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                                 EXHIBIT NO. 4.2
                          REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT dated as of June 22, 2003 (together
with all schedules hereto, and as each may be amended, supplemented or otherwise
modified from time to time, the "Agreement") is between ACETEX CORPORATION, a
Canadian corporation (the "Company"), PERRY PARTNERS L.P., a limited partnership
organized under the laws of New York, and PERRY PARTNERS INTERNATIONAL, INC., a
corporation organized in the Cayman Islands, hereinafter collectively referred
to as the "SHAREHOLDERS."

         WHEREAS, the Company and AT Plastics Inc. ("AT Plastics") are entering
into a Combination Agreement as of the date hereof (the "Combination Agreement")
pursuant to which the Company will establish a wholly-owned subsidiary that will
amalgamate with AT Plastics (the "Amalgamation") on and subject to the terms and
conditions set out in the Combination Agreement;

         WHEREAS, the shares of common stock of AT Plastics held by the
Shareholders have not been registered under the Securities Act (as hereinafter
defined) or any state securities laws; and the certificates representing such
shares of common stock bear a legend restricting their transfer;

         WHEREAS, the shares of common stock of AT Plastics held by the
Shareholders will be exchanged for shares of common stock of the Company
pursuant to the Amalgamation;

         WHEREAS, in connection with the foregoing, the Company has agreed,
subject to the terms, conditions and limitations set forth in this Agreement, to
provide the Shareholders and their respective successors, assigns and
transferees as permitted herein with certain registration rights in respect of
shares of Common Stock.

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto agree as follows:

                                    ARTICLE I
                                   DEFINITIONS

         1.1. Definitions. Capitalized words and phrases used and not otherwise
defined in this Agreement shall have the following meanings:

         COMMISSION: means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

         COMMON STOCK: means the common shares of the Company and any shares
hereafter authorized of any class of the Company, and, in the case of a
reclassification, recapitalization or other similar change in such Common Stock
or in the case of a consolidation or merger of the Company with or into another
Person, such consideration to which a holder of a share of Common Stock would
have been entitled upon the occurrence of such event.

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         COMPANY: includes, in addition to the Company, any successor or
assignee corporation or corporations into which or with which the Company may be
merged or consolidated; any corporation for whose shares the Common Stock may be
exchanged; and any assignee of or successor to all or substantially all of the
assets of the Company.

         EXCHANGE ACT: means the Securities Exchange Act of 1934, as amended.

         HOLDER: means each Shareholder, and each Person who is a Permitted
Transferee of any Shareholder.

         REGISTER, REGISTERED, and REGISTRATION: when used with respect to the
capital stock of the Company, mean a registration effected by preparing and
filing with the Commission a registration statement or similar document in
compliance with the Securities Act which has been declared or ordered effective
in accordance with the Securities Act.

         PERMITTED TRANSFEREE: means any corporation, partnership, limited
liability company or other entity controlled by, controlling or under common
control with any Shareholder (collectively, the "SHAREHOLDER ASSOCIATES") to
whom any Shareholder or any Shareholder Associate has Transferred shares of
Common Stock; Notwithstanding any Person's status as a Permitted Transferee, any
Transfer of Registrable Securities shall be subject to the provisions of Section
9.1.

         PERSON: means any individual, corporation, partnership, trust or other
entity of any nature whatsoever.

         REGISTRABLE SECURITIES: means the Common Stock held by a Holder. Shares
of Common Stock shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such shares of Common Stock shall have
become effective under the Securities Act pursuant to Section 2.1 or Section 3.1
of this Agreement and such shares of Common Stock shall have been disposed of
pursuant to such registration statement, (ii) such shares of Common Stock shall
have been sold or otherwise distributed pursuant to Rule 144 (or any successor
provision) and Rule 145 (or any successor provision) under the Securities Act,
(iii) with respect to Common Stock held by any Holder, registration under the
Securities Act or any applicable state law is not required to permit the
distribution of all of such securities to the public or an exemption from
registration is available therefor, including, without limitation, at such time
as such securities are eligible for sale or other distribution under Rule 144
(or any successor provision) and Rule 145 (or any successor provision) in
accordance with the volume and other limitations thereof, and (iv) such shares
of Common Stock shall have ceased to be outstanding.

         SECURITIES ACT: means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.

         TRANSFER: means any transfer, sale, gift, assignment, distribution,
conveyance, pledge, hypothecation, encumbrance or other voluntary or involuntary
transfer of title or beneficial interest, whether or not for value, including,
without limitation, any disposition by operation of law or any grant of a
derivative or economic interest therein.

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                                   ARTICLE II
                               DEMAND REGISTRATION

         2.1 REGISTRATION. (a) The Company shall prepare and file with the
Commission no later than July 20, 2003 a registration statement on Form F-3 (or
other applicable form) with respect to the Shareholders' Registrable Securities
and use its best efforts to cause such registration statement to become
effective as soon as practicable but no later than 90 days following said filing
and keep such registration statement effective for a period ending no earlier
than 366 days from the date the Amalgamation is effected or until the
distribution described in the registration statement relating thereto has been
completed, whichever shall first occur.

         (b) The Shareholders and each Holder or any number of Holders of
Registrable Securities may at any time when the registration statement referred
to in (a) above is not effective (including at any time following the 365th day
that the Amalgamation is effective) make a written request to the Company that
the Company file a registration statement or similar document under the
Securities Act with respect to all or any part of such Holder's or Holders'
Registrable Securities (a "DEMAND REGISTRATION"). Subject to the provisions of
Section 2.1 (c) and Section 4.1, the Company shall cause such registration
statement or similar document to be filed with the Commission and shall use its
best efforts to include in such registration statement the Registrable
Securities which the Company has been requested to register by the requesting
Holders and to cause all such Registrable Securities to be registered under the
Securities Act within 90 days of receipt of the requesting Holders' request.
Collectively, the Holders shall be entitled to request one (1) Demand
Registration.

         (c) The Company agrees not to issue any Common Stock or any securities
convertible into or exchangeable or exercisable for Common Stock (other than
securities issued pursuant to the Company's option or other benefit plans,
pursuant to a registration identified in clauses (i)-(iii) of Section 3.1(a), or
securities issued by the Company included in any Demand Registration or
securities issued upon conversion of outstanding warrants or common stock issued
in connection with the refinancing of debt issued in connection with the
Amalgamation), for the period commencing 30 days prior to the closing of the
offering of securities included in any Demand Registration and ending on the
30th day following such closing. The Holders shall give the Company notice of
the anticipated closing date of such offering.

         2.2 EXPENSES. With respect to the registration contemplated by Section
2.1 (a) and any Demand Registration, the Company shall pay, and shall reimburse
each Holder for paying, any expenses incurred in connection with such
registrations, including, without limitation, all registration, qualification,
printing and accounting fees and all fees and disbursements of counsel for the
Company and the reasonable fees and disbursements of not more than one counsel
for all participating Holders, but not any underwriting or brokerage fees or
commissions nor any expenses of underwriters or brokers.

                                   ARTICLE III
                             PIGGYBACK REGISTRATION

         3.1 NOTICE OF REGISTRATION. (a) In the event that the Company proposes
to register any of its Common Stock, either for its own account or for the
account of any Person other than the Holders, but not including a registration
(i) relating to employee stock option or purchase plans,

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(ii) relating to a transaction pursuant to Rule 145 under the Securities Act, or
(iii) pursuant to a registration form which does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Registrable Securities (a "Piggyback Registration"), the
Company will:

               (X) promptly give written notice thereof to the Holders; and

               (Y) use its best efforts to include in such Piggyback
         Registration and in any underwriting involved therein up to all of the
         Registrable Securities which the Holders request in writing to be so
         included within 15 days after receipt of such written notice from the
         Company.

               (a)

         (b) Notwithstanding the provisions of Section 3.1(a), the Company shall
not be required to include any Registrable Securities in any Piggyback
Registration during any period in which a shelf registration statement shall
have become and be maintained effective; PROVIDED that such shelf registration
statement shall register under the Securities Act all Registrable Securities and
shall not be subject to (x) any stop order suspending its effectiveness or (y)
any order suspending or preventing the use of any related prospectus or
suspending the qualification of any Registrable Securities included in such
shelf registration statement.

         3.2 EXPENSES. The Company shall pay, and shall reimburse each Holder
for paying, any expenses incurred in connection with a Piggyback Registration
requested pursuant to Section 3.1, including, without limitation, all
registration, qualification, printing and accounting fees and all fees and
disbursements of counsel for the Company and the reasonable fees and
disbursements of not more than one counsel for all participating Holders, but
not any underwriting or brokerage fees or commissions nor any expenses of
underwriters or brokers.

         3.3 UNDERWRITING. If the registration of which the Company gives notice
is for a registered public offering involving an underwriting, the Company shall
so advise the Holders as a part of the written notice given pursuant to Section
3.1, and the right of the Holders to include Registrable Securities in such
registration shall be conditioned upon the Holders' participation in such
underwriting and the entry of the participating Holders (together with the
Company and other holders distributing their securities through such
underwriting) into an underwriting agreement in customary form with the
underwriter or underwriters selected for such underwriting by the Company.

         3.4 PRIORITY. If the underwriter of the registered public offering
referred to in Section 3.3 shall advise the Company in writing that marketing
factors require a limitation of the amount of securities to be underwritten,
securities shall be included in such offering in the following priority: FIRST,
the Common Stock proposed to be registered by the Company; SECOND, Registrable
Securities requested to be included in such registration by requesting Holders
pursuant to Section 3.1; and THIRD, other securities for the account of Persons
other than Holders, allocated among such Persons in accordance with the
priorities then existing among the Company and such Persons. Any securities
excluded pursuant to the provisions of this Section 4.4 shall be withdrawn from
and shall not be included in such Piggyback Registration.

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                                   ARTICLE IV
              PERMITTED DELAYS IN REGISTRATION; HOLDBACK AGREEMENTS

         4.1 SUSPENSION OF COMPANY OBLIGATIONS. Notwithstanding anything to the
contrary set forth in this Agreement, the Company's obligation under Article II
of this Agreement to file any registration statement and to use its best efforts
to cause Registrable Securities to be registered as provided therein shall be
suspended in the event either (i) the Company is engaged in an underwritten
primary offering and the Company is advised in writing by the underwriters that
the sale of Registrable Securities would have a material adverse effect on such
primary offering or (ii) in the good faith opinion of counsel to the Company,
effecting the filing of a Registration Statement pursuant to 2.1(b) hereof would
adversely affect a material financing, acquisition, disposition of assets or
stock, merger or other comparable transaction or would require the Company to
make public disclosure of information the public disclosure of which would have
a material adverse effect upon the Company (any of the events set forth in
clauses (i) and (ii) being hereinafter referred to as a "Suspension Event"), but
such suspension shall occur on not more than one occasion in a 365 day period
and shall continue only for so long as such event or its effect is continuing,
but in no event will any such suspension exceed 180 days. The Company shall
promptly notify the Holders in writing of the existence of any Suspension Event,
and with such notice shall provide the Holders with a copy of such underwriters'
determination (in the case of clause (i) above), or such opinion of counsel the
Board of Directors (in the case of clause (ii) above).

         4.2 NO PARTICIPATION IN OTHER SECURITIES OFFERINGS. The rights granted
by the Company hereunder shall be the exclusive rights granted to Holders with
respect to Registrable Securities. Except as otherwise provided herein, Holders
shall have no rights to participate in any offering of securities by the Company
to third parties, including without limitation, any offering of Common Stock,
whether such offering is effected pursuant to registration under the Securities
Act or pursuant to an exemption from registration thereunder. The Company may,
in its sole and absolute discretion, elect to waive the applicability in any
particular instance of the provisions of this Section 4.2.

                                    ARTICLE V
                             REGISTRATION PROCEDURES

         5.1 REGISTRATION PROCEDURES. In the case of each registration to be
effected by the Company pursuant to this Agreement in which any Holder is
participating, the Company will keep the Holder advised in writing as to the
initiation of each registration and as to the completion thereof. In connection
with each such offering, the Company shall as expeditiously as possible, at its
sole expense:

         (a) prepare and file with the Commission a registration statement with
respect to such Holder's Registrable Securities and use its best efforts to
cause such registration statement to become effective and to remain effective
for a period of at least 180 days (except with respect to the registration
statement contemplated by 2.1(a) hereof which shall remain effective at least
until 366 days from the date the Amalgamation is effected) or until the
distribution described in the registration statement relating thereto has been
completed, whichever shall first occur;

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         (b) in connection with the preparation and filing of a registration
statement, give the Holder, its underwriters, if any, and their respective
counsel, the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and give each of them such access
to its books and records and such opportunities to discuss the business of the
Company with its officers, its counsel and the independent public accountants
who have certified its financial statements as shall be necessary, in the
opinion of the Holder's and such underwriters' respective counsel, to conduct a
reasonable due diligence investigation within the meaning of the Securities Act;

         (c) furnish to the Holder and to the underwriters of the securities
being registered such number of copies of the registration statement,
preliminary prospectus, final prospectus and other documents incident thereto as
such underwriters and the Holder from time to time may reasonably request;

         (d) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement;

         (e) register or qualify the Registrable Securities covered by such
registration statement under such other securities or Blue Sky laws of such
jurisdictions as shall be requested by the Holder for the distribution of the
Registrable Securities covered by the registration statement to be sold by the
Holder; PROVIDED that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions;

         (f) enter into an underwriting agreement in customary form and
substance reasonably satisfactory to the Company, the Holder and the managing
underwriter or underwriters of the public offering of such securities, if the
offering is to be underwritten, in whole or in part; PROVIDED that the Holder
shall be a party to such underwriting agreement and may, at its option, require
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of the Holder. The Holder shall not be required to make any
representations or warranties to or agreement with the Company or the
underwriters other than representations, warranties or agreements regarding the
Holder and the Holder's intended method of distribution and any other
representation or warranty required by law;

         (g) notify the Holder at any time when a prospectus relating thereto
covered by such registration statement is required to be delivered under the
Securities Act, of the happening of any event as a result of which the
prospectus included in such registration statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing;

         (h) furnish, at the request of the Holder on the date that any
Registrable Securities are to be delivered to the underwriters for sale in
connection with a registration pursuant to this

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Agreement, if such securities are being sold through underwriters, on the date
that the registration statement with respect to such securities becomes
effective, (i) an opinion, dated such date, of the counsel representing the
Company for the purposes of such registration, in form and substance as is
customarily given to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holder and (ii) a letter dated such
date, from the independent certified public accountants of the Company, in form
and substance as is customarily given by independent certified public
accountants to underwriters in an underwritten public offering, addressed to the
underwriters, if any, and to the Holder; and

         (i) list all Registrable Securities covered by such registration
statement on such securities exchange as may be mutually agreed upon by the
parties.

                                   ARTICLE VI
                                 INDEMNIFICATION

         6.1 INDEMNIFICATION BY THE COMPANY. In the event of any registration of
any Registrable Securities pursuant to this Agreement under the Securities Act,
the Company will, and hereby does, indemnify and hold harmless each
participating Holder, each of its directors, officers and controlling persons,
if any, within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, to which such participating Holder or controlling person
may become subject under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the registration statement under which such Registrable Securities were
registered under the Securities Act, any preliminary prospectus, final
prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and the Company will reimburse each participating Holder and
controlling person for any reasonable legal or any other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, liability, action or proceeding; PROVIDED, HOWEVER, that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense arises
out of or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement in reliance upon and in conformity with written information furnished
to the Company by any participating Holder, specifically stating that it is for
use in the preparation thereof. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of any participating
Holder or any such underwriter or controlling person and shall survive the
transfer of such securities by the Holder.

         6.2 INDEMNIFICATION BY PARTICIPATING HOLDERS. Each of the participating
Holders whose Registrable Securities are included or to be included in any
registration statement, as a condition to including Registrable Securities in
such registration statement, agrees to indemnify and hold harmless (in the same
manner and to the same extent as set forth in Section 6.1) the Company, each
director of the Company, each officer of the Company and each other Person, if

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any, who controls the Company within the meaning of the Securities Act, with
respect to any untrue statement or alleged untrue statement of a material fact
in or omission or alleged omission to state a material fact from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
untrue statement or alleged untrue statement or omission or alleged omission was
made in reliance upon and in conformity with written information furnished to
the Company by any participating Holder specifically stating that it is for use
in the preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. The obligation to
provide indemnification pursuant to this Section 6.2 shall be several, and not
joint and several, among such participating Holders. Such indemnity shall remain
in full force and effect regardless of any investigation made by or on behalf of
the Company or any such director, officer, or any such underwriter or
controlling person and shall survive the transfer of such securities by any
participating Holder.

         6.3 NOTICES OF CLAIMS. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in Section 6.1 or 6.2, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action; PROVIDED, HOWEVER, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Section 6.1 or 6.2,
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall not be liable to the
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED that the indemnified party may participate in such
defense at the indemnified party's expense and PROVIDED, FURTHER, that all
indemnified parties shall have the right to employ one counsel to represent them
if, in the reasonable judgment of such indemnified parties, it is advisable for
them to be represented by separate counsel by reason of having legal defenses
which are different from or in addition to those available to the indemnifying
party, and in that event the reasonable fees and expenses of such one counsel
shall be paid by the indemnifying party. If the indemnifying party is not
entitled to, or elects not to, assume the defense of a claim, it will not be
obligated to pay the fees and expenses of more than one counsel for the
indemnified parties with respect to such claim, unless in the reasonable
judgment of any indemnified party a conflict of interest may exist between such
indemnified party and any other indemnified parties with respect to such claim,
in which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel for the indemnified parties. No indemnifying
party shall consent to entry of any judgment or enter into any settlement
without the consent of the indemnified party which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation. No indemnifying party shall be subject to any liability for any
settlement made without its consent, which consent shall not be unreasonably
withheld.

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         6.4 OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding Sections of this Article VI (with appropriate modifications) shall
be given by the Company and any participating Holder with respect to any
required registration or other qualification of securities under any federal or
state law or regulation of any governmental authority other than the Securities
Act.

