Document:

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                                                                   EXHIBIT 10.32

CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS
([*]), HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                LICENSE AGREEMENT

      THIS AGREEMENT is dated as of the 1st day of September, 2004
(the "Effective Date"), between Tyho Galileo Research Laboratory, a LLC
organized under the laws of New York with a principal place of business at 101
Old Short Hills Road, Suite 501, West Orange, NJ 07052 ("Galileo") and ViaCell,
Inc., a corporation organized under the laws of Delaware with a principal place
of business at 245 First Street, Cambridge, MA 02142 ("ViaCell").

      WHEREAS, Galileo has been engaged in research in the field of human gamete
cryopreservation;

      WHEREAS, that research led to the United States patents, patent
applications and other inventions listed in Exhibit A, which have been assigned
to Galileo.

      WHEREAS, ViaCell is desirous of obtaining, and Galileo wishes to grant to
ViaCell, an exclusive license to the Licensed Patent Rights (as defined in
Section 1.5), the Technology (as defined in Section 1.13) and the Improvements
(as defined in Section 1.3); and

      WHEREAS, the parties are desirous of collaborating in the Field (as
defined in Section 1.2);

      NOW, THEREFORE, the parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

      1.1. "AFFILIATE" means any corporation, limited liability company or other
legal entity which directly or indirectly controls, is controlled by, or is
under common control with ViaCell or its successors or assigns, or any successor
or assign of such an entity. For the purpose of this Agreement, "control" shall
mean the direct or indirect ownership of at least fifty-one percent (51%) of the
outstanding shares on a fully diluted basis or other voting rights of the
subject entity to elect directors, or if not meeting the preceding, any entity
owned or controlled by or owning or controlling at the maximum control or
ownership right permitted in the country where such entity exists.

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      1.2. "FIELD" means human oocyte and human embryo cryopreservation with
reference to use of the Materials, as described in Exhibit B, or any
Improvements to the Materials.

      1.3. "IMPROVEMENTS" means all inventions, discoveries, designs,
improvements and all other intellectual property rights made or perfected in the
performance of, or arising out of, the Research.

      1.4. "LICENSED MEDIA" means cryopreservation media covered by, or made by
a process covered by, a Valid Claim included in the Licensed Patent Rights, or
which utilizes the Technology or Improvements in material part.

      1.5. "LICENSED PATENT RIGHTS" means Galileo's rights under all patents and
patent applications listed in Exhibit A attached hereto, as well as all foreign
counterpart patents and patent applications (including future foreign
counterparts to the patents and patent applications listed in Exhibit A); any
patents which issue on the applications listed in Exhibit A; all reissues,
reexaminations, renewals, extensions, divisionals, continuations, and
continuations-in-part of the foregoing patents and patent applications; and any
foreign counterparts and any other forms of protection directed to the
inventions covered by the patents or patent applications listed in Exhibit A.

      1.6. "LICENSED PRODUCT" means any product, device, service or system in
the Field which is covered by, or is made by a process covered by, a Valid Claim
included in the Licensed Patent Rights, or which utilizes the Technology or
Improvements in material part, but excluding Licensed Media.

      1.7. "LICENSED TECHNOLOGY" means the Licensed Patent Rights, the
Technology and the Improvements.

      1.8. "MATERIALS" means the CJ panel of media identified on Exhibit B
attached hereto.

      1.9. "GROSS STORAGE REVENUES" means the combined amount received by
ViaCell, its Affiliates and its Sublicensees from the storage of human oocytes
or human embryos cryopreserved through the use of Licensed Products or Licensed
Media.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
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      1.10. "GROSS REVENUES" means the combined amount received by ViaCell, its
Affiliates and its Sublicensees from the sale to unrelated third parties of
Licensed Products or Licensed Media.

Such Gross Revenue received by ViaCell may include, but not be limited to, the
fees charged for hormone therapy, oocyte retrieval, oocyte cryopreservation and
transportation.

Notwithstanding the foregoing, in the event a Licensed Product or Licensed Media
is sold in conjunction with another active component so as to be a combination
product (whether packaged together or in the same therapeutic formulation),
Gross Revenues shall be calculated by multiplying the Gross Revenues of such
combination product by a fraction, the numerator of which shall be the fair
market value of the Licensed Product or Licensed Media as if sold separately
(determined in accordance with generally accepted accounting principles), and
the denominator of which shall be the aggregate fair market value of all the
active components of such combination product, including the Licensed Product or
Licensed Media, as if sold separately. In the event no such separate sales are
made by ViaCell, its Affiliates or its Sublicensees, Gross Revenues of the
combination product shall be calculated in a manner to be negotiated and agreed
upon by the parties, reasonably and in good faith, prior to any sale of such
combination product, which shall be based upon the respective estimated
commercial values of the active components of such combination product.

      1.11. "RESEARCH" means the research and development of cryopreservation
media for human gamete and human embryo cryopreservation performed pursuant to
Section 5.4 hereof, as more fully described in Exhibit C attached hereto, as
such Exhibit C may be amended by mutual written consent of the parties.

      1.12. "ROYALTY TERM" means the period described in Section 5.3.

      1.13. "SUBLICENSEE" means any sublicensee of the rights granted to ViaCell
hereunder other than any Affiliate of ViaCell.

      1.14. "TECHNOLOGY" means all proprietary information, know-how,
procedures, methods, prototypes, designs, technical data and reports owned by or
licensed to Galileo as of the Effective Date that are necessary or useful in the
development of Licensed Products or Licensed

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
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Media and which relate to the Licensed Products or Licensed Media, but which are
not the subject of the Licensed Patent Rights.

      1.15. "TERRITORY" means worldwide.

      1.16. "VALID CLAIM" means (a) an issued claim of an issued patent within
the Licensed Patent Rights, which has not (i) expired or been canceled, (ii)
been declared invalid by an unreversed and unappealable decision of a court or
other appropriate body of competent jurisdiction, (iii) been admitted to be
invalid or unenforceable through reissue, disclaimer or otherwise, and/or (iv)
been abandoned in accordance with or as permitted by the terms of this Agreement
or by mutual written agreement; or (b) a claim included in a pending patent
application within the Licensed Patent Rights that is being actively prosecuted
in accordance with this Agreement and which has not been (i) canceled or
withdrawn from consideration, (ii) finally determined to be unallowable by the
applicable governmental authority (and from which no appeal is or can be taken),
or (iii) abandoned in accordance with or as permitted by the terms of this
Agreement or by mutual written consent.

                                   ARTICLE 2

                                 LICENSE GRANT

      2.1 Galileo hereby grants to ViaCell an exclusive, royalty-bearing license
under the Licensed Technology to research, develop, make, have made, import,
have imported, use, have used, sell, have sold, offer for sale, have offered for
sale, and otherwise exploit Licensed Products and Licensed Media throughout the
Territory.

      2.2 This license is subject to the non-transferable, non-sublicenseable
reservation of Galileo's right to make, have made, and use Licensed Products or
Licensed Media for research at any clinic (Exhibit D) for which it is providing
services to ViaCell.

      2.3 Sublicense Rights are granted to ViaCell to contract with a FDA
approved manufacturer to produce the media for commercial use. Such manufacturer
may only produce media for and sell media to ViaCell. Furthermore, such
manufacturer may not directly or indirectly refer to this License Agreement with
Galileo Technologies Inc. in any oral or written communication.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      2.4 Any sublicenses granted by ViaCell, including, without limitation, any
nonexclusive sublicenses, shall remain in effect and be assigned to Galileo in
the event this license terminates pursuant to Paragraph 8.2; provided, the
financial obligations of each Sublicensee to Galileo shall be limited to the
amounts that the Sublicensee shall be obligated to pay to ViaCell under the
terms of the respective sublicense. In such event and subject to the preceding
sentence, Galileo shall assume all the rights and obligations of ViaCell under
such sublicenses.

      2.5 ViaCell shall use its commercially reasonable efforts to promote the
product development and commercial launch of a Licensed Product or Licensed
Media, such efforts to be commensurate with the efforts undertaken by similarly
situated companies developing products of similar commercial potential.

