
consultation with Dyax below as herein provided, and shall be submitted to the
Steering Committee for approval not later than sixty (60) days prior to January
1 of each year. Each Commercialization Plan approved by the Steering Committee
shall be signed by an authorized representative of each of Dyax and Genzyme.
While minor adjustments to the Commercialization Plan may be made from time to
time without Steering Committee approval, significant changes in the scope or
direction of the work and any changes in funding exceeding one hundred ten
percent (110%) of the total amount budgeted in any calendar year for the
Commercialization Plan must be approved by the Steering Committee, and in the
absence of such approval, the provisions of the most recently approved
Commercialization Plan shall remain in effect. Within sixty (60) days following
the end of each calendar quarter after the filing of the first application for a
Regulatory Approval (other than an application for "orphan drug" designation of
a Collaboration Product), each of Dyax and Genzyme shall provide the other
Parties with a reasonably detailed written report describing the progress to
date of all activities for which such Party was allocated responsibility during
such quarter under the Commercialization Plan, including, if reasonably
available, sales information for each Collaboration Product on a
country-by-country basis.

         6.2 Exclusive Engagement. Kallikrein LLC will engage Genzyme on an
exclusive basis to market and sell Collaboration Products within the Territory
for use within the Field. Genzyme will (by itself or through its Affiliates) use
commercially reasonable and diligent efforts to establish each Collaboration
Product in the markets, fulfill market demand and meet the marketing and
distribution goals set forth in the Commercialization Plan for such
Collaboration Product.

         6.3 Orders. Genzyme shall provide written notice to Kallikrein LLC of
its requirements for the Collaboration Products, setting forth the quantity of
Collaboration Products required, any specifications therefor and the date
required. Kallikrein LLC, on the date set forth in the applicable requirements
notice, shall deliver the Collaboration Products to Genzyme for sale within the
Territory. 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.

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<PAGE>

         6.4 Marketing and Distribution Expenses. Genzyme's ordinary expenses
incurred in the course of performing its marketing and distribution obligations
hereunder shall constitute Commercialization Costs budgeted as part of the
then-effective Commercialization Plan and, as such, shall be reimbursed by Dyax
prior to the satisfaction by Dyax of the Initial Funding Commitment and by
Kallikrein LLC after the satisfaction by Dyax of the Initial Funding Commitment,
but only to the extent that such amounts, together with all other
Commercialization Costs to date during such calendar year, do not exceed one
hundred ten percent (110%) of the Commercialization Costs budgeted in the
Commercialization Plan then in effect for such calendar year (except to the
extent such excess is approved by the Steering Committee pursuant to Section
6.1.2 above). Ordinary marketing and distribution expenses include, but are not
limited to, 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), 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.

         6.5 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, including without limitation the responsibilities described in this
Section 6.5.

                 (a) Genzyme shall be primarily responsible for the
implementation of each Commercialization Plan, including without limitation
setting all terms of sale, including establishing pricing policies, credit terms
and cash discounts and allowances, formulating marketing plans, negotiating
agreements with Third Party distributors (if any), providing patient
information, providing customer support services, providing reimbursement
counseling services and sales force training.

                 (b) Genzyme shall employ sufficiently trained and experienced
individuals in numbers adequate to carry out its responsibilities under this
Article 6. Sales and support personnel shall be familiar with the Collaboration
Products and with competitive products and shall respond promptly to customer
requests for support.

                 (c) Genzyme shall provide instructions and appropriate training
to customers in the proper use and handling of the Collaboration Products and
shall monitor performance of the Collaboration Products.

                 (d) Genzyme shall have sole responsibility for responding to
all requests for medical information regarding Collaboration Products.

                 (e) Genzyme shall comply with all laws and government
regulations applicable to the sale of Collaboration Products within the
Territory.

                 (f) The Collaboration Products shall be sold under trademarks
selected by the Steering Committee and owned by or licensed to Kallikrein LLC in
accordance with Section 9.1.2 hereof.

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<PAGE>

                 (g) Genzyme shall maintain complete and accurate records of all
movements and transactions involving Collaboration Products by an appropriate
identifier and by customer so that all such movements and transactions can be
traced quickly and effectively. Upon written request, Genzyme will provide
copies of such records to the other Parties, with access to facilities used by
Genzyme in performing its duties under this Article 6 during normal business
hours and upon reasonable advance notice for the purpose of inspecting such
facilities for compliance with the terms of this Agreement. The records
maintained by Genzyme pursuant to this clause (g) shall be subject to the other
Parties' audit rights under Section 4.5 hereof.

                 (h) Genzyme shall report to the Steering Committee in writing
the occurrence of each material incident of Collaboration Product performance
required to be reported to regulatory authorities, including without limitation
adverse reaction information in accordance with Section 5.2.3 hereof, within
three (3) business days of the happening of such occurrence.

         6.6 Responsibilities of Kallikrein LLC and Dyax. Kallikrein LLC shall
supply Collaboration Products to Genzyme in accordance with notices of
requirements pursuant to Section 6.3 above. Neither Kallikrein LLC nor Dyax
shall actively solicit for its own account sales of Collaboration Products in
the Territory. Any solicitations or requests to purchase Collaboration Products
received by Kallikrein LLC or Dyax from any customer or prospective customer
with its principal address or place of business located in the Territory or who
Kallikrein LLC or Dyax, as the case may be, knows intends to use the
Collaboration Products in the Territory or ship such Collaboration Products into
the Territory shall be immediately referred to Genzyme.

         6.7 General and Administrative Services. General and administrative
services required by Kallikrein LLC shall be provided at cost by either or both
of Dyax and Genzyme 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 Dyax and Genzyme
in satisfying their respective obligations under this Agreement, shall be
considered to be Program Costs.

                        ARTICLE 7 MANUFACTURE AND SUPPLY

         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:

         7.1 Process Development. The Parties will 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 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

                                       19
<PAGE>

sufficient quantity and in a timely manner will be within the purview of the
Program Management Team. The Parties will use commercially reasonable and
diligent efforts, and will cause any approved Third Party supplier, to make
filings necessary to obtain approval of any license application for a
manufacturing facility which may be required as part of any Regulatory Approval
for the first Collaboration Product.

         7.2 Manufacture and Supply of Collaboration Products for Clinical
Trials. Dyax will use commercially reasonable and diligent efforts to
manufacture and supply, or to have manufactured and supplied, Collaboration
Products for preclinical studies and clinical trials in quantities and within a
time period sufficient to conduct the activities set forth in the Development
Plan. The Fully Absorbed Cost of Goods for such Collaboration Products shall be
deemed Development Costs and reimbursed in accordance with the terms of this
Agreement.

         7.3 Manufacture and Supply of Collaboration Products for Commercial
Sale. Kallikrein LLC shall, as determined by the Steering Committee, designate
one of the Parties (the "Manufacturing Party") to manufacture and supply
Collaboration Products (or cause Collaboration Products to be manufactured or
supplied) for commercial sale pursuant to a supply agreement entered into by
Kallikrein LLC and the Manufacturing Party (a "Supply Agreement"). The terms of
each Supply Agreement shall include, without limitation, the terms and
conditions set forth below.

             7.3.1 General. Kallikrein LLC shall use commercially reasonable and
diligent efforts to manufacture and supply Collaboration Products to meet market
demand for Collaboration Products ordered in accordance with the terms hereof.
The Manufacturing Party shall be entitled to charge Kallikrein LLC an amount
equal to its Fully Absorbed Cost of Goods for such Collaboration Products. The
costs of any failed or discarded lots shall be borne by the Manufacturing Party
and shall not be considered Program Costs. The Manufacturing Party may
subcontract with Genzyme, Dyax or Third Parties for the manufacture or packaging
of Collaboration Products, as determined by the Steering Committee.
Notwithstanding the foregoing provisions of this Section 7.3.1, to the extent
required by the Regulatory Scheme, any entity selected by the Steering Committee
pursuant to Section 5.3 above may be engaged by Kallikrein LLC to manufacture
Collaboration Products. The respective charges to Kallikrein LLC shall be
invoiced following completion of the work, and shall be payable by Kallikrein
LLC within a commercially reasonable time thereafter (but in no event later than
forty-five (45) days of the date of invoice therefor).

             7.3.2 Forecasts. The Program Management Team shall establish a
procedure for providing forecasts of customer orders for Collaboration Products
pursuant to Section 6.3 above, updating such forecasts and ordering
Collaboration Product, in each case within time periods sufficient to enable
Kallikrein LLC to manufacture such Collaboration Products to meet such forecasts
in a commercially reasonable and diligent manner.

         7.4 Certificates of Analysis. The Manufacturing Party selected pursuant
to Section 7.3 above shall perform, or cause its contract manufacturer(s) to
perform, quality assurance and control tests on each lot of Collaboration
Products before delivery and shall prepare, or cause its contract
manufacturer(s) to prepare and deliver, a written report of the results of such
tests (for purposes of Sections 7.4, 7.5 and 7.6, such contract manufacturer(s)
shall be included in the

                                       20
<PAGE>

definition of the term "Manufacturing Party"). Each test report shall set forth
for each lot delivered the items tested, specifications and results in a
certificate of analysis containing the types of information which shall have
been approved by the Program Management Team or required by the FDA or other
applicable regulatory authority. The Manufacturing Party shall maintain such
certificates for a period of not less than five (5) years from the date of
manufacture and for so long as required under applicable requirements of the FDA
or other applicable regulatory authority.

         7.5 Certificates of Manufacturing Compliance. The Manufacturing Party
shall prepare, or cause its contract manufacturer(s) to prepare and deliver, and
maintain for a period of not less than five (5) years and for so long as
required under applicable requirements of the FDA or other applicable regulatory
authority for each lot of Collaboration Products manufactured a certificate of
manufacturing compliance containing the types of information which shall have
been approved by the Program Management Team or required by the FDA or other
applicable regulatory authority, which certificate will certify that the lot of
Collaboration Products was manufactured in accordance with the Specifications
and the Good Manufacturing Practices of the FDA or other applicable regulatory
authority as the same may be amended from time to time. The Manufacturing Party
shall advise the other Parties immediately if an authorized agent of the FDA or
other regulatory authority visits any of the Manufacturing Party's manufacturing
facilities, or the facilities where the Collaboration Products are being
manufactured, for an inspection with respect to the Collaboration Products. The
Manufacturing Party shall furnish to the other Parties the report by such agency
of such visit, to the extent that such report relates to Collaboration Products,
within ten (10) business days of the Manufacturing Party's receipt of such
report, and the other Parties shall have the right to comment on any response by
the Manufacturing Party to such inspecting agency.

         7.6 Access to Facilities. Each Party shall have the right to inspect
those portions of the manufacturing, finish processing or storage facilities and
testing labs of the Manufacturing Party where Collaboration Products are being
manufactured, finished, stored or tested, or any subcontractor who is
manufacturing, finishing, storing or testing Collaboration Products for the
Manufacturing Party, at any time during regular business hours and upon
reasonable advance notice to ascertain compliance with the Good Manufacturing
Practices of the FDA or other applicable regulatory authority, as the same may
be amended from time to time. Any confidential information disclosed to or
otherwise gathered by the Party conducting such inspection during any such
inspection shall be deemed "Information" as defined in Section 10.1 below.

                              ARTICLE 8 MANAGEMENT

         8.1 Program Management Team.

             8.1.1 General. The Parties have established a Program Management
Team to oversee and control development of Collaboration Products and to prepare
for and oversee the launch of Collaboration Products. The Program Management
Team shall be composed of not more than three (3) representatives appointed by
Dyax and three (3) representatives appointed by Genzyme. Such representatives
will include individuals with expertise and responsibilities in such areas as
preclinical development, clinical development, manufacturing, regulatory
affairs,

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<PAGE>

marketing, sales management and reimbursement. The Program Management Team shall
meet as needed, but not less than monthly unless the Parties mutually agree
otherwise. 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 a
majority of the members of the Program Management Team appointed by each of Dyax
and Genzyme 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 two (2) representatives of each of Dyax and Genzyme are present at such
meeting. Representatives of either Dyax and Genzyme 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 Program
Management Team may designate project leaders to the extent it deems it
necessary or advisable.

             8.1.2 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 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.

             8.1.3 Commercialization Functions. Following submission of filings
for Regulatory Approvals for the first Collaboration Product, the functions of
the Program Management Team shall be expanded to include: (a) monitoring the
commercialization of Collaboration Products pursuant to the Commercialization
Plan, including oversight of planning, annual budgeting, manufacturing,
marketing, sales and distribution, and licensing of Collaboration Products; (b)
monitoring actual expenses incurred in the manufacture, marketing, sale and
distribution of Collaboration Products; (c) overseeing any post-marketing
studies of a Collaboration Product and (d) facilitating cooperation regarding
the commercialization and marketing activities of the Parties. In addition,
following the formation of Kallikrein LLC, the Program Management Team shall
function as the operational staff of Kallikrein LLC.

             8.1.4 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 five (5) working 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.

         8.2 Steering Committee.

             8.2.1 General. The Parties have established a Steering Committee to
oversee and manage the collaboration contemplated by this Agreement. The
Steering Committee is and shall continue to be composed of three (3)
representatives appointed by Dyax and three (3)

                                       22
<PAGE>

representatives appointed by Genzyme. Such representatives will be senior
officers and/or managers of their respective companies. Genzyme and Dyax shall
each designate one (1) of their respective representatives on the Steering
Committee to act as Co-Chairman. The Steering Committee shall appoint one (1) of
its members to act as Secretary. The Steering Committee will meet as needed but
not less than once each calendar quarter. 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 Dyax and Genzyme are present at such meeting.
Representatives of either Dyax and Genzyme 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.

             8.2.2 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) approve any agreements with Third Parties regarding
a Collaboration Product or which involve the grant of any rights related to the
development, manufacture or marketing of a Collaboration Product; (e) review and
approve each Development Plan, including each significant change and annual
update thereto, submitted to it pursuant to Section 5.1.3 hereof; (f) review and
approve each Commercialization Plan, including each significant change and
annual update thereto, submitted to it for approval pursuant to Section 6.1.2
hereof; (g) following the formation of Kallikrein LLC, serve as the governing
body of Kallikrein LLC; and (h) perform such other functions as appropriate to
further the purposes of this Agreement as determined by the Parties.

             8.2.3 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) working days after each meeting and shall be approved,
if appropriate, at the next meeting. All records of the Steering Committee shall
at all times be available to both Dyax and Genzyme.

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

                 (a) 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.

                 (b) In the event that the dispute is not resolved after the
period specified in clause (a), the representatives shall promptly present the
disagreement to the Chief

                                       23
<PAGE>

Executive Officers of Dyax and Genzyme or a designee of such Chief Executive
Officer reasonably acceptable to the other Party.

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

                 (d) If such executives cannot resolve such disagreement within
sixty (60) days after such issue has been referred to them, then such dispute
shall be referred to arbitration as described in Section 14.10 hereof.

                     ARTICLE 9 INTELLECTUAL PROPERTY RIGHTS

         9.1 Ownership. The Parties acknowledge that the ownership rights set
forth herein (a) shall not be affected by the participation in the discovery or
development of an Invention (as defined below) by the Program Management Team or
the Steering Committee in the course of discharging their duties hereunder and
(b) are subject to the license grants set forth in Article 3 above.

