Document:

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                                                                    EXHIBIT 10.3

                                   AGREEMENT

     This Agreement (this "Agreement") is entered as of April 18, 2001, between
Genentech, Inc., a Delaware corporation ("Genentech"), and Genaera Corporation,
a Delaware corporation (formerly named Magainin Pharmaceuticals, Inc.,
"Genaera").

                             W I T N E S S E T H:

     WHEREAS, Genentech and Genaera entered into that certain License and
Collaboration Agreement (the "Original Agreement") dated as of April 28, 2000;

     WHEREAS, Genentech notified Genaera on December 15, 2000 of its intention
to terminate the Original Agreement pursuant to Section 13.2(a) thereof; and

     WHEREAS, Genentech and Genaera have determined that it is in their
respective best interests to terminate the Original Agreement effective
immediately rather than upon the 180 days' notice required under such Section
13.2(a).

     NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements contained in this Agreement and intending to be legally
bound, the parties hereto agree as follows:

     1.   Termination of Original Agreement.  Effective as of the date hereof,
          ---------------------------------
the Original Agreement shall be terminated in its entirety under Section 13.2 of
the Original Agreement, except for such sections as expressly survive such
termination, including those set forth in Section 13.11 of the Original
Agreement.

     2.   Termination of Licenses. Effective as of the date hereof, the licenses
          -----------------------
granted by Genaera to Genentech under the Original Agreement shall be terminated
and of no further force or effect in accordance with Article 13 of the Original
Agreement.

     3.   Return of Materials, Etc.  Within thirty (30) days of the date of this
          ------------------------
Agreement, Genentech shall return to Genaera all the materials, samples,
documents, information and other materials in accordance with set forth in
Section 13.8(b)(1) of the Original Agreement and in accordance with that
provision.

     4.   Reimbursement of Development Costs.  The parties hereto acknowledge
          ----------------------------------
that, prior to the execution of this Agreement, they had disagreed about the
amount of Post-Notice Development Costs. Genentech hereby surrenders and returns
Three Hundred (300) shares of Series A Preferred Stock of Genaera held by it in
full and fair settlement of any and all Post-Notice Development Costs.  Promptly
following the date of this Agreement, Genentech shall return stock certificate
number AS-2 dated November 29, 2000 for 688 shares and Genaera shall issue
Genentech a new stock certificate representing 388 shares of Series A Preferred
Stock.  Genaera acknowledges that it shall not be entitled to any further
reimbursement of Post-Notice Development Costs from Genentech under the Original
Agreement or otherwise. The parties agree that they hereby relinquish any claims
they may have against each other relating to the
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Post-Notice Development Costs. Genentech represents that upon execution of this
Agreement, it shall own an aggregate of Eight Hundred Eighty-Eight (888) shares
of Series A Preferred Stock of Genaera.

     5.   Representations and Warranties of Genaera.  Genaera represents and
          -----------------------------------------
warrants to Genentech as follows:

          a.   Organization. Genaera is a corporation duly organized, validly
               ------------
existing and in good standing under the laws of the State of Delaware.

          b.   Authorization. The execution, delivery and performance by Genaera
               -------------
of this Agreement has been duly authorized by all necessary corporate action and
do not and will not (i) require any consent or approval of its stockholders or
(ii) violate any provision of any law, rule, regulation, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to it or any provision of its charter documents.

          c.   Binding Agreement.  This Agreement is a legal, valid and binding
               -----------------
obligation of Genaera enforceable against it in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof and thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.

     6.   Representations and Warranties of Genentech.  Genentech hereby
          -------------------------------------------
represents and warrants to Genaera as follows:

          a.   Organization. Genentech is a corporation duly organized, validly
               ------------
existing and in good standing under the laws of the State of Delaware.

          b.   Authorization. The execution, delivery and performance by
               -------------
Genentech of this Agreement has been duly authorized by all necessary corporate
action and do not and will not (i) require any consent or approval of its
stockholders or (ii) violate any provision of any law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award presently in effect
having applicability to it or any provision of its charter documents.

          c.   Binding Agreement.  This Agreement is a legal, valid and binding
               -----------------
obligation of Genentech enforceable against it in accordance with its terms,
except as rights to indemnification hereunder may be limited by applicable law
and except as the enforcement hereof and thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or
affecting the rights and remedies of creditors or by general equitable
principles.

     7.   Miscellaneous.
          -------------

          a.   Definitions.  Unless otherwise provided in this Agreement, all
               -----------
capitalized terms used herein shall have the meanings set forth in the Original
Agreement.

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          b.   Severability. If any provision of this Agreement shall be invalid
               ------------
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement or
the validity or enforceability of this Agreement in any other jurisdiction.

          c.   Notices.  Any consent, notice or report required or permitted to
               -------
be given or made under this Agreement by one of the parties hereto to the other
shall be in writing, delivered personally or by facsimile (and promptly
confirmed by telephone), postage prepaid (where applicable), addressed to such
other party at its address indicated below, or to such other address as the
addressee shall have furnished in writing to the addressor and shall be
effective upon receipt by the addressee.

          If to Genaera:      Genaera Corporation
                              5110 Campus Drive
                              Plymouth Meeting, PA 19462
                              Attention: President and CEO
                              Telephone: (610) 941-4020
                              Telecopy:  (610) 941-5399

          with a copy to:     Morgan, Lewis & Bockius LLP
                              502 Carnegie Center
                              Princeton, NJ 08540
                              Attention: Randall B. Sunberg, Esq.
                              Telephone: (609) 919-6600
                              Telecopy:  (609) 919-6639

          If to Genentech:    Genentech, Inc.
                              1 DNA Way
                              South San Francisco, CA 94080
                              Attention: Vice President, General Counsel and
                                         Secretary
                              Telephone: (650) 225-1000
                              Telecopy:  (650) 952-9881

          d.   Entire Agreement; Amendments.  This Agreement contains the entire
               ----------------------------
understanding of the parties with respect to the subject matter hereof and
supersedes all other agreements specifically with respect to the subject matter
hereof including, without limitation, the Original Agreement.  This Agreement
may be amended, or any term hereof modified, only by a written instrument duly
executed by both parties hereto.

          e.   Headings. The headings of this Agreement are for convenience of
               --------
reference and shall not form part of, or affect the interpretation of, this
Agreement.

          f.   Waiver.  The waiver by either party hereto of any right hereunder
               ------
or the failure to perform or of a breach by the other party shall not be deemed
a waiver of any other right hereunder or of any other breach or failure by said
other party whether of a similar nature or otherwise.

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

          IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first written above.

                              GENENTECH, INC.

                              By: /s/ Stephen J. Juelsgaard
                                  ---------------------------------------------
                                  Name:  Stephen J. Juelsgaard
                                  Title: Senior Vice President and
                                         General Counsel

                              GENAERA CORPORATION

                              By: /s/ Roy Clifford Levitt, M.D.
                                  ---------------------------------------------
                                  Name: Roy Clifford Levitt, M.D.
                                  Title: President and Chief Executive Officer

                                       4<PAGE>

                                                                    EXHIBIT 10.4

                      COLLABORATION AND LICENSE AGREEMENT

     This Collaboration and License Agreement (this "Agreement") is dated as of
April 19, 2001 by and between Genaera Corporation, a Delaware corporation,
having offices at 5110 Campus Drive, Plymouth Meeting, PA 19462 ("GENAERA"), and
MedImmune, Inc., a Delaware corporation, having offices at 35 West Watkins Mill
Road, Gaithersburg, MD 20878 ("MEDIMMUNE").  The Agreement shall be effective
upon the closing of the Preferred Stock Purchase Agreement of even date herewith
(the "EFFECTIVE DATE") and notwithstanding anything contained in this Agreement
to the contrary, none of the rights, licenses or obligations of the parties
hereunder or otherwise contemplated by this Agreement shall occur or be
effective until the EFFECTIVE DATE.

     WHEREAS, MEDIMMUNE desires to collaborate with and obtain from GENAERA an
exclusive worldwide right and license to certain products; and

     WHEREAS, GENAERA desires to collaborate with and grant such rights to
MEDIMMUNE on the terms and conditions of this Agreement.

     NOW THEREFORE in consideration of the mutual promises and other good and
valuable consideration, the parties agree as follows:

     SECTION 1.  SECTION 1.  Definitions.

     The terms used in this Agreement have the following meaning:

     1.1 "AFFILIATE" means, with respect to a person or entity, any other person
or entity controlling or controlled by or under common control with such person
or entity. For purposes of this definition, the term "control" means possession
of the power to direct or cause the direction of the management and policies
whether through the ownership of voting securities,

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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by contract or otherwise. The ownership of voting securities of a person,
organization or entity, however, shall not, in and of itself, constitute
"control" for purposes of this definition, unless said ownership is of a
majority of the outstanding securities entitled to vote of such person,
organization or entity. Affiliate shall also mean a limited partnership in which
a subsidiary of such person, organization or entity is a general partner.