                                   ARTICLE 3

                            TECHNOLOGY AND MATERIALS

      3.1. With respect to all Technology and Materials existing as of the
Effective Date, Galileo shall disclose, transmit and deliver to ViaCell, orally,
in writing or by delivery thereof, as applicable, all of such Technology and
Materials on or before the expiration of one month from the Effective Date. Such
communication of information and transfer shall include, but not be limited to,
the delivery by Galileo to ViaCell of the patent applications for the Licensed
Patent Rights, all background and back-up information, patent prosecution
information, test results and other information relevant in any way to the
Licensed Patent Rights, the Technology and the Materials.

                                   ARTICLE 4

                     PROSECUTION OF PATENT APPLICATIONS AND
                             PAYMENT OF PATENT COSTS

      4.1. PROSECUTION. ViaCell shall have the right, at its own expense, to
prosecute and maintain in Galileo's name any and all patent applications and
patents included in the Licensed Patent Rights and to file for and maintain
patents in Galileo's name covering any Technology and Improvements licensed
hereunder for which a patent application has not already been filed. ViaCell
shall be entitled to select patent counsel for this purpose, subject to
Galileo's reasonable

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

approval. Further, ViaCell shall have their patent counsel copy Galileo on all
correspondence and filings relating to the prosecution of such patents in
Galileo's name. Galileo agrees to fully cooperate with ViaCell in preparing,
filing, prosecuting, and maintaining any such patent applications and patents,
and Galileo agrees to execute any documents as shall be necessary for such
purpose and not to impair in any way the patentability of such Licensed Patent
Rights, Technology or Improvements.

      4.2. PROSECUTION BY GALILEO. If ViaCell declines to file, prosecute and
maintain or continue the prosecution or maintenance of a patent application or
patent to obtain one or more patent(s) included in the Licensed Patent Rights or
covering the Technology or Improvements, then Galileo may elect to file or take
over the prosecution of any such patent application, and ViaCell shall be
relieved of any obligation to pay the expenses in connection with the
prosecution and maintenance of any such patent or patent application.

                                   ARTICLE 5

                                    PAYMENTS

      5.1. LICENSE FEE. ViaCell shall pay Galileo a license fee of fifty
thousand dollars ($50,000), which includes a $10,000 exclusivity fee, which has
been previously paid, within five (5) business days of the Effective Date.

      5.2. MILESTONE PAYMENT. ViaCell shall pay to Galileo a milestone payment
in connection with the commencement of commercial sales of Licensed Products or
Licensed Media in the amount of twenty-four thousand dollars ($24,000). Such
payment shall be paid in eight quarterly installments of three thousand dollars
($3,000) each, with the first such payment due within five (5) business days of
the first commercial sale of a Licensed Product or Licensed Media and subsequent
payments due on each of the next seven quarterly anniversaries of the first
payment.

      5.3. ROYALTIES.

            (a) ViaCell shall pay Galileo [*] percent ([*]%) of Gross Revenues
       from the sale of Licensed Products and [*] percent ([*]%) of Gross
       Storage Revenues.

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

            (b) ViaCell shall pay to Galileo annual minimum royalties equal to
      thirty thousand dollars ($30,000), payable on each anniversary of the
      Effective Date commencing with the first anniversary of the Effective
      Date. The annual minimum royalties payable under this subsection (b) shall
      be fully creditable against royalties paid by ViaCell to Galileo pursuant
      to Section 5.3(a) during the year preceding the applicable anniversary of
      the Effective Date.

            (c) For the purpose of determining royalties payable under this
      Agreement, any royalties or other revenues ViaCell receives from
      Affiliates or Sublicensees in currencies other than U.S. dollars and any
      Gross Revenues denominated in currencies other than U.S. dollars shall be
      converted into U.S. dollars according to ViaCell's reasonable standard
      internal conversion procedures, including ViaCell's standard internal
      rates and conversion schedule.

            (d) Royalties due under this Article 5 shall be payable on a
      Licensed Product-by-Licensed Product or Licensed Media-by-Licensed Media
      and country by country basis as follows:

                  (i) with respect to Licensed Products or Licensed Media for
            which the manufacture or sale is not covered by a Valid Claim
            included in the Licensed Patent Rights, for a period of ten (10)
            years from the date of the first commercial sale of such Licensed
            Product or Licensed Media in such country.

                  (ii) with respect to Licensed Products or Licensed Media for
            which the manufacture or sale is covered by a Valid Claim included
            in the Licensed Patent Rights, until the last to expire of the Valid
            Claims included in the Licensed Patent Rights covering such Licensed
            Product or Licensed Media in such country;

                  (iii) with respect to each Licensed Product or Licensed Media,
            the foregoing applicable period is referred to herein as the
            "Royalty Term".

            (e) Except as otherwise provided in this Agreement, all royalty
      payments due hereunder shall be paid quarterly within sixty (60) days
      after the end of each calendar

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Commission.
<PAGE>

      quarter. Each such payment shall be accompanied by a reasonably detailed
      statement showing the basis for the calculation of royalties accompanying
      each such report.

            (f) ViaCell shall make all payments required under this Agreement to
      Galileo, in U.S. Dollars (except as otherwise provided herein).

            (g) ViaCell and its Affiliates shall keep complete and accurate
      records pertaining to the sale of Licensed Products and Licensed Media in
      the Territory for a period of not less than three (3) years.

            (h) At the request and expense (except as provided below) of
      Galileo, ViaCell and its Affiliates shall permit an independent, certified
      public accountant appointed by Galileo and reasonably acceptable to
      ViaCell, at reasonable times and upon reasonable notice, to examine no
      more than once per year those records and all other material documents
      relating to or relevant to Gross Revenues or Gross Storage Revenues in the
      possession or control of ViaCell, its Affiliates or Sublicensees, for a
      period of three years after such royalties have accrued. The results of
      any such examination shall be made available to both parties. If, as a
      result of any inspection of the books and records of ViaCell, its
      Affiliates or Sublicensees, it is shown that ViaCell's royalty payments
      under this Agreement were less than the amount which should have been
      paid, then ViaCell shall make all payments required to eliminate any
      discrepancy revealed by said inspection within forty-five (45) days after
      Galileo's demand therefore. Furthermore, if the aggregate royalty payments
      ViaCell made were less than ninety percent (90%) of the amount, which
      should have been paid during the period in question, ViaCell shall also
      reimburse Galileo for the reasonable out-of-pocket cost of such
      inspection.

            (i) In the event that ViaCell is required to withhold and make
      payment of any tax to the tax or revenue authorities in any country in the
      Territory in connection with any payment to Galileo due to the laws of
      such country which payment is credited to Galileo's tax liability, such
      amount paid and so credited shall be deducted from the royalty or other
      payment to be made by ViaCell, and ViaCell shall notify Galileo and
      promptly furnish Galileo with copies of any tax certificate or other
      documentation evidencing such withholding and payment. Each party agrees
      to cooperate with the other

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language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      party in claiming exemptions from such deductions or withholdings under
      any agreement or treaty in effect from time to time.

            (j) If at any time legal restrictions prevent ViaCell's prompt
      remittance of part or all of the royalties due with respect to any country
      where a Licensed Product or Licensed Media is sold or services are
      provided, ViaCell shall convert the amount owed to Galileo into U.S. funds
      and shall pay Galileo directly from ViaCell's U.S. source of funds for the
      amount impounded. ViaCell shall then pay all future royalties due to
      Galileo from ViaCell's U.S. source of funds so long as the legal
      restrictions of this Section still apply.

            (k) In the event that any payment ViaCell is required to make
      hereunder is not made within thirty (30) days after such payment was
      originally due, ViaCell shall pay interest on the past due amount at the
      rate of eight percent (8%) per annum.