             9.1.1 Ownership and Assignment of Discoveries and Improvements. All
right, title and interest in all writings, inventions, discoveries, improvements
and other technology, whether or not patentable or copyrightable, and any patent
applications, patents or copyrights based thereon (collectively, the
"Inventions") that are discovered, made or conceived during and in connection
with the Program solely by employees of Dyax or others acting on behalf of Dyax
("Dyax Inventions") shall be owned by Dyax. All right, title and interest in all
Inventions that are discovered, made or conceived during and in connection with
the Program solely by employees of Genzyme or others 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 during and in
connection with the Program jointly by employees of Dyax and Genzyme ("Joint
Inventions") shall be jointly owned by Genzyme and Dyax. Each of Dyax and
Genzyme shall promptly disclose to Kallikrein LLC and the other Party the
making, conception or reduction to practice of Inventions by employees or others
acting on behalf of such Party. All Dyax Inventions, Genzyme Inventions and
Joint Inventions shall be automatically licensed to Kallikrein LLC in accordance
with the provisions of Section 3.1 hereof.

             9.1.2 Ownership of Trademarks. The Steering Committee shall select
and Kallikrein LLC shall own all trademarks for the sale and use of
Collaboration Products in the Territory, and all expenses thereof shall be
considered Program Costs. All such trademarks shall be registered in the name of
Kallikrein LLC 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 such trademark require that such trademark be registered in the name of an
entity other than Kallikrein LLC, 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 Kallikrein LLC a worldwide,
exclusive, fully-paid, royalty-free, irrevocable (during the term of this
Agreement) right and license (with the right to grant sublicenses) to use such
trademark and (b) comply with the provisions of Article 13 hereof with respect
to the ownership and/or disposition of such

                                       24
<PAGE>

trademark in the event this Agreement is terminated and provide the level of
cooperation described in Section 14.1 hereof in connection therewith.

             9.1.3 Cooperation of Employees. Each of Dyax and Genzyme represents
and agrees that all employees or others acting on its behalf 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 Dyax or Genzyme, Dyax
or Genzyme, as applicable, shall have the right to obtain licenses for all
Inventions made by such non-employees on behalf of Dyax or Genzyme, as
applicable, in accordance with the policies of said company or institution. Dyax
and Genzyme agree to undertake to enforce such agreements (including, where
appropriate, by legal action) considering, among other things, the commercial
value of such Inventions.

         9.2 Filing, Prosecution and Maintenance of Patent Rights.

             9.2.1 Filing, Prosecution and Maintenance. Each of Dyax and Genzyme
shall be responsible for the filing, prosecution and maintenance of all patent
applications and patents which make up its Patent Rights. The Steering Committee
shall designate either Dyax or Genzyme as the Party responsible for the filing,
prosecution and maintenance 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 of
Dyax and Genzyme agrees to file and prosecute patent applications and maintain
the patents covering the Patent Rights for which it is responsible in all
countries in the Territory selected by the Steering Committee. Each of Dyax and
Genzyme 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 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.

             9.2.2 Patent Filing Costs. All costs associated with filing,
prosecuting and maintaining patent applications and patents covering each of
Dyax and Genzyme's Patent Rights and the Joint Patent Rights specific to the
Field in the Territory (including costs relating to patent oppositions,
interferences, reexaminations and reissues) shall be deemed Development Costs;
PROVIDED, HOWEVER, that if the subject matter of any such Patent Rights would
include claims outside the Field, one-half (1/2) of such costs shall be deemed
Development Costs.

         9.3 Cooperation. Each of Dyax and Genzyme 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 periods of time sufficient for such Party to obtain the assistance
it needs from such personnel. Where appropriate, each of Dyax and Genzyme shall
sign or cause to have signed all documents relating to said patent applications
or patents at no charge to the other Party.

                                       25
<PAGE>

         9.4 Notification of Patent Term Restoration. Each of Dyax and Genzyme
shall notify the other Party of (a) the issuance of each United States patent
included within the Patent Rights for which the notifying Party 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
Drug Price Competition and Patent Term Restoration Act of 1984, including
notices pursuant to Sections 101 and 103 of such Act from persons who have filed
an abbreviated NDA. Such notices shall be given promptly, but in any event
within ten (10) business days after receipt of each such notice pursuant to such
Act. Each of Dyax and Genzyme 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 is responsible.

         9.5 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 items
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 of the other Party for uses other than as specified
in Article 3 hereof and this Article 9.

         9.6 Enforcement of Patent Rights; Defense of Infringement Actions. Dyax
and Genzyme shall each promptly notify the other in writing of any alleged or
threatened infringement of any patents or patent applications for which it is
responsible pursuant to Section 9.2 above or if either Party, or any of their
respective Affiliates, shall be individually named as a defendant in a legal
proceeding by a Third Party for infringement of a patent because of the
manufacture, use or sale of a Collaboration Product or because of attempts to
invalidate Patent Rights.

             9.6.1 First Right to Respond. Each of Dyax and Genzyme 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 is responsible pursuant to Section 9.2 above or charge of infringement. Such
right shall be exercised in a diligent and timely manner in order to protect the
rights of the Parties in the Patent Rights. 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.

             9.6.2 Sharing of Litigation and Settlement Expenses. The costs
incurred (a) in responding to or defending against a challenge to or
infringement of a Party's Patent Rights specific to the Field or a charge that
the manufacture, use or sale of Collaboration Products infringe upon the Patent
Rights of Third Parties, (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 withheld or delayed, and (c) as damages paid as a result of
such actions shall be deemed Program Costs.

                                       26
<PAGE>

             9.6.3 Second Right to Respond. If a 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 cost; 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.

                           ARTICLE 10 CONFIDENTIALITY

         10.1 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 Dyax shall cause Subsidiary 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, commercialization or marketing of Collaboration Products and (b)
all information and data not described in clause (a) but supplied by one Party
to the other under this Agreement or in the course of the Parties' due diligence
investigations prior to the execution of 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
fulfill its obligations or exercise its rights under this Agreement, a Party may
disclose Information it is otherwise obligated under this Section not to
disclose to its Affiliates, sublicensees, employees, 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 substantially 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 use of
the other Party's Information or breach of any of the provisions of this
Agreement; or (v) is disclosed by the receiving Party pursuant to a subpoena
lawfully issued by a court or governmental agency, PROVIDED that the receiving
Party notifies the other Party immediately upon receipt of any such subpoena.

         10.2 Terms of this Agreement; Press Releases. The Parties agree to seek
confidential treatment for any filing of this Agreement with the Securities and
Exchange Commission and

                                       27
<PAGE>

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, Dyax and Genzyme each agree not to
disclose any terms or conditions of this Agreement to any Third Party without
the prior consent of the other Party. The Parties agree that all press releases
related to the Program shall be issued jointly by Dyax and Genzyme 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.

         10.3 Publications. Each Party recognizes the mutual interest in
obtaining valid patent protection. Consequently, any Party, its employees or
consultants wishing to make a publication (including any oral disclosure made
without obligation of confidentiality) relating to work performed by such Party
as part of the Program (the "Publishing Party") shall transmit to a
representative of the other Party (the "Reviewing Party") on the Program
Management Team a copy of the proposed written publication at least thirty (30)
days prior to submission for publication, or an abstract of such oral disclosure
at least ten (10) days prior to submission of the abstract or the oral
disclosure, whichever is earlier. 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 thirty (30) days, in the case of proposed written disclosures, or
ten (10) days, in the case of an abstract of proposed oral disclosures, 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 11 REPRESENTATIONS AND WARRANTIES

         11.1 Authorization. Each Party warrants and represents to the other
Parties 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 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 and (d) such Party
has not made and will not make any commitments to others in conflict with or in
derogation of such rights or this Agreement.

                                       28
<PAGE>

         11.2 Intellectual Property Rights. On the LLC Formation Date, and prior
to granting the licenses set forth in Article 3 hereof, the Parties will
represent and warrant to each other as follows:

              11.2.1 Dyax will represent and warrant that, as of the LLC
Formation Date, (a) the Dyax Patent Rights and the Dyax Technology are free and
clear of any lien or other encumbrance and (b) 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.

              11.2.2 Genzyme will represent and warrant that, as of the LLC
Formation Date, (a) the Genzyme Patent Rights and the Genzyme Technology are
free and clear of any lien or other encumbrance and (b) 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.

        11.3 Warranties.

              11.3.1 Genzyme Warranties. Genzyme warrants that (i) any
Collaboration Products delivered by Genzyme pursuant to Section 7.3 hereof, if
any, will conform in all material respects to the Specifications, the conditions
of any applicable Regulatory Approvals regarding the manufacturing process and
any applicable requirements of the Regulatory Scheme regarding the manufacturing
process and (ii) the Collaboration Products sold pursuant to Section 6.2 hereof
will be marketed and sold in all material respects in accordance with the
conditions of all applicable laws and regulations, including any applicable
Regulatory Approvals and any applicable labeling claims.

              11.3.2 Dyax Warranties. Dyax warrants that any Collaboration
Products delivered by Dyax pursuant to Sections 7.2 or 7.3 hereof will conform
in all material respects to the Specifications, the conditions of any applicable
Regulatory Approvals regarding the manufacturing process and any applicable
requirements of the Regulatory Scheme regarding the manufacturing process.

         11.4 Disclaimer of Representations and Warranties. EXCEPT AS OTHERWISE
EXPRESSLY SET FORTH IN THIS AGREEMENT, NONE OF DYAX, GENZYME OR KALLIKREIN LLC
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.

         11.5 Limitation of Liability. It is agreed by the Parties that no Party
shall have a right to or shall claim special, indirect or consequential damages,
including lost profits, for breach of this Agreement. 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.

                                       29
<PAGE>

                              ARTICLE 12 INDEMNITY

         12.1 Indemnity Obligations Prior to the LLC Formation Date. Each Party
(the "Indemnifying Party") shall defend, indemnify and hold harmless the other
Party (the "Indemnified Party") and its directors, officers, employees and
agents from and against any and all claims, liabilities, losses and expenses,
including attorney's fees, incurred by or asserted against the Indemnified Party
or any of the foregoing prior to the LLC Formation Date arising out of the
development, testing, manufacture, handling or storage by the Indemnifying Party
of any Collaboration Product in accordance with the Development Plan or
Commercialization Plan, as the case may be, except to the extent such claims,
liabilities, losses and expenses result from the negligent, reckless or
intentional acts or omissions of the Indemnified Party, in which case the
Indemnified Party shall indemnify and hold harmless the Indemnifying Party and
its directors, officers, employees and agents.

         12.2 Kallikrein LLC Indemnity Obligations. The Operating Agreement
shall provide that Kallikrein LLC shall indemnify each of the Members and its
Affiliates, employees and agents (each an "Indemnified Person") for any act
performed by such Indemnified Person within the scope of the authority conferred
upon such Indemnified Person under this Agreement; 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 Kallikrein LLC, (b) the act for
which indemnification is sought did not constitute gross negligence or willful
misconduct by such Indemnified Person and (c) 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 the Members, which
approval shall not be unreasonably withheld or delayed, or by a court of
competent jurisdiction.

         12.3 Insurance.

              12.3.1 Kallikrein LLC shall obtain and maintain product liability
insurance with respect to the design, development, manufacture, modification,
distribution and sale of Collaboration Products and comprehensive general
liability insurance, each in amounts reasonably believed by Genzyme and Dyax to
be adequate and customary for the development, manufacture and sale of novel
therapeutic products and for the property of Kallikrein LLC. Each such insurance
policy shall be for an amount determined by the Steering Committee. The
insurance will contain a deductible to be determined by the Steering Committee.
Genzyme shall obtain and maintain such insurance on behalf of Kallikrein LLC.
The aforementioned product liability and comprehensive general liability
insurance shall be obtained as soon as practicable after the LLC Formation Date,
but in no event later than ninety (90) days thereafter, from an insurance
carrier approved by the Steering Committee. The costs of all such insurance
shall be included in the Program Costs.

              12.3.2 Genzyme and Dyax shall each maintain at their own cost
similar product liability and comprehensive general liability insurance coverage
in amounts reasonably determined by the Steering Committee from time to time.
Genzyme and Dyax shall each also provide coverage for Kallikrein LLC after the
LLC Formation Date in excess of any valid and collectible insurance available
from Kallikrein LLC by including their respective Percentage

                                       30
<PAGE>

Interests under their respective product liability insurance policies to the
extent their respective interests appear and to the extent such Parties are
legally obligated to pay. Genzyme shall also provide coverage for Kallikrein LLC
under its property and transit insurance policies, with the costs of the
associated insurance premiums to be included in the Program Costs subject to
reimbursement by Kallikrein LLC within thirty (30) days after receipt of an
invoice therefor.

              12.3.3 Each Party will furnish the other Parties a certificate(s)
from an insurance carrier (having a minimum AM Best rating of B) showing all
insurance set forth above.

              12.3.4 The insurance certificate(s) showing Kallikrein LLC's
insurance will include the following statement: "The insurance certified
hereunder is applicable to all contracts between Genzyme Corporation, Dyax Corp.
and the Insured. This insurance may be canceled or altered only after ten (10)
days' written notice to Genzyme Corporation and Dyax Corp." The insurance, and
the certificate(s), will (a) name each of Genzyme and Dyax (including their
respective officers, directors, employees, Affiliates, agents, successors and
assigns) as additional insureds with respect to matters arising from this
Agreement, (b) provide that such insurance is primary to any liability insurance
carried by Genzyme and Dyax and (c) provide that underwriters and insurance
companies of Kallikrein LLC may not have any right of subrogation against
Genzyme or Dyax (including their respective officers, directors, employees,
servants, Affiliates, agents, successors and assigns) except in the event a
claim results from Genzyme's or Dyax's respective gross negligence or willful
misconduct. Such certificate(s) shall be made available to each Party upon
reasonable advance request.

              12.3.5 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 13 TERM AND TERMINATION

         13.1 Term. The term of this Agreement shall be perpetual unless
terminated pursuant to Section 13.2 below.

         13.2 Termination. This Agreement may be terminated in the following
circumstances:

              13.2.1 For Certain Material Breaches. If either Dyax or Genzyme
(a) 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 Commercialization Plan or (b) following the formation of Kallikrein
LLC, fails to make two (2) or more capital contributions in accordance with
Article 4 hereof, and such failure to perform is not cured within ninety (90)
days of written notice thereof from the non-breaching Party, the
non-breaching Party may elect, in its sole discretion, to (i) in the case of
clause (b) above, waive the terms of Article 4 hereof with respect to any one
or more required capital contributions and cause the respective Percentage
Interests and future funding responsibilities of the Parties to be adjusted
in accordance with Section 4.2.1 hereof or (ii) terminate this Agreement with
the consequences set forth in Section 13.3.1 below. Such 90-day period shall
be extended to one hundred eighty (180) days if the breaching Party has
engaged in good faith efforts to remedy such default within such 90-day
period and indicated in writing to the non-breaching Party prior to the
expiration of such

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<PAGE>

90-day period that it believes that it will be able to remedy the default within
such 180-day period, but such extension shall apply only so long as the
breaching Party is engaging in good faith efforts to remedy such default.

              13.2.2 For Convenience. Either Dyax or Genzyme may elect to
terminate this Agreement for any reason at any time after the satisfaction by
Dyax of the Initial Funding Commitment 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 the funding of Program
Costs, shall continue in full force and effect) with the consequences set forth
in Section 13.3.2 below.

              13.2.3 Upon Change of Control. Either Dyax or Genzyme may
terminate this Agreement with the consequences set forth in Section 13.3.3 in
the event that the other Party is a party to a transaction involving (a) a
merger or consolidation in which such party is not the surviving entity or (b)
the sale of all or substantially all of the assets of such Party to a Third
Party. Termination of this Agreement pursuant to this Section 13.2.3 shall be
effective as of the effective date of such transaction.