     1.2 "CONTROL" or "CONTROLLED" means, with respect to any (a) material, item
of information, method, data or other know-how, or (b) intellectual property
right, either (i) ownership thereof as of the EFFECTIVE DATE or thereafter prior
to the end of the ROYALTY PERIOD or (ii) otherwise possessing (other than by
ownership) the ability to grant to the other party access and/or a license as
provided herein under such item or right without violating the terms of any
agreement or other arrangement with any THIRD PARTY existing before or after the
EFFECTIVE DATE under which such ability is obtained.

     1.3 "DIAGNOSTIC" means any product or service that (a) identifies patients
having a particular disease or having a predisposition to a particular disease,
and/or (b) defines the prognosis or monitors the progress of any disease in a
patient and/or (c) is used to select between two (2) or more therapeutic or
prophylactic regimens.

     1.4 "FIELD" means treatment and/or prevention of diseases and/or disorders
in humans; provided that "FIELD" shall expressly exclude DIAGNOSTICS and
VACCINES. With respect to rights granted hereunder that are subject to the
LUDWIG LICENSE AGREEMENT(S)", "FIELD" shall be limited to the definition of
"Field" set forth therein.

     1.5 "FIRST COMMERCIAL SALE" means, in each country, the first sale of a
LICENSED PRODUCT to a THIRD PARTY by MEDIMMUNE or any of its AFFILIATES or
SUBLICENSEES.

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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     1.6 "GENAERA KNOW-HOW" means (i) KNOW-HOW in the possession of GENAERA or
any of its AFFILIATES as of the EFFECTIVE DATE and/or, (ii) KNOW-HOW produced by
GENAERA or on behalf of GENAERA in the course of conducting its activities under
the RESEARCH PLAN and/or (iii) KNOW-HOW CONTROLLED by GENAERA or its AFFILIATES
after the EFFECTIVE DATE and prior to the end of the ROYALTY PERIOD, and in each
case excluding LUDWIG KNOW-HOW.

     1.7 "GENAERA MATERIAL(S)" means (i) MATERIAL(S) in the possession of
GENAERA or any of its AFFILIATES as of the EFFECTIVE DATE and/or, (ii)
MATERIAL(S) produced by GENAERA or on behalf of GENAERA in the course of
conducting its activities under the RESEARCH PLAN and/or (iii) MATERIAL(S)
CONTROLLED by GENAERA or its AFFILIATES after the EFFECTIVE DATE and prior to
the end of the ROYALTY PERIOD, and in each case excluding LUDWIG MATERIAL(S).

     1.8 "GENAERA PATENT(S)" means (i) the PATENT RIGHTS listed in Appendix A
(and any foreign counterparts thereto) and (ii) any other PATENT RIGHTS that are
CONTROLLED by GENAERA or any of its AFFILIATES, in each case as of the EFFECTIVE
DATE or thereafter prior to the end of the ROYALTY PERIOD that are or would be
infringed by the research, development, manufacture, use, sale, import, export
or offering for sale of a PRODUCT, excluding LUDWIG PATENTS.

     1.9 "IL-9" means (i) human or non-human Interleukin 9 and/or (ii) a
derivative, mutant or homolog of any of the foregoing that has Interleukin 9
activity and/or binds to a receptor for Interleukin 9 and/or (iv) a fragment or
portion of any of the foregoing that has Interleukin 9 activity and/or binds to
a receptor for Interleukin 9.

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -3-
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     1.10 "KNOW-HOW" means the information and data (including, but not limited
to, formulae, procedures, processes, protocols, techniques and results of
experimentation and testing) that are useful for the research and/or development
and/or manufacture and/or use of PRODUCT in the FIELD.

     1.11 "LICENSED PRODUCT" means a PRODUCT for use in the FIELD that (i) but
for the license granted by this Agreement, infringes a VALID PATENT CLAIM of a
GENAERA PATENT or LUDWIG PATENT, or (ii) utilizes or is derived from GENAERA
KNOW-HOW or GENAERA MATERIAL or LUDWIG KNOW-HOW or LUDWIG MATERIAL, in each case
provided and licensed to MEDIMMUNE by GENAERA under this Agreement.

     1.12  "LICENSED TERRITORY" means all countries of the world.

     1.13 "LUDWIG KNOW-HOW" means KNOW-HOW that is licensed to GENAERA under the
LUDWIG LICENSE AGREEMENT(S).

     1.14  "LUDWIG" means the Ludwig Institute for Cancer Research.

     1.15 "LUDWIG LICENSE AGREEMENT(S)" means the agreements listed in
Appendix B.

     1.16 "LUDWIG MATERIAL(S)" means MATERIALS licensed to GENAERA under the
LUDWIG LICENSE AGREEMENT(S).

     1.17 "LUDWIG PATENT(S)" means any PATENT RIGHTS, identified in Appendix C
(and any foreign counterparts thereto), and any other PATENT RIGHTS licensed to
GENAERA under the LUDWIG LICENSE AGREEMENT(S) that are or would be infringed by
the research, development, manufacture, use, sale, import, export or offering
for sale of a PRODUCT.

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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     1.18  "MATERIAL(S)" means PRODUCT, cell lines for producing PRODUCT, the
polynucleotides encoding PRODUCT, and the assays, vectors and constructs for
producing PRODUCT and any other material that is useful for the research, and/or
development and/or manufacture and/or use of PRODUCT in the FIELD.

     1.19 "NET SALES" means, with respect to any PRODUCT, the gross amount
invoiced on account of sales of LICENSED PRODUCT by MEDIMMUNE or any of its
AFFILIATES or SUBLICENSEES to THIRD PARTIES less the following to the extent not
already reflected in the invoice price (a) actual credits, allowances, discounts
and rebates to, and chargebacks from the account of, such THIRD PARTIES
(including without limitation THIRD PARTY distributors and wholesalers) for
spoiled, damaged, out-dated, rejected or returned LICENSED PRODUCT and actual
Federal, State, or local government rebates for PRODUCT; (b) actual freight and
insurance costs incurred in transporting such LICENSED PRODUCT to such THIRD
PARTIES; (c) actual cash, quantity and trade discounts; (d) actual sales, use
and value-added taxes and taxes or governmental charges incurred in connection
with the exportation or importation of such LICENSED PRODUCT; and (e) a
reasonable allowance for bad debt, which shall, in the first year of such Net
Sales, be consistent with industry averages for similar LICENSED PRODUCTS or
MEDIMMUNE's experience with similar products and, thereafter, shall be based on
the actual historical bad debt expense for such LICENSED PRODUCT, all in
accordance with Generally Accepted Accounting Principles. For purposes of
determining NET SALES, a sale shall have occurred when recognized in accordance
with MEDIMMUNE's accounting practice for all products sold by MEDIMMUNE (which
recognition event is receipt of LICENSED PRODUCT, and with respect to any change
to which MEDIMMUNE shall promptly notify GENAERA) and consistent with Generally
Accepted Accounting Principles.

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -5-
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Sales of LICENSED PRODUCTS by MEDIMMUNE to any AFFILIATE or SUBLICENSEE that is
a reseller thereof shall be excluded, and only the subsequent sale of such
LICENSED PRODUCTS by the AFFILIATE or a SUBLICENSEE to a THIRD PARTY other than
a SUBLICENSEE shall be deemed NET SALES hereunder. If GENAERA demonstrates that
MEDIMMUNE has reduced the price of LICENSED PRODUCT as a result of other
consideration paid by the purchaser of the PRODUCT, then NET SALES shall be
increased to reflect only the amount that GENAERA demonstrates MEDIMMUNE would
have received for the sale of such LICENSED PRODUCT, absent such other
consideration.

     1.20 "PATENT RIGHTS" means any patent or patent application (or equivalents
thereof, such as extensions or other rights that give the right to exclude
others such as Supplementary Protection Certificates) anywhere in the world.

     1.21 "PRODUCT" means a composition(s), compound(s) or material(s) that
inhibits and/or interferes with and/or blocks and/or reduces the interaction of
IL-9 with or on its receptor which composition(s), compound(s) or material(s)
include, but are not limited to, antibodies (or fragments thereof), proteins (or
fragments thereof), a receptor for IL-9 (or fragment thereof), peptides, small
molecules, ligands, organic compounds and polynucleotide(s) encoding any of the
foregoing.

     1.22 "RESEARCH PLAN" shall have the meaning set forth in Section 2.3(a)
herein.

     1.23   "RESEARCH PLAN FUNDING" shall have the meaning set forth in Section
2.3(a) herein.

     1.24 "ROYALTY PERIOD" means, with respect to PRODUCT in each country in the
LICENSED TERRITORY, the longer of the period during which sale of such PRODUCT
in such country infringes a VALID PATENT CLAIM but for the license granted by
this

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -6-
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Agreement, or (b) ten (10) years from the date of the FIRST COMMERCIAL SALE of
such PRODUCT in such country.