      5.4.  RESEARCH BY GALILEO

            (a) For a period of two year from the Effective Date, and thereafter
      as the parties may mutually agree, Galileo shall perform the Research.
      Such Research shall be performed through the 75% time of Dr. J. Stachecki,
      the 20% time of Dr. Steen Willadsen, and the 20% time of Tim Schimmel
      (together, the "Researchers"). Galileo shall use its best efforts to
      ensure that the Research is performed on the schedule set forth in Exhibit
      D.

            (b) In the event that Dr. Stachecki, Dr. Willadsen or Mr. Schimmel
      become unavailable to perform the Research during the Term of this
      Agreement, Galileo shall use best efforts to replace such individual with
      scientists of equivalent qualifications, which replacement shall be
      reasonably acceptable to ViaCell.

            (c) During the Term of this Agreement and for one year after its
      termination, ViaCell agrees that it will not, without prior written
      consent of Galileo, solicit, hire or otherwise offer employment to any
      employees or consultants of Galileo.

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

            (d) ViaCell shall pay Galileo for the Research, in the amounts and
      on the schedule as set forth in Exhibit D. The total funding per year will
      be $207,000 in Year 1 and 225,000 in Year 2, payable quarterly in arrears.

            (e) Galileo shall provide reasonably detailed quarterly reports to
      ViaCell describing the Research performed during the preceding quarter and
      shall make the Researchers available at reasonable times upon prior notice
      to discuss the course and results of the Research with representatives of
      ViaCell.

            (f) In addition to the reports required pursuant to Section 5.4(c),
      Galileo shall disclose promptly to ViaCell all Improvements made or
      perfected in the performance of, or arising out of, the Research, and will
      maintain adequate and current written records (in the form of notes,
      sketches, drawings or as may otherwise be specified by ViaCell), properly
      corroborated, to document the conception and/or first actual reduction to
      practice of any Improvement. Such written records shall be made available
      to ViaCell at all times. All such Improvements, patent applications and
      patents covering such Improvements shall be the exclusive property of
      Galileo.

                                   ARTICLE 6

                           INFRINGEMENT BY THIRD PARTY

      6.1. Both Galileo and ViaCell agree to notify the other in writing should
either party become aware of possible infringement of the Licensed Patents.
ViaCell shall have the first right, but not the obligation, to initiate an
action against the infringer at ViaCell's expense, either in ViaCell's name or
in Galileo's name if so required by law. ViaCell shall have sole control and
shall bear the cost of the action. If ViaCell does not choose to initiate an
action against the infringer, it shall notify Galileo as soon as practicable,
but in any event sufficiently in advance to permit Galileo to initiate such
action.

      6.2. If ViaCell, its Affiliate or Sublicensee, distributor or other
customer is sued by a third party charging infringement of patent rights that
dominate a claim of the Licensed Patents or that cover the development,
manufacture, use, distribution or sale of a Licensed Product or Licensed Media,
ViaCell will promptly notify Galileo. As between the parties to this

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

Agreement, ViaCell will be entitled to control the defense in any such action(s)
and shall bear the cost thereof.

      6.3. If a declaratory judgment action alleging invalidity,
unenforceability or noninfringement of any of the Licensed Patent Rights is
brought against ViaCell and/or Galileo or a re-examination of any of the
Licensed Patent Rights is filed, ViaCell may elect to have sole control of the
action, and if ViaCell so elects it shall bear all the costs of such action.
ViaCell also may elect to undertake or defend any interference, opposition or
similar procedure with respect to the Licensed Patents providing it bears all
the costs of such action.

      6.4. In the event ViaCell institutes a legal action pursuant to Paragraphs
6.1 or 6.2, Galileo shall fully cooperate with and supply all assistance
reasonably requested by ViaCell, including by using commercially reasonable
efforts to have its employees testify when requested and to make available
relevant records, papers, information, samples, specimens, and the like. ViaCell
shall bear the reasonable expenses incurred by Galileo in providing such
assistance and cooperation as is requested pursuant to this Paragraph. ViaCell
shall keep Galileo reasonably informed of the progress of the legal action, and
Galileo shall be entitled to representation by counsel in connection with such
legal action at its own expense.

      6.5. ViaCell shall have the right to settle any claims under Section 6.1,
6.2, or 6.3, but only upon terms and conditions that are reasonably acceptable
to Galileo. Should ViaCell elect to abandon such an action other than pursuant
to a settlement with the alleged infringer that is reasonably acceptable to
Galileo, ViaCell shall give timely notice to Galileo who, if it so desires, may
continue the action at its own expenses, with the sharing of any recovery to be
determined in accordance with Section 6.6.

      6.6. Any amounts paid to ViaCell by third parties as the result of such an
action pursuant to Section 6.1, 6.2, 6.3 or 6.5 (such as in satisfaction of a
judgment or pursuant to a settlement) shall first be applied to reimbursement of
the unreimbursed expenses (including attorneys' fees and expert fees) incurred
by each party. Any remainder shall be divided between the parties as follows:

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language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

            (a) To the extent the amount recovered reflects ViaCell's lost
      profits or royalties, ViaCell shall retain the remainder, less the amount
      of any royalties that would have been due Galileo on sales of Licensed
      Media and Licensed Products lost by ViaCell as a result of the
      infringement had ViaCell made such sales; and

            (b) To the extent the amount recovered does not reflect ViaCell's
      lost profits or royalties, ViaCell will be allowed to recoup any legal
      costs incurred. The remaining amount shall be shared by the parties

                                   ARTICLE 7

           REPRESENTATIONS, WARRANTIES, INDEMNIFICATION AND INSURANCE

      7.1. Galileo hereby covenants, represents, and warrants to ViaCell as
follows:

            (a) There are no liens, mortgages, commitments, obligations and
      encumbrances of any kind or any nature whatsoever against the Licensed
      Technology other than as described in clause (b) of this Section;

            (b) There are no outstanding options, licenses or agreements of any
      kind relating to the Licensed Technology;

            (c) Galileo has full power to grant the rights, licenses and
      privileges granted herein and can perform as set forth in this Agreement
      without violating the terms of any agreement that Galileo has with any
      third party; and

            (d) No other party will acquire any rights in any inventions that
      would limit Galileo's ability to comply with the provisions of this
      Agreement.

      7.2. The parties agree that nothing in this Agreement shall be construed
as:

            (a) a warranty or representation that anything made, used, sold, or
      otherwise disposed of hereunder is or will be free from infringement of
      rights of third parties; or

            (b) an obligation by Galileo to bring or prosecute actions or suits
      against third parties for infringement of the Licensed Technology.

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language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      7.3. THE PARTIES HEREBY AGREE THAT GALILEO MAKES NO EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH RESPECT
TO THE LICENSED TECHNOLOGY.

      7.4. ViaCell shall indemnify, defend and hold harmless Galileo and
Galileo's officers, employees, representatives and agents against any and all
damages, losses or expenses suffered or paid as a result of any claims to the
effect that any of the services offered by ViaCell does not perform as promised
by ViaCell.

      7.5. ViaCell agrees to procure and maintain, during the Term of this
Agreement and for a reasonable period thereafter, Commercial (Comprehensive)
General Liability Insurance covering the use and sale of the Licensed Media and
Licensed Products both internally and to third parties in an amount commensurate
with the risk of such activities. Such policy shall name Galileo and its
respective officers, directors, employees and agents as additional insured, and
the insurance afforded to Galileo thereunder shall be primary for all purposes.
All policies required by this Agreement shall be written by insurance carriers
approved by and satisfactory to Galileo. Within five (5) days after the
execution hereof ViaCell shall deliver to Galileo a certificate evidencing such
coverage and such status of Galileo. The certificate shall provide thirty (30)
days advance written notice of cancellation, non-renewal or termination be given
to Galileo. By requiring insurance as provided in this Section, ViaCell does not
represent that coverage and limits will be adequate to protect Galileo, its
officers, directors, employees and agents, and such limits shall not be deemed
as a limitation of ViaCell's liability to Galileo.

      7.6. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING OUT OF THIS AGREEMENT,
HOWEVER CAUSED, UNDER ANY THEORY OF LIABILITY.