              13.2.4 Upon Bankruptcy. Either Dyax or Genzyme may terminate this
Agreement with the consequences set forth in Section 13.3.4 below upon the
bankruptcy, insolvency, dissolution or winding-up of the other Party, except in
the case of a petition in bankruptcy filed involuntarily against a Party, if
such petition is dismissed within sixty (60) days of the date of its filing.

        13.3 Effects of Termination.

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

                 (a) 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 effect the foregoing; PROVIDED that such license shall
be for the same level of exclusivity as the rights that had been or would be
granted with respect thereto under Section 3.1 hereof; and PROVIDED, FURTHER,
that 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;

                 (b) if applicable, the breaching Party shall assign and
transfer all of its interest in Kallikrein LLC to the non-breaching Party, and
the non-breaching Party may dissolve Kallikrein LLC in its sole discretion;
provided that in the event that Dyax is the breaching party, it shall also cause
Subsidiary to assign and transfer all of its interest in Kallikrein LLC to
Genzyme.

                                      32
<PAGE>

                 (c) (i) any licenses granted pursuant to Article 3 shall be
revoked, (ii) if Kallikrein LLC does not yet exist or is dissolved, any
applicable Regulatory Approvals (other than any Regulatory Approvals filed in
the name of an entity other than Kallikrein LLC or the non-breaching Party
pursuant to Section 5.3 hereof), pre-clinical and clinical data owned or
licensed by Kallikrein LLC or the breaching Party and any trademarks owned or
licensed by Kallikrein LLC (other than any trademarks registered in the name of
an entity other than Kallikrein LLC or the non-breaching Party pursuant to
Section 9.1.2 hereof) shall be assigned or licensed to the non-breaching Party
and (iii) any Regulatory Approvals filed and any trademarks registered in the
name of an entity other than Kallikrein LLC or the non-breaching Party shall be
(A) exclusively licensed to Kallikrein LLC, the non-breaching Party or any Third
Party or Affiliate designated by such Party until such time as Kallikrein LLC,
the non-breaching Party or its designee is qualified to hold such Regulatory
Approvals or trademarks under the applicable provisions of the Regulatory Scheme
and (B) transferred or assigned to Kallikrein LLC, the non-breaching Party or
its designee, as appropriate, as soon as practicable thereafter; and

                 (d) the non-breaching Party shall become obligated to pay the
breaching Party an amount equal to (i) eighty percent (80%) of the Fair Value
(as defined in Section 13.3.5 below) of the breaching Party's interest in the
Collaboration Products as of the date of termination, plus (ii) if applicable,
the non-terminating Party's Percentage Interest of the net asset value of
Kallikrein LLC as of the date of termination after deduction of net assets
included in the Fair Value of Collaboration Products, plus (iii) interest
thereon at the Base Rate of interest declared from time to time by BankBoston,
N.A. in Boston, Massachusetts 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 or otherwise
dispose of all or any portion of its or its Affiliates' right, title and
interest in the Collaboration Products, then the non-breaching Party shall, upon
any such sale or other disposition, pay the breaching Party an amount equal to
seventy-five percent (75%) of the net proceeds of such sale or other disposition
when such payments are actually paid;

                     (2) for as long as the non-breaching Party (together, in
the case of Dyax with Subsidiary) has not sold or otherwise disposed of all or a
portion of its (together in the case of Dyax, with Subsidiaries) right, title
and interest in the Collaboration Products which is equal to or greater than the
breaching Party's (together in the case of Dyax, with Subsidiaries) Percentage
Interest as of the date of termination, the non-breaching Party shall pay the
breaching Party (and, in the event that Dyax is the breaching Party, Subsidiary)
a percentage of Net Profits, which percentage shall equal (i) the breaching
Party's (and, in the event that Dyax is the breaching Party, Subsidiaries)
Percentage Interest as of the date of termination minus (ii) a percentage equal
to the portion of the right, title and interest in the Collaboration Products
sold or otherwise disposed of by the non-breaching Party (and in the event that
Dyax is the non-breaching Party, Subsidiary) as described in the preceding
paragraph; and

                     (3) on the fourth anniversary of the date of termination,
the non-breaching Party shall pay the breaching Party (and, in the event that
Dyax is the

                                       33
<PAGE>

breaching Party, Subsidiary) the difference between the aggregate amounts paid
pursuant to clauses (1) and (2) above and the Breach Buyout Amount;

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

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

                     (a) the non-terminating Party shall have an option
exercisable upon written notice to the terminating Party within the one-year
period provided in Section 13.2.2 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 that had been or would be
granted with respect thereto under Section 3.1; and PROVIDED, FURTHER, that any
license granted hereunder shall be subject to the obligation of the
non-terminating Party to use commercially reasonable and diligent efforts to
develop and market Collaboration Products pursuant to such license;

                     (b) if applicable, upon exercise of its license option
provided in paragraph (a) of this Section 13.3.2, the terminating Party shall
assign and transfer all of its interest in Kallikrein LLC to the non-terminating
Party, and the non-terminating Party may dissolve Kallikrein LLC in its sole
discretion;

                     (c) upon exercise of its license option provided in
paragraph (a) of this Section 13.3.2, (i) any licenses granted pursuant to
Article 3 shall be revoked, (ii) if Kallikrein LLC does not yet exist or is
dissolved, any applicable Regulatory Approvals (other than any Regulatory
Approvals filed in the name of an entity other than Kallikrein LLC or the
non-terminating Party pursuant to Section 5.3 hereof), pre-clinical and clinical
data owned or licensed by Kallikrein LLC or the terminating Party and any
trademarks owned or licensed by Kallikrein LLC (other than any trademarks
registered in the name of an entity other than Kallikrein LLC or the
non-terminating Party pursuant to Section 9.1.2 hereof) shall be assigned to the
non-terminating Party and (iii) any Regulatory Approvals filed and any
trademarks registered in the name of an entity other than Kallikrein LLC or the
non-terminating Party shall be (A) exclusively licensed to Kallikrein LLC, the
non-terminating Party or any Third Party or Affiliate designated by such Party
until such time as Kallikrein LLC, the non- terminating Party or its designee is
qualified to hold such Regulatory Approvals or trademarks under the applicable
provisions of the Regulatory Scheme and (B) transferred or assigned to
Kallikrein LLC, the non-terminating Party or its designee, as appropriate, as
soon as practicable thereafter;

                     (d) 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

                                       34
<PAGE>

Party an amount equal to (i) one hundred percent (100%) of the Fair Value (as
defined in Section 13.3.5 below) of the terminating Party's interest in the
Collaboration Products as of the date of termination (or, in the event that Dyax
is the non-terminating Party, Genzyme shall pay the Dyax Companies an amount
equal to one hundred percent (100%) of the Fair Value of the Dyax Companies'
aggregate interest in the Collaboration Products as of the date of termination)
plus (ii) if applicable, the non-terminating Party's Percentage Interest of the
net asset value of Kallikrein LLC as of the date of termination after deduction
of net assets included in the Fair Value of Collaboration Products, plus (iii)
interest thereon at the Base Rate of interest declared from time to time by
BankBoston, N.A. in Boston, Massachusetts from the date of termination to the
date payment is made (the "Convenience Buyout Amount"), payable on the terms and
conditions and in accordance with the schedule of payments set forth in Section
13.3.1(d), MUTATIS MUTANDIS; PROVIDED, HOWEVER, that if Genzyme is the
terminating Party and Dyax has not paid the outstanding balance under the
Convenience Buyout Amount on the fourth anniversary of the date of termination,
Genzyme shall make available to Dyax a line of credit for such outstanding
balance, such line of credit to have a five (5) year term and to bear interest
at a rate equal to two percent (2%) above the Base Rate of interest declared
from time to time by BankBoston, N.A. in Boston, Massachusetts, and

                     (e) if the license option provided in paragraph (a) of this
Section 13.3.2 is not exercised, then all right, title and interest in the
Collaboration Products shall be sold to the highest bidder within eighteen (18)
months from the date of termination and the proceeds shall be allocated between
the Members in proportion to their Percentage Interests as of the date of
termination and if applicable, Kallikrein LLC shall be dissolved.

              13.3.3 Upon a Change of Control. In addition to the rights and
duties set forth in Sections 13.4 and 13.5 below, Dyax and Genzyme shall have
the following rights and duties upon termination of this Agreement pursuant to
Section 13.2.3:

                     (a) the terminating Party shall have the exclusive,
irrevocable and, except as provided in Section 13.3.3(d), royalty-free 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 Territory and in the Field, and the non-terminating Party shall
execute such documents and take all action as may be necessary or desirable to
effect the foregoing; PROVIDED that such license shall be for the same level of
exclusivity as the rights that had been or would be 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;

                     (b) if applicable, the non-terminating Party shall assign
and transfer all of its interest in Kallikrein LLC to the terminating Party, and
the terminating Party may dissolve Kallikrein LLC in its sole discretion;
PROVIDED that in the event that Dyax is the non-terminating party, it shall also
cause Subsidiary to assign and transfer all of its interest in Kallikrein LLC to
Genzyme;

                                       35
<PAGE>

                     (c) (i) any licenses granted to Article 3 shall be revoked,
(ii) if Kallikrein LLC does not yet exist or is dissolved, any applicable
Regulatory Approvals (other than any Regulatory Approvals filed in the name of
an entity other than Kallikrein LLC or the terminating Party pursuant to Section
5.3 hereof), pre-clinical and clinical data owned or licensed by Kallikrein LLC
or the non-terminating Party and any trademarks owned or licensed by Kallikrein
LLC (other than any trademarks registered in the name of an entity other than
Kallikrein LLC or the terminating Party pursuant to Section 9.1.2 hereof) shall
be assigned or licensed to the terminating Party and (iii) any Regulatory
Approvals filed and any trademarks registered in the name of an entity other
than Kallikrein LLC or the terminating Party shall be (A) exclusively licensed
to Kallikrein LLC, the terminating Party or any Third Party or Affiliate
designated by such Party until such time as Kallikrein LLC, the terminating
Party or its designee is qualified to hold such Regulatory Approvals or
trademarks under the applicable provisions of the Regulatory Scheme and (B)
transferred or assigned to Kallikrein LLC, the terminating Party or its
designee, as appropriate, as soon as practicable thereafter; and

                     (d) the terminating Party (the "Offeror") shall, pursuant
to the conditions set forth in this Section 13.3(d), give the other Party
(Genzyme in the case Dyax is terminating or the Dyax Companies in the case
Genzyme is terminating, in either case the "Offeree") at the time of termination
written notice of the Offeror's intention to purchase Offeree's entire interest
in and to (i) the Collaboration Products as of the date of termination and (ii)
if applicable, the Percentage Interest of the net asset value of Kallikrein LLC
as of the date of termination (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 (i) the Collaboration
Products as of the date of termination and (ii) if applicable, the Percentage
Interest of the net asset value of Kallikrein LLC as of the date of termination;
PROVIDED, HOWEVER, that the purchase price shall be paid in cash,
publicly-traded and registered securities or as the Parties otherwise agree. The
Offeree shall then have ninety (90) days (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
Offeree's entire interest in and to (i) the Collaboration Products as of the
date of termination and (ii) if applicable, the Percentage Interest of the net
asset value of Kallikrein LLC as of the date of termination to 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 ninety (90) 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 (i) the Collaboration Products as of the date of termination and (ii) if
applicable, the Percentage Interest of the net asset value of Kallikrein LLC as
of the date of termination for the same price (as adjusted for Percentage
Interest, if necessary) and upon such terms and conditions as specified in the
Notice of Offer. In such event, a closing shall be held within ninety (90) 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 Offeree's entire interest in
and to (i) the Collaboration Products as of the

                                       36
<PAGE>

date of termination and (ii) if applicable, the Percentage Interest of the net
asset value of Kallikrein LLC as of the date of termination to the Offeror
pursuant to the terms of the Notice of Offer. For purposes of Sections 13.3.3
(a)-(c) above, the Party purchasing the other Party's interest in (i) the
Collaboration Products and (ii) if applicable, the Percentage Interest of the
net asset value of Kallikrein LLC shall be deemed to be the terminating Party
and the other Party shall be deemed to be the non-terminating Party.

              13.3.4 Upon Bankruptcy. In addition to the rights and duties set
forth in Sections 13.4 and 13.5 below, Dyax and Genzyme shall have the following
rights and duties upon termination of this Agreement pursuant to Section 13.2.4
above:

                     (a) 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 that
had been or would be granted with respect thereto under Section 3.1 hereof; 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;

                     (b) if applicable, the non-terminating Party shall assign
and transfer all of its interest in Kallikrein LLC to the terminating Party, and
the terminating Party may dissolve Kallikrein LLC in its sole discretion;,
PROVIDED that in the event that Dyax is the non-terminating Party, it shall also
cause Subsidiary to assign and transfer all of its interest in Kallikrein LLC to
Genzyme.

                     (c) (i) any licenses granted to Article 3 shall be revoked,
(ii) if Kallikrein LLC does not yet exist or is dissolved, any applicable
Regulatory Approvals (other than any Regulatory Approvals filed in the name of
an entity other than Kallikrein LLC or the terminating Party pursuant to Section
5.3 hereof), pre-clinical and clinical data owned or licensed by Kallikrein LLC
or the non-terminating Party and any trademarks owned or licensed by Kallikrein
LLC (other than any trademarks registered in the name of an entity other than
Kallikrein LLC or the terminating Party pursuant to Section 9.1.2 hereof) shall
be assigned or licensed to the terminating Party and (iii) any Regulatory
Approvals filed and any trademarks registered in the name of an entity other
than Kallikrein LLC or the terminating Party shall be (A) exclusively licensed
to Kallikrein LLC, the terminating Party or any Third Party or Affiliate
designated by such Party until such time as Kallikrein LLC, the terminating
Party or its designee is qualified to hold such Regulatory Approvals or
trademarks under the applicable provisions of the Regulatory Scheme and (B)
transferred or assigned to Kallikrein LLC, the terminating Party or its
designee, as appropriate, as soon as practicable thereafter; and

                     (d) the terminating Party shall become obligated to pay to
the non-terminating Party an amount equal to (i) one hundred percent (100%) of
the Fair Value (as defined in Section 13.3.5 below) of the non-terminating
Party's interest in the Collaboration Products as of the date of termination
(or, in the event that Dyax is the non-terminating Party,

                                       37
<PAGE>

Genzyme shall pay the Dyax Companies an amount equal to one hundred percent
(100%) of the Fair Value of the Dyax Companies' aggregate interest in the
Collaboration Products as of the date of termination), plus (ii) if applicable,
the non-terminating Party's Percentage Interest of the net asset value of
Kallikrein LLC as of the date of termination after deduction of net assets
included in the Fair Value of Collaboration Products, plus (iii) interest
thereon at the Base Rate of interest declared from time to time by BankBoston,
N.A. in Boston, Massachusetts from the date of termination to the date payment
is made (the "Bankruptcy Buyout Amount"), payable on the terms and conditions
and in accordance with the schedule of payments set forth in Section 13.3.1(d),
MUTATIS MUTANDIS.