     1.25 "SUBLICENSEE" means any non-AFFILIATE that pursuant to a sublicense
agreement is granted a sublicense by MEDIMMUNE under the licenses and
sublicenses granted by this Agreement, in accordance with and subject to the
provisions of Section 3.2 hereof.

     1.26 "THIRD PARTY(IES)" means a person or entity other than GENAERA or
MEDIMMUNE or any of their respective AFFILIATES.

     1.27 "VACCINE" means the administration of IL-9 or IL-9 receptor, or a
fragment, portion, derivative, mutant or homolog thereof, as a prophylactic or
therapeutic agent, and such treatment or prophylaxis results from inducing a
humoral and/or cell mediated immune response specifically against IL-9 or IL-9
receptor. Treatment or prophylaxis as a result of inhibiting and/or interfering
with and/or blocking and/or reducing the interaction of IL-9 with or on its
receptor, other than through a humoral and/or cell mediated immune response, is
excluded.

     1.28 "VALID PATENT CLAIM" means either (a) a claim of an issued and
unexpired patent included within the GENAERA PATENTS or LUDWIG PATENTS that has
not been disclaimed or abandoned or withdrawn and has not been held
unenforceable or invalid or permanently revoked by a decision of a court or
other governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been admitted to be
invalid or unenforceable through reissue or disclaimer or otherwise; (b) a claim
of a pending patent application included within the foregoing, which claim was
filed in good faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of such application and the subject matter of
which has not been pending for more than seven (7) years, including the pendency
of any prior application; or (c) a claim that has been

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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pending for more than seven (7) years, including the pendency of any prior
application that subsequently is issued and satisfies the criteria of subsection
(a) above; in each of the above cases to the extent to which MEDIMMUNE retains a
license under this Agreement.

     1.29 The use herein of the plural shall include the singular, and the use
of the masculine shall include the feminine.

     1.30  All dollars are United States Dollars.

     SECTION 2.  Transfer of GENAERA KNOW-HOW and MATERIALS and Research.
                 -------------------------------------------------------

     2.1 (a) Within [**] of the EFFECTIVE DATE, GENAERA shall take substantial
steps, with the assistance of MEDIMMUNE, to identify GENAERA KNOW-HOW, LUDWIG
KNOW-HOW, GENAERA MATERIALS and LUDWIG MATERIALS, in each case relevant to
PRODUCTS, and thereafter shall promptly commence the transfer to MEDIMMUNE of
such GENAERA KNOW-HOW, LUDWIG KNOW-HOW, GENAERA MATERIALS and LUDWIG MATERIALS
as may be requested. Promptly after the end of each calendar quarter thereafter
to the end of the ROYALTY PERIOD, GENAERA shall similarly identify and transfer
to MEDIMMUNE, at MEDIMMUNE's request, the relevant GENAERA KNOW-HOW, LUDWIG
KNOW-HOW, GENAERA MATERIALS and LUDWIG MATERIALS.

     2.2 Up to the end of the ROYALTY PERIOD, GENAERA shall provide MEDIMMUNE
with such technical advice as reasonably requested by MEDIMMUNE with respect to
the use of the GENAERA PATENTS, LUDWIG PATENTS, GENAERA KNOW-HOW, LUDWIG KNOW-
HOW, GENAERA MATERIALS and LUDWIG MATERIALS.

     2.3 (a) MEDIMMUNE agrees to provide research funding to GENAERA in an
amount equal to not less than two million five hundred thousand dollars
($2,500,000.00) (the

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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"RESEARCH PLAN FUNDING") due and payable in eight (8) equal installments every
three (3) months with the first such payment being due and payable on the
EFFECTIVE DATE in connection with the jointly developed plan for transferring
technology and performing research with respect to PRODUCT attached hereto as
Appendix D (the "RESEARCH PLAN"). MEDIMMUNE also agrees to reimburse GENAERA for
any and all external costs incurred by GENAERA in connection with the RESEARCH
PLAN that are approved in advance by MEDIMMUNE, including costs incurred
pursuant to Sections 2.1 and 2.2 hereof, and further agrees that any such
reimbursement shall be in addition to the RESEARCH PLAN FUNDING. MEDIMMUNE
agrees that it shall not, without the prior written consent of GENAERA, modify,
amend, revise or adjust the RESEARCH PLAN if, as a result, there would be an
adverse impact on GENAERA'S obligations or responsibilities hereunder or on its
income statement or budget.

         (b) GENAERA agrees to use commercially reasonable efforts to perform
research in accordance with the RESEARCH PLAN and that funds provided by
MEDIMMUNE will be used for performing research under the RESEARCH PLAN.

     2.4 GENAERA agrees to annually provide MEDIMMUNE with an accounting of the
activities performed under the RESEARCH PLAN in a form reasonably acceptable to
MEDIMMUNE and to make available to MEDIMMUNE books and records of GENAERA that
are reasonably requested by MEDIMMUNE to enable MEDIMMUNE to determine that such
activities were performed in accordance with the RESEARCH PLAN. MEDIMMUNE shall
have the right to have an independent certified accountant selected by MEDIMMUNE
and reasonably acceptable to GENAERA audit such books at the cost and expense of
MEDIMMUNE with reasonable prior notice to GENAERA during normal business hours
of GENAERA for the sole purpose of verifying such reporting, but in no event
more than once in

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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each calendar year, and the results of such audit shall be limited to such
purpose and shall be treated as GENAERA Confidential Information subject to the
obligations of this Agreement.

     2.5 GENAERA shall provide MEDIMMUNE with a quarterly update of research and
results thereof under the RESEARCH PLAN. At the end of the first and second
years of research under the RESEARCH PLAN, GENAERA shall provide MEDIMMUNE with
a detailed report of the research and results thereof performed under the
RESEARCH PLAN.

     2.6 Upon not less than two weeks prior written notice to GENAERA, MEDIMMUNE
shall have the right to visit the premises where research is being performed
under the RESEARCH PLAN and GENAERA agrees to make scientists performing
research under the RESEARCH PLAN reasonably available to MEDIMMUNE to discuss
the research and progress thereof under the RESEARCH PLAN.

     2.7 (a) The parties hereto agree to establish a joint committee (the "JC"),
which shall consist of no fewer than four (4) permanent members, two (2)
permanent members from each party. Each party may replace any or all of its
representatives on the JC at any time upon written notice to the other party.
Such representatives shall include individuals within or designated by the
senior management of each party, and those representatives of each party shall,
individually or collectively, have expertise and/or responsibility in business
and bio-pharmaceutical therapy development or commercialization and authority to
cause the participants from each party to conduct the work covered by the
RESEARCH PLAN. Any member of the JC may designate a substitute to attend and
perform the functions of that member at any meeting of the JC and each member of
the JC may invite such other non-members as deemed necessary to help explore and
resolve the issues before the JC. Each party may individually, in its
discretion, invite non-member representatives of such party to attend meetings
of the JC.

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**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

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         (b) The JC shall perform the following functions:

             (i)   exchange information concerning the overall strategy and
timelines for the RESEARCH PLAN and the collaborative process;

             (ii)  review and evaluate data and progress of the activities under
the RESEARCH PLAN;

             (iii) resolve disputes or disagreements between the parties with
respect to the RESEARCH PLAN;

             (iv)  ensure open communication between the parties as relates to
the RESEARCH PLAN; and

             (v)   provide a mechanism for the exchange of information between
the parties.

         (c) The JC shall operate by consensus with each party having a single
vote. If the JC cannot reach consensus within fifteen (15) days after it has
met and attempted to reach such consensus, the matter shall then be immediately
referred to the Chief Executive Officer of GENAERA, or such other person
holding a similar position designated by GENAERA from time to time, and a
Senior Officer of MEDIMMUNE, or such other person holding a similar position
designated by MEDIMMUNE, from time to time, for resolution. The
executive/senior officers shall use reasonable efforts to resolve the matter
referred to them. If the executive/senior officers cannot reach a mutually
acceptable decision within fifteen (15) days after the matter was referred to
them, then the Chief Executive Officer of MEDIMMUNE shall have the final
authority to make decisions in good faith that are binding on both parties;
provided, however, that such authority shall not include the right to make
decisions that adversely impact GENAERA's obligations and responsibilities
under this Agreement or its income statement or budgets.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -11-
<PAGE>

         (d) During the RESEARCH PLAN FUNDING, the JC shall meet in person at
least quarterly during every calendar year, and more frequently as the parties
deem appropriate, on such dates, and at such places and times, as the parties
shall agree. Meetings of the JC that are held in person shall alternate between
the offices of the parties, or such other place as the parties may agree. The
members of the JC also may convene or be polled or consulted from time to time
by means of telecommunications, video conferences, electronic mail or
correspondence, as deemed necessary or appropriate.