                                   ARTICLE 8

                             TERMINATION OF LICENSE

      8.1. This Agreement and the rights and licenses hereunder shall be in
effect beginning on the Effective Date and continue on a Licensed
Product-by-Licensed Product and Licensed Media-by-Licensed Media until the
expiration of the applicable Royalty Term. Upon expiration

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language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

of this Agreement, other than by Galileo pursuant to Section 8.2, all licenses
granted hereunder shall become fully-paid, perpetual and irrevocable.

      8.2. If this Agreement is materially breached by either party, including
any monetary breach, the non-breaching party may elect to give the breaching
party written notice describing the alleged breach. If the breaching party has
not cured such breach within sixty (60) days after receipt of such notice, the
notifying party will be entitled, in addition to any other rights it may have
under this Agreement, to terminate this Agreement effective immediately;
provided, however, that if either party receives notification from the other of
a material breach and if the party alleged to be in default notifies the other
party in writing within thirty (30) days of receipt of such default notice that
it disputes the asserted default, the matter will be submitted to arbitration as
provided in Article 8 of this Agreement. In such event, the non-breaching party
shall not have the right to terminate this Agreement until it has been
determined in such arbitration proceeding that the other party materially
breached this Agreement, and the breaching party fails to cure such breach
within ninety (90) days after the conclusion of such arbitration proceeding.

      8.3. Termination of this Agreement for any reason shall not release any
party hereto from any liability which, at the time of such termination, has
already accrued to the other party or which is attributable to a period prior to
such termination, nor preclude either party from pursuing any rights and
remedies it may have hereunder or at law or in equity which accrued or are based
upon any event occurring prior to such termination.

      8.4. Except for equitable actions such as seeking a restraining order or
injunction to protect Galileo's Licensed Technology, all disputes,
controversies, or claims arising out of or relating to this Agreement or a
breach thereof shall be submitted to and finally resolved by binding arbitration
under the rules of the American Arbitration Association ("AAA") then in effect.
There shall be one arbitrator, and such arbitrator shall be chosen in accordance
with AAA rules. The arbitration shall take place in New York. The arbitrator
shall apply the laws of the State of New York to all issues in dispute. The
findings of the arbitrator shall be final and binding on the parties, and may be
entered in any court of competent jurisdiction for enforcement. Legal fees shall
be awarded to the prevailing party in the arbitration.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                                   ARTICLE 9

                                CONFIDENTIALITY

      The parties acknowledge that the Mutual Confidential Disclosure Agreement
between the parties dated as of March 12, 2004 and attached hereto as Appendix A
(the "CDA") shall remain in effect according to its terms following the
execution of this Agreement, except that the provision of Section 5 of the CDA
regarding termination shall be deemed to refer to a termination of this
Agreement, and the parties obligations in the event of termination under such
Section 5 shall arise upon termination of this Agreement in lieu of the
termination events described in such Section 5.

                                   ARTICLE 10

                                  MISCELLANEOUS

      10.1. NOTICES. All notice, requests, demands and other communications
hereunder shall be in English and shall be given in writing and shall be: (a)
personally delivered; (b) sent by telecopier, facsimile transmission or other
electronic means of transmitting written documents with confirmation of receipt;
or (c) sent to the parties at their respective addresses indicated herein by
registered or certified mail, return receipt requested and postage prepaid, or
by private overnight mail courier services with confirmation of receipt. The
respective addresses to be used for all such notices, demands or requests are as
follows:

            (a)   If to GALILEO, to:

                  Galileo Research Laboratories, LLC
                  101 Old Short Hills Road
                  Suite 501
                  West Orange, NJ 07052
                  ATTN:  Jacques Cohen, President
                  Phone No.:  646-529-7556
                  Fax No.:  973-322-6235

Or to such other person or address as Galileo shall furnish to ViaCell in
writing.

            (b)   If to VIACELL, to:

                  ViaCell, Inc.
                  245 First Street, 15th Floor
                  Cambridge, MA 02142-1292
                  ATTN:  CEO

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                  Phone No.:  617-914-3510
                  Fax No.:  617-914-3943

                  With a copy to:

                  Marc A. Rubenstein, Esq.
                  Ropes & Gray LLP
                  One International Place
                  Boston, Massachusetts 02110
                  Phone No.: 617-951-7826
                  Fax No.: 617-951-7050

If personally delivered, such communication shall be deemed delivered upon
actual receipt by the "attention" addressee or a person authorized to accept for
such addressee; if transmitted by facsimile pursuant to this Section, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this Section, such communication shall be deemed delivered
upon receipt by the "attention" addressee or a person authorized to accept for
such addressee; and if sent by mail pursuant to this Section, such communication
shall be deemed delivered as of the date of delivery indicated on the receipt
issued by the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Any party to this
Agreement may change its address for the purposes of this Agreement by giving
notice thereof in accordance with this Section 12.1

      10.2. SEVERABILITY. Each provision contained in this Agreement is declared
to constitute a separate and distinct covenant and provision and to be severable
from all other separate, distinct covenants and provisions. It is agreed that
should any clause, condition or term, or any part thereof, contained in this
Agreement be unenforceable or prohibited by law or by any present or future
legislation then such clause, condition, term or part thereof, shall be amended,
and is hereby amended, so as to be in compliance with the said legislation or
law but, if such clause, condition or term, or part thereof, cannot be amended
so as to be in compliance with the said legislation or law but, if such clause,
condition or term, or part thereof, cannot be amended so as to be in compliance
with any such legislation or law, then such clause, condition, term or part
thereof is severable from this Agreement all the rest of the clauses, terms and
conditions or parts thereof contained in this Agreement shall remain unimpaired.

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      10.3. NO AMENDMENT. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

      10.4. GOVERNING LAW. This Agreement, the legal relations between the
parties and any action, whether contractual or non-contractual, instituted by
any party with respect to matters arising under or growing out of or in
connection with or in respect of this Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York,
excluding any choice of law rules that may direct the application of the laws of
another jurisdiction.

      10.5. WAIVER. No waiver of a breach of any provision of this Agreement
shall be deemed to be, or shall constitute, a waiver of a breach of any other
provision of this Agreement, whether or not similar, nor shall such waiver
constitute a continuing waiver of such breach unless otherwise expressly
provided in such waiver.

      10.6. HEADINGS. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.

      10.7. COUNTERPARTS/FACSIMILES. This Agreement may be executed in one or
more counterparts, all of which taken together shall be deemed one original.
Facsimile signatures shall be deemed original.

      10.8. RECITALS. The recitals to this Agreement are true and correct and
are made a part of this Agreement.

      10.9. NO ENDORSEMENT. ViaCell agrees that it shall not make any form of
representation or statement which would constitute an express or implied
endorsement by Galileo of any Licensed Product or Licensed Media, and that it
shall not authorize others to do so, without first having obtained written
approval from Galileo, except as may be required by governmental law, rule or
regulation. Galileo agrees, however, that ViaCell may identify Galileo as the
inventor of the Licensed Patent Rights in any advertising or publicity material.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      10.10. ENTIRE AGREEMENT. Except for the CDA which shall remain in effect
following the date hereof as modified by the provisions of Article 9 hereof,
this Agreement sets forth the complete agreement of the parties concerning the
subject matter hereof. No claimed oral agreement in respect thereto shall be
considered as any part hereof. No waiver of or change in any of the terms hereof
subsequent to the execution hereof claimed to have been made by any
representative of either party shall have any force or effect unless in writing,
signed by duly authorized representatives of the parties.

      10.11. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of any successor or assignee of Galileo. This Agreement is not
assignable by ViaCell without the prior written consent of Galileo (not to be
unreasonably withheld or delayed), except that ViaCell may assign this Agreement
without the prior written consent of Galileo to any Affiliate or any successor
of, or purchaser of a substantial part of, the assets of its business to which
this Agreement pertains or services utilizing the methods within the Licensed
Patent Rights. Any permitted assignee shall succeed to all of the rights and
obligations of ViaCell under this Agreement.