         6.5 INDEMNIFICATION PAYMENTS. The indemnification required by this
Article VI shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.

         6.6 CONTRIBUTION. If, for any reason, the foregoing indemnity is
unavailable, or is insufficient to hold harmless an indemnified party, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of the expense, loss, damage or liability (a) in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other
(determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement or omission); or (b) if the allocation
provided by clause (a) above is not permitted by applicable law or provides a
lesser sum to the indemnified party than the amount otherwise payable hereunder,
in the proportion as is appropriate to reflect not only the relative fault of
the indemnifying party and the indemnified party, but also the relative benefits
received by the indemnifying party on the one hand and the indemnified party on
the other, as well as any other relevant equitable considerations. No
indemnified party guilty of fraudulent misrepresentation (within the meaning of
Section 11 (f) of the Securities Act) shall be entitled to contribution from any
indemnifying party who was not guilty of such fraudulent misrepresentation.

                                   ARTICLE VII
                      INFORMATION BY PARTICIPATING HOLDERS

         7.1 INFORMATION REGARDING PARTICIPATING HOLDERS. If any Registrable
Securities are included in any registration, each participating Holder shall
furnish to the Company and any applicable underwriter such information regarding
such Holder and the distribution proposed by such Holder as the Company or such
underwriter may request in writing and as shall be required in connection with
any registration, qualification or compliance referred to in this Agreement.

                                  ARTICLE VIII
                           RULE 144 AND RULE 145 SALES

         8.1 REPORTING. With a view to making available to the Holders the
benefits of certain rules and regulations of the Commission which may permit the
sale of Registrable Securities (and shares of Common Stock held by any Holder
which are eligible for sale or distribution under Rule 144 (or any successor
provision) and Rule 145 (or any successor provision)

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promulgated under the Securities Act) to the public without registration or
through short form registration forms the Company agrees to:

         (a) file with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and

         (b) furnish to each Holder, so long as such Holder owns any Registrable
Securities (or any shares of Common Stock which are eligible for sale or
distribution under Rule 144 and Rule 145), forthwith upon request a written
statement by the Company that it has complied with the reporting requirements of
Rule 144 and Rule 145, the Securities Act and the Exchange Act, a copy of the
most recent annual or quarterly report of the Company, and such other reports
and documents so filed by the Company as such Holder may reasonably request in
availing itself of any rule or regulation of the Commission permitting such
Holder to sell any such securities without registration.

         (c) RULE 144 AND RULE 145 SALES. In connection with any sale, transfer
or other disposition by any Holder of any Registrable Securities (or any shares
of Common Stock which are eligible for sale or distribution under Rule 144 and
Rule 145) pursuant to Rule 144 and Rule 145, upon the delivery to the Company of
an opinion of counsel to the Holder (such counsel to be reasonably satisfactory
to the Company) to the effect that such securities may be sold in a transaction
exempt from the registration and prospectus delivery requirements of the
Securities Act so that all transfer restrictions can be removed upon the
consummation of such sale, the Company shall provide such Holder with
certificates representing the Common Stock, free and clear of all transfer
restrictions and legends. The Company agrees promptly to deliver such
legend-free certificates to the Holder for such number of shares of Common Stock
and registered in such names as the Holder may reasonably request.

                                   ARTICLE IX
                               TRANSFER OF RIGHTS

         9.1 TRANSFER OR ASSIGNMENT. The rights granted hereunder by the Company
may be assigned or otherwise conveyed to the respective transferees of the
Shareholders. It shall be a condition to any Transfer that (a) such Transfer is
effected in accordance with applicable federal and state securities laws, (b)
such transferee or assignee becomes a party to this Agreement or agrees in
writing to be subject to the terms hereof to the same extent as if it were the
Holder hereunder, and (c) the Company is given written notice by the Holder of
said Transfer, stating the name and address of said transferee and identifying
the securities with respect to which such registration rights are being
assigned.

                                    ARTICLE X
                                   TERMINATION

         10.1 TERMINATION. This Agreement and the rights provided hereunder
shall terminate and be of no further force and effect with respect to each
Holder on the earlier of the date such Holder shall no longer hold any
Registrable Securities.

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                                   ARTICLE XI
                                  MISCELLANEOUS

         11.1 REMEDIES FOR BREACH. It is expressly understood that the equitable
remedies of specific performance and injunction shall be available for the
enforcement of the covenants and agreements herein, and that the availability of
these equitable remedies shall not be deemed to limit any other right or remedy
to which any party to this Agreement would otherwise be entitled.

         11.2 SUCCESSORS AND ASSIGNS. Subject to the provisions of Section 9.1,
the terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors, assigns and transferees of the parties
If any successor, assignee or transferee of any Holder shall acquire Registrable
Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities such Person
shall be conclusively deemed to have agreed to be bound by all of the terms and
provisions hereof.

         11.3 NOTICES. All notices and other communications provided for
hereunder shall be in writing and sent by registered or certified mail, return
receipt requested, postage prepaid or delivered in person or by courier,
telecopier or electronic mail, and shall be deemed to have been duly given when
received, by the party to whom such notice is to be given at its address set
forth below, or at such other address for the party as shall be specified by
notice given pursuant hereto:

         (a) if to the Company, to:

                  Acetex Corporation
                  750 World Trade Center
                  999 Canada Place
                  Vancouver, British Columbia
                  Canada
                  Attention: Brooke Wade

                  with a copy to:

                  Burnet Duckworth & Palmer LLP
                  350 Seventh Avenue, SW
                  Calgary, Alberta
                  Canada
                  Attention: David Ross

          (b) if to a Holder, to:

                  Perry Capital LLC
                  599 Lexington Avenue
                  New York, NY 10022
                  Attention: Richard C. Perry

                                       11
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                  with a copy to:

                  Cadwalader, Wickersham & Taft
                  100 Maiden Lane New York, NY 10038
                  Attention: Dennis J. Block, Esq.

         11.4 GOVERNING LAW. This Agreement and any controversy or claim arising
out of or relating to this Agreement shall be governed by the laws of the State
of New York, without giving effect to the principles of conflicts of laws.

         11.5 ENTIRE AGREEMENT; AMENDMENTS AND WAIVERS. This Agreement
constitutes the entire agreement among the parties pertaining to the subject
matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by all parties. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.

         11.6 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. Copies of executed
counterparts transmitted by telecopy or other electronic transmission service
shall be considered original executed counterparts for purposes of this Section
11.6.

         11.7 SEVERABILITY. In the event that any one or more of the provisions
contained in this Agreement shall, for any reason, be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement.

         11.8 HEADINGS. The headings of the Articles and Sections herein are
inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.

         11.9 GENDER AND OTHER REFERENCES. Unless the context clearly indicates
otherwise, the use of any gender pronoun in this Agreement shall be deemed to
include all other genders, and singular references shall include the plural and
vice versa.

         11.10 COOPERATION IN PRIVATE RESALES. The Company shall reasonably
cooperate with any Holder who seeks to sell any Registrable Securities in a
transaction exempt from the requirements of the Securities Act, including any
private placement or block trade. Such cooperation shall include, without
limitation, assisting the Holder by providing information regarding the Company
and reasonable access to Company facilities and personnel to potential buyers of
Registrable Securities.

                                       12
<Page>

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                              ACETEX CORPORATION

                              Per: (signed) "BROOKE N. WADE"
                                   ---------------------------------------------
                                   Name:  Brooke Wade
                                   Title: Chairman & Chief Executive Officer

                              PERRY PARTNERS L.P. BY PERRY
                              CORP., ITS GENERAL PARTNER

                              Per: (signed) "RANDALL BORKENSTEIN"
                                   ---------------------------------------------
                                   Name:  Randall Borkenstein
                                   Title: Managing Director and Chief
                                          Financial Officer

                              PERRY PARTNERS INTERNATIONAL,
                              INC. BY PERRY CORP., ITS
                              INVESTMENT MANAGER

                              Per: (signed) "RANDALL BORKENSTEIN"
                                   ---------------------------------------------
                                   Name:  Randall Borkenstein
                                   Title: Managing Director and Chief
                                          Financial Officer

                                       13<Page>

                                                                    Exhibit 10.1

                                                          CONFIDENTIAL TREATMENT
                                    GTC Biotherapeutics, Inc. has requested that
                                the marked portions of this document be accorded
                                   confidential treatment pursuant to Rule 24b-2
                                   PROMULGATED UNDER THE SECURITIES EXCHANGE ACT

                                    AGREEMENT

                           RELATING TO THE PRODUCTION

                                       OF

                         CLARIFIED GOAT MILK CONTAINING

                       RECOMBINANT HUMAN ALPHA FETOPROTEIN

                                 BY AND BETWEEN

                            GTC BIOTHERAPEUTICS, INC.
                           A MASSACHUSETTS CORPORATION

                                       AND

                         MERRIMACK PHARMACEUTICALS, INC.
                           A MASSACHUSETTS CORPORATION

                                  JUNE 27, 2003

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                                                                               2

     THIS AGREEMENT (the "Agreement") is made this 27th day of June, 2003 (the
"Effective Date"), by and between MERRIMACK PHARMACEUTICALS, INC., a
Massachusetts corporation ("Merrimack") located at 101 Binney Street, Cambridge,
MA 02142 and GTC BIOTHERAPEUTICS, INC., a Massachusetts corporation ("GTC")
located at 175 Crossing Boulevard, Framingham, MA 01702. (GTC and Merrimack each
individually a "Party" and collectively the "Parties").

     WHEREAS, Merrimack, the successor-in-interest to Atlantic
Biopharmaceuticals, Inc. ("ABI"), is a biotechnology company actively involved
in the development of recombinant human alpha fetoprotein); and

     WHEREAS, GTC is a leader in the development of therapeutic proteins in the
milk of transgenic animals;

     WHEREAS, on May 11, 1999, ABI and GTC entered into an agreement under which
GTC was to conduct a mouse feasibility study of human alpha fetoprotein (the
"May 1999 Agreement"); and

     WHEREAS, on February 12, 2001, ABI and GTC entered into an agreement for
the generation of goats transgenic for human alpha fetoprotein expressed in milk
(the "February 2001 Agreement" and together with the May 1999 Agreement, the
"Initial Agreements"); and

     WHEREAS, in order to more fully exploit the opportunities for the
commercialization of rhAFP, Merrimack and GTC wish to enter into a strategic
alliance for the purpose of producing rhAFP in the milk of transgenic animals
for Merrimack's use in pre-clinical studies, clinical trials and commercial
distribution (the "Project"), to be implemented in three stages through a series
of Definitive Agreements between the Parties as more fully described below; and

     WHEREAS, Merrimack and GTC also wish to arrange for the production of
Clinical Grade AFP (as defined below) through the purification of Clarified Milk
by GTC, on terms set forth herein; and

     WHEREAS, all payments and compensation under this agreement shall be in
United States dollars ("USD").

     NOW THEREFORE, in consideration of the premises and agreements herein
contained, and intending to be bound hereby, the Parties hereto hereby agree as
set forth below.

     1.1  PRIOR AGREEMENTS. Except as otherwise stated herein, the Initial
Agreements between the Parties are hereby terminated; provided however, that
such terms of these Initial Agreements that were intended to survive any
termination thereof

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shall remain in full force and effect. For the avoidance of doubt, the
provisions in the Initial Agreements relating to the payment of royalties
from Merrimack to GTC are terminated and replaced with the provisions of
Section 9 of this Agreement. The Purification Agreement, dated December 27,
2002, between the Parties is hereby modified such that the provisions of the
Purification Agreement executed between the Parties and attached and
incorporated herein by reference as Appendix IV remain in full force and
effect, as modified, with all other provisions being terminated and replaced
in their entirety with the terms of this Agreement. In the event of any
conflict the terms and provisions of this Agreement are controlling.

     1.2  EXCLUSIVITY. The Parties agree during the term of this Agreement the
commercial production of any rhAFP in the milk, other bodily fluid or tissue of
transgenic animals by or on behalf of Merrimack or its Affiliates, will be done
exclusively by GTC pursuant to this Agreement.

     1.3  DEFINITIONS. For purposes of this Agreement the following terms shall
have the meaning set forth below:

"AFFILIATE"           Shall mean any corporation that controls, is controlled
                      by, or is under common control with a Party hereto. A
                      corporation shall be regarded as in control of another
                      corporation if it owns or directly or indirectly controls
                      at least fifty (50%) of the voting stock of the other
                      corporation, or in the absence of the ownership of at
                      least fifty percent (50%) of the voting stock, if it
                      possesses, directly or indirectly, the power to direct or
                      cause the direction of the management and policies of the
                      corporation.

"BIOPHARMACEUTICAL"   Means any medicinal drug, therapeutic, vaccine or any
                      medically useful composition whose origin, synthesis, or
                      manufacture involves the use of microorganisms,
                      recombinant animals (including, without limitation,
                      chimeric or transgenic animals), nuclear transfer,
                      microinjection, or cell culture techniques.

"BREEDING DATE"       Shall mean the date upon which GTC commenced breeding of
                      the Founder Goats. [*****].

"BUSINESS DAY"        Shall mean any day on which the banks are open for
                      commercial banking business in the Commonwealth of
                      Massachusetts.

"CELL LINES"          Shall mean the transfected cells used for the development
                      of the transgenic Founder Goats and containing the DNA
                      sequence encoding rhAFP and/or the cells derived from
                      tissue samples from a transgenic goat containing the DNA
                      sequence encoding rhAFP.

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"CHANGE IN            Shall mean (i) the acquisition of ownership, directly or
CONTROL"              indirectly, beneficially or of record, by any person or
                      group (within the meaning of the Securities Exchange Act
                      of 1934, as amended, and the rules of the Securities and
                      Exchange Commission thereunder as in effect on the date
                      hereof), of shares representing more than 50% of the
                      aggregate ordinary voting power represented by the issued
                      and outstanding capital stock of GTC, (ii) a merger or
                      similar combination after which 50% or more of the voting
                      stock of the surviving corporation is held by persons who
                      were not stockholders of GTC immediately prior to such
                      merger or combination (iii) occupation of a majority of
                      the seats on the Board of Directors of GTC by persons who
                      were neither (A) nominated by the independent Directors of
                      GTC or a committee thereof (as determined pursuant to the
                      rules of the securities exchange on which GTC's shares, as
                      then in effect) are listed nor (B) appointed by directors
                      so nominated, or (iii) the acquisition of the power to
                      directly or indirectly direct or cause the direction of
                      the management or policies of GTC, whether through the
                      ability to exercise voting power, by contract or
                      otherwise.

"CHARACTERIZATION     Shall mean analytical and microbiological techniques
AND RELEASE           employed to evaluate the agreed upon attributes of rhAFP
ASSAYS"               in Clarified Milk, as described in Appendix III, and bulk
                      rhAFP drug substance as described in Appendix V.

"CLARIFIED MILK"      Shall mean the milk of Transgenic Goats that contains
                      rhAFP and that has been processed to remove [*****]
                      allowing further processing to recover rhAFP.

"CLARIFICATION        Shall mean technology, methods or Know-How for purifying,
TECHNOLOGY"           treating, [*****] filtering, clarifying, [*****]so as to
                      enable the production of a Clarified Milk product
                      containing rhAFP. This does not include the production of
                      a recombinant protein in the milk of a transgenic animal.

"CLINICAL GRADE       Shall mean rhAFP that has been produced by GTC pursuant to
rHAFP"                this Agreement and, using the Characterization and Release
                      Assays, is determined by the Parties to be suitable for
                      use by Merrimack in clinical trials including First in Man
                      Trials.

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COMMERCIALIZATION     Shall mean the date of first regulatory approval of a
                      Transgenic rhAFP product in either the United States or
                      Europe.

"CONCENTRATION        Shall mean the Enzyme-Linked Immunosorbant Assay (ELISA)
ASSAY"                for the quantitative measurement of alpha fetoprotein
                      (AFP) using the [*****] or any other such assay as
                      mutually agreed by the parties in the future with
                      appropriate calibration and use of purified rhAFP
                      reference standards as internal controls.

"FIELD OF             Shall mean the production of rhAFP in a Clarified Milk
INTEREST"             product of a transgenic animal and/or the means to process
                      that Clarified Milk into a form of rhAFP useful as a
                      Biopharmaceutical.

"FIRST IN MAN         Shall mean initial human clinical trials, conducted by
TRIALS"               Merrimack that are approved by an institutional review
                      board and performed in normal healthy volunteers (or
                      subjects) for purposes of establishing safety,
                      pharmacokinetics and/or pharmacodynamics of rhAFP
                      administered by one or more routes of administration.

"FIRST PRODUCTION     Shall mean the date that is 90 days after the date upon
DATE"                 which GTC completes the production of a total of [*****]
                      of rhAFP in Clarified Milk from the hormonal induction
                      and/or natural lactation of the Founder Goats, such
                      quantity to be determined using the Concentration Assay.

"FOUNDER GOATS"       Shall mean the two female Transgenic Goats produced by GTC
                      pursuant to the February 2001 Agreement, [*****].

"HOLD POINT           Shall mean those studies performed by GTC to establish a
STUDIES"              time period in which rhAFP in Clarified Milk can be stored
                      under defined conditions (as mutually agreed by the
                      parties) with substantially all of the rhAFP still meeting
                      the definition of Clinical Grade rhAFP when purified.

"IMPROVEMENTS"        Shall mean any improvement, enhancement or modification of
                      a product or process described in a patent or patent
                      application owned, controlled licensed or assigned to one
                      of the Parties.

"IMPROVEMENT          Any patents and/or patent applications relating to or
PATENTS"              claiming any Improvement.

"INVENTION"           Includes any invention, discovery, work of authorship,
                      software, information or data, patentable or unpatentable,
                      that is conceived, developed or reduced to practice in the
                      course of the services provided pursuant to this Agreement
                      specifically excluding, however, any of either

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                      Party's pre-existing assays, techniques, compositions,
                      methods or processes. A "Patentable Invention" for
                      purposes of this Agreement is an Invention that passes the
                      tests of the 1952 Patent Code with regard to satisfying
                      the key statutory legal tests of novelty, utility and
                      non-obviousness.