              13.3.5 Fair Value. For purposes of this Section 13.3, the "Fair
Value" of a Party's interest in the Collaboration Products shall be the amount
an informed and willing buyer under no compulsion to buy would be willing to pay
and an informed and willing seller under no compulsion to sell would be willing
to accept for all right, title and interest in such Party's interest in the
Collaboration Products, determined as of the date of termination, which
determination shall be made by the mutual agreement of Dyax and Genzyme. In the
event that Dyax and Genzyme are unable to agree upon the Fair Value within one
hundred and twenty (120) days of the date of termination, the Fair Value shall
be determined by an investment banking firm selected by mutual agreement of Dyax
and Genzyme, and the costs and expenses incurred in connection with the
engagement of such investment banking firm shall be shared equally by Dyax and
Genzyme.

         13.4 Inventory. Upon the termination of this Agreement, if Genzyme does
not obtain a license pursuant to Section 13.3 hereof, Dyax shall have the option
to repurchase Genzyme's inventory of Collaboration Products acquired by Genzyme
pursuant to Article 6 hereof. Within ten (10) days after such termination, Dyax
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) repurchase
Genzyme's inventory of Collaboration Products. If Dyax 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
repurchase of Genzyme's inventory of Collaboration Products shall be at the
price as stated in Genzyme's then-current price list, LESS a handling charge to
be reasonably determined by the Parties in good faith.

         13.5 Survival of Rights and Duties. No termination of this Agreement
shall eliminate any rights or duties of the Parties accrued prior to such
termination. The provisions of Article 1, Sections 2.2, 3.4, 4.3, 4.5, 9.1.1,
9.1.3, 9.3, 9.5, Article 10, Article 12, Sections 13.2, 13.3, 13.4, 14.1, 14.3,
14.4, 14.8, 14.9, 14.10 and 14.11 hereof shall survive any termination of this
Agreement.

                            ARTICLE 14 MISCELLANEOUS

         14.1 Cooperation. If either Dyax or Genzyme (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

                                       38
<PAGE>

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. If the Responsible Party is the
Manufacturing Party for a Collaboration Product, the Responsible Party shall, at
the option of the Assuming Party, supply such Collaboration Product to the
Assuming Party, at a mutually agreeable price not to exceed the Fully Allocated
Cost of Goods for such Collaboration Product, until the earlier of: (i)
twenty-four (24) months from the effective date of termination and (ii) six (6)
months after the Assuming Party delivers notice to the Responsible Party that
the Assuming Party is able to manufacture such Collaboration Product. In
addition, if upon the date this Agreement is terminated Collaboration Products
are being manufactured in facilities owned or leased by the Responsible Party
(including facilities subleased by Kallikrein LLC from 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 twenty-four (24) months.

         14.2 Exchange Controls. All payments due hereunder shall be paid in
United States dollars. If at any time legal restrictions prevent the prompt
remittance of part or all payments with respect to any country in which
Collaboration Products are sold, payment shall be made through such lawful means
or methods as the Parties may determine in good faith.

         14.3 Withholding Taxes. If applicable laws or regulations require that
taxes be withheld from payments made hereunder, the Party paying such taxes will
(a) deduct such taxes, (b) timely pay such taxes to the proper authority and (c)
send written evidence of payment to the Party from whom such taxes were withheld
within sixty (60) days after payment. Each Party will assist the other Party or
Parties in claiming tax refunds, deductions or credits at such other Party's
request and will cooperate to minimize the withholding tax, if available, under
various treaties applicable to any payment made hereunder.

         14.4 Interest on Late Payments. Any payments to be made hereunder that
are not paid on or before the date such payments are due under this Agreement
shall bear interest, to the extent permitted by applicable law, at the Base Rate
of interest declared from time to time by BankBoston, N.A. in Boston,
Massachusetts, calculated on the number of days payment is delinquent.

         14.5 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 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

                                       39
<PAGE>

FORCE MAJEURE. The Parties shall mutually seek a resolution of the delay or the
failure to perform in good faith.

         14.6 Assignment. This Agreement may not be assigned or otherwise
transferred by any Party without the consent of the other Parties; PROVIDED,
HOWEVER, that either Dyax or Genzyme 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; PROVIDED, HOWEVER, 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 14.6 shall be void.

         14.7 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.

         14.8 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 14.8 and
shall be effective upon receipt by the addressee.

         If to Dyax:                Dyax Corp.
         or Subsidiary              One Kendall Square
                                    Cambridge, Massachusetts 02139
                                    Attention: President
                                    Facsimile: (617) 225-2501

         with a copy to:            Palmer & Dodge LLP
                                    One Beacon Street
                                    Boston, Massachusetts 02108
                                    Attention:  Nathaniel S. Gardiner
                                    Facsimile: (617) 227-4420

                                       40
<PAGE>

         If to Genzyme:    Genzyme Corporation
                                    One Kendall Square
                                    Cambridge, Massachusetts 02139
                                    Attention: President
                                    Facsimile: (617) 374-7423

         with a copy to:            Genzyme Corporation
                                    One Kendall Square
                                    Cambridge, Massachusetts 02139
                                    Attention: Chief Legal Officer
                                    Facsimile: (617) 252-7553

         If to Kallikrein           Kallikrein LLC
         LLC (if such               c/o Genzyme Corporation
         notice is sent             One Kendall Square
         by Dyax):                  Cambridge, Massachusetts 02139
                                    Attention: President
                                    Facsimile: (617) 374-7423

         with a copy to:            Genzyme Corporation
                                    One Kendall Square
                                    Cambridge, Massachusetts 02139
                                    Attention: Chief Legal Officer
                                    Facsimile: (617) 252-7553

         If to Kallikrein           Kallikrein LLC
         LLC (if such               c/o Dyax Corp.
         notice is sent             One Kendall Square
         by Genzyme):               Cambridge, Massachusetts 02139
                                    Attention: President
                                    Facsimile: (617) 225-2501

         with a copy to:            Palmer & Dodge LLP
                                    One Beacon Street
                                    Boston, Massachusetts 02108
                                    Attention: Nathaniel S. Gardiner
                                    Facsimile: (617) 227-4420

         14.9 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts without regard
to any choice of law principle that would dictate the application of the laws of
another jurisdiction.

         14.10 Arbitration. 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 finally resolved by binding arbitration as herein provided.

                                       41
<PAGE>

              14.10.1 General. Except as otherwise provided in this Section
14.10, any arbitration hereunder shall be conducted under the commercial rules
of the American Arbitration Association. Each such arbitration shall be
conducted in the English language by a panel of three (3) arbitrators (the
"Arbitration Panel"). Each of Dyax 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 Dyax and Genzyme. The Arbitration Panel shall be
convened upon delivery of the Notice of Arbitration (as herein defined). Any
such arbitration shall be held in Boston, Massachusetts. 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 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.

              14.10.2 Procedure.

                 (a) Whenever a Party (the "Claimant") shall decide to institute
arbitration proceedings, it shall give written notice to that effect (the
"Notice of Arbitration") to the other Party (the "Respondent"). The Notice of
Arbitration shall set forth in detail the nature of the Dispute, the facts upon
which the Claimant relies and the issues to be arbitrated (collectively, the
"Arbitration Issues"). Within fifteen (15) days of its receipt of the Notice of
Arbitration, the Respondent shall send the Claimant and the Arbitration Panel a
written Response (the "Response"). The Response shall set forth in detail the
facts upon which the Respondent relies. In addition, the Response shall contain
all counterclaims which the Respondent may have against the Claimant which are
within the Arbitration Issues, whether or not such claims have previously been
identified. If the Response sets forth a counterclaim, the Claimant may, within
fifteen (15) days of the receipt of the Response, deliver to the Respondent and
the Arbitration Panel a rejoinder answering such counterclaim.

                 (b) Within fifteen (15) days after the later of (i) the
expiration of the period provided in Section 14.10.2(a) above for the
Claimant to deliver a rejoinder or (ii) the completion of any discovery
proceedings authorized by the Arbitration Panel: (A) the Claimant shall send
to the Arbitration Panel a proposed resolution of the Arbitration Issues and
a proposed resolution of any counterclaims set forth in the Response,
including without limitation the amount of monetary damages, if any, or other
relief sought (the "Claimant's Proposal"); and (B) the Respondent shall send
to the Arbitration Panel a proposed resolution of the Arbitration Issues, a
proposed resolution of any counterclaims set forth in the Response and a
proposed resolution of any rejoinder submitted by the Claimant, including
without limitation the amount of monetary damages, if any, or other relief
sought (the "Respondent's Proposal"). Once both the Claimant's Proposal and
the Respondent's Proposal have been submitted, the Arbitration Panel shall
deliver to each Party a copy of the other Party's proposal.

                 (c) The Arbitration Panel shall issue an opinion with
respect to any Dispute, which opinion shall explicitly accept either the
Claimant's Proposal or the Respondent's Proposal in its entirety (the "Final
Decision"). The Arbitration Panel shall not have the authority to reach a
Final Decision that provides remedies or requires payments other than those
set forth in the Claimant's Proposal or the Respondent's Proposal. The
concurrence of two (2) arbitrators shall be sufficient for the entry of a
Final Decision. The arbitrators shall issue a Final Decision

                                       42
<PAGE>

within one (1) month from the later of (i) the last day for submission of
proposals under Section 14.10.2(b) above or (ii) the date of the final hearing
on any Dispute held by the Arbitration Panel. A Final Decision shall be binding
on both Parties.

         14.11 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 or Parties shall have the right to obtain equitable relief to
enforce Article 10 hereof.

         14.12 Entire Agreement. This Agreement and the Operating Agreement
contain the entire understanding of the Parties 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 and modifications thereof dated October 1, 1997. This Agreement may
be amended, or any term hereof modified, only by a written instrument duly
executed by both Parties hereto. Each of the Parties hereby acknowledges that
this Agreement is, and the Operating Agreement will be, the result of mutual
negotiation and therefore any ambiguity in their respective terms shall not
be construed against the drafting Party.

         14.13 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.

         14.14 Independent Contractors. It is expressly agreed that Dyax and
Genzyme shall be independent contractors and that, except as Members of
Kallikrein LLC, the relationship between the two Parties shall not constitute
a partnership, joint venture or agency. Neither Dyax nor Genzyme 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.

         14.15 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.

         14.16 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.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       43
<PAGE>

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

                                                     GENZYME CORPORATION

                                                     By: /s/ Peter Wirth
                                                         -----------------------

                                                     Title:

                                                     DYAX CORP.

                                                     By: /s/ Keith S. Ehrlich
                                                         ----------------------

                                                     Title:

                                       44
<PAGE>

                                  SCHEDULE 1.10

                               DYAX PATENT RIGHTS
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
                                             APPLICATION
                COUNTRY                        NUMBER                        FILING DATE                     STATUS
-------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                           <C>                <C>
           U.S. (Markland 1)                     08/179,964                    1/11/94              Abandoned in favor of US
                                                                                                           08/208,264
-------------------------------------------------------------------------------------------------------------------------------
        U.S. CIP (Markland 1A)                   08/208,264                    3/10/94                      Pending
-------------------------------------------------------------------------------------------------------------------------------
        U.S. CIP (Markland 1B)                   08/676,125                    9/25/96            U.S. Patent 5,795,865 issued
                                                                                                            8/18/98
-------------------------------------------------------------------------------------------------------------------------------
      U.S. Div. (Markland 1B Div)                   09/                        8/17/98                      Pending
-------------------------------------------------------------------------------------------------------------------------------
         Canada (Markland 1B)                    2,180,950                     1/11/95                      Pending
-------------------------------------------------------------------------------------------------------------------------------
           EPO (Markland 1B)                    95/909223.0                    1/11/95                      Pending

                                            pub 0739355 10/30/96
-------------------------------------------------------------------------------------------------------------------------------
          Japan (Markland 1B)                     7-518726                     1/11/95                      Pending
-------------------------------------------------------------------------------------------------------------------------------
           PCT (Markland 1B)                      US95/00299                   1/11/95

                                                  WO95/21601
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                       45
<PAGE>

                                  SCHEDULE 1.17

                              GENZYME PATENT RIGHTS

                                      None

                                       46
<PAGE>

                                                                 Schedule 1.28

                               OPERATING AGREEMENT

                                       of

                                 KALLIKREIN LLC

                                   dated as of

<PAGE>

                                                  TABLE OF CONTENTS

<TABLE>
<S>                                                                                                             <C>
ARTICLE 1.  FORMATION AND MEMBERSHIP.............................................................................1

         1.1  Formation..........................................................................................1
         1.2  Members............................................................................................1
         1.3  Management.........................................................................................1

ARTICLE 2.  OFFICES, NAME, ETC...................................................................................2

         2.1  Principal Office...................................................................................2
         2.2  Registered Office; Resident Agent..................................................................2
         2.3  Name...............................................................................................2
         2.4  Term...............................................................................................2
         2.5  Business Ventures..................................................................................2

ARTICLE 3.  PURPOSES AND POWERS..................................................................................2

         3.1  Purpose............................................................................................2
         3.2  Powers.............................................................................................2

ARTICLE 4.  MEMBERS AND THEIR CONTRIBUTIONS AND LOANS............................................................2

         4.1  Contributions......................................................................................2
         4.2  Capital Accounts...................................................................................3
         4.3  Loans..............................................................................................4
         4.4  Additional Members.................................................................................4
         4.5  Liability of Members...............................................................................4
         4.6  Withdrawal of Members..............................................................................4

ARTICLE 5.  ALLOCATIONS..........................................................................................4

         5.1  Certain Definitions................................................................................4
         5.2  Allocations of Profit and Loss.....................................................................6
         5.3  Special Allocations................................................................................6

ARTICLE 6.  DISTRIBUTIONS........................................................................................8

         6.1  Distribution of Company Funds......................................................................8

ARTICLE 7.  INDEMNIFICATION......................................................................................8

         7.1  Indemnification of Members.........................................................................8

ARTICLE 8.  ASSIGNABILITY OF MEMBERSHIP INTERESTS................................................................9

         8.1  Assignment.........................................................................................9
         8.2  Substitute Members................................................................................10
         8.3  Rights of Assignees...............................................................................10
         8.4  Other Restrictions................................................................................10

ARTICLE 9.  FISCAL YEAR, ACCOUNTING, INSPECTION OF BOOKS........................................................10

         9.1  Fiscal Year and Accounting........................................................................10
         9.2  Inspection of Books...............................................................................10
</TABLE>

                                       1
<PAGE>

<TABLE>
<S>                                                                                                            <C>
ARTICLE 10.  DISSOLUTION........................................................................................11

         10.1  Events of Dissolution............................................................................11
         10.2  Consent to Continue Company......................................................................11
         10.3  Distribution Upon Dissolution....................................................................11

ARTICLE 11.  GENERAL PROVISIONS.................................................................................12

         11.1  Complete Agreement; Modification.................................................................12
         11.2  Governing Law; Severability......................................................................12
         11.3  Notice...........................................................................................12
         11.4  Pronouns.........................................................................................13
         11.5  Titles...........................................................................................13
         11.6  Successors and Assigns...........................................................................13
         11.7  Counterparts.....................................................................................13
</TABLE>

                                       2
<PAGE>

                               OPERATING AGREEMENT

                                       OF

                                 KALLIKREIN LLC

         THIS OPERATING AGREEMENT (the "Agreement") is made and adopted as of
                             , by and among Genzyme Corporation, a Massachusetts
corporation having its principal place of business at One Kendall Square,
Cambridge, Massachusetts 02139 ("Genzyme"), Dyax Corp., a Delaware
corporation having its principal place of business at One Kendall Square,
Cambridge, MA 02139 ("Dyax"), [Subsidiary], a Delaware corporation and a
wholly-owned subsidiary of Dyax having its principal place of business at One
Kendall Square, Cambridge, MA 02139 ("Subsidiary") and such other persons who
may become members of Kallikrein LLC (the "Company") in accordance with law
or the terms hereof (hereinafter collectively referred to as the "Members"
and individually as a "Member"). Dyax and Subsidiary are hereinafter
collectively referred to as the "Dyax Companies." Capitalized terms used but
not defined herein shall be given the same meaning as provided in the
Collaboration Agreement dated as of September   , 1998 between Dyax and Genzyme
(the "Collaboration Agreement").