      10.12. THIRD-PARTY TECHNOLOGY. Nothing in this Agreement will impair
ViaCell's right to independently acquire, license, develop for itself, or have
others develop for it, intellectual property and technology performing similar
functions as the technology described in the Licensed Technology or to market
and distribute products other than Licensed Products based on such other
intellectual property and technology.

      10.13. FORCE MAJEURE. Neither party shall lose any rights hereunder or be
liable to the other party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers,
terrorist acts or any other reason where failure to perform is beyond the
reasonable control and not caused by the negligence or intentional conduct or
misconduct of the nonperforming party, and such party has exerted all reasonable
efforts to avoid or remedy such force majeure; provided, however, that in no
event shall a party be required to settle any labor dispute or disturbance.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      10.14. CONSENTS AND APPROVALS. Whenever provision is made in this
Agreement for either party to secure the consent or approval of the other, that
consent or approval shall not unreasonably be withheld or delayed, and whenever
in this Agreement provisions are made for one party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed:

                                      TYHO GALILEO RESEARCH LABORATORY

Date:  8/13/04                        By: /s/ Jacques Cohen
      ____________________________        _____________________________________

                                      Name:   Jacques Cohen
                                             __________________________________

                                      Title:  President
                                             __________________________________

Date:  8/16/04                        VIACELL, INC.
      ____________________________
                                      By: /s/ Marc Beer
                                          _____________________________________

                                      Name:   Marc Beer
                                             __________________________________

                                      Title:  CEO
                                             __________________________________

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                                    EXHIBIT A

                             LICENSED PATENT RIGHTS

<TABLE>
<CAPTION>
Appln Serial #/                                                 Issue       Expiration
Issued Patent #                  Title                           Date          Date
----------------     -----------------------------------       --------     ----------
<S>                  <C>                                       <C>          <C>
US Patent            Cryopreservation and cell culture         11/16/99       8/1/17
Number 5,985,538     medium comprising less than 50 mM
                     sodium ions and greater than 100 mM
                     chlorine salt
</TABLE>

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                                    EXHIBIT B

                                    MATERIALS

<TABLE>
<CAPTION>
                                  g/1 LITER
                                  ---------
<S>                               <C>

</TABLE>

<TABLE>
<CAPTION>
                                    g/1 LITER
                                    ---------
<S>                                 <C>

</TABLE>

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                                    EXHIBIT C

                                  RESEARCH PLAN

                               [To be finalized]

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                                    EXHIBIT D

                               GALILEO AFFILIATES

INSTITUTE OF REPRODUCTIVE MEDICINE AND SCIENCE, SAINT BARNABAS, LIVINGSTON, NJ,
USA

HIGHLAND PARK IN VITRO FERTILIZATION LABORATORY, HIGHLAND PARK, IL, USA

PACIFIC INFERTILITY INSTITUTE, HONOLULU, HI, USA

LONG ISLAND IVF AND MATHER HOSPITAL, PORT JEFFERSON, NY, USA

YALE UNIVERSITY MEDICAL SCHOOL, NEW HAVEN, CT, USA

CODA LABORATORIES AND CENTER FOR REPRODUCTIVE MEDICINE (CRM), LONDON, ENGLAND

IVF ITALY, NAPLES, ITALY

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

                                   APPENDIX A

                                  VIACELL, INC.

                    MUTUAL CONFIDENTIAL DISCLOSURE AGREEMENT

      This Agreement is between ViaCell, Inc. and the undersigned party.

      In connection with a possible business relationship between the parties in
the field oocyte cryopreservation, each party intends to disclose certain
confidential information to the other party. The purpose of such disclosure is
to enable each party (i) to evaluate the proposed business relationship and (ii)
to conduct any ensuing business arrangement that is actually conducted by the
parties without the benefit of a further agreement governing the treatment of
confidential information.

      In consideration of each party making such confidential information
available to the other party, the parties hereby agree as follows:

      1.  As used in this Agreement, the term "Confidential Information" means
any technical or business information furnished by one party (the "Disclosing
Party") to the other party (the "Receiving Party") and/or both parties for
information exchanged reciprocally ("Both Parties") in connection with the
proposed business relationship, regardless of whether such information is
specifically designated as confidential and regardless of whether such
information is in written, oral, electronic, or other form. Such Confidential
Information may include, without limitation, trade secrets, know-how,
inventions, technical data or specifications, testing methods, business or
financial information, research and development activities, product and
marketing plans, designs, drawings, diagrams, flow charts, storyboards, business
relationships, and customer and supplier information.

      2.  The Both Parties agree that they shall:

          (a)   maintain all Confidential Information in strict confidence,
                except that the Receiving Party may disclose or permit the
                disclosure of any Confidential Information to its directors,
                officers, employees, consultants, and advisors who are obligated
                to maintain the confidential nature of such Confidential
                Information and who need to know such Confidential Information
                for the purposes set forth in this Agreement;

          (b)   use all Confidential Information solely for the purposes set
                forth in this Agreement and for no other purposes; and

          (c)   allows its directors, officers, employees, consultants, and
                advisors to reproduce the Confidential Information only to the
                extent necessary to effect the purposes set forth in this
                Agreement, with all such reproductions being considered
                Confidential Information.

          (d)   not disclose the existence of this Agreement or the discussions
                between the parties except as required by law.

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* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

      3.  The obligations of the Receiving Party under Section 2 above shall not
apply to the extent that the Receiving Party can demonstrate that certain
Confidential Information:

          (a)   was in the public domain prior to the time of its disclosure
                under this Agreement;

          (b)   entered the public domain after the time of its disclosure under
                this Agreement through means other than an unauthorized
                disclosure resulting from an act or omission by the Receiving
                Party;

          (c)   was independently developed or discovered by the Receiving Party
                prior to the time of its disclosure under this Agreement;

          (d)   is or was disclosed to the Receiving Party at any time, whether
                prior to or after the time of its disclosure under this
                Agreement, by a third party having no fiduciary relationship
                with the Disclosing Party and having no obligation of
                confidentiality with respect to such Confidential Information;

          (e)   is required to be disclosed to comply with applicable laws or
                regulations, or with a court or administrative order, provided
                that the Disclosing Party receives prior written notice of such
                disclosure and that the Receiving Party takes all reasonable and
                lawful actions to obtain confidential treatment for such
                disclosure and, if possible, to minimize the extent of such
                disclosure; or

          (f)   was disclosed by the Disclosing Party without any restrictions
                or obligations relating to confidentiality.

      4.  The Receiving Party acknowledges that the Disclosing Party (or any
third party entrusting its own confidential information to the Disclosing Party)
claims ownership of the Confidential Information disclosed by the Disclosing
Party and all patent, copyright, trademark, trade secret, and other intellectual
property rights in, or arising from, such Confidential Information. No option,
license, or conveyance of such rights to the Receiving Party is granted or
implied under this Agreement. If any such rights are to be granted to the
Receiving Party, such grant shall be expressly set forth in a separate written
instrument.

      5.  Upon the termination by either party of (i) the contemplated business
discussions and, if applicable, (ii) any ensuing business arrangement between
the parties that is conducted without the benefit of a further agreement
governing the treatment of Confidential Information, the Receiving Party shall
return to the Disclosing Party all originals, copies, and summaries of
documents, materials, and other tangible manifestations of Confidential
Information in the possession or control of the Receiving Party. The obligations
set forth in this Agreement shall remain in effect for a period of five (5)
years after such termination by either party, except that the obligation of the
Receiving Party to return Confidential Information to the Disclosing Party shall
survive until fulfilled.

      6.  Both Parties agree that during the contemplated business discussions
and, if applicable, any ensuing business arrangement between the parties and for
a period of two (2)

                                    -26 of 27

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this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.
<PAGE>

years after the termination or cessation of such discussions or business
relationship for any reason, Both Parties shall not:

          (a)   solicit, divert or take away, or attempt to divert or take away,
                the business or patronage of any actual or prospective clients,
                customers, or accounts of the Disclosing Party; and

          (b)   directly or indirectly recruit, solicit, or hire any employee of
                the Disclosing Party, or induce or attempt to induce any
                employee of the Disclosing Party to discontinue his or her
                employment relationship with the Disclosing Party.