         (e) The JC shall exist until the termination or expiration of the
RESEARCH PLAN.

         (f) Each party shall be responsible for all travel and related costs
and expenses for its members and approved invitees to attend meetings of, and
otherwise participate on the JC.

     SECTION 3. - License Grant.
                  -------------

     3.1 (a) GENAERA hereby grants to MEDIMMUNE and MEDIMMUNE hereby accepts
from GENAERA a sole and exclusive right and license for the LICENSED TERRITORY
under and to GENAERA PATENTS, GENAERA MATERIALS and GENAERA KNOW-HOW to
research, develop, make, have made, use, import, export and sell or offer to
sell PRODUCTS for use in the FIELD.

         (b) GENAERA hereby grants to MEDIMMUNE and MEDIMMUNE hereby accepts
from GENAERA a sole and exclusive sublicense for the LICENSED TERRITORY under
and to the LUDWIG PATENTS, LUDWIG MATERIALS AND LUDWIG KNOW-HOW to research,
develop, make, have made, use, import, export and sell or offer to sell
PRODUCTS for use in the FIELD.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -12-
<PAGE>

         (c) To the extent that any of the rights and licenses granted to
MEDIMMUNE under Section 3.1(a) is with respect to jointly owned GENAERA
PATENTS, GENAERA KNOW-HOW or GENAERA MATERIALS under a LUDWIG LICENSE
AGREEMENT, or under Section 3.1(b) is a license or sublicense under a LUDWIG
LICENSE AGREEMENT, then such rights and licenses are subject to the terms,
conditions and restrictions of the LUDWIG LICENSE AGREEMENT applicable thereto.
The Parties acknowledge that certain notification requirements, confidentiality
provisions, diligence obligations and limitations on use apply to such
sublicense as is described in the LUDWIG LICENSE AGREEMENT(S).  For the
avoidance of doubt, GENAERA is responsible for making all payments that are due
and payable by GENAERA under any LUDWIG LICENSE AGREEMENT, and agrees to make
such payments when due; notwithstanding the previous sentence, MEDIMMUNE agrees
that it will reimburse GENAERA for [**] of all annual license maintenance fees
payable to LUDWIG under the LUDWIG LICENSE AGREEMENT(S), provided, however,
that if any person or entity is also granted a sublicense under the LUDWIG
LICENSE AGREEMENT(S), then such fees shall be equally divided among all of such
sublicensees and MEDIMMUNE.

     3.2 (a) MEDIMMUNE shall have the right to grant sublicenses under the
licenses and sublicenses granted under Section 3.1 to its AFFILIATES and, upon
the prior written notification to and consultation with GENAERA, to THIRD
PARTIES.  MEDIMMUNE, within its sole discretion, shall determine whether or not
to grant a sublicense.  Each such sublicense shall be subject to the terms and
conditions of this Agreement and the LUDWIG LICENSE AGREEMENT(S) to the extent
applicable.  A sublicense shall not be deemed to relieve MEDIMMUNE from the
obligation to perform its obligations under this Agreement; provided

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -13-
<PAGE>

that such obligations may be performed by a SUBLICENSEE and shall be deemed for
purposes of this Agreement to have been performed by MEDIMMUNE.

         (b) GENAERA shall have the right to grant licenses or sublicenses with
respect to GENAERA PATENTS, GENAERA MATERIALS, GENAERA KNOW-HOW, LUDWIG
PATENTS, LUDWIG MATERIALS, or LUDWIG KNOW-HOW in the field of DIAGNOSTICS or
VACCINES to AFFILIATES and, upon the prior written notification to and
consultation with MEDIMMUNE, to THIRD PARTIES.  GENAERA, within its sole
discretion, shall determine whether or not to grant such licenses or
sublicenses.

     3.3 With respect to the NET SALE of each unit of LICENSED PRODUCT for which
MEDIMMUNE pays a royalty under this Agreement, no further royalty shall be due
with respect to such unit of LICENSED PRODUCT.

     3.4 (a) MEDIMMUNE shall use commercially reasonable efforts consistent with
the efforts it would use with respect to an internal product of similar
commercial potential to research, develop and commercialize a LICENSED PRODUCT.
The efforts of a SUBLICENSEE and/or an AFFILIATE and/or a collaborator of
MEDIMMUNE shall be considered as efforts of MEDIMMUNE.

         (b) If, in any calendar year, MEDIMMUNE or its AFFILIATE and/or a
SUBLICENSEE and/or a collaborator of MEDIMMUNE has performed one of the
following with respect to  LICENSED PRODUCT, then MEDIMMUNE shall  be deemed to
have complied with MEDIMMUNE'S obligations under Section 3.4(a):

             (i) expended [**] for research and/or development and/or
production that in good faith is directed to a LICENSED PRODUCT through license
approval, provided, however that such expenditure shall not include the

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -14-
<PAGE>

RESEARCH PLAN FUNDING or any reimbursement to GENAERA pursuant to Section 2.3
hereof;

             (ii) in good faith is in a Phase I trial with respect to a
LICENSED PRODUCT and conducts such trial in a manner, scope and timeframe that
is customary and usual for similar PRODUCTS in the biotech and/or
pharmaceutical industry;

             (iii) in good faith is in a Phase II trial with respect to a
LICENSED PRODUCT and conducts such trial in a manner, scope and timeframe that
is customary and usual for similar PRODUCTS in the biotech and/or
pharmaceutical industry;

             (iv) in good faith is in a Phase III trial with respect to a
LICENSED PRODUCT and conducts such trial in a manner, scope and timeframe that
is customary and usual for similar PRODUCTS in the biotech and/or
pharmaceutical industry;

             (v) prepared in good faith documents for filing a Biologics
License Application and/or a New Drug Application (or its equivalent) in the
United States, Europe or Japan with respect to a LICENSED PRODUCT, provided,
however, that MEDIMMUNE shall in good faith file such application for LICENSED
PRODUCT within [**]after consummation of such activities;

             (vi) good faith review and/or good faith analysis of clinical
protocols and/or data with respect to a LICENSED PRODUCT during any period in
which the clinical trial is suspended at the request of the U.S. Federal Food
and Drug Administration or a foreign equivalent thereof;

             (vii) manufactured in good faith, LICENSED PRODUCT for use in
human clinical trials in the United States, Europe or Japan, provided, however,
that MEDIMMUNE shall in good faith commence such human clinical trials of such
LICENSED PRODUCT within [**] after commencement of such manufacturing;

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -15-
<PAGE>

             (viii) a Biologics License Application (or its equivalent) is on
file in the United States, Europe or Japan for a LICENSED PRODUCT, provided,
however, that MEDIMMUNE shall in good faith continue to work toward approval of
such an Application for LICENSED PRODUCT;

             (ix) approval of a Biologics License Application (or its
equivalent) for a LICENSED PRODUCT in the United States, Japan or Europe;

             (x) expended [**] for marketing, sales, and manufacturing
production which in good faith is directed to an approved LICENSED PRODUCT; or

             (xi) a LICENSED PRODUCT launch in the United States or Japan or
Europe.

         (c) (i) Subject to Section 3.4(c)(ii), if MEDIMMUNE fails to comply
with the obligations of Section  3.4(a) with respect to any calendar year,
GENAERA's sole and exclusive remedy for MEDIMMUNE'S failure to comply therewith
shall be the right to terminate this Agreement by written notice to MEDIMMUNE
within [**] after the end of the applicable calendar year, unless MEDIMMUNE
cures such failure prior to the expiration of [**] after such notice, provided
that such ability to cure shall apply only to the first such failure to comply.

             (ii) In the event that, in the aggregate, after the EFFECTIVE
DATE, MEDIMMUNE has spent [**] with respect to research and/or development of
LICENSED PRODUCT (including, but not limited to, clinical trials but excluding
the purchase of equity pursuant to the Stock Purchase Agreement), GENAERA's
sole and exclusive remedy for MEDIMMUNE's failure, in any calendar year, to
comply with the

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -16-
<PAGE>

obligations of Section 3.4(a) is for GENAERA to convert the exclusive license
granted to MEDIMMUNE to a non-exclusive license by written notice to MEDIMMUNE
within [**] after the end of the applicable calendar year, unless MEDIMMUNE
cures such failure prior to the expiration of [**] after such notice, provided
that such ability to cure shall apply only to the first such failure to comply.
For purposes of clarity, it is agreed and acknowledged that the other terms of
this Agreement, including, without limitation, the milestone and royalty
payment provisions of Section 6, shall continue in full force and effect.

         (d) If MEDIMMUNE receives a notice under Section 3.4(c), MEDIMMUNE
shall have the right to contest such notice by requesting arbitration under
Section 13.2, and if MEDIMMUNE requests such arbitration this Agreement shall
be terminated or made non-exclusive, as the case may be, pursuant to Section
3.4(c) only if in such arbitration there is a final determination that GENAERA
has such right, as provided in Section  3.4(c).