"INTELLECTUAL         Shall mean any patent or patent application, Know-How,
PROPERTY"             development or other Confidential Information, including
                      but not limited to ideas, concepts, unpatented inventions,
                      trade secrets, drawings, designs, models, specifications,
                      formulae, data, processes, procedures and techniques.

"KNOW-HOW"            Shall mean all technical information, unpatented
                      inventions, manufacturing secrets, practical experience,
                      secret processes, formulae, manufacturing procedures,
                      methods and materials relating to the Field of Interest.

"NET REVENUE"         Shall mean the gross amount received by Merrimack and/or
                      its Affiliates from the commercial sale of its rhAFP
                      Product to a person or entity or the grant of rights to
                      sell or distribute its Transgenic rhAFP Product. These
                      amounts shall include all royalty payments to Merrimack or
                      its Affiliates, milestone payments received by Merrimack
                      or its Affiliates or any other payments received by
                      Merrimack (except for payments for research and
                      development activities) less the following:
                              (i)    customary trade, quantity, or cash
                                        discounts to the extent actually allowed
                                        and taken;
                              (ii)   amounts repaid or credited by reason of
                                        rejection or return;
                              (iii)  to the extent separately stated on purchase
                                        orders, invoices, or other documents of
                                        sale, any taxes or other governmental
                                        charges levied on the production, sale,
                                        transportation, delivery, or use of a
                                        Transgenic rhAFP Product which is paid
                                        by or on behalf of Merrimack; and
                              (iv)   outbound transportation costs prepaid or
                                        allowed and costs of insurance in
                                        transit.

                      Net Revenue may be received by Merrimack either before or
                      after Commercialization.

                      No deductions shall be made for commissions paid to
                      individuals whether they are with an independent sales
                      agency or regularly employed by Merrimack and on its
                      payroll, or for cost of collections.

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                      In the case of sales of a product that contains a
                      Transgenic rhAFP Product and at least one other essential
                      functional component, (hereinafter, "Combination
                      Product"), Net Revenue mean the gross amount received by
                      Merrimack and its Affiliates on sales of the Combination
                      Product, less the deductions set forth above, multiplied
                      by a pro-ration factor that is determined as follows:

                              (i)    If all components of the Combination
                                        Product are sold separately, the
                                        pro-ration factor shall be determined by
                                        the formula [A/(A+B)], where A is the
                                        aggregate gross sales price of an rhAFP
                                        product when sold separately from all
                                        other essential functional components,
                                        and B is the aggregate gross sales price
                                        of the other essential functional
                                        components when sold separately from the
                                        Transgenic rhAFP Product; or

                              (ii)   If all components of the Combination
                                        Product are not sold separately, the
                                        pro-ration factor shall be determined by
                                        the formula [V/(V+D)], where V is the
                                        value of a Transgenic rhAFP Product, and
                                        D is the value of the other essential
                                        functional components, each being
                                        determined by agreement in good faith by
                                        Merrimack and GTC.

    "NET PARTNER
    SALES"            Shall mean the gross amount or any other payment received
                      by a Partner for the sale of a Transgenic rhAFP Product to
                      any person, firm or entity other than Merrimack or an
                      Affiliate of Merrimack or such Partner, less the
                      following:
                              (i)    customary trade, quantity, or cash
                                        discounts to the extent actually allowed
                                        and taken;
                              (ii)   amounts repaid or credited by reason of
                                        rejection or return;
                              (iii)  to the extent separately stated on purchase
                                        orders, invoices, or other documents of
                                        sale, any taxes or other governmental
                                        charges levied on the production, sale,
                                        transportation, delivery, or use of a
                                        Transgenic rhAFP Product which is paid
                                        by or on behalf of such Partner; and
                              (iv)   outbound transportation costs prepaid or
                                        allowed and costs of insurance in
                                        transit; and
                              (v)    any transfer price payable to GTC or any
                                        of its Affiliates for the purchase of a
                                        Transgenic rhAFP Product by such Partner
                                        or any of its Affiliates.

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                      No deductions shall be made for commissions paid to
                      individuals whether they be with independent sales
                      agencies or regularly employed by such Partner and on its
                      payroll, or for cost of collections.

                      In the case of a Combination Product, Net Partner Sales
                      shall be calculated in the same manner as is used to
                      calculate Net Revenues in connection with such Combination
                      Product.

"NUCLEAR TRANSFER     Shall mean the process of reconstructing an oocyte for the
       PROCESSES"     purpose of creating a viable embryo and, ultimately, an
                      animal that produces a recombinant protein (in this case
                      rhAFP).

"PARTNER"             Shall mean a firm or entity with a contractual
                      relationship with Merrimack or any of its Affiliates,
                      which contractual relationship provides for the Partner to
                      market, sell or distribute a Transgenic rhAFP Product
                      anywhere in the world.

"PHASE II TRIALS"     Shall mean clinical studies of rhAFP that are designed to
                      explore and assess the pharmacokinetics, pharmacodynamics,
                      safety and/or efficacy of rhAFP in patients with the
                      disease or condition under study. Such trials, depending
                      on design features, may be considered adequate and
                      well-controlled and a pivotal study.

"PHASE III TRIALS"    Shall mean one or more adequate and well-controlled
                      clinical trials, conducted by Merrimack, that are designed
                      to demonstrate efficacy of rhAFP and refine the safety
                      profile in the patient population to be treated.

"PIVOTAL STUDIES"     Shall mean one or more adequate and well-controlled
                      clinical trials conducted by Merrimack for purposes of
                      establishing efficacy of rhAFP.

"PURIFICATION         Shall mean technology, Inventions, methods or Know-How for
TECHNOLOGY"           purifying rhAFP from Clarified Milk.

"rHAFP"               Shall mean recombinant human non-glycosolated Alpha
                      Fetoprotein.

"STAGE 1 ACTIVITIES"  The activities to be performed by the Parties during the
                      first stage of the Project ("Stage 1") as set forth in
                      Section 2.1 hereof.

"STAGE 2 ACTIVITIES"  The activities to be performed by the Parties during the
                      second stage of the Project ("Stage 2") as set forth in
                      Section 2.2 hereof.

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"STAGE 3 ACTIVITIES"  The activities to be performed by the Parties during the
                      third stage of the Project ("Stage 3") as set forth in
                      Section 2.3 hereof.

"SUBORDINATED         Shall mean (i) debt of Merrimack which is subordinated in
   DEBT"              right of payment to amounts owed to GTC under the
                      provision of Section 6.3 or under a promissory note in
                      favor of GTC, or (ii) debt with respect to accounts
                      payable and accrued expenses occurring in the normal
                      course of business.

"TRANSGENIC           Shall mean those genetic materials that can be used in
BANK"                 establishing a continuous source of the transgenic founder
                      line including, but not limited to Cell Lines, embryos
                      and/or the semen of a limited number of highly
                      characterized transgenic goats, their offspring and
                      transgenic goats that have had a series of tests to
                      confirm their genetic profiles and have been determined to
                      carry in their genome the DNA encoding rhAFP.

"TRANSGENIC GOATS"    Shall mean goats which carry the heterologous DNA encoding
                      human alpha fetoprotein.

"TRANSGENIC rHAFP
PRODUCT"              Shall mean any rhAFP produced using any of GTC's
                      Intellectual Property and/or originally derived or
                      produced from the use of Improvements in the GTC
                      Intellectual Property.

"TRANSGENIC           Shall mean Know-How, Intellectual Property and practices
TECHNOLOGY"           for the production of recombinant proteins in the milk of
                      transgenic animals and the development of such animals,
                      also included is enabling the production of a transgenic
                      animal such an animal being capable of producing a target
                      recombinant protein in its milk.

"VALID CLAIM"         Means with respect to the claim of a Patent Right licensed
                      under this Agreement, a claim that has not been held
                      permanently invalid or otherwise unenforceable by a court
                      of competent jurisdiction whose holding is not appealable
                      or is not appealed within the time allowed for appeal.

     2. PROJECT ACTIVITIES The Parties shall undertake the Project in three
separate and distinct stages as follows. As of the Effective Date of this
exclusive Agreement, the Parties have agreed on Stage 1 Activities and the
consideration to be paid therefore. The Stage 2 Activities and Stage 3
Activities have not yet been finally agreed upon by the Parties. If the Parties
decide to extend the term of this Agreement in order to carry out the Stage 2
Activities and the Stage 3 Activities, the Parties shall agree on the activities
to be undertaken, the time frame within which to complete those activities and
the consideration to be paid. The Parties hereby agree to negotiate in good
faith regarding the establishment of mutually acceptable contracts for the
completion of Stage 2 and 3 activities.

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          2.1    STAGE 1 ACTIVITIES. In Stage 1, GTC and Merrimack each agree
to undertake the following activities primarily related to the production by GTC
of Clarified Milk containing rhAFP. If an event or milestone provided below has
been completed it will be so indicated.

          GTC WILL:

                 2.1.1   Develop a bench scale milk clarification process for
                         rhAFP produced in the milk of Transgenic Goats (an
                         activity which has previously been completed by
                         GTC)[completed[*****];

                 2.1.2   Develop the Concentration Assay protocol (including
                         calibration and use of purified rhAFP reference
                         standards as internal control), as agreed to by both
                         Parties, to quantify rhAFP in Clarified Milk [completed
                         [*****];

                 2.1.3   Establish and/or qualify appropriate Characterization
                         and Release Assays to support the development of a
                         clarification process for rhAFP in milk, as agreed to
                         by both Parties as described in Appendix III [completed
                         [*****];

                 2.1.4   Conduct Hold Point Studies to define a period of time
                         during which rhAFP in Clarified Milk can be stored in
                         defined conditions, as agreed to by the Parties;

                 2.1.5   Induce the Founder Goats to lactate through hormonal
                         manipulation as contemplated by this Agreement
                         [completed [*****];

                 2.1.6   Breed the Founder Goats [completed [*****];

                 2.1.7   On or before June 30, 2003, produce not less than
                         [*****] grams of rhAFP in Clarified Milk from the
                         hormonal induction and/or natural lactation of the
                         Founder Goats, such quantity to be determined using the
                         Concentration Assay [completed [*****];

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                 2.1.8   Produce for Merrimack an additional [*****] grams of
                         rhAFP in Clarified Milk from the natural lactation of
                         the Founder Goats, such quantity to be determined using
                         the Concentration Assay;

                 2.1.9   Generate a herd of at least [*****] Transgenic Goats
                         from the selected Founder Goats through the Nuclear
                         Transfer Process;

                 2.1.10  Breed Female Transgenic Goats for the production of
                         milk from natural lactation;

                 2.1.11  Produce the next [*****] grams of Clinical Grade rhAFP
                         in Clarified Milk from the natural lactation of the
                         Founder Goats and Transgenic Goats generated by the
                         Nuclear Transfer Process, such quantity to be
                         determined using the Concentration Assay;

                 2.1.12  Produce the next [*****] grams of Clinical Grade rhAFP
                         in Clarified Milk from the natural lactation of the
                         Founder Goats and Transgenic Goats generated by the
                         Nuclear Transfer Process, such quantity to be
                         determined using the Concentration Assay.

     MERRIMACK WILL:

                 2.1.15  Perform analytical studies as deemed necessary and
                         appropriate by Merrimack to support GTC's process
                         development activities; and

                 2.1.16  Perform First in Man Trials with Clinical Grade
                         AFP[*****], provided that GTC complies with its
                         obligations set forth in Section 2.1.7 above and in
                         Appendix IV hereof. Merrimack will share all data with
                         GTC on a confidential basis and will acknowledge GTC
                         as the source of the material used in those trials.

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     GTC AND MERRIMACK WILL JOINTLY:

                 2.1.17  Prior to September 28, 2003 the Parties shall initiate
                         good faith negotiations regarding the establishment of
                         a mutually acceptable agreement that will finalize the
                         terms under which the Stage 2 Activities will be
                         carried out;

                 2.1.18  If the Parties agree to Stage 2 Activities and extend
                         the initial Term of this Agreement, within 90 days
                         after treatment of the last patient enrolled in Phase
                         II Trials, the Parties will negotiate, in good faith
                         regarding the establishment of an agreement for Stage 3
                         Activities; and

                 2.1.19  The Parties will establish a Steering Committee
                         consisting of at least three (3) members from each
                         company to review the program on a quarterly basis.
                         Each company will be entitled to equal representation
                         on such committee, with the committee chairman selected
                         by Merrimack.

            2.2     STAGE 2 ACTIVITIES In Stage 2, it is contemplated that GTC
and Merrimack will undertake the following activities primarily related to the
production by GTC of rhAFP intended for use in clinical trials by Merrimack.

          GTC WILL:

                 2.2.1   Develop and validate dedicated housing, milking and
                         clarification facilities and equipment for the
                         production of rhAFP in Clarified Milk;

                 2.2.2   Scale-up and transfer the milk clarification process
                         for rhAFP in order to ensure that the process is
                         suitable to meet the production requirements applicable
                         to Stage 2 of the Project; and

                 2.2.3   Produce [*****] of rhAFP in Clarified Milk, such
                         quantity to be determined using the Concentration
                         Assay. Production to be undertaken at Merrimack's
                         direction. Beginning in January 2004, Merrimack will
                         provide GTC with rolling 6 month estimates of
                         production needs (six (6) month lead time on production
                         start, not delivery date). [*****] (see also Section
                         6.7.4.1 and Purification agreement Sections I(o) and
                         II(s)).
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     MERRIMACK WILL:

                 2.2.4   In the normal course of Merrimack's clinical
                         development activities relating to rhAFP, it shall use
                         commercially reasonable efforts to carry out Pivotal
                         Studies and make a regulatory submission using
                         Transgenic rhAFP Product produced by GTC at the
                         earliest possible date; and

                 2.2.5   Provide GTC with six (6) month rolling production
                         projections as required by GTC for the purposes of
                         scale-up and production planning.

            2.3     STAGE 3 ACTIVITIES. In Stage 3, it is contemplated that GTC
and Merrimack will undertake the following activities primarily related to the
production by GTC of commercial quantities of rhAFP in Clarified Milk for
Merrimack.

     GTC WILL:

                 2.3.1   Design, build and validate dedicated housing, milking
                         and clarification facilities and equipment;

                 2.3.2   Scale-up and transfer the milk clarification process
                         for production of commercial quantities of rhAFP;

                 2.3.3   Scale-up the female Transgenic Goat herd; and

                 2.3.4   Produce commercial quantities of rhAFP in Clarified
                         Milk according to Merrimack's commercial product
                         projections as provided by Merrimack to GTC.

            2.4  PURIFICATION ACTIVITIES. In addition to the Project activities
set forth above, the Parties agree to carry out the purification activities set
forth in Appendix IV hereto.

     3.   PROJECT PERFORMANCE

          3.1 GENERAL PROVISIONS. Merrimack and GTC shall use their respective
diligent efforts to complete each stage of the Project that is the subject of a
Definitive Agreement and to perform the tasks described herein. Merrimack and
GTC each recognize the importance of the objectives and overall timing of the
Project and the key transgenic development events as set forth in Section 8
hereof and agree to use their respective diligent efforts to achieve the
objectives of the Project as set forth herein with one another. Throughout the
Project, Merrimack shall have the right to have one of its employees located on
GTC's premises in Framingham, Massachusetts in order to observe the progress of
the Project. Such person shall execute the appropriate Confidentiality

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Agreements and shall comply with all reasonable directions of a GTC employee
designated to supervise such observation, and shall complete any necessary
training or safety education classes as determined by GTC, in its sole
discretion. Merrimack shall indemnify and hold GTC harmless from and against any
liabilities or damages caused by such Merrimack employee.

          3.2 COMPLIANCE WITH LAWS; GMPs AND GLPs. Merrimack and GTC shall work
together in order to conduct the Project in conformance with the applicable
requirements of the FDA and otherwise in compliance with all laws, ordinances
and governmental rules or regulations pertaining thereto. All rhAFP produced and
processes developed by GTC hereunder will be developed and prepared in
accordance with all applicable current FDA Good Manufacturing Practices ("GMPs")
and Good Laboratory Practices ("GLPs"), as each may be in effect from time to
time.

          3.3 PRESERVATION OF FOUNDER GOATS, TRANSGENIC GOATS AND TRANSGENIC
BANK. GTC shall use best reasonable efforts to preserve the rhAFP Founder Goats,
Transgenic Goats and Transgenic Bank through the term of the Project. GTC has
established general guidelines for herd health, biosecurity, semen
cryopreservation and disaster recovery[*****], which guidelines will be used by
GTC to manage the health, safety and viability of the Transgenic Goats during
the term of the Project. Key elements of the GTC herd health management
guidelines are as follows; i) maintaining a certified scrapie-free herd; ii)
applying good husbandry practices coupled with quality standards of traceability
and audit; iii) maintaining current biosecurity measures intended to help
prevent ingress of infectious viruses, bacteria, and prions, toxins and any
other agents that may adversely affect the health or well being of an animal;
iv) disease monitoring procedures to assure maintenance of health standards; v)
regular reviewing and modification (when appropriate) of herd health management
systems. During the Project, GTC shall also maintain and preserve elements of
the Transgenic Bank in separate locations as follows; [*****]. GTC shall also
separate the Transgenic Goats on site in at least two locations as is practical
during the early stages of the Project to minimize the risk of herd loss due to
unforeseen events. Transgenic Goat dispersal practices are defined in GTC's
Standard Farm Practice Manual. Additionally, upon development of a commercial
herd for the supply of rhAFP for commercial sale by Merrimack, GTC and Merrimack
shall agree to maintain a subset of the commercial herd, as determined to be
appropriate by GTC, in a location separate from the commercial production site.
Merrimack shall have reasonable access to the above guidelines and associated
documents.