      7.  The Receiving Party agrees that any breach of its obligations under
this Agreement will cause irreparable harm to the Disclosing Party; therefore,
the Disclosing Party shall have, in addition to any remedies available at law,
the right to obtain equitable relief to enforce this Agreement without the need
for a bond or to prove such harm.

      8.  This Agreement shall be governed by the laws of the Commonwealth of
Massachusetts. The parties agree that any action, suit or other legal proceeding
commenced to resolve any matter arising under or relating to any provision of
this Agreement shall be commenced only in a court of the Commonwealth of
Massachusetts (or, if appropriate, a federal court located within
Massachusetts), and hereby consent to the jurisdiction of such court with
respect to any action, suit or proceeding commenced in such court by the
Company.

Acknowledged and agreed as of this day:  3/12/04

VIACELL, INC.                                 TYHO-GALILEO RESEARCH LABORATORIES

By: /s/ Chris Adams                                  By: /s/ Jacques Cohen
   ----------------------------------                  -------------------------
Name:  Christoph M. Adams, Ph.D.                     Name:
Title: Sr. V.P. Business Development                 Title:
Business Address:                                    Business Address:
      131 Clarendon Street                           101 Old Short Hills Road
      Boston, MA 02116                               Suite 501
                                                     West Orange, NJ 07052

Telephone:  617-216-9255                             Telephone:  973-334-8409
Fax:        617-247-4733                             Fax:

                                    -27 of 27

* Confidential treatment has been requested with respect to certain portions of
this exhibit. Such portions are marked with a "[*]" in place of the redacted
language. Omitted portions are filed separately with the Securities and Exchange
Commission.<PAGE>

                              RETIREMENT AGREEMENT

      This Agreement (the "Agreement") is entered into as of the 20th day of
October, 2004, by and among John K. P. Stone, III ("Executive"), PolyMedica
Corporation, a Massachusetts Corporation (the "Company").

                                    RECITALS

      WHEREAS Executive and the Company previously entered into an Executive
Employment Agreement dated as of March 27, 2002, as amended on April 1, 2003;
August 29, 2003; November 3, 2003; May 17, 2004; and August 31, 2004 and an
Executive Retention Agreement dated as of March 28, 2002, as amended on November
3, 2003 and August 31, 2004 (collectively, all of the foregoing agreements shall
be referred to as the "Previous Agreements"); and

      WHEREAS Executive has advised the Company that he wishes to retire
effective December 31, 2004 (the "Retirement Date"); and

      WHEREAS the Company and Executive wish to plan for the smooth transition
of Executive's duties; and

      WHEREAS the Company recognizes Executive's valuable service to the
Company; and

      WHEREAS Executive and the Company desire for this Agreement to supersede
all Previous Agreements as of January 1, 2005; and

      NOW THEREFORE, in consideration of the mutual promises and forbearances
set forth in this Agreement, and other good and valuable consideration which
Executive and the Company hereby acknowledge, Executive and the Company agree as
follows:

                                       1

<PAGE>

      TERMS AND CONDITIONS

      1. BACKGROUND AND RECITALS. The foregoing Background and Recitals are
incorporated into and made a part of the Terms and Conditions of the Agreement.

      2. RESIGNATION OF EMPLOYMENT. Executive hereby resigns his positions with
the Company and its affiliates and subsidiaries as follows: General Counsel,
PolyMedica Corporation; President and Secretary, Liberty Medical Supply LLC;
President and Secretary, Liberty Home Pharmacy LLC; Director, Liberty Healthcare
Group, Inc.; Director, Liberty Medical Supply, Inc.; Director, Liberty Home
Pharmacy Corporation; Director, Liberty Therapeutic Shoe Corporation; Director,
Liberty Medical Supply LLC; Director, Liberty Home Pharmacy LLC; Director,
Liberty Lane Development Company, Inc; and Director, Liberty Lane Condominium
Association, Inc., all effective as of the date of this Agreement. Executive
shall, however, remain employed as Senior Vice President of the Company through
the Retirement Date, at which time Executive agrees to execute and deliver the
Resignation Letter attached hereto as Exhibit 1.

      3. RETIREMENT BENEFITS.

            3.1 RETIREMENT PAY.

                  (a) LUMP SUM RETIREMENT PAYMENT. In recognition of Executive's
contributions to the Company, the Company shall pay to Executive a one-time lump
sum payment in the gross amount of Six Hundred Thousand Dollars ($600,000.00),
less applicable tax withholdings, upon the execution of this Agreement.

                  (b) As of the Retirement Date, the Company shall pay Executive
salary continuation at his current base salary for eighteen (18) months, less
all applicable tax withholdings (the "Retirement Pay"). The Retirement Pay shall
be paid in accordance with the Company's normal payroll procedures, but in no
event shall payment start earlier than the first regular payroll after the end
of the Revocation Period for the General Release of Claims executed by Executive
(as provided for in Section 10.1 herein). The full unpaid balance of the
Retirement Pay, if any, shall immediately become due if Executive dies prior to
the end of said eighteen (18) month period and

                                       2

<PAGE>

shall be paid to his estate or as Executive may otherwise have directed by
written notice to the Company. (c) The Company shall pay to Executive any
accrued unpaid salary and any accrued but unpaid vacation (less applicable tax
withholding) in the next regular payroll following the Retirement Date.

                  (d) In the event that other members of the Company's senior
executive management team receive bonuses for FY2005, the Company shall pay
Executive three-quarters of the bonus Executive would have received if he had
remained employed as a senior executive of the Company for the full fiscal year
(less applicable tax withholdings); said amount, if any, to be determined and
calculated using the same criteria as will be used for other senior executives
of the management team and paid at the same time or times as such bonuses are
paid out to the senior executives of the management team.

            3.2 HEALTH INSURANCE. For a period of 18 months after the Retirement
Date, or until the Executive becomes employed and covered by health insurance
meeting the requirements of the Omnibus Budget Reconciliation Act of 1989 and
the Health Insurance Portability and Accountability Act, whichever occurs first,
the Company shall offer Executive continued health and dental insurance as
required under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"), or other law, and shall reimburse Executive for the full cost of that
coverage. If Executive elects not to maintain health insurance pursuant to COBRA
or other law, the Company is under no obligation to reimburse Executive for his
otherwise elected coverage. Executive shall be obligated to give the Company
prompt notice of any full-time subsequent employment, and at that time the
Company's obligations under this Section 3.2, if any, shall cease if and when
Executive is eligible for health insurance coverage with no pre-existing
condition exclusion.

            3.3 EQUIPMENT. Executive shall be entitled to permanent ownership of
the laptop computer and Blackberry handheld device provided to him by the
Company.

            3.4 LIFE INSURANCE. For a period of 18 months after the Retirement
Date or until Executive becomes employed and is offered comparable life
insurance coverage by a new employer, whichever occurs first, the Company shall
maintain or reimburse Executive for the presently effective cost of maintaining
life insurance on the life of the Executive in the amount of

                                       3

<PAGE>

Five Hundred and Seventy One Thousand Dollars ($571,000). Executive shall be
obligated to give the Company prompt notice of any full-time subsequent
employment offering comparable life insurance coverage, and at that time the
Company's obligations under this Section 3.4, if any, shall cease to the extent
of such comparable coverage.

            3.5 NOTICE OF FULL-TIME SUBSEQUENT EMPLOYMENT. Executive shall be
obligated to provide the Company prompt notice of his subsequent employment and
at that time, the Company's obligations under Sections 3.2 and 3.4, if any,
shall cease. For purposes of this Agreement, full-time subsequent employment
shall mean regularly scheduled work of at least 35 hours per week for
remuneration.