     3.5 MEDIMMUNE shall provide GENAERA with a written report with respect to
research and development of LICENSED PRODUCT, in each calendar year, within [**]
after the end of the applicable calendar year, and an oral report with respect
thereto within [**] after the end of each calendar quarter.

     3.6 GENAERA acknowledges that MEDIMMUNE is in the business of developing,
manufacturing and selling of medical processes and products and that nothing in
this Agreement shall be construed as restricting such business or imposing on
MEDIMMUNE the duty to market, and/or sell and exploit LICENSED PRODUCT for which
royalties are due hereunder to the exclusion of or in preference to any other
product or process.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -17-
<PAGE>

     3.7 Subject to the terms of this Agreement, MEDIMMUNE shall have sole
discretion for making all decisions relating to the commercialization and
marketing of LICENSED PRODUCT.

     3.8 Within a reasonable time period following the EFFECTIVE DATE, GENAERA
shall in good faith request that its licensor under each LUDWIG LICENSE
AGREEMENT(S) provide the consent of Appendix E.

     SECTION 4. - Confidentiality.

     4.1 Subject to Sections 4.7 and 4.8, during the term of this Agreement,
each party agrees not to provide or disclose to a THIRD PARTY any GENAERA
PATENTS, GENAERA MATERIALS, GENAERA KNOW-HOW, LUDWIG PATENTS, LUDWIG MATERIALS
or LUDWIG KNOW-HOW.

     4.2 Subject to Section 4.8, during the term of this Agreement, it is
contemplated that each party will disclose to the other party confidential
information and materials which is owned or controlled by the party providing
such information and materials or which that party is obligated to maintain in
confidence and which is designated by the party providing such information and
materials as confidential (such materials and information is individually and
collectively "Confidential Information").  Each party shall have the right to
refuse to accept the other party's Confidential Information.  Subject to Section
4.8, each party agrees to retain the other party's Confidential Information in
confidence, and to limit disclosure of any such Confidential Information to its
officers, directors, employees and permitted assigns on a need to know basis.
Each party agrees to use the other party's Confidential Information only as
permitted by this Agreement, and subject to Section 4.8, not to disclose or
provide any such Confidential

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -18-
<PAGE>

Information to any other person or entity without the prior written consent of
the party providing such Confidential Information. For the avoidance of doubt,
GENAERA PATENTS, GENAERA MATERIALS, GENAERA KNOW-HOW, LUDWIG PATENTS, LUDWIG
MATERIALS and LUDWIG KNOW-HOW will be Confidential Information of GENAERA.

     4.3 The obligations of confidentiality and non-use of Sections  4.1, and
4.2 will not apply to:

         (a) Confidential Information generally known to the public prior to
its disclosure hereunder; or

         (b) Confidential Information that subsequently becomes known to the
public by some means other than a breach of this Agreement;

         (c) Confidential Information that is subsequently disclosed to the
receiving party by a THIRD PARTY having a lawful right to make such disclosure
and who is not under an obligation of confidentiality to the party that
disclosed the Confidential Information to the receiving party; or

         (d) Confidential Information that is approved for release by the
parties.

     4.4 Neither party shall disclose any terms or conditions of this Agreement
to any THIRD PARTY without the prior consent of the other party; provided,
                                                                 --------
however, that a party may disclose the terms or conditions of this Agreement,
-------
(a) on a need-to-know basis to its legal and financial advisors to the extent
such disclosure is reasonably necessary in connection with such party's
activities expressly permitted by this Agreement and ordinary and customary
business operations, and (b) to a THIRD PARTY in connection with (i) an equity
investment in such party, (ii) a merger, consolidation, change in control or
similar transaction by such party, (iii) the transfer or sale of all or
substantially all of the assets of such party, or (iv) in connection with the

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -19-
<PAGE>

granting of a sublicense under this Agreement.  Prior to execution of this
Agreement the parties have agreed upon the substance of information that may be
used to describe the terms and conditions of this transaction, and each party
may disclose such information, as modified by mutual written agreement of the
parties, without the consent of the other party.

     4.5 The obligations of this Section 4 shall not apply to the extent that a
party is required to disclose information by applicable law, regulation or bona
                                                                           ----
fide legal process, provided that the party required to make the disclosure
----
takes reasonable steps to restrict and maintain confidentiality of such
disclosure and provides reasonable prior notice to the other party.

     4.6 The parties' obligations under this Section 4 shall terminate five (5)
years after the expiration or termination of this Agreement.

     4.7 GENAERA may provide or disclose GENAERA PATENTS, GENAERA MATERIALS,
GENAERA KNOW-HOW, LUDWIG PATENTS, LUDWIG MATERIALS, LUDWIG KNOW-HOW to a THIRD
PARTY for use in a manner that is not inconsistent with the exclusive license
granted to MEDIMMUNE, provided that the THIRD PARTY agrees to confidentiality
provisions similar to those of this Agreement and consistent with the
corresponding provisions of the LUDWIG LICENSE AGREEMENT(S) and agrees not to
use the GENAERA PATENTS, GENAERA MATERIALS, GENAERA KNOW-HOW, LUDWIG PATENTS,
LUDWIG MATERIALS and LUDWIG KNOW-HOW in a manner inconsistent with the
exclusive license granted to MEDIMMUNE under this Agreement.

     4.8 MEDIMMUNE may provide or disclose GENAERA PATENTS, GENAERA MATERIALS,
GENAERA KNOW-HOW, LUDWIG PATENTS, LUDWIG MATERIALS, LUDWIG KNOW-HOW to a THIRD
PARTY for use in a manner that is consistent with the exclusive license granted
to MEDIMMUNE, provided that the THIRD PARTY agrees to

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -20-
<PAGE>

confidentiality provisions similar to those of this Agreement and consistent
with the corresponding provisions of the LUDWIG LICENSE AGREEMENT(S) and agrees
to use the GENAERA PATENTS, GENAERA MATERIALS, GENAERA KNOW-HOW, LUDWIG
PATENTS, LUDWIG MATERIALS, LUDWIG KNOW-HOW only in a manner  consistent with
the exclusive license granted to MEDIMMUNE under this Agreement.

     SECTION 5. - Patents.
                  -------

     5.1 (a) GENAERA shall file, prosecute and maintain GENAERA PATENTS through
patent counsel selected by GENAERA.  The parties hereto acknowledge that certain
notification, confidentiality, patent cost reimbursement and ownership interest
provisions and obligations related to LUDWIG may apply to the GENAERA PATENTS,
GENAERA KNOW-HOW and GENAERA MATERIALS that are jointly owned with LUDWIG.
GENAERA shall consult with and keep MEDIMMUNE advised with respect thereto.

         (b) To the extent permitted under the terms of the respective LUDWIG
LICENSE AGREEMENT(S), GENAERA shall file, prosecute and maintain LUDWIG PATENTS
through patent counsel selected by GENAERA.  The parties acknowledge that
certain notification requirements, confidentiality provisions, patent cost
reimbursement obligations and ownership interests apply to the LUDWIG PATENTS
as is described in the LUDWIG LICENSE AGREEMENT(S).  GENAERA shall consult with
and keep MEDIMMUNE advised with respect thereto.

     5.2 With respect to any (i) GENAERA PATENTS, and (ii) LUDWIG PATENTS,
subject to the limitation in Section 5.1(b), and to the extent available to
GENAERA, each patent application, office action, response to office action,
request for terminal disclaimer, and request

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -21-
<PAGE>

for reissue or reexamination or extension of any patent issuing from such
application shall be provided to MEDIMMUNE sufficiently prior to the filing of
such application, response or request to allow for review and comment by
MEDIMMUNE.  GENAERA agrees to consider such comments and follow reasonable
comments unless GENAERA believes that such comments are adverse to the
interests of GENAERA.

     5.3 (a) GENAERA shall not allow any GENAERA PATENTS licensed to MEDIMMUNE
to lapse (other than expiration of the patent term) or be surrendered, or
abandoned without the written consent of MEDIMMUNE (other than those that are
abandoned in the ordinary course of prosecution in connection with the filing
of a continuation or continuation in part application therefor and/or as a
result of the expiration of the patent term and/or as a result of a patent
being determined to be invalid by a court or administrative agency of competent
jurisdiction);

         (b) To the extent known to GENAERA, GENAERA shall notify MEDIMMUNE in
advance, in writing, of any abandonment, lapse or surrendering of any LUDWIG
PATENT or the intent to do so, and, after GENAERA first having a reasonable
opportunity to cure or prevent such lapse, abandonment or surrender, then to the
extent permitted under the LUDWIG LICENSE AGREEMENT or by LUDWIG, permit
MEDIMMUNE to cure or prevent any such lapse, abandonment or surrender, where
possible.