     4.   PROJECT REPORTS. GTC will keep Merrimack advised of the status of the
Project through telephone conversations and meetings as the same may be
reasonably requested from time to time by Merrimack. In addition, GTC will
complete a final report relative to each stage of the Project within sixty (60)
days of the completion of the activities to be undertaken during each such
stage.

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     5.   PROJECT RECORDS. GTC will maintain records of the status and progress
of the Project that are accurate and appropriate for initiating, scaling, and
manufacturing a Biopharmaceutical for clinical studies, and as applicable,
commercial distribution. Copies of all correspondence or documentation prepared
by GTC in connection with GTC's compliance with any GMPs, GLPs or any other
applicable law, rule or regulation whether relating to the Project or otherwise
(collectively, the "Regulatory Documentation") will be retained by GTC and made
available for Merrimack's audit and review during normal business hours at the
offices of GTC at 175 Crossing Boulevard, Framingham, Massachusetts, five (5)
business days after GTC's receipt of a written request to do so from Merrimack.
Additionally, GTC shall make the Regulatory Documentation available to Merrimack
at Merrimack's request, in order to allow Merrimack to complete any regulatory
filings on its own behalf or in connection with any assignment of this Agreement
by GTC pursuant to Section Section 15 hereof. GTC will not destroy any records
relating to the Project without submitting written notice allowing Merrimack the
opportunity to further maintain such records.

     6.     CONSIDERATION

            6.1  CONSIDERATION FOR WORK PERFORMED TO PRIOR TO ESTABLISHMENT OF
STAGE 1, STAGE 2, STAGE 3 OR PURIFICATION ACTIVITIES. In full payment of all
amounts owed by Merrimack to GTC under the Initial Agreements and in
consideration of the Parties' mutual agreement to terminate the Initial
Agreements according to Section 23 hereof, the Parties agree that:

                 6.1.1   Pursuant to the terms of the February 2001 Agreement as
                         modified by the parties, and relating to the
                         establishment by GTC of founder goats for a total cost
                         of [*****], Merrimack paid [*****] on September 27,
                         2002, and has executed a promissory note in favor of
                         GTC dated October 31, 2002, attached hereto as Appendix
                         I, in the amount of[*****], of which [*****] was paid
                         on December 27, 2002 and [*****] was paid on March 27,
                         2003;

                 6.1.2   For initial delivery of Clarified Milk obtained from
                         the induced lactation of the Founder Goats, Merrimack
                         paid [*****] on December 27, 2002. Merrimack will pay
                         an

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                         additional [*****] on or before the later to occur of
                         (y) September 30, 2003, and (z) the date upon which
                         GTC first delivers to Merrimack Clarified Milk obtained
                         from the natural lactation of the Founder Goats.

6.2  CONSIDERATION FOR STAGE 1 PROJECT ACTIVITIES AND CAPACITY FEES. As
consideration for GTC's agreement to undertake the Stage 1 Activities, and
subject to Section 6.3 hereof, Merrimack agrees to pay GTC as follows for Stage
1 Activities totaling $4.439 million:

                 6.2.1   [*****], representing GTC's Stage 1 commercialization
                         fee, the payment of which has previously been deferred
                         in accordance with Section 6.3 hereof and effective
                         November 6, 2002 (line A in Appendix VI);

                 6.2.2   [*****], representing GTC's cost of allocating and
                         dedicating bench scale milk clarification equipment
                         necessary in order to carry out its required Stage 1
                         Project activities, the payment of which has previously
                         been deferred in accordance with Section 6.3 hereof,
                         and effective as of November 6, 2002 (line P in
                         Appendix VI);

                 6.2.3   [*****] upon written notification by GTC to Merrimack
                         of the completion of a bench scale milk clarification
                         process for Transgenic Goat's milk containing rhAFP,
                         its transfer to a pilot suite facility and delivery of
                         a Process Definition Report (line H in Appendix VI);

                 6.2.4   [*****] upon written notification by GTC to Merrimack
                         regarding GTC's establishment of the Characterization
                         and Release Assays detailed in Appendix III; [completed
                         as of [*****] (line D in Appendix VI);

                 6.2.5   [*****] upon written notification by GTC to Merrimack
                         of the completion of the Hold Point Studies (line F in
                         Appendix VI);

                 6.2.6   [*****] upon written notification by GTC to Merrimack
                         of the completion of production of the first [*****]
                         grams of

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                         rhAFP in Clarified Milk from the hormonal induction
                         and/or natural lactation of the Founder Goats, such
                         quantity to be determined using the Concentration Assay
                         [completed as of[*****] (lines J and N in Appendix VI);

                 6.2.7   [*****] upon written notification by GTC to Merrimack
                         of the completion of production of the next [*****]
                         grams of rhAFP in Clarified Milk from the hormonal
                         induction and/or natural lactation of the Founder
                         Goats, such quantity to be determined using the
                         Concentration Assay [completed as of [*****] (lines J
                         and N in Appendix VI);

                 6.2.8   [*****] upon written notification by GTC to Merrimack
                         of the completion of production of the next [*****]
                         grams of rhAFP in Clarified Milk (production to include
                         milk collection and clarification) from the natural
                         lactation of the Transgenic Goats, such quantity to be
                         determined using the Concentration Assay (lines BB and
                         EE in Appendix VI);

                 6.2.9   [*****] upon written confirmation by GTC to Merrimack
                         of the initiation of the Nuclear Transfer Process
                         necessary for the generation of [*****] female
                         Transgenic Goats for the production of rhAFP in
                         Clarified Milk [completed as of [*****]] (line S in
                         Appendix VI);

                 6.2.10  [*****] upon written confirmation by GTC to Merrimack
                         of the production of the first [*****] Transgenic
                         Goats. GTC will perform [*****] analysis and provide to
                         Merrimack written confirmation of transgenic status of
                         the

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                         first [*****] animals [completed as of [*****] (line S
                         in Appendix VI);

                 6.2.11  [*****] upon written confirmation by GTC to Merrimack
                         of the production of an additional [*****] Transgenic
                         Goats. GTC will perform [*****] analysis and provide to
                         Merrimack written confirmation of the next [*****]
                         transgenic animals (line S in Appendix VI);

                 6.2.12  [*****] upon written notification by GTC to Merrimack
                         of the initial procurement of clarification equipment
                         for processing milk from the out bred Transgenic Goats
                         (line OO in Appendix VI);

                 6.2.13  [*****] upon written notification by GTC to Merrimack
                         of the initiation of out-breeding activities for the
                         female transgenic goats (lines PP and QQ in Appendix
                         VI);

                 6.2.14  [*****] upon written notification by GTC to Merrimack
                         of the completion of scale up and transfer of
                         clarification process to a pilot facility (line Z in
                         Appendix VI);

                 6.2.15  [*****] to produce the next [*****] grams of rhAFP in
                         Clarified Milk from the natural lactation of the
                         Transgenic Goats (production to include milk collection
                         and clarification), such quantity to be determined
                         using the Concentration Assay (lines CC and GG in
                         Appendix VI), payable quarterly on a per batch basis;

                 6.2.16  [*****] to produce the next [*****] grams of rhAFP in
                         Clarified Milk from the natural lactation of the
                         Transgenic Goats (production to include milk collection
                         and clarification), such quantity to be determined
                         using the

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                         Concentration Assay (lines CC and II in Appendix VI)
                         payable quarterly on a per batch basis; and

                 6.2.17  As activities are completed pursuant to this Agreement,
                         both Parties agree that the amounts due and owing can
                         be invoiced.

            6.3  PAYMENT DEFERRAL RIGHTS. Merrimack shall have the option to
elect to defer the payment of up to $ 4,000,000 (four million USD) of any
amount due and payable to GTC for the provision of various goods and services
as detailed in Section 6.2 above, Section 6.6 below and Appendix IV, provided
that any such payment obligation arises prior to October 31, 2003 and any
election to defer is made on or prior to such date. Merrimack hereby
represents, as a condition for such deferral, that it has raised a total of
at least [*****] through the sale of securities on terms previously disclosed
to GTC, subsequent to September 30, 2002.

                 6.3.1   PAYMENT.
                         In the event of the termination of this Agreement by
                         Merrimack, and pursuant to Section 13 below, any amount
                         owing to GTC as of the date of termination shall
                         immediately become owed.

            6.4  REPAYMENT OBLIGATIONS. If, in accordance with Section 6.3
above, Merrimack shall elect to defer the payment of any amounts owed to GTC
under Section 6.2 above or Section 6.6 and Appendix IV below, all such
deferred payments shall be made by Merrimack to GTC, with interest thereon at
a rate of 6.75% per annum according to the following repayment schedule:

                 6.4.1   $500,000 of the deferred payments shall be payable by
                         Merrimack on the latest to occur of (x) the First
                         Production Date, and (y) June 27, 2003;

                 6.4.2   An additional $ 500,000 of the deferred payments shall
                         be payable by Merrimack on the latest to occur of (x)
                         the First Production Date, and (y) September 26, 2003;

                 6.4.3   An additional $ 250,000 of the deferred payments shall
                         be payable by Merrimack on the latest to occur of (x)
                         the First Production Date, and (y) October 31, 2003;

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                 6.4.4   An additional $ 1,900,000 of the deferred payments
                         shall be payable by Merrimack on the latest to occur of
                         (x) the First Production Date, and (y) November 30,
                         2003; and

                 6.4.5   Any remaining deferred balance shall be payable by
                         Merrimack on the latest to occur of (x) the First
                         Production Date, and (y) December 20, 2003.

          6.5    MERRIMACK'S ASSETS. Merrimack agrees that while any amounts
are owed to GTC pursuant to Merrimack's election to defer payments to GTC in
accordance with Section 6.3 above, or pursuant to Merrimack's issuance of a
promissory note in favor of GTC as provided for in Section 6.1 above,
Merrimack shall not make any pledge or assignment of its assets including,
its intellectual property to any Third Party, nor will it assume or incur any
additional debt, other than Subordinated Debt.

          6.6    ADDITIONAL COSTS. The amounts set forth in Section 6.2 above
do not provide for the payment of the following additional costs which may
arise during the course of the Parties' performance of their respective
obligations hereunder. If Merrimack requests that GTC incur such costs, the
Parties will work together in good faith to establish mutually agreed upon
and commercially reasonable pricing thereof.

                 6.6.1   Costs associated with quality assurance/regulatory
                         activities in order to support regulatory submissions
                         for transgenically produced rhAFP. Any such costs will
                         be based on hourly FTE (fully burdened) rates on a per
                         task basis; and

                 6.6.2   Costs associated with animal maintenance and facility
                         holding if this Agreement is terminated for any reason
                         other than Merrimack's material breach of the terms
                         hereof in accordance with Section 13.2 hereof.

          6.7    ESTIMATED COSTS - STAGE 2. Contractual Terms for Stage 2
activities will be negotiated by the Parties in good faith. The Parties
intend to negotiate the activities, timing, and consideration, the estimates
of which are approximated hereunder and in Section 8. The total estimated
cost for Stage 2 Activities is $5.550 million.

                 6.7.1   [*****], representing a capacity fee to allocate and
                         dedicate housing, milking and clarification facilities
                         and equipment sufficient for the projected Phase III
                         Clinical Trial production requirements of rhAFP.
                         Payments to include

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                         Facility Capacity Fees of [*****] per quarter for eight
                         consecutive quarters (total [*****]) and Phase II
                         Equipment Fees of [*****] per quarter for six
                         consecutive quarters[*****];

                 6.7.2   [*****], upon initiation of the scale up and transfer
                         of the milk clarification process;

                 6.7.3   [*****], upon completion of the scale up and transfer
                         of the milk clarification process; and

                 6.7.4   [*****], to produce and deliver to Merrimack [*****] of
                         rhAFP in Clarified Milk for use by Merrimack in Phase
                         III Clinical Trials. To be paid in three equal payments
                         of [*****] upon delivery of the first [*****], the
                         second [*****] and the remaining[*****].

                            6.7.4.1   Beginning in January 2004, Merrimack will
                                      provide GTC with rolling six (6) month
                                      estimates of production needs (six (6)
                                      month lead time on production start, not
                                      delivery date). [*****] (see also, Section
                                      2.2.3 hereof and Purification Agreement
                                      Sections I(o) and II(s)).

          6.8    ESTIMATED COSTS - STAGE 3. Contractual Terms for Stage 3
activities will be negotiated by the Parties in good faith. The Parties
intend to negotiate the activities, timing, and consideration, the estimates
of which are approximated hereunder and in Section 8. The total estimated
cost for Stage 3 Activities is $13.911 million, exclusive of those activities
provided under Sections 6.8.6 and 6.8.7 below.

                 6.8.1   An initial fee of[*****];

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                 6.8.2   [*****] to design, build and validate a dedicated
                         housing, milking and clarification facility of
                         sufficient capacity for the annual production of
                         [*****] of rhAFP in Clarified Milk;

                 6.8.3   [*****] upon initiation of the scale-up and transfer of
                         the milk clarification process;

                 6.8.4   [*****] upon completion of the scale up and transfer of
                         the milk clarification process;

                 6.8.5   [*****] to generate a herd of Transgenic Goats of
                         sufficient size to produce [*****] of rhAFP in
                         Clarified Milk, annually; and

                 6.8.6   Transfer price based upon an annual production amount
                         of rhAFP in Clarified Milk as follows:

                         [*****]

          7.     EQUITY AGREEMENTS

                 7.1     MERRIMACK WARRANTS. As consideration for GTC's
agreement to allow Merrimack to defer payments in accordance with Section 6.3
above, Merrimack agrees, as a precondition to its election to defer any
payments thereunder, to issue to GTC, at the time of any deferment election,
a warrant to purchase a number of shares of Merrimack's Series B Preferred
Stock equal to ([*****] of the amount of any such deferment) divided by
[*****] and at a per-share purchase price of [*****]. In addition, Merrimack
agrees to issue to GTC upon execution of this Agreement a warrant to purchase
a number of shares of Merrimack's Series B Preferred Stock equal to [*****]
divided by [*****] and at a per-share purchase price of [*****]. Any such
warrants shall be substantially in the form attached hereto as Appendix II.
If Merrimack fails to make any of the payments required to be made by it in
accordance with Section 6.1, Section 6.2 or Section 6.4, following notice by
GTC and a thirty (30) day cure period, or immediately in the event of
Merrimack's bankruptcy, Merrimack or its successors in

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interest shall issue to GTC additional warrants to purchase a number of shares
of Merrimack's Series B Preferred Stock as shall equal [*****] of the aggregate
amount of all amounts elected to be deferred by Merrimack in accordance with
Section 6.3 above divided by [*****] and at a per-share purchase price of
[*****].

                 7.2     CONVERSION RIGHTS. If after the Effective Date of this
Agreement and prior to[*****], Merrimack shall raise at least [*****] from the
sale of Merrimack's equity securities, at Merrimack's sole option, Merrimack may
elect to require GTC to convert up to an aggregate of [*****] of any amounts
owed by Merrimack to GTC hereunder into Merrimack's equity securities on the
same terms applicable to Merrimack's most recent round of equity financing of at
least [*****] At GTC's sole option, GTC may elect at any time, to convert any
amounts owed by Merrimack to GTC hereunder into Merrimack equity securities on
the same terms applicable to Merrimack's most recent round of equity financing
of at least[*****].

          8.     ESTIMATED TIMING.  The estimated date of completion (the
"Designated Completion Date") of the key transgenic development events of the
Project (each a "Milestone"), is as follows:

               STAGE 1

     Begin herd scale up by Nuclear Transfer for by             [*****]
     Phase III production.

     Development of Characterization and Release assays.        [*****]

     Completion of a bench scale milk clarification             [*****]
     process for rhAFP produced in the milk of
     Transgenic Goats.

     Production of a total of                                   [*****]
     [*****]of rhAFP in Clarified Milk from
     hormonal induction and/or natural lactation of the

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     Founder Goats. [*****]

     Perform Hold Point Studies.                                [*****]

     Complete production of the next [*****]of                  [*****]
     rhAFP in Clarified Milk.

     Generate [*****] female Transgenic Goats through the       [*****]
     Nuclear Transfer Process.

     Complete production of the next[*****]                     [*****]
     of rhAFP in Clarified Milk

     Complete production of the next [*****]                    [*****]
     of rhAFP in Clarified Milk

               STAGE 2
     The estimated timing relating to Stage 2 of the Project assumes the timely
     and successful completion of Stage 1 of the Project, but the Parties
     anticipate entering negotiations regarding the Stage 2 Agreement by
     September 2003.

     Begin scale-up and transfer of milk clarification          TBD
     process.

     Begin production of [*****] of                             TBD
     rhAFP in Clarified Milk for use by Merrimack
     in Phase III Trials.

     Finalize scale and transfer of milk clarification          TBD
     process to GTC manufacturing facility.

     Complete production of first [*****] of                    TBD

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     rhAFP in Clarified Milk for use by Merrimack
     in Phase III Trials.

     Complete production of next [*****] of rhAFP               TBD
     in Clarified Milk for use by Merrimack in clinical trials.

               STAGE 3

     The estimated timing hereunder in relation to Stage 3 of the project
     assumes timely and successful completion of a Phase II clinical trial by
     Merrimack. The Parties anticipate entering into discussions on the Stage 3
     Commercial Agreement within 90 days of the treatment of the last patient
     enrolled in the Phase II Trial.

               Begin facility design and construction                    [*****]

               Complete facility design and construction                 [*****]

               Begin equipment design and fabrication                    [*****]

               Complete equipment design and fabrication                 [*****]

               Qualify equipment                                         [*****]

               Validate facility                                         [*****]

               Complete technical transfer of the clarification process  [*****]

               Begin scale-up of the commercial goat herd                [*****]

               Begin commercial production of rhAFP in Clarified Milk    [*****]

     9.  ROYALTY PAYMENTS.

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               9.1     ROYALTY. In further consideration of the rights granted
                       and services provided to it hereunder, Merrimack hereby
                       agrees to make royalty payments to GTC equal to a royalty
                       rate initially set at [*****] of Merrimack's Net
                       Revenues, subject to the other provisions of this
                       section.