            3.6 401(K) PLANS. Executive is a participant in the Company's
non-qualified 401(k) shadow plan/social security equalization plan/pension
plan/deferred salary and bonus plan (the "SERP") and has a fully vested account
balance in the SERP . Executive's participation in the SERP shall cease as of
the Retirement Date. As soon as practicable and in no event later than January
15, 2005, the Company shall cause the full amount in Executive's SERP account
(less applicable tax withholdings) to be paid to him in a lump sum.

            3.7 AUTOMOBILE. The Company shall continue to provide Executive with
the use of the Company-leased vehicle currently provided to him and to maintain
insurance and registration on said vehicle through the expiration of the current
lease term in July 2006. Executive will continue to be responsible for proper
maintenance and repairs of said vehicle and agrees to return the vehicle in good
working order at the end of the lease term.

      4. INDEMNIFICATION AND NO ADVERSE ACTION. The Company currently maintains
Directors and Officers liability insurance and acknowledges Executive's rights
as an Indemnitee under the Articles of Organization (the "Articles") of the
Company. The Company shall use commercially reasonable efforts to keep such
policies in effect as to the Executive after the date hereof. Executive, in
order to comply with the provisions of the Articles and with Massachusetts law,
hereby undertakes to repay to the Company any amounts advanced for legal fees in
the event that it shall ultimately be determined that the Executive was not
entitled to be indemnified by the Company in accordance with the Articles. This
provision does not otherwise

                                       4

<PAGE>

reduce, modify, limit or impair any rights, procedural or otherwise, contained
or reflected in Article 6F of the Articles of Organization.

      5. COOPERATION.

            5.1 The parties recognize that the Company may provide information
to a Governmental Entity (as defined below) or plaintiffs, as the case may be,
on a voluntary basis. The parties recognize and understand that the Company has
the right to assert the attorney-client privilege and/or work product protection
as to protected communications with Executive or any other counsel retained by
the Company and/or work performed by and /or at the direction of Executive or
other counsel retained by the Company and only the Company may waive such
privilege or work product protection. Nor shall anything in this Section 5.1 be
construed to limit or impede anyone acting on behalf of the Company from
responding to any legal process. For purposes of this agreement the term
"Governmental Entity" shall mean any court, arbitrational tribunal,
administrative agency or commission or other governmental or regulatory
authority, agency or instrumentality, any entity charged by a Governmental
Entity with the administration of a government program, or any stock market or
stock exchange on which shares of the Company's stock are traded.

            5.2 The Executive agrees to cooperate fully with the Company in the
defense or prosecution of any claims or actions or investigations which already
have been brought, any inquiries by the United States Securities & Exchange
Commission, any grand jury investigation, or any claims or actions which may be
brought in the future against, or on behalf of or involving the Company before
any Governmental Entity. The Executive's full cooperation in connection with
such investigations, claims or actions shall include, but not be limited to, his
being available to meet with the Company's counsel to prepare its claims or
defenses, to prepare for trial or discovery or an administrative hearing and to
act as a witness when requested by the Company at reasonable times designated by
the Company. The Executive agrees that he will notify the Company promptly and
in writing in the event that he is served with a subpoena or other such request
for information or documents from a third party concerning the Company.

                                       5

<PAGE>

            5.3 The Company agrees that the Company and its lawyers will
cooperate with Executive by providing him and his lawyers with reasonable access
to copies of all business records of the Company, to which the Executive would
have been entitled to access in the ordinary course of business during the
period in which Executive was employed by the Company, that are necessary to
enable the Executive to assist in any current or future investigation, claim or
action against the Company before any Governmental Entity or any other
indemnified activity for so long as such indemnification continues.

      6. NON-DISCLOSURE AND NON-COMPETITION. The Executive acknowledges and
reaffirms his obligations with respect to intellectual property and
non-competition, as stated more fully in the Invention and Non-Disclosure
Agreement dated March 28, 2002, or under any similar later agreements with the
Company (the "Confidentiality Agreement") and the Non-Competition and
Non-Solicitation Agreement of the same date, or under any similar later
agreements with the Company (the "Non-Compete Agreement"), each of which remains
in full force and effect.

      7. RETURN OF COMPANY PROPERTY. On the Retirement Date, the Executive
agrees to return all Company property in good working order which has been
provided to Executive including, but not limited to, keys, files, records (and
copies thereof), equipment (including, but not limited to, computer hardware,
software and printers, cellular phones, pagers, etc.), Company identification
and any other Company-owned property which is in his possession or control and
to advise the Company of any password protected identification that he has
placed on or used in connection with any document or file on the Company's
computer system and any necessary actions required to facilitate the Company's
access to all documents on the computer system; provided however, that Executive
may retain the laptop computer and Blackberry handheld device as set forth in
Sections 3.3 and 3.7 of this Agreement. Further, Executive agrees to leave
intact all electronic Company documents, including those he developed or helped
develop during his employment and to cancel all accounts for his benefit, if
any, in the Company's name, including but not limited to, credit cards,
telephone charge cards, cellular phone and/or pager accounts and computer
accounts and to delete all Company files or records on any personal computer on
which he stored such information.

                                       6

<PAGE>

      8. CONFIDENTIALITY. To the extent permitted by law, the Executive
understands and agrees that the contents of the negotiations and discussions
resulting in this Agreement shall be maintained as confidential by the
Executive, his attorneys, agents and representatives, and none of the above
shall be disclosed except to the extent required by federal or state law or as
otherwise agreed to in writing by the authorized agent of each party.

      9. RELEASES.

            9.1 The Executive agrees to execute and deliver to the Company the
General Release of Claims attached hereto as Exhibit 2 on the Retirement Date.
The Executive acknowledges that he has been advised by the Company to consult
with an attorney of his own choosing prior to signing the General Release of
Claims and that he may revoke the General Release of Claims for a period of
seven (7) days from the date of execution and that the General Release of Claims
shall not be effective or enforceable until the expiration of the seven (7)-day
Revocation Period. In the event the Executive exercises his right to revoke the
Release during the Revocation Period, this Agreement and the Company's
obligations hereunder shall be null and void.

            9.2 The Company agrees to execute and deliver to the Executive the
General Release of Claims attached hereto as Exhibit 3 on the Retirement Date;
provided, however, that the Company's Release shall be null and void in the
event the Executive revokes his Release during the Revocation Period.

            9.3 Nothing contained in the releases set forth in Sections 9.1 and
9.2 above shall be deemed to defeat the right, if any, of any issuer or
underwriter of directors' and officers' liability insurance for PolyMedica and
its directors and officers to recover monies on a theory of subrogation,
indemnification or contribution.

      10. STOCK TRADES. The Company agrees to prepare and file with the
Securities and Exchange Commission on a timely basis all reports required to be
filed by Executive pursuant to Section 16 of Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder; provided that
Executive reports to the Company all of his transactions in the Company's
securities triggering the filing of such a report no later than the initiation
of such a

                                       7

<PAGE>

transaction. Executive acknowledges that he is responsible for promptly and
accurately reporting any transactions to the Company and that the Company is not
responsible for any liability arising from its filing of such reports at the
request of Executive.

      11. BOARD COMPENSATION. The Executive acknowledges that he shall not be
entitled to receive any compensation as a member of the Company's Board of
Directors while he is receiving Retirement Pay under this Agreement; provided,
however, that nothing in this Agreement affects any rights Executive has or may
have under any stock option grants that the Executive has received pursuant to
the Company's 2000 Stock Incentive Plan.

      12. VOLUNTARY ASSENT. The Executive affirms that no other promises or
agreements of any kind have been made to or with him by any person or entity
whatsoever to cause him to sign this Agreement, and that he fully understands
the meaning and intent of this Agreement. The Executive states and represents
that he has had an opportunity to fully discuss and review the terms of this
Agreement with an attorney. The Executive further states and represents that he
has carefully read this Agreement, understands the contents herein, freely and
voluntarily assents to all of the terms and conditions hereof, and signs his
name of his own free act.

      13. MISCELLANEOUS.

            13.1 ENTIRE AGREEMENT. This Agreement contains the entire
understanding of Executive and the Company in respect of its subject matter and
supersedes all prior oral or written agreements or understandings between
Executive and the Company with respect to such subject matter; provided however,
that the Previous Agreements shall remain in effect through the Separation Date
and that the Non-Compete Agreement and the Confidentiality Agreement shall
remain in effect as set forth in Section 6 above.