     5.4 MEDIMMUNE shall pay the reasonable out of pocket costs and expenses
incurred after the Effective Date by GENAERA for filing, prosecuting and
maintaining GENAERA PATENTS and LUDWIG PATENTS as to which MEDIMMUNE retains an
exclusive license or exclusive sublicense as applicable under this Agreement,
provided, however, MEDIMMUNE shall pay [**] of such costs and expenses for
GENAERA PATENTS or

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -22-
<PAGE>

LUDWIG PATENTS that also contain claims that cover subject matter in addition
to the subject matter that is exclusively licensed to MEDIMMUNE under this
Agreement, provided, however, that if any person or entity receives a license
or sublicense under any of such GENAERA PATENTS or LUDWIG PATENTS, then such
costs and expenses shall be divided equally between such licensees and
MEDIMMUNE.

     SECTION 6. - Royalties.
                  ---------

     6.1 Subject to Sections 6.2, 6.3, 6.10(c) and 6.12, in each country,
MEDIMMUNE shall pay royalties to GENAERA for PRODUCTS as follows:

         (a) During the ROYALTY PERIOD, on NET SALES of LICENSED PRODUCT that
but for the license granted by this Agreement infringe a VALID PATENT CLAIM in
the country where sold ("PATENTED PRODUCT"):

             (i) [**] of the aggregate of NET SALES of PATENTED PRODUCT in a
calendar year up to [**];

             (ii) [**] of the portion of NET SALES of PATENTED PRODUCT sold in
a calendar year that is in excess of [**] up to [**]; and

             (iii) [**] of the portion of NET SALES of PATENTED PRODUCT in a
calendar year that exceeds [**].

         (b) During any ROYALTY PERIOD, [**] of NET SALES of LICENSED PRODUCT
that does not infringe a VALID PATENT CLAIM and for which no royalties are due
under Section 6.1(a).

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -23-
<PAGE>

         (c) In addition to the royalties owed under Section 6.1(a) and (b),
during the period that MEDIMMUNE is sublicensed under the LUDWIG LICENSE
AGREEMENTS, MEDIMMUNE shall pay to GENAERA [**] owed by [**] and in the
aggregate [**], as defined in the [**].  For the avoidance of doubt, MEDIMMUNE
shall not pay monies owed to [**] by GENAERA under [**].

     6.2 In the event that a LICENSED PRODUCT is sold in combination with a
therapeutically active component that is not a LICENSED PRODUCT for which
royalties are due under this Agreement (such combination being a "Combination
Product"), then NET SALES of such Combination Product upon which a royalty is
paid shall be subject to the following adjustment.  If the LICENSED PRODUCT and
the other therapeutically active component are sold separately in a country,
then NET SALES of such Combination Product in such country upon which a royalty
is paid shall be multiplied by the fraction A/A+B, where A equals the average
sales price of such LICENSED PRODUCT sold separately in such country, and B
equals the average sales price of the other therapeutically active component
sold separately in such country.  Otherwise, the parties shall enter into good
faith negotiations and attempt to reach mutual agreement to determine an
appropriate adjustment to the NET SALES of such Combination Product in a country
to reflect the relative contributions of the LICENSED

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -24-
<PAGE>

PRODUCT and the other therapeutically active component to the value of the
Combination Product in such country.  If such mutual agreement is not reached
within ninety (90) days after commencement of such negotiations, then the
determination shall be submitted to binding arbitration under Section 13.2.

     6.3 In the event that royalties are to be paid to GENAERA under Section
6.1(a) and royalties are also due to a THIRD PARTY (other than LUDWIG) with
respect to LICENSED PRODUCT, then [**] of the royalties due to such THIRD PARTY
and [**] of the royalties described in Section 6.1(c) can be deducted from
royalties due under Section 6.1(a) but in no event shall such reduction reduce
the royalties under Section 6.1(a) to less than [**] under section 6.1(a)(i),
to less than [**] under Section 6.1(a)(ii) and less than [**] under Section
6.1(a)(iii).

     6.4 MEDIMMUNE shall keep, and shall cause each of its AFFILIATES and
SUBLICENSEES to keep, full and accurate books of account containing all
particulars that may be necessary for the purpose of calculating all royalties
payable to GENAERA, including, without limitation, particulars with respect to
price reductions, if any, of LICENSED PRODUCT as a result of other consideration
paid by the purchaser of LICENSED PRODUCT.  Such books of account, together with
all necessary supporting data, shall be kept at their principal place of
business, and for the three (3) years next following the end of the calendar
year to which each pertains, shall be open for inspection by an independent
certified accountant selected by GENAERA and reasonably acceptable to MEDIMMUNE
upon reasonable notice during normal business hours at GENAERA's expense for the
sole purpose of verifying royalty statements or compliance with this Agreement,
but in no event more than once in each calendar year.  All information and data
offered shall be used only for the purpose of verifying royalties; shall be

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -25-
<PAGE>

treated as MEDIMMUNE Confidential Information subject to the obligations of this
Agreement; and disclosure by such accountant to GENAERA shall be limited to the
information necessary to quantify any underpayment and to identify the cause
thereof, including without limitation the amount, if any, that any such
royalties have been underpaid.  In the event that for the period inspected,
MEDIMMUNE has underpaid royalties by at least [**], then MEDIMMUNE shall pay the
fees charged to GENAERA for such inspection.

     6.5 With each quarterly payment, MEDIMMUNE shall deliver to GENAERA a full
and accurate accounting of the calculation of the royalties owing hereunder to
include at least the following information:

         (a) Quantity of each LICENSED PRODUCT subject to royalty sold (by
country) by MEDIMMUNE, its AFFILIATES and SUBLICENSEES;

         (b) NET SALES for each LICENSED PRODUCT (by country), including a
detailed reconciliation from the gross invoiced sales price to NET SALES;

         (c) The calculation of the gross royalties (before deductions),
including detail of each THIRD PARTY royalty paid pursuant to Section 6.3
hereof, for each LICENSED PRODUCT (by country) and any deductions, offsets and
credits therefrom; and

         (d) Total royalties payable to GENAERA for each LICENSED PRODUCT (by
country) and the total royalties payable to GENAERA for all LICENSED PRODUCTS
(for all countries).

     6.6 In each year the amount of royalty due shall be calculated quarterly
as of March 31, June 30, September 30 and December 31 (each being the last day
of an "ACCOUNTING PERIOD") and shall be paid quarterly within the sixty (60)
days next following such date.  Every such payment shall be supported by the
accounting prescribed in Section 6.5 and shall be made

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -26-
<PAGE>

in United States currency.  Whenever for the purpose of calculating royalties
conversion from any foreign currency shall be required, such conversion shall be
at the average of the rate of exchange (local currency per US$1) published in
the Eastern Edition of The Wall Street Journal under the caption "Currency
                       -----------------------
Trading" for the last business day of each month during the applicable
ACCOUNTING PERIOD.

     6.7 If the transfer of or the conversion into United States Dollar
equivalent of any remittance due hereunder is not lawful or possible in any
country, such remittance shall be made by the deposit thereof in the currency
of the country to the credit and account of GENAERA or its nominee in any
commercial bank or trust company located in that country, prompt notice of
which shall be given to GENAERA.  GENAERA shall be advised in writing in
advance by MEDIMMUNE and provide to MEDIMMUNE a nominee, if so desired.

     6.8 Any tax required to be withheld by MEDIMMUNE under the laws of any
foreign country for the account of GENAERA shall be promptly paid by MEDIMMUNE
for and on behalf of GENAERA to the appropriate governmental authority, and
MEDIMMUNE shall furnish GENAERA with proof of payment of such tax.  Any such
tax actually paid on GENAERA's behalf shall be deducted from royalty payments
due GENAERA. MEDIMMUNE shall reasonably assist GENAERA in connection with the
making of any claim to a refund of any such tax payment.

     6.9 Only one royalty shall be due and payable for the manufacture, use and
sale of a LICENSED PRODUCT irrespective of the number of patents or claims
thereof which cover the manufacture, use and sale of such LICENSED PRODUCT.

     6.10 (a) MEDIMMUNE shall pay to GENAERA the following milestone payments
upon the occurrence of the following events with respect to a LICENSED PRODUCT;

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -27-
<PAGE>

provided that [**]:

<TABLE>
<CAPTION>

           Event                   Payment
           -----                   -------
<C>                                <S>

(1)   [**]                           [**]
(2)   [**]                           [**]
(3)   [**]                           [**]
(4)   [**]                           [**]
(5)   [**]                           [**]
(6)   [**]                           [**]
(7)   [**]                           [**]
(8)   [**]                           [**]
(9)   [**]                           [**]
(10)  [**]                           [**]
(11)  [**]                           [**]
(12)  [**]                           [**]
(13)  [**]                           [**]
</TABLE>

         (b) The milestone payments under Section 6.10(a) are due and payable
thirty (30) days after the applicable milestone occurs, and each milestone is
paid only once.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -28-
<PAGE>

         (c) [**]

     6.11 MEDIMMUNE shall purchase preferred shares of GENAERA in accordance
with the Stock Purchase Agreement between GENAERA and MEDIMMUNE dated of even
date herewith.