               9.2     INVESTMENT. In the event that GTC invests [*****] ($USD)
                       in Merrimack stock prior to the Commercialization of a
                       Transgenic rhAFP Product, the Royalty payable to GTC will
                       convert from [*****] of Merrimack's Net Revenues to
                       [*****] of Merrimack's Net Revenues plus [*****] of Net
                       Partner Sales.

               9.3     ADDITIONAL PAYMENT. After completion of the investment
                       described in Section 9.2 above, an additional payment of
                       [*****] ($USD) to Merrimack by GTC, either in cash or
                       forgiveness of indebtedness or in such combination of
                       goods and/or services as may be agreed by Merrimack and
                       GTC, prior to the Commercialization of a Transgenic rhAFP
                       Product, will result in the conversion of the Royalty
                       payable to GTC from [*****] of Merrimack's Net Revenues
                       plus [*****] Net Partner Sales to [*****] of Net Partner
                       Sales. GTC shall have the right to make this payment in
                       cash or forgiveness of indebtedness at any time prior to
                       Commercialization of a Transgenic rhAFP Product; any
                       payment of this amount in goods and services (other than
                       goods and services provided under this Agreement) shall
                       be subject to Merrimack's reasonable agreement regarding
                       the nature and value of such goods and/or services. Such
                       nature and value shall be made through a good faith
                       determination by the Parties.

               9.4     TERMS OF INVESTMENT. Merrimack stock purchased under the
                       provisions of Section 9.2 (the "Investment Securities")
                       shall be issued to GTC at a [*****] premium relative to
                       Merrimack's most recent equity financing as of the date
                       of such investment, but otherwise on the same terms as
                       such equity financing. Upon written notice from GTC that
                       it wishes to purchase the Investment Securities,
                       Merrimack shall as promptly as is practicable use all
                       reasonable efforts to obtain such stockholder approvals
                       as may be

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                       necessary to authorize the issuance and sale of the
                       Investment Securities to GTC, and the Parties shall in
                       good faith proceed to close the investment as promptly as
                       is practicable. The Parties acknowledge and agree that in
                       no case shall any royalty be due from GTC to Merrimack
                       hereunder.

               9.5     REPORTING. For each calendar quarter after
                       Commercialization, Merrimack shall deliver to GTC, within
                       sixty (60) business days after the end of each calendar
                       quarter, a written report setting forth Net Revenues and
                       Net Partner Sales of any Transgenic rhAFP Product during
                       such calendar quarter, on a country-by-country basis;
                       provided that if Merrimack does not receive data from its
                       Partner regarding Net Partner Sales for any calendar
                       quarter within forty five (45) business days after the
                       end of such quarter, such sixty (60) business day period
                       shall be extended to a date which is fifteen (15)
                       business days after Merrimack receives such data. Each
                       such report shall also set forth an explanation of the
                       calculation of the royalties, if any, payable hereunder.

               9.6     PAYMENT. Simultaneously with the delivery of each report
                       required pursuant to Section 9.5 above, Merrimack shall
                       tender payment in USD all royalties shown to be due
                       therein based on exchange rates then in effect. The basis
                       for determining the exchange rates in effect for the
                       purposes of this Section 9.6 shall be the "buy" rate for
                       Dollars in such currency as published in the WALL STREET
                       JOURNAL on the Business Day immediately preceding the
                       date such payment is due.

               9.7     BLOCKED PAYMENTS. If by law, regulation, or fiscal policy
                       of a particular country, conversion into United States
                       dollars or transfer of funds of a convertible currency to
                       USD is restricted or forbidden ("BLOCKED PAYMENTS"),
                       Merrimack shall give GTC prompt notice in writing and
                       shall pay the Blocked Payments through such means or
                       methods as are lawful in such country as GTC may
                       reasonably designate. Failing the designation by GTC of
                       such lawful means or methods within thirty (30) days
                       after such notice is given to GTC, Merrimack shall
                       deposit such Blocked Payments in local currency to the
                       credit of GTC in a recognized banking institution
                       selected by Merrimack and identified in a written notice
                       to GTC, and such deposit shall fulfill all obligations of
                       Merrimack to GTC with respect to such Blocked Payments.
                       So long as Merrimack satisfies the provisions of this
                       Section 9.7, Merrimack shall not be considered to have
                       violated any of its payment obligations hereunder with
                       respect to any Blocked Payments.

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               9.8     TAXES. Any and all withholding or similar taxes imposed
                       or levied on account of the receipt of royalties payable
                       under this Agreement which are required to be withheld by
                       Merrimack shall be paid by Merrimack on behalf of GTC and
                       shall be paid to the proper taxing authority. Proof of
                       payment shall be secured and sent to the GTC by Merrimack
                       as evidence of such payment in such form as required by
                       the tax authorities having jurisdiction over Merrimack.
                       Such taxes shall be deducted from the royalty that would
                       otherwise be remittable by Merrimack.

               9.9     BOOKS AND RECORDS. Merrimack shall keep, and shall
                       require all Affiliates to keep, full, true and accurate
                       books of accounts and other records containing all
                       information and data which may be necessary to ascertain
                       and verify the royalties payable hereunder relative to a
                       Transgenic rhAFP Product for a period of three (3) years
                       from the calendar quarter to which such books and records
                       apply. For a period of three (3) years from the calendar
                       quarter to which such books and records apply, GTC shall
                       have the right from time to time (not to exceed once
                       during each calendar year) during normal business hours
                       to have an independent agent, accountant or other
                       representative audit in confidence, such books, records
                       and supporting data. The cost of such audit shall be
                       borne by GTC unless it is established by the audit that
                       there has been an error which has caused GTC to receive
                       less than it is due by five percent (5%) of more for the
                       period under audit, in which case the cost of such audit
                       shall be borne by GTC.

     10.       CONFIDENTIALITY

               10.1    For a period of ten (10 ) years from the termination of
this Agreement, any Confidential Information (as defined below) disclosed by the
disclosing Party hereunder, directly or indirectly, to the receiving Party
hereunder, including information which forms the subject matter of this
Agreement which has been disclosed prior to the date hereof, shall be deemed
confidential, and shall not be disclosed by the receiving Party to third
Parties, except as set forth below. Access to such Confidential Information will
be limited to employees, agents, Affiliates (as defined below), consultants or
contractors of the receiving Party who reasonably require such Confidential
Information and who are bound to the receiving Party by similar obligations in
respect of confidentiality and use. The receiving Party will use such
Confidential Information only to carry out its obligations or to exercise its
rights hereunder and will not use such Confidential Information for its own
benefit or for the benefit of others or in any way inconsistent with this
Agreement.

               10.2    Nothing contained herein will in any way restrict or
impair each Party's right to use, disclose or otherwise deal with any
Confidential Information which:

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                    10.2.1    at the time of disclosure, is in the public
                              domain;

                    10.2.2    after disclosure, becomes part of the public
                              domain by publication or otherwise, except by
                              breach of this Agreement by the receiving Party;

                    10.2.3    was demonstrably in the receiving Party's
                              possession at the time of such disclosure, and
                              which was not acquired, directly or indirectly,
                              from the disclosing Party;

                    10.2.4    the receiving Party receives from third Parties,
                              provided such Confidential Information was not
                              obtained by such third Parties, directly or
                              indirectly, from the disclosing Party on a
                              confidential basis;

                    10.2.5    results from research and development of the
                              receiving Party demonstrably independent of such
                              disclosure;

                    10.2.6    is required to be disclosed by legal process;
                              provided, however, in each case the Party so
                              disclosing Confidential Information timely informs
                              the other Party and uses reasonable efforts to
                              limit the disclosure and maintain confidentiality
                              to the extent possible and permits the other Party
                              to attempt by appropriate legal means to limit
                              such disclosure;

                    10.2.7    pertains to the tax structure or tax treatment of
                              the transaction embodied in this Agreement; or

                    10.2.8    the disclosing Party identifies in writing as
                              being for public disclosure.

               10.3 For purposes of this Agreement, the term "Confidential
Information" shall mean all of the data, information, technology, samples, DNA,
specimens, materials and any other information affecting the business operations
of the disclosing Party received by the receiving Party from the disclosing
Party, and data results, and information developed by GTC and Merrimack
hereunder.

               10.4 In addition, neither Party shall originate any written
publicity, news release or other public announcement or statement relating to
this Agreement or to the performance hereunder or the existence of an
arrangement between the Parties without prior review and written approval of the
other Party, such approval not to be unreasonably withheld. Notwithstanding the
foregoing, either Party may make a public written disclosure if required by
applicable law provided that prior to making such written disclosure, the
disclosing Party shall provide the other Party with a copy of, and

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reasonable opportunity to review, the materials to be disclosed. To the extent
that the non-disclosing Party requests that any information in the proposed
disclosure be deleted, the disclosing Party shall request confidential treatment
of such information pursuant to applicable law, so that there be omitted from
the materials that are publicly filed any information that the non-disclosing
Party requests to be deleted or redacted. Each Party shall be free at all times
to disclose the tax treatment and tax structure or the transaction embodied by
this Agreement.

     11.       INTELLECTUAL PROPERTY

               11.1    OWNERSHIP.

                       11.1.1   All Intellectual Property relating to the rhAFP
                                molecule or its use shall be solely owned by
                                Merrimack, regardless of the designation of
                                inventorship between the Parties and their
                                employees;

                       11.1.2   All Intellectual Property relating to the
                                Purification Technology shall be solely owned by
                                Merrimack, regardless of the designation of
                                inventorship between the Parties and their
                                employees;

                       11.1.3   All Intellectual Property relating to the
                                Transgenic Technology and the Clarification
                                Technology shall be solely owned by GTC,
                                regardless of the designation of inventorship
                                between the parties and their employees;

                       11.1.4   All transgenic animals expressing rhAFP which
                                are generated by GTC as part of the Project,
                                including the Founder Goats, and all milk
                                produced by such transgenic animals shall be
                                solely owned by Merrimack;

                       11.1.5   All Cell Lines shall be solely owned by
                                Merrimack; and

                       11.1.6   All Intellectual Property not described above in
                                this Section 11 and invented pursuant to this
                                Agreement, the Project and within the Field of
                                Interest shall be jointly owned by the Parties,
                                regardless of the designation of inventorship
                                between the parties and their employees
                                (hereinafter, the "Joint Intellectual
                                Property").

               11.2    MAINTENANCE OF GTC INTELLECTUAL PROPERTY GTC shall have
the primary right, but not the obligation, to prepare, file, prosecute, and
maintain any of the Intellectual Property owned by it pursuant to Section 11.1
above (the "GTC Intellectual

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Property") at its sole cost and expense, and Merrimack shall cooperate with GTC
with respect thereto.

                       11.2.1   If GTC desires to abandon any patent or patent
                                application within the GTC Intellectual Property
                                in the Field of Interest with at least one Valid
                                Claim specifically related to the production of
                                rhAFP from Clarified Milk in any country or to
                                decline responsibility for the maintenance or
                                prosecution of any such patent or patent
                                application in any country, GTC shall provide
                                Merrimack with sufficient prior written notice
                                of such intended abandonment or declination of
                                responsibility such that Merrimack shall have
                                the opportunity to assume responsibility for
                                such patent or patent application without the
                                loss of any rights therein, and Merrimack shall
                                have the right, at its cost and expense, to
                                prepare, file, prosecute, and maintain the
                                relevant patents and/or patent applications in
                                the relevant country or countries in the name of
                                GTC to the extent legally necessary. In such an
                                event, GTC shall cooperate, and cause its
                                Affiliates to cooperate, with Merrimack with
                                respect thereto. Should Merrimack assume the
                                responsibility for one or more patents or patent
                                applications included within the GTC
                                Intellectual Property and thereafter proceed,
                                maintain, renew, revive or obtain any patent as
                                a result of GTC's abandonment or declination of
                                responsibility as contemplated herein, Merrimack
                                shall thereafter have a fully paid-up, perpetual
                                and sub-licensable non-exclusive license to any
                                such patent or patent applications, including
                                all related divisionals, continuations, national
                                stage applications or patents filed under the
                                Patent Cooperation Treaty of 1978, reissues,
                                renewals, extensions or additions. Furthermore,
                                if Merrimack exercises such right, it shall no
                                longer owe GTC royalties with respect to such
                                patents and/or patent applications. Specifically
                                excluded from this provision are any rights for
                                Merrimack with regard to the Transgenic
                                Technology and the Clarification Technology.

               11.3    MAINTENANCE OF MERRIMACK INTELLECTUAL PROPERTY.
Merrimack shall have the primary right, but not the obligation, to prepare,
file, prosecute, and maintain the Intellectual Property owned by it pursuant
to Section 11.1 above (the "Merrimack Intellectual Property") Merrimack
Intellectual Property at its sole cost and expense and GTC shall cooperate,
and cause its Affiliates to cooperate, with Merrimack with respect thereto.
If Merrimack desires to abandon any patent or patent application covering the
Purification Technology as it relates to Biopharmaceuticals other than rhAFP
(a "Purification Technology Patent") in any country or to decline
responsibility

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for the maintenance or prosecution of any such patent application in any
country, Merrimack shall provide GTC with sufficient prior written notice of
such intended abandonment or declination of responsibility so that GTC shall
have the opportunity to assume responsibility for such patent or patent
application without the loss of any rights therein, and GTC shall have the
right, at its cost and expense, to prepare, file, prosecute, and maintain the
relevant patents and patent applications in the relevant country or countries in
the name of Merrimack to the extent legally necessary. In such an event,
Merrimack shall cooperate, and cause its Affiliates to cooperate, with GTC with
respect thereto, at GTC's cost and expense. Should GTC assume the responsibility
for one or more such patents or Inventions and thereafter proceed, maintain,
renew, revive or obtain any patent as a result of Merrimack's abandonment or
declination of responsibility as contemplated herein, GTC shall thereafter have
a fully paid-up, perpetual and sub-licensable non-exclusive license to any such
patent or patent applications, including all related divisionals, continuations,
continuations-in-part, national stage applications or patents filed under the
Patent Cooperation Treaty of 1978, reissues, renewals, extensions or additions.
Furthermore, if GTC exercises such right, it shall not owe Merrimack any
royalties with respect to such patents and/or patent applications.

     11.4      JOINT INTELLECTUAL PROPERTY. With regard to Joint Intellectual
Property, GTC shall have the right and authority to prepare, file, prosecute and
maintain such intellectual property and/or patent application at its sole
expense. Such authority shall also enable GTC to select the country or countries
where potential patent applications may be filed and to use patent counsel to
further this purpose that are reasonably satisfactory to both the Parties. The
Parties hereby agree that Byron Olsen, the Associate General Counsel of GTC
Biotherapeutics is a satisfactory patent attorney for the management and
prosecution of any patent application or other Joint Intellectual Property
developed pursuant to this agreement.

     11.5      LICENSE GRANTS

               11.5.1 The Parties grant to each other, solely for the purpose of
carrying out their respective responsibilities under this Agreement and any
Definitive Agreements covering Stage 2 and Stage 3 of the Project as may be
entered into in the future, a non-exclusive, paid-up, royalty-free license to
practice any Invention pertaining to the Field of Interest including without
limitation Intellectual Property related to the production of rhAFP from
Clarified Milk, assays and/or analytical techniques useful in the measurement or
characterization of rhAFP in Clarified Milk or the purification of rhAFP from
Clarified Milk developed pursuant to this Agreement, with a right to grant
sublicenses. Notwithstanding any provision herein to the contrary the breadth of
such a license shall be only as it pertains to rhAFP. Moreover, and for the sake
of clarity, this grant does not in any way include or provide to Merrimack or
any other third party, sublicense, assignee, contractor, or consultant, any
license, right-to-use, shop right or assignment with regard to GTC's Transgenic
Technology at all, or separately to any of GTC's proprietary Clarification
Technology not within the Field of Interest.

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               11.5.2 Merrimack hereby grants to GTC a perpetual, exclusive,
paid-up, royalty-free license to any rights it has in or to the Purification
Technology outside of the Field of Interest.

               11.5.3 GTC hereby grants to Merrimack a perpetual, non-exclusive,
paid-up, royalty-free license to practice the Clarification Technology within
the Field of Interest.

     11.6      LICENSING. Each Party shall consult with the other, in good
faith, regarding commercialization or third party licensing of any Joint
Intellectual Property that may result from this Agreement.

     11.7      COOPERATION GTC will, upon request by Merrimack, cooperate in
the drafting of any and all patent applications, assignments and other
instruments which Merrimack deems are necessary or useful for the protection of
any and all such Merrimack Intellectual Property. With regard to GTC
Intellectual Property, or Joint Intellectual Property, which will be filed or
prepared at GTC's cost and expense, Merrimack agrees to cooperate in the
drafting of any and all patent applications, assignments and other instruments
which GTC deems are necessary or useful for the protection of any and all such
GTC Intellectual Property or Joint Intellectual Property.

     11.8      NOTIFICATION OF PATENT ISSUANCES. GTC and Merrimack shall
notify each other of the issuance of each patent included within the GTC
Intellectual Property, Joint Intellectual Property and the Merrimack
Intellectual Property that have at least one claim within the Field of Interest,
giving the date of issue and the patent number for each such patent. Such notice
shall be given promptly, but in any event within thirty (30) Business Days after
receipt of such notice from an appropriate oversight authority.

     11.9      PATENT APPLICATIONS. The Parties will promptly furnish to each
other a written disclosure of any Intellectual Property within the Field of
Interest, the assays or analytical techniques developed and validated by
Merrimack or GTC for the purification or processing of rhAFP under this
Agreement or Joint Intellectual Property conceived and/or reduced to practice
during the term of this Agreement. The Parties shall advise each other on all
communications concerning such Intellectual Property and will promptly supply to
the other Party full and complete copies of all papers received and filed in
connection with the prosecution and/or allowance thereof before the United
States Patent and Trademark Office or other equivalent foreign office.