                       ARTICLE 1. FORMATION AND MEMBERSHIP

         1.1 Formation. The Company has been organized as a limited liability
company pursuant to the Delaware Limited Liability Company Act (the "Act"). The
Act shall govern the rights and liabilities of the parties hereto except as
otherwise expressly stated herein.

         1.2 Members. The sole initial Member of the Company was Dyax. Following
the execution and delivery of the Collaboration Agreement, Dyax assigned one
percent (1%) of its interest in the Company to Subsidiary, and Subsidiary was
admitted as a Member of the Company. The Company elected under Section 754 of
the Internal Revenue Code of 1986, as amended ("IRC"), to apply the provisions
of Sections 734(b) and 743(b) of the IRC. Thereafter, effective upon execution
and delivery of the Purchase Agreement of even date herewith by and between Dyax
and Genzyme (the "Purchase Agreement"), Dyax has sold and assigned to Genzyme a
fifty percent (50%) interest in the Company (subject to adjustment as provided
herein and in Section [4.2.1] of the Collaboration Agreement). Upon execution
and delivery of this Agreement, Dyax and Subsidiary each hereby consent to the
admission of Genzyme as a Member of the Company and Genzyme is hereby admitted
as a Member of the Company. Hence, the Members of the Company are those persons
listed on Schedule A attached hereto, as amended from time to time.

         1.3 Management. The Company shall be managed by the Steering Committee
provided for in Section [8.2] of the Collaboration Agreement

                                       1
<PAGE>

                         ARTICLE 2. OFFICES, NAME, ETC.

         2.1 Principal Office. The principal office of the Company shall be
located at One Kendall Square, Cambridge, Massachusetts 02139 or such place
within the Commonwealth of Massachusetts as may be determined by the Members
from time to time. The Company shall maintain its records at such address.

         2.2 Registered Office; Resident Agent. The name and address of the
Company's registered agent for service of process in the State of Delaware shall
be Corporation Service Company, 1013 Centre Road, Wilmington, Delaware
19805-1297. The name and address of the Company's registered agent for service
of process in the Commonwealth of Massachusetts shall be Genzyme Corporation,
One Kendall Square, Cambridge, Massachusetts 02139.

         2.3 Name. The business of the Company shall be conducted under the name
of "Kallikrein LLC".

         2.4 Term. The term of the Company shall commence upon the filing of the
Certificate of Formation (the "Effective Date") and shall be perpetual until it
is terminated as hereinafter provided.

         2.5 Business Ventures. Any Member may engage independently or with
others in other business ventures of every nature and description, and neither
the Company nor any Member shall have any rights in and to such independent
ventures or the income or profits derived therefrom; PROVIDED, HOWEVER, that a
Member's participation in such venture is subject to and consistent with the
provisions of Section [2.2] of the Collaboration Agreement.

                         ARTICLE 3. PURPOSES AND POWERS

         3.1 Purpose. The purpose of the Company is to: (i) develop and
commercialize the Collaboration Products; (ii) act as a partner in limited
partnerships, general partnerships and limited liability partnerships, and as a
member of limited liability companies; and (iii) engage in any other business
permitted under the Act that the Members shall deem desirable or expedient.

         3.2 Powers. The Company shall have all the powers necessary or
convenient to the conduct, promotion or attainment of the business, trade,
purposes or activities of the Company, including, without limitation, all the
powers of an individual, partnership, corporation or other entity.

              ARTICLE 4. MEMBERS AND THEIR CONTRIBUTIONS AND LOANS

         4.1 Contributions.

                                       2
<PAGE>

         (a) Each Member has agreed to contribute the amounts and/or property
set forth in Sections [3.1, 3.2, 3.5, 4.1 and 4.2] of the Collaboration
Agreement. The amount so contributed is hereinafter referred to as each Member's
"Capital Contribution". The cash and agreed value of any property contributed by
each Member as of the date hereof is set forth in Schedule A attached hereto.

         (b) Pursuant to the terms of the Collaboration Agreement, Dyax, on
behalf of the Dyax Companies, and Genzyme have undertaken to make monthly
Capital Contributions to the Company in the amount equal to fifty percent (50%)
of all Program Costs following satisfaction of the Initial Funding Commitment.

             If either Genzyme or Dyax (on behalf of the Dyax Companies)
fails to make all or any portion of a monthly Capital Contribution, the other
Member may elect to make such Contribution (or a portion thereof). If either
Genzyme or Dyax (on behalf of the Dyax Companies) fails to make all or any
portion of a monthly Capital Contribution, the Percentage Interests (as defined
below) shall be adjusted to correspond to the percentage of cumulative Capital
Contributions made by or on behalf of each Member and subsequent monthly Capital
Contributions shall be made by the Members in proportion to their adjusted
Percentage Interests;

         (c) No interest shall accrue on any Capital Contributions, and no
Member shall have the right to withdraw or to be repaid any capital it has
contributed, except as otherwise specifically provided in this Agreement.

         (d) Each Member's percentage interest ("Percentage Interest") is as set
forth in Schedule A hereto, subject to adjustment as provided in Section 4.1(b)
of this Agreement.

         4.2 Capital Accounts. A separate account (a "Capital Account") shall be
maintained for each Member and adjusted in accordance with Treasury Regulation
Section 1.704-1(b) as follows:

         (a) There shall be credited to each Member's Capital Account the amount
of such Member's Capital Contribution as of the date, and to the extent, that
such Capital Contribution has been paid, and such Member's allocable share of
Net Profits (and any items in the nature of income or gain separately allocated
to such Member); and there shall be charged against each Member's Capital
Account the amount of all distributions to such Member and such Member's
allocable share of Net Losses (and any items in the nature of losses or
deductions separately allocated to such Member). Capital Contributions made by
or on behalf of the Dyax Companies shall be credited to their Capital Accounts
in proportion to their relative Percentage Interests.

         (b) If the Company at any time distributes any of its assets in kind to
any Member, the Capital Account of each Member shall be adjusted to account for
that Member's allocable share (as determined under Section 5.1 below) of the Net
Profits or Net Losses that would have been realized by the Company had it sold
the assets that were distributed at their respective fair market values
immediately prior to their distribution.

                                       3
<PAGE>

         (c) In the event any Member's interest is transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred interest.

         4.3 Loans. The Members shall not make loans to the Company unless the
Members unanimously agree in writing to make such loans.

         4.4 Additional Members. Except as otherwise provided in Section 8.2
below with respect to Substitute Members, additional Members may only be
admitted with the prior written unanimous approval of the Members. Such
additional Members shall execute and acknowledge a counterpart to this Agreement
or shall otherwise evidence in writing their agreement to be bound by the terms
hereof in such manner as the Members shall determine.

         4.5  Liability of Members.

         (a) No Member shall be liable for the obligations of the Company solely
by reason of being a Member.

         (b) No Member shall be required to make any contributions to the
capital of the Company other than as provided in this Article 4.

         (c) No Member shall be personally liable to the Company or its other
Members for monetary damages for breach of fiduciary duty as a Member to the
extent permitted by applicable law; PROVIDED, HOWEVER, that this provision shall
not eliminate the liability of a Member (i) for any breach of the Member's duty
of loyalty to the Company or its other Members, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law or (iii) for any transaction from which the Member derived an improper
personal benefit. No amendment to or repeal of this Section 4.5(c) shall apply
to or have any effect on the liability or alleged liability of any Member for or
with respect to any acts or omissions of such Member occurring prior to such
amendment or repeal.

         4.6 Withdrawal of Members. No Member shall have the right to withdraw
from the Company or to demand a return of its capital interest at any time
except upon termination and dissolution of the Company, unless agreed to by the
unanimous written consent of the other Members.

                             ARTICLE 5. ALLOCATIONS

         5.1 Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings given them in this Article 5:

             (a)  "Adjusted Capital Account" for a Member means such Member's
                  Capital Account (i) reduced by the net adjustments,
                  allocations and distributions described in Treasury Regulation
                  Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) which, as of the
                  end of the Company's taxable year are reasonably

                                       4
<PAGE>

                  expected to be made to such Member, and (ii) increased by the
                  sum of (A) the amounts a Member is obligated to restore to its
                  Capital Account or is deemed obligated to restore pursuant to
                  the penultimate sentences of Treasury Regulation Sections
                  1.704-2(g)(1) and 2(i)(5), (B) the excess, if any, of such
                  Member's Capital Contribution over such Member's actual
                  paid-in capital contribution and (C) that portion of any
                  indebtedness of the Company (other than "partner nonrecourse
                  debt" as defined in Treasury Regulation Section 1.704-2(b)(4))
                  with respect to which the Member bears the economic risk of
                  loss that such indebtedness would not be repaid out of the
                  assets of the Company if all of the assets of the Company were
                  sold at their respective book values as of the end of the
                  fiscal period and the proceeds from the sales together with
                  any amounts described in clauses (A) and (B) above, were used
                  to pay the liabilities of the Company.

             (b)  "Net Profits" and "Net Losses" mean the taxable income or
                  loss, as the case may be, for a period (or from a transaction)
                  as determined in accordance with Section 703(a) of the IRC
                  (for this purpose, all items of income, gain, loss or
                  deduction required to be separately stated pursuant to IRC
                  Section 703(a)(1) shall be included in taxable income or loss)
                  computed with the following adjustments:

                       (i)    To the extent required by (and in the manner
                              described in) Treasury Regulation 1.704-1(b)(2),
                              items of gain, loss and deduction shall be
                              computed based upon the book values of the
                              Company's assets rather than upon such assets'
                              adjusted bases for federal income tax purposes (if
                              different);

                       (ii)   Any tax-exempt income received by the Company
                              shall be included as an item of gross income;

                       (iii)  The amount of any adjustments to the adjusted
                              bases (or book values if clause (i) above applies)
                              of any assets of the Company pursuant to IRC
                              Section 743 shall not be taken into account; and

                       (iv)   Any expenditure of the Company described or
                              treated as being described in IRC Section
                              705(a)(2)(B) shall be treated as a deductible
                              expense.

             (c)  "Member Loan Nonrecourse Deductions" means any Company
                  deductions that would be Nonrecourse Deductions if they were
                  not attributable to a liability owed to or guaranteed by a
                  Member within the meaning and intent of Treasury Regulation
                  Section 1.704-2(i).

             (d)  "Member Loan Minimum Gain" has the meaning set forth in
                  Treasury Regulation Section 1.704-2(i)(3).

                                       5
<PAGE>

             (e)  "Minimum Gain" has the meaning set forth in Treasury
                  Regulation Section 1.704-2(d). Minimum Gain shall be computed
                  separately for each Member in a manner consistent with the
                  Treasury Regulations under IRC Section 704(b).

             (f)  "Nonrecourse Deductions" has the meaning set forth in Treasury
                  Regulation Section 1.704-2(b)(1). The amount of Nonrecourse
                  Deductions for a taxable year of the Company shall be
                  determined according to the provisions of Treasury Regulation
                  Section 1.704-2(c).

             (g)  "Nonrecourse Liability" means any liability of the Company
                  with respect to which no Member has personal liability, as
                  determined in accordance with IRC Section 752 and the Treasury
                  Regulations promulgated thereunder.

         5.2 Allocations of Profit and Loss. As of the end of each fiscal year
of the Company, or at the time any allocation is determined to be necessary by
the Members, Net Profits or Net Losses shall be allocated as follows:

         (a) Except as provided in Sections 5.2(b) and 5.3 below, any allocation
required by this Section 5.2 to be made to the Members shall be allocated among
the Members in proportion to their respective Percentage Interests.

         (b) With respect to the allocation of Net Losses or Net Profits
pursuant to this Section 5.2 among the Members for any fiscal year in which an
additional or substitute Member is admitted to the Company or there is an
adjustment to the Percentage Interests during such fiscal year, all Net Losses
or Net Profits so allocable shall be allocated in a manner which takes into
account the varying Percentage Interests during such fiscal year based on an
accounting convention chosen by the Members. In no event shall a retroactive
allocation of Net Losses be made pursuant to this Section 5.2.

         5.3 Special Allocations. Notwithstanding the provisions of Section 5.2
above, the following allocations of Net Profits and Net Losses and items thereof
shall be made:

         (a) If, during any year a Member unexpectedly receives any adjustment,
allocation or distribution described in Treasury Regulation Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) and, as a result of such adjustment,
allocation or distribution, such Member's Adjusted Capital Account has a
negative balance (computed with the adjustments set forth in clauses (i) and
(ii) of Section 5.1(a)), then items of gross income for such year (and, if
necessary, subsequent years) shall first be allocated to such Member in the
amount necessary to eliminate such negative balance as quickly as possible. This
Section 5.3(a) is intended to constitute a "qualified income offset" provision
within the meaning of the above Treasury Regulations, and shall be so
interpreted.

         (b) Nonrecourse Deductions for a taxable year or other period shall be
specially allocated among the Members in proportion to their Percentage
Interests.

                                       6
<PAGE>

         (c) Any Member Loan Nonrecourse Deduction for any taxable year or other
period shall be specially allocated to the Member or Members who bear the risk
with respect to the loan to which the Member Loan Nonrecourse Deduction is
attributable in accordance with Treasury Regulation Section 1.704-2(b).

         (d) In no event shall Net Losses of the Company be allocated to a
Member if such allocation would cause or increase a negative balance in such
Member's Adjusted Capital Account.

         (e) Except as set forth in Treasury Regulation Section 1.704-2(f)(2),
(3) and (4), if, during any taxable year, there is a net decrease in Minimum
Gain, each Member, prior to any other allocation pursuant to this Article 5,
shall be specially allocated items of gross income and gain for such taxable
year (and, if necessary, subsequent taxable years) in an amount equal to that
Member's share of the net decrease in Minimum Gain, computed in accordance with
Treasury Regulation Section 1.704-2(g). Allocation of gross income and gain
pursuant to this Section 5.3(e) shall be made first from gain recognized from
the disposition of Company assets subject to non-recourse liabilities (within
the meaning of the Treasury Regulations promulgated under IRC Section 752), to
the extent of the Minimum Gain attributable to those assets, and thereafter,
from a pro rata portion of the Company's other items of income and gain for the
taxable year. It is the intent of the parties hereto that any allocation
pursuant to this Section 5.3(e) shall constitute a "minimum gain chargeback"
under Treasury Regulation Section 1.704-2(f). With respect to a net decrease in
Member Loan Minimum Gain, items of gross income shall be specially allocated
consistent with the preceding sentence, and Treasury Regulation Section
1.704-2(i)(4).

         (f) In the event that Net Profits, Net Losses or items thereof are
allocated to one or more Members pursuant to paragraphs (a) or (d) above,
subsequent Net Profits and Net Losses will first be allocated (subject to the
provisions of paragraphs (a) through (d)) to the Members in a manner designed to
result in each Member having a Capital Account balance equal to what it would
have been had the original allocation of Net Profits, Net Losses or items
thereof pursuant to paragraphs (a) or (d) not occurred.