     6.12 In the event that MEDIMMUNE, by the expenditure of money that would be
deemed to be reasonable under the circumstances, cures a material breach by
GENAERA (after first having provided GENAERA with reasonable notice and
opportunity to cure such breach) under a GENAERA LICENSE AGREEMENT, MEDIMMUNE
shall have the right to credit the cost and expense thereof against any payment
due to GENAERA under this Agreement and/or recover such amount directly from
GENAERA.

     SECTION 7. - Infringement.
                  ------------

     7.1 (a) If any of the GENAERA PATENTS or LUDWIG PATENTS to the extent that
MEDIMMUNE is licensed exclusively or sublicensed exclusively hereunder is
infringed by an unlicensed person or entity in the FIELD, and subject to the
provisions of the LUDWIG LICENSE AGREEMENT(S), MEDIMMUNE shall have the right
and option but not the obligation to bring an action for such infringement, at
its sole expense, against such an unlicensed person or entity in the name of
GENAERA and/or in the name of MEDIMMUNE and/or in the name of a licensor of
GENAERA, as the case may be, and to join GENAERA or its licensor as a party
plaintiff if required, and, in the absence of MEDIMMUNE'S joinder of GENAERA as
a party plaintiff, GENAERA shall, at its option, be permitted to join such
action

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -29-
<PAGE>

at GENAERA's expense.  MEDIMMUNE shall promptly notify GENAERA of any such
infringement and shall keep GENAERA informed as to the prosecution of any
action for such infringement.  No settlement, consent judgment or other
voluntary final disposition of the suit that adversely affects GENAERA PATENTS
or LUDWIG PATENTS may be entered into without the consent of GENAERA, which
consent shall not unreasonably be withheld.

         (b) In the event that MEDIMMUNE shall undertake the enforcement under
Section 7.1(a) of any of the GENAERA PATENTS or LUDWIG PATENTS by litigation
and with respect to LUDWIG PATENTS, subject to the provisions of the LUDWIG
LICENSE AGREEMENT(S), any recovery of damages by MEDIMMUNE for any such suit
shall be applied first pro rata in satisfaction of any unreimbursed out of
pocket expenses and legal fees of MEDIMMUNE regarding such suit and next to any
unreimbursed out of pocket expenses and legal fees of GENAERA regarding such
suit, if GENAERA has joined in such suit.  The balance remaining from any such
recovery shall be divided between MEDIMMUNE and GENAERA, as follows (i) for
that portion, if any, based on lost profits, GENAERA shall recover the royalty
GENAERA would have received under this Agreement if such sales had been made by
MEDIMMUNE, and (ii) for any other recovery, GENAERA shall receive five percent
(5%) of the remaining amount.

     7.2 In the event that MEDIMMUNE elects not to pursue an action for
infringement, within a reasonable time period after written notice to GENAERA
by MEDIMMUNE that an unlicensed person or entity is an infringer of a VALID
PATENT CLAIM of any of the GENAERA PATENTS or LUDWIG PATENTS licensed to
MEDIMMUNE, GENAERA shall have the right and option, but not the obligation at
its cost and expense to initiate infringement litigation and to retain any
recovered damages.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -30-
<PAGE>

     7.3 In any infringement suit either party may institute to enforce any of
the GENAERA PATENTS or LUDWIG PATENTS pursuant to this Agreement, the other
party hereto shall, at the request of the party initiating such suit,
reasonably cooperate and, to the extent reasonably possible, have its employees
testify when requested and make available relevant records, papers,
information, samples, specimens, and the like.  All reasonable out-of-pocket
costs incurred in connection with rendering cooperation requested hereunder
shall be paid by the party requesting cooperation.

     7.4 Notwithstanding anything in this Section 7, GENAERA shall have the
right to initiate any action against any person or entity related to the
infringement by a person or entity of a PRODUCT or any other products or
processes outside of the FIELD.

     SECTION 8. - Representations, Warranties and Covenants.
                  -----------------------------------------

     8.1 Each of GENAERA and MEDIMMUNE warrants and represents to the other
that:

         (a) it has the corporate power and authority and the legal right to
enter into this Agreement and to perform its obligations hereunder;

         (b) it has taken all necessary corporate action on its part to
authorize the execution and delivery of this Agreement and the performance of
its obligations hereunder; and

         (c) this Agreement has been duly executed and delivered on its behalf,
and constitutes a legal, valid, binding obligation, enforceable against it in
accordance with its terms.

     8.2 GENAERA represents and warrants to and covenants with MEDIMMUNE that:

         (a) it has not previously granted and, prior to expiration or
termination of this Agreement, will not grant any rights in the GENAERA PATENTS
or GENAERA KNOW-HOW

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -31-
<PAGE>

or GENAERA MATERIALS or LUDWIG PATENTS or LUDWIG KNOW-HOW or LUDWIG MATERIALS
that conflict with the rights and licenses granted to MEDIMMUNE herein;

         (b) it has provided to MEDIMMUNE a true, complete and correct copy of
the LUDWIG LICENSE AGREEMENT(S) (including any amendments thereto), GENAERA has
performed all obligations under such agreements to enable GENAERA to grant the
license granted to MEDIMMUNE hereunder, and there are no other requirements
necessary for GENAERA to grant such license.  GENAERA has neither received nor
delivered any written notice of default under the LUDWIG LICENSE AGREEMENT(S);
and GENAERA is not in breach in any material respect of any of the LUDWIG
LICENSE AGREEMENT(S).

         (c) GENAERA has provided to MEDIMMUNE all information and data in its
possession and control regarding the safety and efficacy of PRODUCT.

         (d) The GENAERA PATENTS owned by GENAERA and the LUDWIG PATENTS
licensed to GENAERA under the LUDWIG LICENSE AGREEMENT in each case that exist
as of the Effective Date are listed in Appendices A and C.  GENAERA has neither
received from nor delivered any written claim to a THIRD PARTY, nor has any
actual knowledge that any THIRD PARTY intends to assert any claim asserting the
invalidity, unenforceability or misuse of the GENAERA PATENTS or the LUDWIG
PATENTS.

     8.3 Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN SECTIONS 8.1
         ----------
and 8.2, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY
KIND EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR VALIDITY
OF ANY PATENT RIGHTS ISSUED OR PENDING.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -32-
<PAGE>

     8.4 GENAERA hereby covenants and agrees that (i) it shall not consent to
any amendment or modification or termination of the LUDWIG LICENSE AGREEMENT(S)
that would adversely affect the licenses granted hereunder without the written
permission of MEDIMMUNE, such permission not to be unreasonably withheld;
(ii) it shall perform its contractual obligations to keep the LUDWIG LICENSE
AGREEMENT(S) in full force and effect during the respective terms thereof;
(iii) it shall not assign any of the LUDWIG LICENSE AGREEMENT(S) without the
written consent of MEDIMMUNE (which consent shall not be unreasonably
withheld), except that such consent shall not be required for assignment in
connection with the transfer or sale of all or substantially all of its
business, or in the event of its merger, consolidation, change in control or
similar transaction, (x) provided that such assignment is subject to this
Agreement and (y) such assignment does not adversely affect the LUDWIG LICENSE
AGREEMENT(S) or GENAERA rights thereunder; and (iv) GENAERA shall promptly
advise MEDIMMUNE of any notice of a breach or intent to terminate any LUDWIG
LICENSE AGREEMENT(S) that is received from LUDWIG, and to the extent permitted
under the LUDWIG LICENSE AGREEMENT(S), MEDIMMUNE shall have the right but not
the obligation to cure any such breach.   GENAERA shall only be liable for a
breach of Section 8.4(i) if such failure to perform results in a termination of
a LUDWIG LICENSE AGREEMENT and/or MEDIMMUNE's sublicense thereunder, provided
that in no event shall GENAERA be liable for consequential, special or punitive
damages as a result thereof.

     SECTION 9. - Indemnification.
                  ---------------

     9.1 MEDIMMUNE agrees to indemnify and hold harmless GENAERA, its directors,
officers, employees and agents (individually and collectively, the "Indemnitee")
from and

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -33-
<PAGE>

against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) incurred in connection with any claims, demands,
actions or other proceedings by any THIRD PARTY arising from (a) the research,
development, manufacture, use or sale of PRODUCTS by MEDIMMUNE, or any of its
AFFILIATES or SUBLICENSEES, (b) the use of PRODUCTS manufactured or sold by
MEDIMMUNE or any of its AFFILIATES or SUBLICENSEES by any purchasers thereof,
or (c) the use by MEDIMMUNE or any of  its AFFILIATES or SUBLICENSEES of the
GENAERA PATENTS, LUDWIG PATENTS, GENAERA KNOW-HOW, GENAERA MATERIALS, LUDWIG
KNOW-HOW or LUDWIG MATERIALS.