     11.10     RESERVATION OF RIGHTS Except as expressly provided in this
Section 11, neither Party grants to the other whether implicitly, by estoppel,
or otherwise, any right or license in or to any of its intellectual property
rights, Know-How or Inventions. Each Party also represents and warrants that it
has not entered into any agreement with any other government entity or third
Party, nor shall it do so, which would give any such government entity or third
Party any claim or right to any inventions or discoveries arising under or in
connection with this Agreement.

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               11.11  REPORTS. GTC and Merrimack designated personnel will
communicate at least on a quarterly basis regarding the GTC Intellectual
Property, Joint Intellectual Property and the Merrimack Intellectual Property
developed pursuant to this Agreement. Each Party will provide a written report
to the other Party detailing the timing and payment status of necessary annuity
payments, maintenance fees, outstanding actions, appeals, new filings,
oppositions, interferences filed, to be filed with or under the jurisdiction of
an appropriate oversight authority (such as United States and Trademark Office
with regard to patent applications and other matters pending before it in the
United States of America) for which such Party is responsible hereunder. The
first such communication shall take place within thirty (30) days of the
Effective Date of this Agreement. The Parties shall keep complete and accurate
records of the status and progress of their respective Intellectual Property
licensed to the other Party hereunder. Each Party shall retain and will not
destroy such records without giving the other Parties prior written notice and
the opportunity to archive at least one copy of such records, which such records
shall be treated as Confidential Information.

     12.       INDEMNIFICATION Merrimack and GTC shall each defend, indemnify
and hold the other and its affiliates the respective directors, officers,
employees and agents and affiliates, harmless from and against any and all
losses, damages, liabilities, claims, demands, judgements, settlements costs and
expenses (including, without limitation, reasonable attorneys' fees and other
costs of defense) arising out of, relating to or resulting from the breach of
any of their respective representations, warranties and covenants contained
within this Agreement or their respective negligence or willful misconduct in
the conduct of their obligations or activities hereunder.

               12.1 NOTICE OF INDEMNIFICATION A Party seeking indemnification
pursuant to this Section 12 ( an "Indemnified Party") from or against the
assertion of any claim by a third person (a "Third Person Assertion") shall give
prompt notice to the Party from whom indemnification is sought (the
"Indemnifying Party"); provided, however, that failure to give prompt notice
shall not relieve the Indemnifying Party of any liability hereunder (except to
the extent the Indemnifying Party has suffered actual material prejudice by such
failure).

               12.2 ASSUMPTION OF DEFENSE. Within thirty (30) business days of
receipt of notice from the Indemnified Party pursuant to Section 12 hereof, the
Indemnifying Party shall have the right exercisable by written notice to the
Indemnified Party, to assume the defense of a Third Person Assertion. If the
Indemnifying Party assumes such defense, the Indemnifying Party may select
counsel, which shall be reasonably acceptable to the Indemnified Party.

               12.3 FAILURE TO DEFEND. If the Indemnifying Party (i) does not
assume the defense of any Third Person Assertion in accordance with Section
12.2 hereof; or (ii) having so assumed such defense, unreasonably fails to
defend against such Third Person Assertion, then, upon ten (10) days' written
notice to the Indemnifying Party, the Indemnified Party may assume the
defense of such Third Person Assertion. In such

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event, the Indemnified Party shall be entitled under this Section 12.3 as
part of its damages to indemnification for the costs of such defense.

               12.4 CONFLICTS OF INTEREST. If one of the Parties has been
advised, by the written opinion of counsel made available to both Parties, that
the use of the same counsel to represent both the Indemnified Party and the
Indemnifying Party would present a conflict of interest, then the Indemnified
Party may select its own counsel to represent it in the defense of the matter
and the costs of such defense shall be borne by the Indemnifying Party. The
Indemnifying Party shall be entitled to continue to handle its own
representation in such matter through its own counsel.

               12.5 SETTLEMENT. The Party controlling the defense of a Third
Person Assertion shall have the right to consent to the entry of judgment with
respect to, or otherwise settle, such Third Person Assertion with the prior
written consent of the other Party, which consent shall not be unreasonably
withheld.

               12.6 PARTICIPATION. The Indemnifying Party and the Indemnified
Party shall cooperate, in the defense or prosecution of any Third Person
Assertion. The Indemnified Party shall have the right to participate, at its own
expense, in the defense or settlement of any Third Person Assertion.

     13.       TERM AND TERMINATION

               13.1 TERM The initial term of this Agreement (the "Initial Term")
                    shall commence on the Effective Date and, unless extended by
                    the Parties, shall terminate on the earlier to occur of: (i)
                    June 30, 2005; or (ii) the date the Agreement is terminated
                    in accordance with the provisions of Section 13.2 below. If
                    the Parties agree to extend the Initial Term in order to
                    complete the Stage 2 Activities, the term of this Agreement
                    shall be extended until the earlier to occur of (i) December
                    31, 2006; or (ii) the date the Agreement is terminated in
                    accordance with the provisions of Section 13.2 below.

               13.2 EARLY TERMINATION
                    This Agreement may be terminated at any time upon mutual
                    agreement of the Parties. In addition, either Party may
                    terminate this Agreement:

                    13.2.1 Upon sixty (60) days written notice in the event the
                           other Party fails to make any payments due pursuant
                           to this Agreement, unless such failure is remedied
                           within such sixty (60) Business Day notice period;

                    13.2.2 Upon sixty (60) days written notice in the event the
                           other Party is in material breach of any other
                           obligation

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                           hereunder and such other Party or its Affiliate shall
                           fail to remedy any such breach within sixty (60) days
                           after written notice of such breach;

                    13.2.3 Immediately upon written notice to the other Party,
                           in the event that the other Party has ceased
                           conducting business in the ordinary course (it being
                           agreed that for this purpose the conduct of research
                           and development activities shall be deemed to
                           constitute the conduct of business); or

                    13.2.4 Immediately upon written notice if one or more of the
                           following circumstances remains uncorrected for more
                           than ninety (90) days: (a) entry of an order for
                           relief by or against the other Party under Title 11
                           of the United States Code or any foreign bankruptcy
                           code; (b) the making by the other Party of a general
                           assignment to the benefit of creditors; (c) the
                           appointment of a general receiver or trustee in
                           bankruptcy of the other Party's business or property;
                           or (d) action by the other Party under any insolvency
                           or similar law for the purpose of its bankruptcy,
                           reorganization, or liquidation.

               13.3 EFFECT OF TERMINATION OR EXPIRATION

                    13.3.1 IN GENERAL. Upon termination or expiration of this
                           Agreement, neither Party will have any further
                           obligations under this Agreement, except (i) the
                           liabilities accrued through the date of termination,
                           including compensation for costs incurred through the
                           date of termination; (ii) payment of actual or
                           committed costs incurred to date towards any
                           milestones in process as of the time of termination
                           or expiration; and (iii) the obligations which
                           expressly survive this Agreement as set forth in
                           Section 24 hereof. Upon termination, GTC will, if
                           requested to do so by Merrimack, dispose of any rhAFP
                           and/or any Transgenic Goats generated by GTC pursuant
                           to the Project in accordance with Merrimack's
                           instructions and at Merrimack's expense. At
                           Merrimack's written request, GTC shall maintain the
                           Founder Goats and any progeny, at Merrimack's
                           expense, that have been generated on Merrimack's
                           behalf for a reasonable time not to exceed one
                           hundred and twenty (120) days after Termination until
                           such time as Merrimack is prepared to receive and
                           properly care for the Transgenic Goats.

                    13.3.2 LICENSE RIGHTS. Subject to Sections 14 and 15 below,
                           upon a termination of this Agreement by GTC under

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                           Section 13.2 above, the license rights granted to
                           Merrimack under Section 11.5 above shall terminate.
                           Upon a termination of this Agreement by Merrimack
                           under Section 13.2 above, the license rights granted
                           to GTC under Section 11.5 above shall terminate. In
                           addition, the license rights granted by GTC to
                           Merrimack under Section 11.5 above shall terminate if
                           this Agreement is terminated after Commercialization
                           as a result of either Merrimack's failure to renew
                           this agreement or failure to proceed to the next
                           Definitive Agreement contemplated by this Agreement,
                           AND the following conditions have been met:

                              13.3.2.1  GTC shall at the time be capable of
                                        continuing to supply Transgenic rhAFP to
                                        Merrimack and its Partners in the
                                        quantity necessary for the commercial
                                        sale of the product; and

                              13.3.2.2  GTC shall have offered to renew the
                                        Agreement and to continue to supply
                                        Transgenic rhAFP to Merrimack or its
                                        Partner on substantially the terms then
                                        in effect under this Agreement, subject
                                        to a price adjustment that complies with
                                        the following subsection; and

                              13.3.2.3  In the event of an increase in the
                                        transfer price for a given renewal term,
                                        the transfer price offered by GTC for
                                        that renewal term would provide GTC with
                                        the same operating margin with respect
                                        to sales to Merrimack and its Partners
                                        as was in effect during the then-current
                                        term, and Merrimack shall have received
                                        a certificate to that effect from GTC's
                                        independent public accountants. Such
                                        certificate available only upon written
                                        request of a Party.

                              13.3.2.4  Notwithstanding the foregoing, Merrimack
                                        may cause the license rights granted to
                                        it by GTC under this Agreement to
                                        survive any termination of this
                                        Agreement in which they would otherwise
                                        terminate as a result of provisions of
                                        Section 13.3.2 by agreeing to pay, in
                                        addition to the then current royalty
                                        requirements under Section 9 of this

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                                        Agreement, an additional royalty equal
                                        to 2% of Net Partner Sales, on the terms
                                        set forth in Section 9.

                              13.3.2.5  At any time prior to Commercialization,
                                        Merrimack may choose to transfer the
                                        manufacturing process for rhAFP out of
                                        GTC, notwithstanding the fact that GTC
                                        has substantially performed under the
                                        then existing Definitive Agreement. In
                                        such event, the licenses granted to
                                        Merrimack to GTC under Section 11.5
                                        shall survive termination of this
                                        Agreement and the royalties paid to GTC
                                        shall remain at the then current levels
                                        set forth in any Agreement, provided
                                        however that GTC shall retain the right
                                        to exercise its equity purchase options
                                        set forth in Section 9 of this Agreement
                                        without the associated increase in GTC's
                                        royalty position as provided in that
                                        section.

     14    SPECIAL PROTECTIONS.

               14.1 CHANGE IN CONTROL AT GTC. If, after a Change in Control,
                    GTC's successor in interest commits a willful breach of this
                    Agreement, then upon written notice from Merrimack,
                    Merrimack shall be entitled to each of the following
                    remedies at its sole option, which remedies are not intended
                    to be exclusive of any other remedies available to Merrimack
                    at law or equity upon a willful breach of this Agreement:

                       14.1.1  At Merrimack's option, the Agreement with GTC's
                               successor in interest may be cancelled by written
                               notice;

                       14.1.2  Merrimack shall have a fully-paid, perpetual,
                               assignable license to use the GTC Intellectual
                               Property within the Field of Interest for the
                               sole purpose of producing Clinical Grade rhAFP
                               from a Clarified Milk product, with right to
                               sublicense;

                       14.1.3  GTC's successor in interest shall reimburse
                               Merrimack for all amounts paid by Merrimack to
                               GTC or its successor pursuant to this Agreement,
                               up to a maximum dollar value of [*****];

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                       14.1.4  Merrimack shall be entitled to take, upon 10 days
                               written notice, possession of all animals
                               transgenic for rhAFP that are in GTC's
                               possession, and GTC's successor in interest shall
                               transport such animals at its expense to any
                               facility designated by Merrimack that is located
                               in the United States and within [*****]; and

                       14.1.5  GTC's successor shall be obligated to (i) provide
                               Merrimack the know-how and technical support
                               necessary to permit Merrimack to continue
                               production of Clinical Grade rhAFP from a
                               Clarified Milk product for up to one year after a
                               Change in Control and to (ii) take all reasonably
                               necessary steps in order allow access to
                               Merrimack, under the reasonable control of GTC
                               and/or its successor in interest, to the physical
                               facilities used in the breeding and maintenance
                               of the Transgenic Goats produced under this
                               Agreement including to the barn housing the rhAFP
                               Transgenic Goats if needed and/or a portion of
                               the surrounding farmland suitable for the
                               breeding and maintenance of the Transgenic Goats
                               if needed, as well as the conveyance to Merrimack
                               of all facilities solely dedicated to the
                               maintenance of goats producing rhAFP in their
                               milk.

                       14.1.6  The above provisions apply only to a successor in
                               interest to GTC.

               14.2 PARTNERING PROTECTION. The Parties agree that in negotiating
                    a renewal of this Agreement covering the Stage 2 and 3
                    Activities, they shall negotiate in good faith a provision
                    whereby GTC would receive compensation if Merrimack
                    terminates its relationship with GTC in order to enter into
                    into an arrangement with a Partner pursuant to which the
                    Partner manufactures rhAFP other than through the use of
                    transgenic animals.

     15.   PROTECTIONS FOR GTC RIGHTS IN BANKRUPTCY.

               15.1 NOTICE. Merrimack shall notify GTC in writing promptly
                    after: (i) the filing by or against Merrimack of any
                    petition in bankruptcy or similar filing seeking relief from
                    creditors; (ii) receipt by Merrimack of any notice of
                    foreclosure and/or default that could be reasonably foreseen
                    to have the effect of preventing GTC from practicing the
                    licenses granted to it hereunder.

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               15.2 REPRESENTATION AND WARRANTY. Merrimack hereby represents,
                    warrants, and covenants that of the Effective Date it has no
                    knowledge of any bankruptcy, insolvency, reorganization, or
                    liquidation, notices of foreclosure and/or default, or other
                    filing or proceedings with respect to Merrimack that would
                    affect its promises hereunder or preclude GTC from
                    practicing the licenses granted to it hereunder throughout
                    the term of this Agreement.

               15.3 LICENSE. As of the Effective Date hereto Merrimack hereby
                    grants GTC a limited, fully paid up, non-royalty bearing,
                    sublicenseable license to the Merrimack Intellectual
                    Property within the Field of Interest to the extent required
                    to make, have made, import, export, use, sell and otherwise
                    produce rhAFP as contemplated by this Agreement and Stages I
                    through III. This right is assignable and will flow to GTC's
                    successor in interest, or Affiliate at GTC's sole option.
                    However this license shall not become effective, and neither
                    GTC nor any successor in interest, transferee or Affiliate
                    of GTC, shall be entitled to practice the inventions covered
                    by such license, unless and until six (6) months after
                    Merrimack initiates or becomes subject to one or more of the
                    following circumstances: (i) seek the entry of an order for
                    relief from or against GTC or any other party under Title 11
                    of the United States Code or any foreign bankruptcy code;
                    (ii) making a general assignment to the benefit of its
                    creditors; (iii) make or be required to accept the
                    appointment of a general receiver or trustee in bankruptcy
                    of its business or property; or (iv) taking action by
                    Merrimack under any insolvency or similar law for the
                    purpose of its bankruptcy, reorganization, or liquidation.
                    Collectively the above circumstances (i) through (iv) shall
                    be referenced as "Failure by Merrimack."

               15.4 POSSESSION. In addition to the license granted pursuant to
                    Section 15.3 above, upon any Failure by Merrimack GTC shall
                    be entitled to take possession of and ownership in all
                    animals transgenic for rhAFP and/or the all of the Cell
                    Lines.

               15.5 LEGAL COMPLIANCE. The Parties intend that the license and
                    protections granted pursuant to this Section 15 shall be
                    effective and fully compliant with 11 USC Section 365(n)
                    and 11 USC Section 362 of the United States Bankruptcy code
                    such that GTC can exercise and otherwise utilize the license
                    granted hereunder.

               15.6 TIME RESTRICTION; TERMINATION.

                       15.6.1 If actions taken by GTC directly cause Merrimack
                              to file for bankruptcy prior to September 30,
                              2004, then any

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                              license and/or covenant given by this Section 15
                              are voided.

                       15.6.2 This Section 15 shall terminate and be of no
                              further force or effect upon payment to GTC of
                              all amounts owed to it as a result of Merrimack's
                              election to defer payments under Section 6.3
                              hereof provided that such payment occurs within
                              the six (6) month cure period called out in
                              Section 15.3 above.

     16.       ASSIGNABILITY. This Agreement, and the rights and obligations
hereunder, may not be assigned or transferred by either Party without the prior
written consent of the other Party, such consent not to be unreasonably
withheld. Notwithstanding the foregoing, either Party may assign this Agreement,
without the other's consent, to an Affiliate or in connection with (i) the
merger or consolidation of such Party with or into another person firm or
entity; or (ii) the sale by such Party of all or substantially all of the
business that is the subject matter of this Agreement; provided that in any such
case the assignee agrees in writing to be bound by the provisions of this
Agreement. This Agreement shall be binding on the successors and assigns of the
Parties hereto. Violation of this provision shall be considered a material
breach.

     17.       PUBLICATION. Any publication or presentation relating to the
Project must first be approved in writing by both Parties, such approval not
to be unreasonably withheld. Each Party agrees to submit, for review, any
proposed publication (including any writing to be presented orally) relating
to the Project at least forty-five (45) days prior to submission for
publication or presentation. Either Party may request a delay in publication
or presentation if any of the information to be published or presented is
reasonably deemed by the requesting Party to represent patentable
information. If such a delay is requested, the other Party agrees to delay
the publication or presentation, for a period of ninety (90) days from the
date of such request. Such period may be extended, if necessary, for an
additional period mutually acceptable to the Parties. Notwithstanding the
foregoing, both Parties agree that: (i) no publication or presentation shall
contain Confidential Information with respect to which it has confidentiality
obligations pursuant to Section 10 hereof and (ii) GTC's approval of a
publication by Merrimack shall be required only if and to the extent a
proposed publication relates to Transgenic Technology or Clarification
Technology.