         (g) The respective Percentage Interests in the Net Profits and Net
Losses or items thereof shall remain as set forth above (subject to adjustment
as provided in Section 4.1(b) and Article 5) unless changed by amendment to this
Agreement or by an assignment of an interest in the Company authorized by the
terms of this Agreement. Except as otherwise provided herein, for tax purposes,
all items of income, gain, loss, deduction or credit shall be allocated to the
Members in the same manner as are Net Profits and Net Losses; PROVIDED, HOWEVER,
that if, as a result of clause (i) of Section 5.1(b), the book value of any
property of the Company was used in computing Net Profits or Net Losses, then
items of income, gain, deduction or credit related to such property for tax
purposes shall be allocated among the Members so as to take account of the
variation between the adjusted basis of the property for tax purposes and its
book value in the manner provided for under IRC Section 704(c).

                                       7
<PAGE>

         (h) If a Member's Percentage Interest is reduced (provided the
reduction does not result in a complete termination of the Member's interest in
the Company), the Member's share of the Company's "unrealized receivables" and
"substantially appreciated inventory" (within the meaning of IRC Section 751)
shall not be reduced, so that, notwithstanding any other provisions of this
Agreement to the contrary, that portion of the Net Profit otherwise allocable
upon a liquidation or dissolution of the Company pursuant to Article 5 hereof
which is taxable as ordinary income (recaptured) for federal income tax purposes
shall, to the extent possible without increasing the total gain to the Company
or to any Member, be specially allocated among the Members in proportion to the
deductions (or basis reductions treated as deductions) giving rise to such
recapture.

         (i) In each taxable year of the Company, items of deduction and credit
attributable to Program Costs shall be allocated to the Members in proportion to
the Capital Contributions which funded the applicable expenditure.

                            ARTICLE 6. DISTRIBUTIONS

         6.1 Distribution of Company Funds. The timing of distributions by the
Company (other than distributions in dissolution to which Section 10.3 applies)
shall be determined in accordance with the provisions of Section [4.3] of the
Collaboration Agreement. Such distributions shall be made to the Members first
in proportion to the excess of the positive balances in their Capital Accounts
over the amounts of their Capital Contributions, and then in proportion to their
remaining positive Capital Account balances; PROVIDED, HOWEVER, that the amount
distributable to the Members pursuant to this Section 6.1 shall be reduced by
the amount required to fund the budgeted capital, working capital and reserve
requirements of the Company during the one hundred and eighty (180) day period
following the proposed distribution date and by such other amounts as the
Steering Committee reasonably determines to be necessary or appropriate for the
operation of the Company.

                           ARTICLE 7. INDEMNIFICATION

         7.1 Indemnification of Members.

         (a) The Company shall, to the fullest extent permitted by the Act, as
amended from time to time, indemnify each Member, each Member's Affiliates, and
the respective directors, officers, employees and agents of each Member and its
Affiliates (collectively, "Indemnified Persons") from and against all expenses
and liabilities (including counsel fees, judgments, fines, excise taxes,
penalties and amounts paid in settlements) reasonably incurred by or imposed
upon an Indemnified Person in connection with any threatened, pending or
completed action, suit or other proceeding, whether civil, criminal,
administrative or investigative, in which such Indemnified Person may become
involved by reason of (i) any act performed by such Indemnified Person in
connection with the performance of and within the scope of the authority
conferred by the Collaboration Agreement or (ii) such Indemnified Person's
service as a director, officer, manager or member of the Company or any of its
subsidiaries or, if such service

                                       8
<PAGE>

was undertaken at the request of the Company, such Indemnified Person's service
as a director, officer or trustee of, or in a similar capacity with, another
organization.

         (b) Indemnification may include payment by the Company of expenses in
defending an action or proceeding in advance of the final disposition of such
action or proceeding upon receipt of an undertaking by the Indemnified Person to
repay such payment if it is ultimately determined that such Indemnified Person
is not entitled to indemnification under this Article 7, which undertaking may
be accepted without reference to the financial ability of the Indemnified Person
to make such repayments.

         (c) The Company shall not indemnify any Indemnified Person in
connection with a proceeding (or part thereof) initiated by such person unless
such Indemnified Person is successful on the merits, the proceeding was
authorized by the Members or the proceeding seeks a declaratory judgment
regarding such Indemnified Person's own conduct.

         (d) The indemnification rights provided in this Article 7 (i) shall not
be deemed exclusive of any other rights to which Indemnified Persons may be
entitled under any law, agreement or vote of disinterested Members or otherwise
and (ii) shall inure to the benefit of the heirs, executors and administrators
of Indemnified Persons. The Company may, to the extent authorized from time to
time by its Members, grant indemnification rights to employees or agents of the
Company or persons other than Indemnified Persons serving the Company and such
rights may be equivalent to, or greater or less than, those set forth in this
Article 7.

         (e) No indemnification shall be provided for any Indemnified Person
with respect to (i) any matter as to which such Indemnified Person shall have
been finally adjudicated in any proceeding not to have acted in good faith in
the reasonable belief that such Indemnified Person?s action was in the best
interests of the Company, (ii) any act which constitutes gross negligence or
wilful misconduct or (iii) any matter disposed of by a compromise payment by
such Indemnified Person, pursuant to a consent decree or otherwise, unless the
payment and indemnification thereof have been approved by the Members, which
approval shall not unreasonably be withheld, or by a court of competent
jurisdiction.

         (f) Any amendment or repeal of the provisions of this Article 7 shall
not adversely affect any right or protection of an Indemnified Person with
respect to any act or omission of such Indemnified Person occurring prior to
such amendment or repeal.

                ARTICLE 8. ASSIGNABILITY OF MEMBERSHIP INTERESTS

         8.1 Assignment.

         (a) Except in accordance with Article [13] of the Collaboration
Agreement, a Member may not assign his or her interest in whole or in part to
any assignee which is not already a Member without the prior written consent of
all of the other Members who may or may not consent in their absolute
discretion.

                                       9
<PAGE>

         (b) An assignment of a Member's interest does not of itself dissolve
the Company or permit the assignee to participate in the business and affairs of
the Company or to become a Member or exercise any rights or powers of a Member.

         8.2 Substitute Members. No assignee of a Member's interest (other than
an assignee which is already a Member) shall have the right to be admitted as a
substitute member in place of the assignor (a "Substitute Member") unless:

                  (a) the assignor shall designate in writing satisfactory to
         the other Members the intention that the assignee is to become a
         Substitute Member;

                  (b) the assignee shall agree in writing to be bound by all of
         the terms of this Agreement;

                  (c) all of the other Members consent in writing to the
         admission of the assignee as a Substitute Member, which consent may be
         withheld in their absolute discretion;

                  (d) the assignee shall execute and/or deliver such
         instruments, including without limitation, an opinion of counsel
         satisfactory to the Members, to the effect that such proposed
         assignment and substitution does not violate the registration
         requirements of state or federal securities laws, and such instrument
         as the Members deem necessary or desirable to effect such assignee's
         admission as a Substitute Member and to evidence the assignee's
         acceptance of the terms of this Agreement; and

                  (e) the assignee shall pay all reasonable expenses in
         connection with the assignee's admission as a Substitute Member.

         8.3 Rights of Assignees. An assignee who does not become a Substitute
Member shall succeed only to the rights of the assignor to receive allocations
and distributions from the Company as provided in Articles 5, 6 and 10 hereof,
and shall not have the right to become a Member or exercise any rights or powers
of a Member.

         8.4 Other Restrictions. A Member may not pledge, encumber or
hypothecate any of its interest without the consent of the other Members.

             ARTICLE 9. FISCAL YEAR, ACCOUNTING, INSPECTION OF BOOKS

         9.1 Fiscal Year and Accounting. Except as otherwise approved by the
Members, or required by law, the fiscal year of the Company shall be the
calendar year and the books of the Company shall be kept on the accrual method.

         9.2 Inspection of Books. The books of the Company shall at all times be
available for inspection and audit by any Member at the Company's principal
place of business during business hours. The Company shall furnish each Member
with all necessary tax reporting

                                       10
<PAGE>

information as to its interest in the Company, with an annual balance sheet and
profit and loss statement and with a cash flow statement showing any
distributions made to the Members, within sixty (60) days after the close of
each fiscal year.

                             ARTICLE 10. DISSOLUTION

         10.1 Events of Dissolution. The term of the Company shall commence on
the Effective Date and shall be in full force and effect until the earliest of
the following:

                  (a) the sale or disposition of all or substantially all of the
         Company property;

                  (b) the dissolution of the Company by the unanimous written
         consent of the Members;

                  (c) the bankruptcy or dissolution of a Member other than
         Subsidiary; PROVIDED, HOWEVER, that if there are at least two (2)
         remaining Members, the Members may consent to the continuation of the
         business of the Company after the occurrence of such an event, pursuant
         to Section 18-802 of the Act and Section 10.2 of this Agreement;

                  (d) the entry of a decree of judicial dissolution under
         Section 18-802 of the Act;

                  (e) the occurrence of any event, other than those referred to
         in paragraph (d), which causes dissolution of a limited liability
         company under the Act; or

                  (f) upon the occurrence of an event and at the time specified
         in Article [13] of the Collaboration Agreement.

         Notwithstanding the dissolution of the Company, the business of the
Company shall continue to be governed by this Agreement until the winding up of
the Company occurs.

         10.2 Consent to Continue Company. The Members may vote to continue the
business of the Company within ninety (90) days after the occurrence of an event
of dissolution set forth in Section 10.1(d) of this Agreement, pursuant to and
in accordance with Section 18-801(4) of the Act. The agreement of the remaining
Members holding a majority of the remaining Percentage Interests shall
constitute the consent of the Members to the continuation of the Company.

         10.3  Distribution Upon Dissolution.

         (a) After payment of liabilities owing to creditors, the Members or
liquidator shall set up such reserves as they deem reasonably necessary for any
contingent or unforeseen liabilities or obligations of the Company, including
the expenses of liquidation. Such reserves may be paid over by the Members or
liquidator to a bank, to be held in escrow for the purpose of paying any such
contingent or unforeseen liabilities or obligations and, at the expiration of
such period as the Members or liquidator may deem advisable, such reserves shall
be distributed to all of the

                                       11
<PAGE>

Members or their assigns in the manner set forth in Section 10.3(b) below. In
the event that any part of such net assets consists of securities or other
non-cash assets, the Members or liquidator may (but shall not be required to)
take whatever steps they deem appropriate to convert such assets into cash or
into any other form that would facilitate the distribution thereof.

         (b) After payment has been made pursuant to Section 10.3(a) above, the
Members or the liquidator shall cause the remaining net assets of the Company to
be distributed to and among the Members in proportion to and to the extent of
their positive Capital Account balances (after such balances have been adjusted
to reflect all allocations of Net Profits and Net Losses and distributions
pursuant to Article 6). Cash and non-cash assets shall be distributed to each
Member on a pro rata basis, or in such other manner as the Members may agree,
with all noncash assets being distributed on the basis of their fair market
value.

         (c) The Company shall terminate when all property has been distributed
among the Members. Upon such termination, the Members shall execute and cause to
be filed a certificate of cancellation of the Company, as provided for in
Section 18-203 of the Act, and any and all other documents necessary in
connection with the termination of the Company.

                         ARTICLE 11. GENERAL PROVISIONS

         11.1 Complete Agreement; Modification. This Agreement and the
Collaboration Agreement together contain a complete statement of all the
agreements among the parties with respect to the Company. There are no
representations, agreements, arrangements or undertakings, oral or written,
between or among the parties to this Agreement relating to the subject matter of
this Agreement which are not fully expressed in this Agreement. This Agreement
may be amended or modified only with the unanimous consent of the Members.

         11.2 Governing Law; Severability. All questions with respect to the
construction of this Agreement and the rights and liabilities of the parties
shall be determined in accordance with the applicable provisions of the laws of
the State of Delaware, and this Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations of such state. If any provision of this
Agreement, or the application thereof to any person or circumstances, shall, for
any reason and to any extent, be invalid or unenforceable, the remainder of this
Agreement and the application of that provision to other persons or
circumstances shall not be affected but rather be enforced to the extent
permitted by law.

         11.3 Notice. All notices, requests, consents and statements hereunder
shall be deemed to have been properly given if mailed from within the United
States by prepaid certified mail, return receipt requested, or if sent by
prepaid telegram, or overnight delivery service, or if hand delivered, addressed
in each case if to the Company at its principal place of business and, if to any
Member, to the address set forth herein, or to such other address or addresses
as any such Member shall have theretofore designated in writing to the Company
in accordance with this Section 11.3.

                                       12
<PAGE>

         11.4 Pronouns. Feminine or masculine pronouns shall be substituted for
the neuter pronouns, neuter pronouns for masculine or feminine pronouns, plural
for the singular and the singular for the plural, in any place in this Agreement
where the context may require such substitution.

         11.5 Titles. The titles of Articles and Sections are included only for
convenience and shall not be construed as a part of this Agreement or in any
respect affecting or modifying its provisions.

         11.6 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of all parties hereto and their heirs, successors, assigns
and legal representatives.

         11.7 Counterparts. This Agreement may be signed in one or more
counterparts and all counterparts so executed shall constitute one agreement
binding on all parties hereto, notwithstanding that all parties have not signed
the original or the same counterpart.

                                       13
<PAGE>

         IN WITNESS WHEREOF, we have affixed our signatures as of the day first
above written.

MEMBERS:

GENZYME CORPORATION

By:

Title:

Date:

DYAX CORP.

By:

Title:

Date:

SUBSIDIARY

By:

Title:

Date:

                                       14
<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
MEMBERS                     CAPITAL CONTRIBUTION                       PERCENTAGE INTEREST
<S>                                                                            <C>
Genzyme Corporation                                                            50.00%

Dyax Corp.                                                                     49.00%

Subsidiary                                                                      1.00%

        TOTAL:                                                                 100.00%
</TABLE>

                                       15
<PAGE>

                                  SCHEDULE 3.2

                                EXTERNAL PRODUCTS

         The Proposing Party shall receive such percentage ("X%") of (i) all
license fees (other than up-front license fees) and milestone and royalty
payments relating to, and Net Profits generated from the sale of, an External
Product and/or (ii) any proceeds from the sale of all of the rights to an
External Product, determined in accordance with the following formula:

X% = AB + C/B + C

Where:   A equals the Proposing Party's Percentage Interest at the time the
         Steering Committee either fails or affirmatively declines to accept
         the proposal to develop a Collaboration Product for an additional
         indication (the "Decision Time");

         B equals the aggregate amount of Development Costs incurred by the
         Parties as of the Decision Time; and

         C equals the aggregate amount of Development Costs incurred by the
         Proposing Party for such External Product after the Decision Time.

         By way of example, assuming that (i) the Parties' respective
Percentage Interests are 50% at the Decision Time, (ii) $4 million in
Development Costs had been incurred by the Parties as of such time, and (iii)
the Proposing Party incurs $6 million in Development Costs after the Decision
Time, the Proposing Party would be entitled to 80% and the other Party would
be entitled to 20%.