            13.2 AMENDMENT; WAIVER. This Agreement may not be amended,
supplemented, cancelled or discharged, except by written instrument executed by
all parties. No failure to exercise, and no delay in exercising, any right,
power or privilege hereunder shall operate as a waiver thereof. No waiver of any
breach of any provision of this Agreement shall be deemed to be a waiver of any
preceding or succeeding breach of the same or any other provision.

                                       8

<PAGE>

            13.3 BINDING EFFECT; ASSIGNMENT. The rights and obligations of this
Agreement shall bind any successor of the Company by reorganization, merger,
acquisition or consolidation, or any assignee of all or substantially all of the
Company's business and properties. The Company will require any successor to all
or substantially all of the business and/or assets of the company (whether
direct or indirect, by purchase, merger, consolidation, asset or stock
acquisition or otherwise) to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. As used in this
Agreement, "the Company" shall mean the Company as hereinbefore defined and any
successor to all or substantially all of its business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law or
otherwise. The Company agrees to require any such successor to acknowledge its
obligation pursuant to this Agreement in a binding written agreement approved by
Executive prior to such transaction.

            13.4 HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

            13.5 APPLICABLE LAW. This Agreement shall be interpreted and
construed by the laws of the Commonwealth of Massachusetts, without regard to
conflict of laws provisions. Executive hereby irrevocably submits and
acknowledges and recognizes the jurisdiction of the courts of the Commonwealth
of Massachusetts, or if appropriate, a federal court located in Massachusetts
(which courts, for purposes of this Agreement, are the only courts of competent
jurisdiction), over any suit, action or other proceeding arising out of, under
or in connection with this Agreement or the subject matter hereof.

            13.6 FURTHER ASSURANCES. The Company and Executive agree to execute,
acknowledge, deliver and perform, or cause to be executed, acknowledged,
delivered or performed, at any time, or from time to time, as the case may be,
all such further documents, acts, deeds, assignments, transfers, conveyances,
powers of attorney and assurances as may be necessary or proper to carry out the
provisions or intent of this Agreement.

            13.7 SEVERABILITY. If any one or more of the terms, provisions,
covenants or restrictions of this Agreement shall be determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of

                                       9

<PAGE>

this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. If, moreover, any one or more of the
provisions contained in this Agreement shall for any reason be determined by a
court of competent jurisdiction to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting or
reducing it so as to be enforceable to the extent compatible with then
applicable law.

      EXECUTION

      The parties executed this Agreement as a sealed instrument as of the date
first written above.

                                                  POLYMEDICA CORPORATION

/s/ John K. P. Stone, III                         /s/ Fred H. Croninger, III
_________________________________                 ______________________________
John K. P. Stone, III                             Fred H. Croninger, III
                                                  Chief Financial Officer

                                       10

<PAGE>

                                                                       Exhibit 1

                              LETTER OF RESIGNATION

I, John K. P. Stone, III, hereby resign as Senior Vice President of PolyMedica
Corporation as well as any other unnamed positions that I may hold in any
affiliate or subsidiary of PolyMedica Corporation effective the close of
business on December 31, 2004.

______________________                               ___________________________
DATE                                                 John K. P. Stone, III

                                       11

<PAGE>

                                                                       Exhibit 2

                            GENERAL RELEASE OF CLAIMS

I, John K. P. Stone, III, hereby fully, forever, irrevocably and unconditionally
release, remise and discharge PolyMedica Corporation, its officers, directors,
stockholders, corporate affiliates, subsidiaries, parent companies and each of
their agents and employees (each in their individual and corporate capacities)
(hereinafter, the "Released Parties") from any and all claims, charges,
complaints, demands, actions, causes of action, suits, rights, debts, sums of
money, costs, accounts, reckonings, covenants, contracts, agreements, promises,
doings, omissions, damages, executions, obligations, liabilities, and expenses
(including attorneys' fees and costs), of every kind and nature which I ever had
or now have against the Released Parties arising out of my employment with
and/or separation from the Company, including, but not limited to, all
employment discrimination claims under Title VII of the Civil Rights Act of 1964
29 U.S.C. Section 621 et seq., the Age Discrimination in Employment Act, 29
U.S.C. Section 621 et seq., the Americans With Disability Act of 1990, 42 U.S.C.
Section 12101 et seq., the Family and Medical Leave Act, 29 U.S.C. Section 2601
et seq., 1973, 29 U.S.C. Section 701 et seq., the Rehabilitation Act of 1973, 29
U.S.C. Section 701 et seq., and the Massachusetts Fair Employment Practices Act,
M.G.L. c.151B, Section 1 et seq., all as amended; all claims arising out of the
Fair Credit Reporting Act, 15 U.S.C. Section 1681 et seq., the Employee
Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. Section 1001 et
seq., the Massachusetts Civil Rights Act of M.G.L. c.12 Sections 11H and 11I,
the Massachusetts Equal Rights Act, M.G.L. c.93, Section 102 and M.G.L. c.214,
Section 1C, the Massachusetts Labor and Industries Act, M.G.L. c.149, Section 1
et seq., and the Massachusetts Privacy Act, M.G.L. c.214, Section 1B, all as
amended; the Florida Civil Rights Act; and the Florida Whistleblower Act; 31
U.S.C. Section 3729 et seq., all common law claims including, but not limited
to, actions in tort, defamation and breach of contract; and any claim or damage
arising out of my employment with or separation from the Company (including a
claim for retaliation) under any common law theory or any federal, state or
local statute or ordinance not expressly referenced above; provided, however,
that nothing in this General Release of Claims prevents me from filing,
cooperating with, or participating in any proceeding before the EEOC or a state
Fair Employment Practices Agency (except that I acknowledge that I may not be
able to

                                       12

<PAGE>

recover any monetary benefits in connection with any such claim, charge or
proceedings) and, provided further, that the foregoing General Release of Claims
shall not apply to the Non-Compete Agreement or the Confidentiality Agreement
executed by me.

I acknowledge that I have been given at least twenty-one (21) days to consider
this General Release of Claims, and that the Company advised me to consult with
an attorney of my own choosing prior to signing this General Release of Claims.
I understand that I may revoke this General Release of Claims for a period of
seven (7) days from today and that this General Release of claims shall not be
effective or enforceable until the expiration of the seven (7) day Revocation
Period.

______________________                               ___________________________
Date                                                 John K. P. Stone, III

                                       13

<PAGE>

                                                                       Exhibit 3

                            GENERAL RELEASE OF CLAIMS

      PolyMedica Corporation ("the Company") hereby fully, forever, irrevocably
and unconditionally releases, remises and discharges John K. P. Stone, III (the
"Executive") from any and all claims, charges, complaints, demands, actions,
causes of action, suits, rights, debts, sums of money, costs, accounts,
reckonings, covenants, contracts, agreements, promises, doings, omissions,
damages, executions, obligations, liabilities, and expenses (including
attorneys' fees and costs), of every kind and nature, whether known or unknown,
which it ever had or now has against the Executive, his agents and attorneys,
arising out of his employment with or separation from the Company including, but
not limited to, all statutory or common law claims, breaches of duty, actions in
tort, defamation and breach of contract, any claim concerning any of the
Previous Agreements or any amendments thereof entered into between the Executive
and the Company, and any claim or damage arising out of the Executive's
employment with or separation from the Company, provided the foregoing release
shall not apply to the Non-Compete Agreement or the Confidentiality Agreement
executed by the Executive.

      Nothing contained in this release shall be deemed to defeat the right, if
any, of any issuer or underwriter of Directors' and Officers' liability
insurance for PolyMedica Corporation and its directors and officers to recover
monies on a theory of subrogation, indemnification or contribution.

___________________________                     ________________________________
Date                                            Fred H. Croninger, III
                                                Chief Financial Officer
                                                PolyMedica Corporation

                                       14

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