     18.       GOVERNING LAW AND ENTIRETY. The validity, interpretation and
performance of this Agreement shall be governed and construed in accordance with
the laws of the Commonwealth of Massachusetts, U.S.A. This document along with
any separate confidentiality agreements between the Parties, constitutes the
full understanding of the Parties with respect to the subject matter hereof, and
a complete and exclusive statement of the terms of their agreement, and no
terms, conditions understanding or

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agreement purporting to modify or vary the terms of this Agreement shall be
binding unless made in writing and signed by the Party to be bound.

     19.       DISPUTE RESOLUTION. The Parties hereto hereby agree to perform
the terms of this Agreement in good faith, and to attempt to resolve any
controversy, claim or dispute arising hereunder in good faith. Any dispute
regarding the validity, construction, interpretation or performance of this
Agreement (other than any provisions, hereof relating to any intellectual
property rights, or the confidentiality obligations contained in Section 10
hereof) shall be submitted to binding arbitration in Boston, Massachusetts,
to be conducted in accordance with the Arbitration Rules of the American
Arbitration Association ("AAA"). In connection with the foregoing, the
Parties hereto hereby submit to the jurisdiction of the Federal and state
courts of the Commonwealth of Massachusetts. Any arbitration hereunder shall
be submitted to an arbitration tribunal made up of three (3) members, one of
whom shall be selected by Merrimack, one of whom shall be selected by GTC,
and one of whom shall be selected by the other two arbitrators. The order or
award of the arbitrators shall be final and may be enforced in any court of
competent jurisdiction in the United States. The prevailing Party in any
legal or arbitration action brought by one Party against the other shall be
entitled, in addition to any other rights and remedies it may have, to
reimbursement for its expenses incurred thereby, including court costs and
reasonable attorneys' fees. The Parties shall have the right of limited
pre-hearing discovery, including (i) exchange of witness lists, (ii) exchange
of documentary evidence and reasonably related documents, (iii) written
interrogatories, and (iv) subject to the reasonable discretion of the
arbitrators and upon good cause shown depositions under oath of any witnesses
who are to be called to testify at the arbitration hearing. As soon as the
discovery is concluded, the arbitrators shall hold a hearing in accordance
with the aforesaid shall hold a hearing in accordance with the aforesaid AAA
rules.

     20.       NO WAIVER. No waiver of any term or condition of this Agreement
shall be valid or binding on either Party unless agreed in writing by the Party
to be charged. The failure of each Party to enforce at any time any of the
provisions of this Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the validity of either Party to enforce each and every such provision
thereafter.

     21.       COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original and both of which together shall
constitute one instrument.

     22.       INDEPENDENT CONTRACTORS The relationship of Merrimack and GTC
established by this Agreement is that of independent contractors, and nothing
contained

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in this Agreement shall be construed to: (i) give either Party the power to
direct or control the day-to-day activities of the other; (ii) constitute the
Parties as partners, joint venturers, co-owners or otherwise as participants in
a joint or common undertaking; or (iii) allow a Party to create or assume any
obligation on behalf of the other Party for any purpose whatsoever. Nothing in
this Agreement will give rise to the creation of any labor relation by and
between either Party or any employees of the other Party.

     23.   THE INITIAL AGREEMENTS. As evidenced by their execution hereof,
the Parties hereto expressly acknowledge that each of the Initial Agreements,
other than the portions of those agreements which were intended to survive
termination have been superceded and replaced as a result of the mutual
agreement of the Parties hereto, and that neither Party will have any further
obligations thereunder except as expressly set forth in this Agreement.

     24.   SURVIVAL. The provisions of Sections 1.1, 6.1, 6.2, 6.4, 9, 10
(for a period of ten (10) years), 11 through 15, 17 and this Section 24 shall
survive the termination of this Agreement.

     25.   NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been sufficiently
given for all purposes hereof, if mailed by first class, certified or registered
mail, postage prepaid, addressed to the Party to be notified and its address or
such other addresses have been furnished in writing to the notifying Party.
Unless otherwise specified in writing, the mailing address shall be as follows:

     TO MERRIMACK:                   Merrimack Pharmaceuticals, Inc.
                                     101 Binney Street
                                     Cambridge, Massachusetts 02142
                                     Attention: Robert Mulroy, President & CEO
                                     Fax:   (617) 354-8391

           with a copy to:       Testa, Hurwitz & Thibeault, LLP
                                 125 High Street
                                 Boston, MA 02110
                                 Attention: Lawrence S. Wittenberg, Esq.
                                 Fax:   (617) 248-7100

     TO GTC:                         GTC Biotherapeutics Inc
                                     175 Crossing Boulevard

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                                     Framingham, MA 01701
                                     USA
                                     Attention: Chairman, President & CEO
                                     Facsimile:   (508) 370-3797

           with a copy to:       GTC Biotherapeutics Inc
                                 175 Crossing Boulevard
                                 Framingham, MA 01701
                                 USA
                                 Attention: Sr. Vice President & General Counsel
                                 Facsimile:     (508) 370-3797

     26.   NO OTHER RIGHTS. Except as expressly set forth in this Section, no
other rights, express or implied, are granted hereunder to either Party under
any Patent Rights, Transgenic Technology or Know How of the other Party. Except
as otherwise expressly provided in this Section, under no circumstances shall
either Party, as a result of this Agreement, obtain any ownership interest in or
other right to the Patent Rights or Know How of the other Party, including
intellectual property owned, controlled or developed by or licensed to the other
Party prior to or any time during the term of this Agreement.

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     27.     INSURANCE. Each Party shall maintain insurance, including
product liability insurance and workers compensation or an insurance product
with a similar purpose, with respect to its activities hereunder. Such
insurance shall be in such amounts and subject to such deductibles as the
Parties may agree based upon standards prevailing in the industry at the
time. Each Party may satisfy its obligations under this Section 27 through
self-insurance to the same extent.

     28.     SEVERABILITY. If any provision or condition of this Agreement is
determined to be invalid, illegal or unenforceable, the remaining provisions and
conditions of this Agreement shall remain in full force and effect and the
Parties hereby acknowledge and agree that they would have executed the remaining
portion hereof without including the portion so declared invalid, void or
unenforceable. In the event of any such determination, the Parties agree to
negotiate in good faith to modify this Agreement to fulfill as closely as
possible the original intent and purpose hereof. To the extent permitted by law,
the Parties hereby, to the same extent, waive any provision of law that renders
any provision hereof prohibited or unenforceable in any respect.

     29.     FORCE MAJEURE. If the performance of this Agreement or any
obligation hereunder is prevented, restricted or interfered with by reason of
fire or other casualty or accident, strikes or labor disputes, inability to
procure raw materials, power or supplies, terrorist act or other violence, any
law, order, proclamation, regulation, ordinance, demand or requirement of any
government agency, or any other act or condition whatsoever beyond the control
of a Party hereto, the Party so affected, upon giving prompt notice to the other
Party, shall be excused from such performance to the extent of such prevention,
restriction or interference; provided, however, that the Party so affected shall
use reasonable efforts to avoid or remove such causes of non-performance and
shall continue performance hereunder with the utmost dispatch whenever such
causes are removed.

     30.     DILIGENCE Under the terms of this Agreement GTC and Merrimack each
agree to use commercially reasonable efforts to meet the Estimated Timing
outlined in Section 8 hereof. Both Parties agree to be flexible and to work
together in good faith to optimally coordinate the desired outcomes for this
Project.

     GTC BIOTHERAPEUTICS, INC.                   MERRIMACK PHARMACEUTICALS, INC.
     175 Crossing Boulevard, Suite 410           101 Binney Street
     Framingham, MA 01702                        Cambridge, MA 02142
     Attn:  Chairman, President & CEO            Attn:  President & CEO

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IN WITNESS WHEREOF, duly-authorized representatives of the Parties have signed
this Agreement as a document under seal as of the Effective Date.

GTC BIOTHERAPEUTICS, INC.            MERRIMACK PHARMACEUTICALS,
     INC.                                INC.

By:  /s/ Geoffrey F. Cox             By:   /s/ Robert J. Mulroy
    -------------------------------      -------------------------------

Print Name:  Geoffrey F. Cox         Print Name:  Robert J. Mulroy
            -----------------------              ------------------------------

       Chairman, President & Chief
Title: Executive Officer             Title:  President & Chief Executive Officer
      -----------------------------         ------------------------------------

Date:  June 27, 2003                 Date:  June 29, 2003
      -----------------------------        -------------------------------------

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                                                                      APPENDIX I

                                 PROMISSORY NOTE

NOVEMBER __, 2002                                                       $[*****]

FOR VALUE RECEIVED, the undersigned, a Massachusetts corporation (the
"Borrower"), hereby promises to pay to the order of GTC BIOTHERAPEUTICS, INC.
(the "Holder"), a Massachusetts corporation, the principal sum of $1,000,000.00
as follows:

     $[*****] on or before December 27, 2002
     $[*****] on or before March 25, 2003

together with interest from the date hereof on the unpaid principal at the prime
rate (as reported in the WALL STREET JOURNAL) plus 2.5%.

This Note may be prepaid from time to time in whole or in part without
permission or penalty.

For the security of the Holder hereof, the undersigned Borrower covenants that
so long as any part of the principal or interest on this note is outstanding and
unpaid, it will not grant any security interest to any third Party upon its
property, or create any lien whatsoever thereon, without also thereby including
therein this note equally with every other evidence of debt, secured by any of
the undersigned's property. If the Borrower breaks this covenant, the Holder may
make this note due and payable in full on demand upon proper written notice.
This remedy will be deemed cumulative and in addition to any other remedy
available to the Holder hereof.

The undersigned agrees to pay all costs, including reasonable attorney's fees,
incurred by the Holder in enforcing payment hereof.

This Note shall be construed in accordance with, and governed by the laws of the
Commonwealth of Massachusetts.

Agreed and accepted:

MERRIMACK PHARMACEUTICALS, INC. (Borrower)
100 Binney Street
Cambridge, MA  02142

By its duly authorized officer

Name
     ------------------------------------
Title:
     ------------------------------------
Date:
     ------------------------------------

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                                                                     APPENDIX II

                         MERRIMACK PHARMACEUTICALS, INC.

THIS WARRANT AND ANY SECURITIES ACQUIRED UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES
LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION TO THE
REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS. THIS WARRANT AND SUCH
SECURITIES MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF EXCEPT IN
COMPLIANCE WITH THE CONDITIONS SPECIFIED IN THIS WARRANT.

   SERIES B CONVERTIBLE PREFERRED STOCK PURCHASE WARRANT

                                 [______] SHARES

                           [_____________ __], 200[_]

     Merrimack Pharmaceuticals, Inc., a Massachusetts corporation f/k/a Atlantic
BioPharmaceuticals, Inc. hereby certifies that, for value received,
[________________________] (the "Holder"), is entitled, subject to the terms set
forth below, to purchase from the Company, up to [______] shares of the
Company's Series B Convertible Preferred Stock (the "Warrant Shares"), at a
purchase price (the "Purchase Price") of [*****] per share. The number and
character of the Warrant Shares and the Purchase Price are subject to adjustment
as provided herein.

     This Series B Convertible Preferred Stock Purchase Warrant (the "Warrant")
is issued pursuant to a certain term sheet by and between the Company (as
defined below) and the Holder whereby the Parties contemplate entering into and
performing a certain Agreement relating to the production of recombinant human
alpha fetoprotein in Clarified Milk, a copy of which is on file at the principal
office of the Company. The Series B Convertible Preferred Stock issuable upon
exercise of the Warrant Shares shall be subject to the provisions of the
Restated Articles of Organization of the Company (the "Charter"), as from time
to time amended, to which Holder hereby assents.

1.   DEFINITIONS.

     As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

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     (a)  The term "Company" shall mean Merrimack Pharmaceuticals, Inc., a
Massachusetts corporation (f/k/a Atlantic BioPharmaceuticals, Inc.) and any
corporation that shall succeed to or assume the obligations of Merrimack
Pharmaceuticals, Inc. hereunder.

     (b)  The term "Common Stock" shall mean the Company's common stock, without
par value.

     (c)  The term "Market Price" shall mean, on any date specified herein, fair
market value of the Preferred Stock as of such date determined in good faith by
the Board of Directors of the Company.

     (d)  The term "Other Securities" shall mean any stock (other than Preferred
Stock) and other securities of the Company or any other person (corporate or
otherwise) which Holder at any time shall be entitled to receive, or shall have
received, upon exercise of this Warrant, in lieu of or in addition to Preferred
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of the Preferred Stock.

     (e)  The term "Person" shall mean an individual, firm, partnership,
association, unincorporated organization, trust, corporation, or any other
entity.

     (f)  The term "Preferred Stock" shall mean the Series B Convertible
Preferred Stock, without par value, of the Company.

2.   EXERCISE OF WARRANT.

     2.1. EXERCISE PROCEDURE. This Warrant may be exercised by the Holder
hereof, in whole or in part, at any time or from time to time prior to the
Expiration Date (as defined in Section 8), by surrendering to the Company at its
principal office this Warrant, with the form of Election to Purchase Shares
attached hereto as Exhibit A duly executed by the Holder and accompanied by
payment of the Purchase Price for the number of shares of Preferred Stock
specified in such form.

     2.2. PAYMENT OF PURCHASE PRICE. Payment of the Purchase Price may be made
as follows (or by any combination of the following): (i) in United States
currency by cash or delivery of a certified check or bank draft payable to the
order of the Company or by wire transfer to the Company, or (ii) by cancellation
of such number of the shares of Preferred Stock otherwise issuable to the Holder
upon such exercise as shall be specified in such Election to Purchase Shares,
such that the excess of the aggregate current Market Price of such specified
number of shares on the date of exercise over the portion of the Purchase Price
attributable to such shares shall equal the Purchase Price attributable to the
shares of Preferred Stock to be issued upon such exercise, in which case such
amount

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shall be deemed to have been paid to the Company and the number of shares
issuable upon such exercise shall be reduced by such specified number.

     2.3. EFFECTIVE DATE OF EXERCISE. Each exercise of this Warrant shall be
deemed to have been effected immediately prior to the close of business on the
business day on which this Warrant shall have been surrendered to, and the
Purchase Price shall have been received by, the Company as provided in Section
2.1, and at such time the person or persons in whose name or names any
certificate of certificates for shares of Preferred Stock shall be issuable upon
such exercise as provided in Section 3 shall be deemed to have become the holder
or holders of record thereof for all purposes.

     2.4. FRACTIONAL SHARES. In no event shall any fractional share of Preferred
Stock be issued upon any exercise of this Warrant. If, upon exercise of this
Warrant, Holder would, except as provided in this Section 2.4, be entitled to
receive a fractional share of Preferred Stock, then the Company shall issue the
next higher round number of full shares of Preferred Stock, issuing a full share
with respect to such fractional share.

3.   DELIVERY OF STOCK CERTIFICATES.

     As soon as practicable after the exercise of this Warrant in full or in
part, and in any event within 3 business days thereafter, the Company at its
expense (including the payment by it of any applicable taxes) will cause to be
issued in the name of and delivered to Holder (or its designee), a certificate
or certificates for the number of fully paid and nonassessable shares of
Preferred Stock (or Other Securities) to which Holder shall be entitled on such
exercise, together with any other stock or other securities and property
(including cash, where applicable) to which Holder is entitled upon such
exercise pursuant to Section 2 or otherwise. As used in this Warrant the term
"business day" shall mean any day other than a Saturday or a Sunday on which
commercial banking industries in the Commonwealth of Massachusetts are
authorized to be closed.

4.   CONSOLIDATION, MERGER, ETC.

     4.1  ADJUSTMENTS FOR CONSOLIDATION, MERGER, SALE OF ASSETS, REORGANIZATION,
ETC. In case the Company after the date hereof (a) shall consolidate with or
merge into any other Person and shall not be the continuing or surviving
corporation of such consolidation or merger, or (b) shall permit any other
Person to consolidate with or merge into the Company and the Company shall be
the continuing or surviving Person but, in connection with such consolidation or
merger, the Preferred Stock shall be changed into or exchanged for stock or
other securities of any other Person or cash or any other property, or (c) shall
transfer all or substantially all of its properties or assets to any other
Person, or (d) shall effect a capital reorganization or reclassification of the
Preferred Stock, then, and in the case of each such transaction, proper
provision shall be made so that, upon the basis and the terms and in the manner
provided in this Warrant, the Holder of this Warrant, upon the exercise hereof
at any time after the consummation of such transaction, shall be entitled to
receive (at the aggregate Purchase Price in effect at the time of such
consummation for all Preferred Stock issuable upon such exercise

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immediately prior to such consummation), in lieu of the Preferred Stock issuable
upon such exercise prior to such consummation, the highest amount of securities,
cash or other property to which such Holder would actually have been entitled as
a shareholder upon such consummation if such Holder had exercised this Warrant
immediately prior thereto, subject to adjustments (subsequent to such
consummation) as nearly equivalent as possible to the adjustments provided for
in Section 5, PROVIDED that if a purchase, tender or exchange offer shall have
been made to and accepted by the holders of more than 50% of the outstanding
voting securities of the Company, and if the Holder so designates in a notice
given to the Company on or before the date immediately preceding the date of the
consummation of such transaction, the Holder of such Warrant shall be entitled
to receive the highest amount of securities, cash or other property to which it
would actually have been entitled as a shareholder if the Holder of such Warrant
had exercised such Warrant prior to the expiration of such purchase, tender or
exchange offer and accepted such offer, subject to adjustments (from and after
the consummation of such purchase, tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in Sections 3 and 4.

     4.2  ASSUMPTION OF OBLIGATIONS. Notwithstanding anything contained in this
Warrant, the Company shall not effect any of the transactions described in
clauses (a) through (d) of Section 4.1 unless, prior to the consummation
thereof, each Person (other than the Company) which may be required to deliver
any stock, securities, cash or property upon the exercise of this Warrant as
provided herein shall assume any obligations of the Company under this Warrant
(and if the Company shall survive the consummation of such transaction, such
assumption shall be in addition to and shall not release the Company from, any
continuing obligations under this Warrant), and (b) the obligation to deliver to
the Holder such shares of stock, securities, cash or property as, in accordance
with the foregoing provisions of this Section 4, the Holder may be entitled to
receive.