                   X% = ((50%)($4,000,000)) + 6,000,000
                        -------------------------------
                                 10,000,000

                             X% =    8,000,000
                                    ----------
                                    10,000,000

                                 X% = 80%<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

                                                                   Exhibit 10.26

                       RESEARCH AND DEVELOPMENT AGREEMENT

      This RESEARCH AND DEVELOPMENT AGREEMENT ("Agreement") is made as of this
10th day of March, 1997 (hereinafter "Effective Date") by and between DEBIOPHARM
S.A., having its principal place of business at 17, rue des Terreaux, CH-1000
Lausanne 9, Switzerland ("Debio") and Dyax Corp., having its principal place of
business at One Kendall Square, Bldg. 600, 5th Floor, Cambridge, Massachusetts,
02139, USA ("Dyax") with respect to the following facts:

                                   WITNESSETH:

      WHEREAS, Dyax possesses certain know-how and proprietary rights, including
patents (granted and pending) concerning the identification, production and
purification of EPI-HNE4, an inhibitor of human neutrophil elastase, and of
other molecules with similar anti-neutrophil elastase activity;

      WHEREAS, Debio possesses expertise in the development and registration of
therapeutic products and wishes to conduct certain "Research," as defined
herein, concerning EPI-HNE4 for the purpose of determining whether EPI-HNE4 has
therapeutic potential in humans; and

      WHEREAS, both Dyax and Debio wish to enter into a Research and Development
Agreement, governing the "Research" to be conducted by Debio, which will then
provide Debio with the exclusive option to license certain exclusive rights to
develop and distribute EPI-HNE4 within certain geographic markets;

      NOW, THEREFORE, Dyax and Debio agree as follows:

1.    Definitions and Interpretations.

      Terms, when used with initial capital letters, shall have the meanings set
forth below or at their first use when used in the Agreement.

      1.1 "Affiliates" means any corporation or other business entity controlled
      by, controlling, or under common control with or by either party to this
      Agreement. For this purpose, "control" means direct or indirect beneficial
      ownership of more than fifty percent (50%) of the voting stock, or more
      than fifty percent (50%) interest in the income, of a party or such
      corporation or other business.

                                       1
<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

      1.3 "Confidential Information," as used herein shall mean each party's
      confidential information, know-how or data, and includes manufacturing,
      marketing, personnel and other business information and plans, whether in
      oral, written graphic or electronic form, and which is identified as
      confidential. Confidential information shall not be deemed confidential,
      and the receiving party shall have no obligation with respect to any
      information which is (a) known by the receiving party prior to disclosure
      by the furnishing party, and reduced to writing by the receiving party,
      (b) information which is in the public domain or subsequently enters the
      public domain through no fault of either party, (c) information that is
      received by the receiving party from an independent third party with the
      lawful right to disclose. All test and development data, processes,
      methods and other technology developed by Debio pursuant to the Agreement
      shall also be "Confidential Information"

      1.4 "Debio" shall mean Debiopharm S.A. and Affiliates.

      1.5 Dyax" shall mean Dyax Corp. and Affiliates, and their successors and
      assigns.

      1.6 "EPI-HNE" shall mean molecules, including EPI-HNE4, *************
      that produce EPI-HNE4 and methods of purifying EPI-HNE4 from
      *************, and other protein molecules with anti-neutrophil
      elastase activity described in the Dyax patent application designated
      LEY-1PCT in Exhibit A.

      1.7 "EPI-HNE Patent Rights" shall mean the patent applications listed as
      Exhibit A, attached hereto and hereby made a part hereof and any and all
      continuations, divisions, renewals, reissues, reexaminations,
      continuations-in-part and extensions corresponding thereto, and any
      patents issuing therefrom.

      1.8 "Know-How" shall mean any and all technical information, test and
      development data, formulations, processes, ideas, protocols, regulatory
      files and the like, which is non-patentable and discovered or developed
      pursuant to the Research.

      1.9 "Product" means any pharmaceutical formulation containing EPI-HNE for
      use in the Field of Use (as defined in Section 15.2), pursuant to EPI-HNE
      Patent Rights.

      1.10 "Research" by Debio shall mean the procurement, investigation and
      study of EPI-HNE4 for the purposes of determining whether EPI-HNE4 has
      therapeutic potential in humans for the treatment of cystic fibrosis,
      ARDS, or chronic obstructive pulmonary diseases, such as emphysema and
      chronic bronchitis, all as set forth in the Research Plan in Exhibit B,
      attached hereto and hereby made a part hereof.

                                       2
<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

      1.11 "Revenues" shall mean the ************* from the commercial use or
      sale of Product, including all payments from sublicensees, less the
      following items: (a) *************, (b) payments *************, and (c)
      payments ************* (and *************).

      1.12 "Territory" means the countries of the European Union, Norway,
      Iceland, Switzerland, Czech and Slovak Republics, Poland, Hungary,
      Romania, Bulgaria, Turkey, Israel, Albania, Liechtenstein, Former
      Yugoslavia and those Additional Countries in which Dyax may grant
      rights to Debio pursuant to Article 15.2.2

2.    The Development and Evaluation Work Phase.

      2.1 Scope of Agreement.

      2.1.1 Obligation of Dyax. To facilitate the Research, Dyax shall provide
      a mutually acceptable contract manufacturer with EPI-HNE4 *********, at
      no cost to Debio and all available information regarding the fermentation
      of such strains and the purification of EPI-HNE4 ("EPI-HNE4 Materials")
      for use solely in performance of the Research, under the conditions set
      forth herein. Dyax shall also provide available information developed
      by Dyax and third parties concerning the therapeutic potential of
      EPI-HNE in humans.

      2.1.2 Obligation of Debio. Debio agrees to perform the Research in
      accordance with the Research Plan, as may be amended from time to time by
      mutual agreement of the parties. The Research shall be conducted
      at the sole expense of Debio.

      2.1.3 Recordkeeping by Debio. Debio agrees to maintain records, in
      accordance with generally accepted accounting practices in Switzerland, of
      its research and development costs in performing the Research Plan. In the
      event such costs are relevant to Revenue sharing in accordance with
      Sections 4.4.1 or 15.3, Dyax shall have the right from time to time to
      audit such records using an independent accountant.

      2.2 Due Diligence and Workmanship. Debio shall use its best efforts to
      conduct the Research in accordance with Good Clinical Practices and to
      deliver to Dyax reports of the results. However, the parties agree that
      the results of the Research cannot be accurately predicted, and that Debio
      does not warrant or guarantee that the Research will yield any useful or
      anticipated results. The sole obligation of Debio is to diligently pursue
      the activities pursuant to the Research.

                                       3
<PAGE>

      2.3 Development and Evaluation Phase Research Licenses.

      2.3.1 License to Debio. For the term of this Agreement only and as
      reasonably necessary to perform the Research (and with no commercial
      rights), Dyax grants to Debio an exclusive royalty-free license under the
      EPI-HNE Patent Rights, Dyax Know-How, EPI-HNE4 Materials and rights
      arising under Section 4.1 herein in the Field of Use for the Territory.

      2.3.2 To the best of Dyax's knowledge up to the Effective Date, the
      EPI-HNE Patent Rights are valid and effective, as shown in Exhibit A, has
      been properly filed, prosecuted and/or issued in the respective offices
      and jurisdictions, and all applicable fees due and payable have been paid.

      2.3.3 In the event that any of the EPI-HNE Patent Rights under Exhibit A
      should not be granted or established by reasonable proof to Debio's
      satisfaction, Debio may either terminate this Agreement under Section 8.1
      or negotiate a license agreement with the relevant third party, in its
      sole discretion, to conduct the Research.

3.    Transfer and Handling of Materials.

      3.1 Debio shall use the EPI-HNE4 Materials and Dyax Confidential
      Information solely for the purposes specified in this Agreement and for no
      other purpose, including without limitation, use in any research
      activities other than those which relate directly to the purposes
      specified herein, or for any commercial purpose. Such use shall be in
      compliance with all applicable laws and regulations. Upon conclusion of
      the Research, Debio shall return or destroy, as directed by Dyax, all
      unused EPI-HNE4 Materials. Debio shall not sell, transfer, disclose or
      otherwise provide access to the EPI-HNE4 Materials or Dyax Confidential
      Information, any method or process relating thereto or any material that
      could not have been made but for the foregoing, to any person or entity
      without the prior express written consent of Dyax, except that Debio may
      allow access to the EPI-HNE4 Materials to employees or agents for purposes
      consistent with the Agreement. Debio will make diligent efforts to ensure
      that such employees and agents will use the EPI-HNE4 Materials in a manner
      that is consistent with the terms of the Agreement. Dyax shall use Debio
      Know-How solely for the purposes specified in this Agreement and for no
      other purpose.

      3.2 Upon termination of the Agreement and except as provided under any
      license agreement, Debio shall immediately cease all use, including,
      without limitation, research and commercial use, of the EPI-HNE4 Materials
      and Dyax Confidential Information and shall, according to Dyax's
      instructions, destroy or return the EPI-HNE4 Materials and any copies or
      replications thereof, under the control of Debio.

                                       4
<PAGE>

      3.3 Debio acknowledges and agrees that the EPI-HNE4 Materials may have
      biological and/or chemical properties that are unpredictable and unknown
      at the time of transfer and that they are to be used with caution and
      prudence.

      3.4 Title to and ownership rights in the EPI-HNE4 Materials shall remain
      with Dyax and Debio will acquire no title thereto as a result of this
      Agreement.

4.    Ownership of Results.

      4.1 Patentable Inventions. Unless otherwise agreed to by the parties in
      any license or other agreement, all patentable inventions, improvements
      and any patent rights appurtenant thereto, conceived and reduced to
      practice pursuant to the Research shall be owned jointly where created
      jointly or solely by each party where so created. Licenses to any such
      inventions, improvements and patent rights, however owned, shall be
      governed by the terms of this Agreement and/or any future license
      agreement pertaining to such rights.

      4.1.1 If either party identifies or becomes aware of a patentable
      invention, that party shall promptly submit a written description of the
      subject matter of such invention to the other party. With regard to
      inventions with application to the Research or future products within the
      Field of Use, Debio shall have primary responsibility for determining
      whether to file patent applications in the Territory, and shall be
      responsible for determining the timing and scope of a patent
      application and for selecting the countries for filing, and for the
      filing, prosecution and maintenance of such patent application and all
      patents issuing therefrom. Debio and Dyax shall provide to each other
      all necessary cooperation relating to the filing, prosecution and
      maintenance of such patent applications. All expenses for such matters
      in the Territory shall be borne by Debio; provided however, that such
      expenses shall be considered development costs for purposes of Section
      15.3.

      4.2 Know-How. Subject to Section 8 and unless otherwise agreed to by the
      parties, any and all Know-How developed or discovered by Debio shall be
      owned solely by Debio.

      4.3 Cooperation. Both Debio and Dyax undertake to promptly notify the
      other of any patentable invention, as described in Section 4.1, and to
      cause their respective employees to sign and complete all such deeds,
      documents, patent applications, assignments, and other instruments and to
      do all such acts and things as are necessary to give full force and effect
      to the terms and conditions contemplated by the Agreement and to make such
      terms and conditions binding on their respective employees.

                                       5
<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

      4.4 Rights of Dyax. Subject to Debio's rights to add additional countries
      to its license pursuant to Section 15.2.2, as for all patentable
      inventions and Know-How conceived as a result of the Research and owned
      solely or jointly by Debio and subject to restrictions imposed by any
      government source of grant monies received by Debio after the Effective
      Date:

      4.4.1 Outside of the Territory for all therapeutic uses, Dyax shall have
      an exclusive license with the right to grant sublicenses; provided that
      for any patentable invention and Know-How solely owned by Debio, Dyax
      shall pay Debio *************; and

      4.4.2 Throughout the world for all non-therapeutic uses, Dyax shall have a
      royalty free exclusive license with the right to grant sublicenses.

5.    Administration and Indemnification.

      5.1 Representatives. Debio and Dyax will designate a person or persons of
      their choice to act representatives during the term of this Agreement.
      Dyax designates Dr. Edward Cannon and Debio designates Neil L. Brown to
      act as representatives under this Agreement. Each party may change its
      representative upon reasonable notice to the other party.

      5.2 Reports and Access to Data. The parties agree to provide each other
      with written detailed Research Status Reports no less frequently than
      ************* and to provide the other with access to all Know-How and any
      information related to any pre-clinical or clinical investigations
      developed from the Research.

      5.3 Insurance and Indemnification.

      5.3.1 Debio shall indemnify and hold harmless Dyax, its employees and
      agents against all third party actions, proceedings, claims, demands,
      losses, costs, damages or expenses whatsoever which may be brought against
      or suffered by Dyax or which Dyax may sustain as a result of use of
      Product for testing in or treatment of humans by Debio or under Debio's
      supervision.

      5.3.2 Both Dyax and Debio agree that each company will assume liability
      for its own losses, costs, damages, and expenses of any nature which it
      may suffer, sustain, par or incur by reason of any matter or thing
      arising out of, or in any way attributable to, the Research or any
      other work performed under this Agreement, except as provided for under

                                       6
<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

      Section 5.3.1 or where losses, costs, damages or expenses are the result
      of the willful breach of any term hereof by the other party, or by the
      other party's servants, agents, employees or subcontractors. Each party
      shall indemnify and hold harmless the other party, its employees and
      agents against all third party actions, proceedings, claims, demands,
      losses, costs, damages or expenses whatsoever which may be brought against
      or suffered by the other party or which such party may sustain, as a
      result of willful breach of any term hereof by the indemnifying party.
      Such indemnification will survive termination of the Agreement.

      5.3.3 Each party undertakes to notify the other party if it has any reason
      to believe that the use of EPI-HNE, EPI-HNE4 Materials, or Confidential
      Information could result in a claim by any third party, and the parties
      agree that in such case they shall consult in good faith to take such
      remedial actions that are necessary to avoid such liability.

      5.3.4 Dyax shall take reasonable action to institute and prosecute
      legal proceedings against third parties who infringe patents from the
      EPI-HNE Patent Rights, or to otherwise defend any issued patent rights
      for EPI-HNE4, in the Fields of Use in the Territory. Any such action,
      taken under this paragraph, shall be at Dyax's expense. Debio shall, if
      requested by Dyax and at Dyax's expense, assist in the prosecution of
      such action.

      5.4 Steering Committee.

      5.4.1 The parties agree to form a Steering Committee to oversee the
      Research and to undertake a development program to exploit all indications
      for EPI-HNE *************. The Steering Committee shall be composed of two
      representatives of Debio and two representatives of Dyax. Such Committee
      shall meet at least every six months (more frequently, if deemed necessary
      by at least two members of the Committee) to discuss the progress of the
      Research and to consider options for development of new indications.
      Representatives may be accompanied at such meetings by consultants and
      experts bound by appropriate confidentiality agreements who may
      participate, but may not vote at said meetings. Decisions of the Steering
      Committee shall be made by a vote of three or more representatives of the
      parties. Each party shall bear their own respective travel and
      accommodation expenses, as well as all fees and costs incurred by their
      consultants associated with attending such meetings.

6.    Confidentiality.

      6.1 The parties agree that Confidential Information exchanged during the
course of the Agreement will be accorded confidential treatment and shall not be
used for any other purpose than the performance of this Agreement for a period
of

                                       7
<PAGE>

Seven (7) years from the expiration or termination of the Agreement. Debio
and Dyax may disclose confidential information to candidate sublicensees
solely for the purpose of entering into a business relationship subject to
these candidate sublicensees entering into confidentiality and non-use
agreements no less restrictive than the terms and conditions of Section 6.1.

7.    General Provisions.

      7.1 Notices. Notices required or permitted to be made or given to either
      party hereto pursuant to this Agreement shall be sufficiently made or
      given on the date of mailing if sent to such party by certified or
      registered mail, postage prepaid, addressed to it at its address set forth
      or to such other address as it shall designate by written notice to the
      other party as follows:

      In the case of Dyax:

      Dyax Corp.
      One Kendall Square, Bldg. 600, 5th Floor
      Cambridge, Massachusetts  02139
      Attn: Edward Cannon

      In the case of Debio:

      Debiopharm S.A.
      17, rue des Terreaux
      Case Postale 211
      CH-1000 Lausanne 9
      Switzerland
      Attn: Legal Department

      Copies to:

      Kostopulos & Associates
      205 S. Whiting St., Suite 201
      Alexandria, VA 22304
      Attn: N. Peter Kostopulos
      Telecopier: (703) 751-2807

8. Termination.The Agreement can be terminated at anytime depending upon the
following circumstances:

      8.1 The Agreement can be terminated by Debio alone, at any time upon three
      (3) months written notice to Dyax.

      8.2 In the event that the Agreement is terminated by Debio under Section
      8.1 or by Dyax under Section 8.3, all rights granted to Debio under
      Section 2.3.1 shall revert to Dyax. The parties shall meet immediately to
      negotiate an assignment to Dyax to all Know-

                                       8
<PAGE>

      How under Sections 4.1 and 4.2, information under Section 5.2, and all
      regulatory filings. With respect to the assignment of any patentable
      inventions and/or patent filings which are solely owned by Debio, the
      amounts and details will be negotiated in good faith by Debio and Dyax.

      8.3 In the event of any breach of any material term or condition of this
      Agreement by either party, the non-breaching party shall give sixty (60)
      days written notice to the breaching party to correct such breach, along
      with a written explanation supporting its reasons for termination. In the
      event the breach is not cured with the sixty-day period, the non-breaching
      party shall have the following rights:

      8.3.1 immediately terminate and/or modify this Agreement; provided,
      however the non-breaching party shall continue to have all rights under
      this Agreement, including the right to conduct Research under 2.3.1 and
      the right to use all patentable inventions under Section 4.1, all know-how
      under Section 4.2, information under Section 5.2, and all regulatory
      filings, as well as the license options under Section 15; all of which,
      under terms and conditions no less favorable than provided for under this
      Agreement;

      8.3.2 receive losses and damages sustained as a result of the breach(s) by
      the breaching party, unless otherwise excluded or limited by a provision
      of the Agreement.

9. Term of Agreement. Unless terminated earlier pursuant to Section 8 or other
mutual agreement, this Agreement shall commence upon the Effective Date and
shall terminate upon the expiration of the option set forth in Section 15.
Sections 4.1, 4.4 5.2, 5.3, 6 and 7.1 shall survive expiration or termination of
the Agreement

10. Independent Contractor. The relationship of Debio and Dyax under this
Agreement is intended to be that of an independent contractor. Nothing contained
in this Agreement is intended or is to be construed so as to constitute the
undersigned parties as partners or either party hereto as an agent or employee
of the other. Neither party has any express or implied right or authority under
this Agreement to assume or create any obligations on behalf of or in the name
of the other, or to bind the other party hereto to any contract, agreement or
undertaking with any third party.

11. Complete Agreement. The parties hereto acknowledge that this document sets
forth the entire agreement and understanding of the parties, except for
pre-existing confidentiality obligations between the parties, and supersedes all
prior written or oral agreements or understandings with respect to the subject
matter hereof. No modification of this Agreement shall be deemed to be valid
unless in writing and signed by both parties.

12. Assignment. This Agreement shall be binding upon and inure to the benefit of
the successors or permitted assignees of each of the parties, and may not be
assigned or transferred by either party without the prior written consent of the
other.

                                       9
<PAGE>

13.   Law Governing and Dispute Resolution.

      13.1 This Agreement shall be governed by and construed under the laws of
      the Commonwealth of Massachusetts.

      13.2 In the event the parties are unable to resolve a dispute, the parties
      shall engage a single mediator acceptable to both parties. Said mediator
      will immediately meet with Senior Vice Presidents of both parties to
      discuss the basis for the dispute and to attempt to resolve the dispute.

      13.3 Any dispute, controversy or claim arising under, out of or relating
      to this Agreement and any subsequent amendments of this Agreement,
      including, without limitation, its formation, validity, binding effect,
      interpretation, performance, breach or termination, as well as non
      contractual claims, shall be referred to and finally determined by
      arbitration in accordance with the WIPO Arbitration Rules. The arbitral
      tribunal shall consist of three arbitrators. The place of arbitration
      shall be Geneva, Switzerland. The language to be used in the arbitral
      proceedings shall be English.

14. Execution. This Agreement shall be executed in two (2) counterparts, each of
which shall be deemed an original, but both of which together shall constitute
one and the same instrument.

15. Option to Obtain License. Dyax hereby grants to Debio an option to enter
into an exclusive license to manufacture, have manufactured, use and sell
EPI-HNE products in the Territory (the "License Agreement"), for a period of
three (3) years after the Effective Date subject to extension until
completion of the first Phase II clinical trial in the Research Plan if such
trial has been started (the "Option Period"). Debio shall not pay any licnese
fee (cash or milestones) to Dyax for entering into the License Agreement.
Such a license with Debio shall include, among other things, the following
terms:

      15.1 Definitions. The license agreement shall incorporate definitions from
      the Research and Development Agreement, plus additional definitions deemed
      appropriate by the parties.

      15.2 Grant of Rights Dyax shall grant exclusive rights, including the
      right to sublicense, to make, have made, use and sell Product, under the
      EPI-HNE Patent Rights, Dyax Know-How, inventions and know-how developed
      under Sections 4.1 and 4.2 in this Agreement, for the following
      therapeutic uses: treatment of cystic fibrosis, ARDS or chronic
      obstructive pulmonary diseases, such as emphysema and chronic
      bronchitis ("Field of Use").

      15.2.1 Other Indications. Debio shall have the first right to negotiate a
      license in the Territory for the rights to any other therapeutic
      indication outside of the Field of Use, provided that a third party does
      not already control the licensing of such rights.

                                       10
<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

      15.2.2 Additional Countries. If at the time of the license in the
      Territory set forth in this Section 15 is granted to Debio and rights to
      commercialize EPI-HNE in the Field of Use remain available outside the
      Territory (including for North America), Dyax shall grant Debio a right
      of first refusal to such other countries. Dyax will deliver written
      notice to Debio of its intention to grant such rights to a third party,
      of the country or countries concerned and of the proposed terms of such
      a grant (an "Offer Notice"). Debio shall have sixty (60) days after the
      receipt of an Offer Notice during which it may consider the terms in
      the Offer Notice. If Debio has not delivered written ntoice of its
      acceptance of the terms in the Offer Notice within such sixty (60) day
      period, Dyax shall be free to negotiate with third parties and to
      conclude an agreement with a third party on the same terms or on terms
      even more favorable to Dyax than in the Offer Notice. Before concluding
      an agreement with a third party on terms less favorable to Dyax, Dyax
      must again offer such rights to Debio following the same procedure.

      15.3 Royalties.

      15.3.1 Payments to Dyax. As to rights granted by Dyax to Debio, Debio
      shall pay Dyax ************* of all Revenues received by Debio in the
      Field of Use in the Territory. Prior to sharing such Revenues with Dyax,
      Debio shall be entitled to ************* equal to *************. In the
      event that *************, the parties agree *************.

      15.3.2 Duration of Payments. Payments under 15.3.1 shall continue on a
      country-by-country basis until the expiration or finally determined
      invalidity of all patents, granted or to be granted, covering the products
      for which Revenues are being received in each country, or for
      ten (10) years from the first Commercial Sale of Product in each country,
      whichever is longer, provided that revenues are being received on the
      Product.

      15.4 Territory. The territory will be the same geographic areas as defined
      in the Agreement.

      15.5 Exercise of the option. At any time during the Option Period, Debio
      may notify Dyax that Debio exercises the option. Debio and Dyax shall then
      meet at their mutual convenience to negotiate in good faith the remaining
      terms of the License Agreement.

      15.5.1 If Debio and Dyax have not signed the License Agreement within
      90 days from the exercise of the option,

                                       11
<PAGE>

Confidential material omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote such omissions.

      either party may refer the matter to mediation followed, in the absence of
      an agreement, by arbitration.

      15.5.2 The License Agreement will be effective no later than *************
      after the commencement of the mediation, even if the final agreement is
      reached later or the final decision is rendered later.

      15.5.3 Mediation. Any disagreement as to the terms of the License
      Agreement shall be submitted to mediation in accordance with the WIPO
      Mediation Rules. The place of mediation shall be Geneva. The language to
      be used in the mediation shall be English.

      15.5.4 Arbitration. If, and to the extent that, any such disagreement as
      to the terms of the License Agreement has not been settled pursuant to the
      mediation within 90 days of the commencement of the mediation, it
      shall, upon the filing of a Request for Arbitration by either party, be
      referred to and finally determined by arbitration in accordance with
      the WIPO Expedited Arbitration Rules. Alternatively, if, before the
      expiration of the said period of 90 days, either party fails to
      participate or to continue to participate in the mediation, the
      disagreement as to the terms of the License Agreement shall, upon the
      filing of a Request for Arbitration by the other party, be referred to
      and finally determined by arbitration in accordance with the WIPO
      Expedited Arbitration Rules. The place of arbitration shall be Geneva.
      The language to be used in the arbitral proceedings shall be English.

      15.5.4.1 Within a short period to be fixed by the Arbitral Tribunal, each
      party shall submit to the Arbitral Tribunal a full proposal for the
      License Agreement, which will not be communicated to the other party. The
      Arbitral Tribunal shall then decide which of the two proposals is closer
      to the common intent of the parties as evidenced by documentary record
      between the two parties, including, but not limited to the research and
      development program and correspondence between the parties. The Arbitral
      Tribunal is authorised to decide ex8aequo et bono. The Arbitral Tribunal
      may not take some terms in one proposal and some other terms in the other
      proposal, but shall choose one proposal and decide that it shall
      constitute the License Agreement deemed entered into by the parties.

16.   Force Majeure.

      16.1 Neither party shall be liable for a failure to comply with a
      provision herein, if it is prevented from performing the said provision
      because of force majeure, this notion being defined as an event beyond the
      control of the parties hereto and independent from their will including,
      but not limited to, strikes or other labor trouble, war,

                                       12
<PAGE>

      insurrection, fire, flood, explosion, discontinuity in supply of power,
      court order or governmental interference.

      16.2 Despite the event of force majeure, either party hereto shall
      undertake reasonable efforts to comply to the extent possible with its
      obligations vis-a-vis the other party, pursuant to this Agreement.

      16.3 The party invoking an event of force majeure must notify it forthwith
      to the other party, and must specify which one or ones of its obligations
      it is being prevented from complying with, and the nature of force
      majeure, and must give an estimate of the period during which it is likely
      that it shall be prevented from complying with the said obligation or
      obligations.

17.   Miscellaneous.

      17.1 In the event that, during the duration of this Agreement, the
      regulations in force at the time of its execution are drastically
      modified, or in the event that the data on which the parties hereto relied
      to enter into this Agreement change in such a manner that one party shall
      suffer severe hardship, which could not reasonably be foreseen as of the
      date on which this Agreement was executed, the parties hereto shall then
      meet and adapt the conditions of this Agreement to the new situation, in a
      manner equitable to both parties.

      17.2 If any provision of this Agreement should be or become fully or
      partly invalid or unenforceable for any reason whatsoever or should
      violate any applicable law, this Agreement is to be considered divisible
      as to such provision and such provision is to be deemed deleted from this
      Agreement, and the remainder of this Agreement shall be valid and binding
      as if such provision were not included therein. There shall be substituted
      for any such provision deemed to be deleted a suitable provision which, as
      far as is legally possible, comes nearest to the sense and purpose of the
      stricken provision.

      17.3 Failure by any party to enforce any term or provision of this
      Agreement in any specific instance or instances hereunder shall not
      constitute a waiver by such party of any such term or provision, and such
      party may enforce such term or provision in any subsequent instance
      without any limitation or penalty whatsoever.

      17.4 The headings set forth in this Agreement are for convenience only and
      do not qualify or affect the terms or conditions of this Agreement.

                                       13
<PAGE>

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and year
first above written.

DEBIOPHARM S.A.                                       DYAX CORP.

By:     /s/ R.Y. Mauvernay          By:     /s/ L. Edward Cannon
      ------------------------            ----------------------
             11/3/97                                3/3/97

                                       14
<PAGE>

                        EXHIBIT A - EPI-HNE Patent Rights

Confidential

DYAX NEUTROPHIL ELASTASE INHIBITOR PATENT RIGHTS

===============================================================================
COUNTRY              APPLICATION NO.         FILING DATE       STATUS
-------------------------------------------------------------------------------
US                   08/133,031              2/28/92           Abandoned in
(Ladner 7C)                                                    favor of US
                                                               08/358,160
-------------------------------------------------------------------------------
Canada               2,105,304               2/28/92           Pending
(Ladner 7C)
-------------------------------------------------------------------------------
EPO                  92/9088481.2            2/28/92           Pending
(Ladner 7C)
-------------------------------------------------------------------------------
Japan                92/508204               2/28/92           Pending
(Ladner 7C)          4-507558 pub 9/1/93
-------------------------------------------------------------------------------
PCT                  US92/01501              2/28/92
(Ladner 7C)          WO92/15605
-------------------------------------------------------------------------------
US                   08/358,160              12/16/94          Allowed
(Ley 1)
-------------------------------------------------------------------------------
PCT                  US95/16349              12/15/95          Will go
(Ley 1A)             WO                                        national
                                                               6/16/97
===============================================================================

*     Priority applciations: USSN 664,989 filed 3/1/91 (Ladner 7 which issued as
      US Patent 5,223,409) and USSN 715,834 filed 6/1/91 (Ladner 9 abandoned in
      favor of 08/133,031)

                                       15
<PAGE>

                                     AMENDMENT No. 1
                                        TO THE
                            RESEARCH AND DEVELOPMENT AGREEMENT
                          BETWEEN DEBIOPHARM S.A. AND DYAX CORP.

     This Amendment (the "Amendment"), effective as of May 10, 2000, is made
by and between DEBIOPHARM S.A. ("Debio") and DYAX CORP. ("Dyax") to the
Research and Development Agreement effective as of March 10, 1997 (the
"Agreement").

     WHEREAS, Debio has, by letter dated February 29, 2000, exercised its
option pursuant to Article 15 of the Agreement to obtain a license, and the
parties have been and are continuing to negotiate the terms of such license;

     WHEREAS, Section 15.5.1 of the Agreement provides that, if Debio and
Dyax have not signed the license agreement within 90 days from the exercise
of the option, either party may refer the matter to mediation followed, in
the absence of an agreement, by arbitration;

     WHEREAS, notwithstanding the ongoing negotiations, the parties do not
anticipate to have signed a license agreement by May 28, 2000; and

     WHEREAS, the parties wish to extend the 90-day period set forth in
Section 15.5.1 of the Agreement.

     NOW, THEREFORE, the parties hereto agree as follows:

     1. The parties hereby agree to extend the 90-day negotiation period set
forth in Section 15.5.1 of the Agreement until up through and including
September 15, 2000.

     2. Except as modified herein, all other terms and conditions of the
Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have signed this Amendment as of the
date set forth above.

DEBIOPHARM S.A.                             DYAX CORP.

By: /s/ Rolland-Yves Mauvernay              By: /s/ Henry E. Blair
    --------------------------                  ----------------------------
Name: Rolland-Yves Mauvernay                Name: Henry E. Blair
Title: President                            Title: CEO and Chairman

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