     4.3  NO DILUTION OR IMPAIRMENT. The Company shall not, by amendment of its
Charter or through any consolidation, merger, reorganization, transfer of the
assets, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder of this Warrant against
impairment. Without limiting the generality of the foregoing, the Company (a)
shall not permit the par value of any shares of stock receivable upon the
exercise of this Warrant to exceed the amount payable therefor upon such
exercise, (b) shall take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Preferred Stock upon exercise of this Warrant and issue
fully paid and nonassessable shares of Common Stock upon conversion of the
Warrant Shares received upon exercise of this Warrant, and (c) shall not take
any action which results in the total number of shares of Preferred Stock
issuable upon the exercise of this Warrant exceeding the total number of shares
of Preferred Stock then authorized by the Company's Charter and available for
the purpose of issue upon such exercise.

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5.      ADJUSTMENTS FOR STOCK DIVIDENDS AND STOCK SPLITS.

     In the event that the Company shall (i) issue additional shares of stock as
a dividend or other distribution on outstanding Preferred Stock or (ii)
subdivide or combine its outstanding shares of Preferred Stock, then, the number
of Warrant Shares issuable upon exercise of this Warrant immediately prior to
such subdivision or to the issuance of such stock dividend shall be
proportionately increased, and the Purchase Price shall be proportionately
decreased, and in the event that the Company shall at any time combine the
outstanding shares of Preferred Stock, the number of shares issuable upon
exercise of this Warrant immediately prior to such combination shall be
proportionately decreased, and the Purchase Price shall be proportionately
increased, effective at the close of business on the date of such subdivision,
stock dividend or combination, as the case may be, provided however, that there
shall be no decrease in the Purchase Price pursuant to this Section 5 if such
decrease would cause the Purchase Price to be equal to an amount that is less
than the par value of the Preferred Stock.

6.   INVESTMENT REPRESENTATIONS.

     6.1  ACCREDITED INVESTOR. Holder is an "accredited investor" as such term
is defined under Regulation D of the Act.

     6.2  INVESTMENT PURPOSE. This Warrant and the right to purchase shares of
Preferred Stock upon the exercise thereof, are being acquired for investment
purposes only and not with a view towards, or for sale in connection with, the
distribution thereof, and Holder has no present intention of distributing or
selling the same except pursuant to an applicable registration or exemption
under the Act.

7.   NO VOTING RIGHTS.

     This Warrant shall not entitle the holder hereof to any voting rights or
other rights as a stockholder of the Company.

8.   TERMINATION OF WARRANT.

     Holder's right to exercise this Warrant shall expire upon the earlier of
(i) 5:00 p.m., Eastern Time, on [______________ __], 200[__FIVE YEARS FROM
ISSUANCE], or (ii) immediately prior to the declaration by the Securities and
Exchange Commission of the effectiveness of a registration statement relating to
the Company's Qualified Initial Public Offering (the "Expiration Date"). For
purposes of the foregoing sentence, a "Qualified Initial Public Offering" is an
underwritten public offering of the Common Stock with a per share offering price
equal to or greater than [*****] (subject to adjustment for stock splits, stock
dividends and the like), which results in aggregate net

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proceeds to the Company of at least [*****] and a pre-money valuation of the
Company of at least [*****].

9.   MISCELLANEOUS.

     9.1  TRANSFER OF WARRANT. Subject to Holder's compliance with applicable
Federal and state securities laws, this Warrant may be transferred by Holder in
whole or in part. Upon surrender of this Warrant for transfer, properly
endorsed, to the Company, the Company at its expense will issue and deliver a
new Warrant or Warrants of the same denomination and terms, in the name of
Holder's transferee(s).

     9.2  REPLACEMENT OF WARRANTS. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Warrant and, in the case of any such loss, theft or destruction of any Warrant,
on delivery of an indemnity agreement or security reasonably satisfactory in
form and amount to the Company or, in the case of any such mutilation, on
surrender and cancellation of such Warrant, the Company at its expense will
execute and deliver, in lieu thereof, a new Warrant of like tenor; provided,
however, if any Warrant is lost, stolen or destroyed, the affidavit of an
officer of Holder setting forth the circumstances with respect to such loss,
theft or destruction shall be accepted as satisfactory evidence thereof, and no
indemnity bond or other security shall be required as a condition to the
execution and delivery by the Company of a new Warrant in replacement of such
lost, stolen or destroyed Warrant.

     9.3  REMEDIES. The Company stipulates that the remedies at law of Holder
in the event of any default or threatened default by the Company in the
performance of or compliance with any of the terms of this Warrant are not and
will not be adequate, and that such terms may be specifically enforced by a
decree for the specific performance of any agreement contained herein or by an
injunction against a violation of any of the terms hereof or otherwise.

     9.4  NOTICES. Any notice or other communication required or which may be
given hereunder shall be in writing and shall be delivered personally, sent by
facsimile transmission (with a copy by mail) or sent by certified, registered or
express mail (including Federal Express or other established overnight delivery
service), postage prepaid, as follows:

     to the Company:                  Merrimack Pharmaceuticals, Inc.
                                      101 Binney Street
                                      Cambridge, Massachusetts 02142
                                      Attention: Robert Mulroy, President & CEO
                                      Fax:   (617) 354-8391

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     with a copy to:                  Testa, Hurwitz & Thibeault, LLP
                                      125 High Street
                                      Boston, MA 02110
                                      Attention: Lawrence S. Wittenberg, Esq.
                                      Fax:      (617) 248-7100

     to Holder:                       [Insert name and address]

     with a copy to:                  [insert any person to receive a copy]

The Parties may from time to time amend the above addresses and names by written
notice given the other Party.

     9.5  SIGNIFICANCE OF CAPTIONS. The captions of the Articles, Sections and
subsections of this Warrant are for convenience of reference only and shall not
affect the meaning or interpretation of any of the provisions hereof.

     9.6  BENEFIT AND BINDING EFFECT. This Warrant shall inure to the benefit of
the respective personal representatives, successors and assigns of the Parties
hereto.

     9.7  GOVERNING LAW. This Warrant shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Massachusetts.

     9.8  RESERVATION OF STOCK. The Company shall at all times reserve and keep
available, solely for issuance and delivery upon exercise of this Warrant, the
number of shares of Preferred Stock, from time to time issuable upon exercise of
this Warrant and the total number of shares of Common Stock which may be issued
upon the conversion of the Warrant Shares, at any time outstanding. All shares
of Preferred Stock issuable upon exercise of this Warrant and all shares of
Common Stock issuable upon conversion of the Warrant Shares shall be duly
authorized and, when issued upon such exercise or conversion, as appropriate,
shall be validly issued and, in the case of shares, fully paid and
nonassessable. All Warrant Certificates surrendered upon the exercise of the
rights thereby evidenced shall be canceled, and such canceled Warrants shall
constitute sufficient evidence of the number of shares of stock which have been
issued upon the exercise of such Warrants. Subsequent to the Expiration Date, no
shares of Preferred Stock and Common Stock need to be reserved in respect of any
unexercised Warrant.

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     9.9  ENTIRE AGREEMENT.  This Warrant  represents the entire agreement of
the Parties hereto with respect to the transactions contemplated hereby and
supersedes all prior agreements and understandings.

     IN WITNESS WHEREOF, the Parties have executed this Warrant under seal as of
the day and year first written above.

                                                      MERRIMACK PHARMACEUTICALS,
                                                      INC.

                                                      By:
                                                         -----------------------
                                                      Name:
                                                           ---------------------
                                                      Title:
                                                             -------------------

                                                      GTC BIOTHERAPEUTICS, INC.

                                                      By:
                                                         -----------------------
                                                      Name:
                                                           ---------------------
                                                      Title:
                                                            --------------------

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                                                                    APPENDIX III

             CHARACTERIZATION AND RELEASE ASSAYS FOR CLARIFIED MILK

ASSAYS* (rHAFP IN CLARIFIED MILK)

          1)   [*****] for recovering microorganisms

          2)   [*****] assay for detection of Bacterial Endotoxin

          3)   Concentration Assay

          4)   Assays for detection of adventitious viruses using three
               indicator cell lines: [*****]

          [*****]

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                                                                     APPENDIX IV

                             PURIFICATION AGREEMENT

I.   ACTIVITIES

     1)   MERRIMACK AND GTC AGREE AS FOLLOWS:

          a.   GTC and Merrimack will collaborate on defining appropriate
                 purification processes for rhAFP produced in the milk of
                 transgenic goats and clarified by [*****]. The assumption for
                 the purposes of this Agreement is that a [*****] purification
                 process for rhAFP from clarified milk will be used;

          b.   GTC will develop in collaboration with Merrimack appropriate
                 assays to support purification process development, Purified
                 Bulk release, and stability monitoring;

          c.   GTC will apply the purification process to purify rhAFP from
                 clarified milk from hormonal induction and natural lactation
                 for pre-clinical and early stage human clinical studies by
                 Merrimack; and

          d.   GTC will perform stability studies on Purified Bulk and the
                 finished Drug Product as agreed by both parties.

     2)   GTC WILL PERFORM THE FOLLOWING ACTIVITIES:

          a.   GTC will, in collaboration with Merrimack, optimize and define
               a bench scale process for the purification of rhAFP from
               clarified milk (starting material) produced by hormonal
               induction of the F0 female Founder Goats [*****];

          b.   GTC will develop a bench scale process for the purification of
               rhAFP from clarified milk (starting material) produced from
               natural lactation of the Founder Goats and the Transgenic Goats
               generated by [*****];

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          c.   GTC will purchase, calibrate and qualify purification equipment;
               purchase and release raw materials and shall generate
               documentation sufficient to support manufacturing rhAFP for early
               stage human clinical studies by Merrimack.. GTC will devise a
               plan for process scale up including: calibrating equipment,
               optimizing the purification process and generating the process
               documentation for early stage human clinical studies by
               Merrimack;

          e.   GTC, in collaboration with Merrimack, will optimize and qualify
               appropriate assays to support purification process development,
               stability studies and the release of Purified Bulk;

          f.   GTC will perform and/or manage a preliminary [*****] study that
               will include a study on the [*****];

          g.   GTC shall perform and/or manage a [*****] study for [*****], to
               be determined by the Parties;

          h.   GTC, in collaboration with Merrimack, will perform [*****]
               studies for monitoring Purified Bulk and Finished Drug Product
               produced by[*****];

          i.   GTC will process [*****] in clarified milk from hormonal
               induction lactation for pre-clinical studies by Merrimack[*****];

          j.   GTC will process [*****] in clarified milk from hormonal
               induction and natural lactation using [*****], intended for early
               stage human clinical studies by Merrimack [*****];

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          k.   GTC will process [*****] in clarified milk from natural lactation
               using[*****], intended for pre-clinical studies by
               Merrimack[*****];

          l.   GTC will process the next [*****] in clarified milk from natural
               lactation using [*****], intended for early stage human clinical
               studies by Merrimack[*****];

          n.   GTC will process the next [*****] in clarified milk from natural
               lactation using [*****], intended for early stage human clinical
               studies by Merrimack [*****]; The first of these runs may be
               classified as an "Engineering Run" depending on purification
               results);

          o.   As part of the Stage 2 agreement, Merrimack and GTC will
               negotiate in good faith regarding terms for the purification of
               the next [*****] of AFP in clarified milk produced in Stage 2

          p.   GTC, in collaboration with Merrimack, will set product
               specifications and perform lot release testing, specifically not
               including a potency assay; and

          q.   GTC shall provide a deliverables list including development
               reports, quantities of purified bulk material, and viral
               clearance reports.

II.  COMPENSATION FOR PURIFICATION ACTIVITIES PERFORMED

     1)   MERRIMACK AGREES TO COMPENSATE GTC THROUGH THE PURIFICATION PROGRAM AS
          FOLLOWS:

          a.   $150,000 upon execution of this Initial Collaboration Agreement
               as payment towards the following activities [This was paid
               on[*****].

                    i)   [*****] project management fees upon processing of
                         [*****] rhAFP in clarified milk (line C in Appendix
                         VI);

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                    ii)  [*****] to develop/optimize [*****] (line I in Appendix
                         VI); and,

                    iii) [*****] to develop/optimize analytical methods as
                         described in Appendix V (line E in Appendix VI).

          b.   $100,000 prior to January 31, 2003 as further payment towards i),
               ii) and iii) above [This was paid on[*****];

          c.   $200,000 upon completion of processing of [*****] of rhAFP or by
               April 30,2003 whichever is earlier as further payment towards i)
               above and as payment towards the following activities [This was
               paid on [*****];

                    i)   [*****] to conduct a preliminary viral clearance study
                         (nanofiltration) for [*****] (line L in Appendix VI);

                    ii)  [*****] to process clarified milk containing [*****]
                         rhAFP intended for pre-clinical studies by Merrimack.
                         (line K in Appendix VI);

                    iii) [*****] to transfer the process to the GTC pilot
                         purification facility (line M in Appendix VI);

                    iv)  [*****] to process clarified milk containing [*****]
                         intended for early stage human clinical studies by
                         Merrimack [*****] (line O in Appendix VI);

                    v)   [*****] toward utilization of pilot scale purification
                         equipment [*****] (line Q in Appendix VI); and,

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                    vi)  [*****] to conduct product stability studies (line G in
                         Appendix VI).

          d.   [*****] by July 31, 2003 or within [*****] business days of
                    Merrimack closing new Series C venture capital financing
                    whichever is earlier as payment towards [*****] above.

          e.   [*****] by September 30, 2003 or within five (5) business days of
                    Merrimack closing new [*****] venture capital financing
                    whichever is earlier as payment towards [*****] above.

          f.   [*****] project management fees payable over six (6) consecutive
               quarters for clarification and purification activities (line T in
               Appendix VI).

          g.   [*****] upon written notification by GTC to Merrimack of the
               completion of the development of [*****] (line W in Appendix VI);

          h.   [*****] upon written notification by GTC to Merrimack of the
               completion of qualification and transfer of analytical methods to
               support clinical manufacturing and release of Purified Bulk (line
               U in Appendix VI);

          i.   Cost for conducting viral clearance study for [*****] to be
               determined (line X in Appendix VI);

          j.   [*****] upon the initiation of the utilization of purification
               equipment for [*****]. (line R in Appendix VI);

          k.   [*****] upon initiation of the procurement of columns and resins
               for [*****] (line MM in Appendix VI);

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          l.   [*****] upon written notification by GTC to Merrimack of the
               completion of the transfer of [*****], to GTC pilot purification
               facility (line Y in Appendix VI);

          m.   [*****] upon the initiation of the utilization of purification
               equipment for [*****] (line NN in Appendix VI);

          n.   [*****] upon written notification by GTC to Merrimack of the
               completion of the transfer of [*****], to GTC pilot purification
               facility (line AA in Appendix VI);

          o.   [*****] upon written notification by GTC to Merrimack of the
               completion of processing clarified milk containing [*****] rhAFP
               intended for preclinical studies by Merrimack [*****] (line FF in
               Appendix VI);

          p.   [*****] to process [*****] rhAFP, payable quarterly on a per
               batch basis, intended for early stage human clinical studies by
               Merrimack [*****] (line HH in Appendix VI);

          r.   [*****] to process [*****] rhAFP, payable quarterly on a per
               batch basis, intended for early stage human clinical studies by
               Merrimack [*****] (line JJ in Appendix VI);

          s.   As part of the Stage 2 agreement, Merrimack and GTC will
               negotiate in good faith regarding terms for the purification of
               the next [*****] of AFP in clarified milk produced in Stage 2

          t.   [*****] to conduct stability studies on Purified Bulk and
               Finished Drug Product produced by [*****], payable over 6
               consecutive quarters (line V in Appendix VI).

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III. TIMING

     The estimated timing of the purification program is provided below and is
     regarded by GTC as the most likely for this project. The key approximate
     time points are as follows:

          [*****] defined                                   [*****]

          Analytical methods developed                      [*****]

          Manufacturing to produce rhAFP for                [*****]
          [*****] rhAFP in clarified milk processed at
          [*****]

          [*****] transferred to Pilot facility             [*****]

          Preliminary viral clearance study for             [*****]
          [*****] completed

          Manufacturing to produce rhAFP                    [*****]
          for early stage clinical trials
          ([*****] in clarified milk processed
          at[*****])

          [*****] defined                                   [*****]

          [*****]transferred                                [*****]

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          to pilot facility

          Manufacturing to produce rhAFP for animal         [*****]
          toxicology studies ([*****] rhAFP in clarified
          milk processed at [*****])

          Manufacturing to produce rhAFP for early stage    [*****]
          clinical trials ([*****] rhAFP in clarified milk
          processed at[*****])

          [*****]transferred                                [*****]
          to pilot facility

          Manufacturing to produce rhAFP for early stage    [*****]
          clinical trials ([*****] )

          Stability studies                                 [*****]

IV.  EXCLUSIONS

     Specifically not included in the services to be provided by GTC in this
     Agreement are the following procedural elements:

     1)   Finished Drug Product lot release.

     2)   Formulation development.

     3)   Clinical and regulatory support. Costs associated with QA/regulatory
          activities to support regulatory submissions for
          transgenically-produced rhAFP shall be determined by the Parties.
          These costs will be based on hourly FTE (fully burdened) rates on a
          per task basis to be agreed between the Parties.

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                                                                      APPENDIX V

CHARACTERIZATION AND RELEASE ASSAYS FOR rHAFP* (PURIFIED BULK rHAFP)

     1)   Quality
               [*****]
     2)   Potency
               [*****]
     3)   Purity
               [*****]
     4)   Identity
               [*****]

*Note: Specifications for each test to be discussed and agreed upon by both
parties.  AFP must meet requirements for use in clinical trials.

^ To be done by third party contract lab.

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                                                                     APPENDIX VI

[*****]
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