     9.2 If any such claims or actions are made, the Indemnitee shall be
defended at MEDIMMUNE's sole expense by counsel selected by MEDIMMUNE and
reasonably acceptable to the Indemnitee provided that the Indemnitee may, at
its own expense, also be represented by counsel of its own choosing.

     9.3 MEDIMMUNE's indemnification under Section 9.1 shall not apply to the
extent any loss, liability, damage or expense is attributable to the gross
negligence or intentional misconduct of any of Indemnitee.

     9.4 MEDIMMUNE may settle any such claim, demand, action or other
proceeding or otherwise consent to an adverse judgment (i) with prior written
notice to the Indemnitee but without the consent of the Indemnitee where the
only liability to the Indemnitee is the payment of money and MEDIMMUNE makes
such payment (ii) otherwise only with the prior written consent of the
Indemnitee not to be unreasonably withheld in all other cases.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -34-
<PAGE>

     9.5 The Indemnitee shall notify MEDIMMUNE promptly of any claim, demand,
action or other proceeding under Section 9.1 and shall reasonably cooperate
with all reasonable requests of MEDIMMUNE with respect thereto.

     9.6 The Indemnitee may not settle any such claim, demand, action or other
proceeding or otherwise consent to an adverse judgment in any such action or
other proceeding without the express written permission of MEDIMMUNE, which
shall not be unreasonably withheld.

     SECTION 10. -  Assignment; Successors.
                    ----------------------

     10.1 This Agreement shall not be assigned or otherwise transferred (in
whole or in part, whether voluntarily, by operation of law or otherwise) by
either of the parties without the prior written consent of the other party
(which consent shall not be unreasonably withheld); provided, however, that
either party may, without such consent, assign this Agreement and its rights
and obligations hereunder to an AFFILIATE or in connection with the transfer or
sale of all or substantially all of its business, or in the event of its
merger, consolidation, change in control or similar transaction, provided that
such assignment by any party does not cause the termination of the rights and
licenses granted to the other party under this Agreement and is subject to this
Agreement.  Any permitted assignee shall assume all obligations of its assignor
under this Agreement.  Any purported assignment or transfer in violation of
this Section 10.1 shall be void.

     10.2 Subject to the limitations on assignment herein, this Agreement shall
be binding upon and inure to the benefit of said successors in interest and
assigns of MEDIMMUNE and GENAERA.

     SECTION 11. - Term and Termination.
                   ---------------------

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -35-
<PAGE>

     11.1 Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Section 3.4, 11.2 or 11.3 of this Agreement, this
Agreement and the licenses and rights granted thereunder shall remain in full
force and effect for [**] years or until MEDIMMUNE has no further royalty
obligation hereunder (whichever is shorter), at which time MEDIMMUNE shall have
a fully paid-up, non-cancelable, nonexclusive license under the GENAERA KNOW-HOW
and GENAERA MATERIALS to research, develop, make, have made, use, import, export
and sell or offer to sell PRODUCTS.

     11.2 MEDIMMUNE shall have the right to terminate this Agreement in its
entirety or with respect to any one or more countries in the TERRITORY upon
[**] prior written notice to GENAERA.

     11.3 GENAERA shall have the right to terminate this Agreement (i) pursuant
to the terms of Section 3.4(c) hereof  or (ii) if MEDIMMUNE breaches its
obligations under Sections 2.3, 6 or 9 or the payment obligations of Section 5
of this Agreement.  If such a breach shall occur, GENAERA shall provide
MEDIMMUNE with written notice of such breach and if such breach is not cured
within [**] after such written notice, GENAERA may terminate this Agreement by
written notice to MEDIMMUNE, provided such written notice is given within [**]
after the expiration of such initial [**] period.

     11.4 (a) Upon any termination of this Agreement, except a termination under
Section 11.3(ii), MEDIMMUNE, at its option, shall be entitled to sell any
completed inventory of PRODUCT which remains on hand as of the date of the
termination, so long as MEDIMMUNE pays to GENAERA the royalties applicable to
said subsequent sales in accordance with the same terms and conditions as set
forth in this Agreement.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -36-
<PAGE>

     11.5 Except for any voluntary termination by MEDIMMUNE under Section 11.2
hereof, in the event that this Agreement is terminated at any time after [**]
from the EFFECTIVE DATE, and a sublicense has been granted under this Agreement
then this Agreement shall become an agreement between GENAERA and the
SUBLICENSEE, to the extent of such sublicense, subject to the SUBLICENSEE
agreeing to be bound to GENAERA under the terms and conditions of this
Agreement.  At the request of MEDIMMUNE, GENAERA will acknowledge to a
SUBLICENSEE GENAERA's obligations to the SUBLICENSEE under this paragraph. If
MEDIMMUNE grants any sublicense under this Agreement at any time within [**]
from the EFFECTIVE DATE, GENAERA may, at its sole discretion and option, agree
to be bound by such sublicense under the terms and conditions of this Agreement
following any termination of this Agreement (other than any voluntary
termination by MEDIMMUNE under Section 11.2 hereof).

     11.6 Upon any termination of this Agreement, MEDIMMUNE shall promptly
return to GENAERA any GENAERA MATERIALS, GENAERA KNOW-HOW, LUDWIG MATERIALS and
LUDWIG KNOW-HOW, except that a SUBLICENSEE shall have the right to retain the
foregoing in the case where and to the extent that the SUBLICENSEE retains
rights under this Agreement pursuant to Section 11.5.

     11.7 In the event that this Agreement is terminated, MEDIMMUNE agrees to
discuss with GENAERA the granting of a royalty-bearing license to MEDIMMUNE
intellectual property with respect to LICENSED PRODUCT, with it being expressly
understood that MEDIMMUNE has no obligation to grant such a license or to retain
the ability to grant such a license.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -37-
<PAGE>

     11.8 The provisions of Sections 4, 9, 11.1, 11.4, 11.5, 11.6, 11.7, 11.8,
11.9 and 13.4 shall survive any expiration or termination of this Agreement.

     11.9 Upon expiration or termination of this Agreement for any reason,
nothing herein shall be construed to release either party from any obligation
that matured prior to the effective date of such expiration or termination.

     11.10 All rights and licenses granted under or pursuant to this Agreement
by GENAERA to MEDIMMUNE are, and shall irrevocably be deemed to be,
"intellectual property" as defined in Section 101(56) of the Bankruptcy Code.
In the event of the commencement of a case by or against either party under any
Chapter of the Bankruptcy Code, this Agreement shall be deemed an executory
contract and all rights and obligations hereunder shall be determined in
accordance with Section 365(n) thereof.  Unless a party rejects this Agreement
and the other party decides not to retain its rights hereunder, the other party
                            ---
shall be entitled to a complete duplicate of (or complete access to, as
appropriate) all intellectual property and all embodiments of such intellectual
property held by the party and the party shall not interfere with the rights of
the other party, which are expressly granted hereunder, to such intellectual
property and all embodiments of such intellectual property from another entity.
Further, this Agreement shall be deemed, upon presentation to another entity,
to be the same as an express instruction by the party to such other entity to
provide such intellectual property and all embodiments of such intellectual
property directly to the other party.  Without limiting the foregoing
provisions in this paragraph, the other party shall be entitled to all
post-bankruptcy-petition improvements, updates, or developments of intellectual
property created hereunder.  If such intellectual property is not fully
developed as of the commencement of any bankruptcy case, the other party shall
have the right to complete development of the property.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -38-
<PAGE>

     SECTION 12. - Force Majeure.
                   -------------

     12.1 No failure or omission by the parties hereto in the performance of
any obligation of this Agreement (other than an obligation for the payment of
money) shall be a breach of this Agreement, nor shall it create any liability,
if the same shall arise from any cause or causes beyond the reasonable control
of the affected party, including, but not limited to, the following, which for
purposes of this Agreement shall be regarded as beyond the control of the party
in question: acts of God; acts or omissions of any government; any rules,
regulations, or orders issued by any governmental authority or by any officer,
department, agency or instrumentality thereof; fire; storm; flood; earthquake;
accident; war; rebellion; insurrection; riot; invasion; strikes; and lockouts
or the like; provided that the party so affected shall use its commercially
reasonable efforts to avoid or remove such causes or nonperformance and shall
continue performance hereunder with the utmost dispatch whenever such causes
are removed.

     SECTION 13. - General Provisions.
                   ------------------

     13.1 The relationship between GENAERA and MEDIMMUNE is that of independent
contractors.  GENAERA and MEDIMMUNE are not joint venturers, partners, principal
and agent, master and servant, employer or employee, and have no relationship
other than as independent  contracting parties.  GENAERA shall have no power to
bind or obligate MEDIMMUNE in any manner.  Likewise, MEDIMMUNE shall have no
power to bind or obligate GENAERA in any manner.

     13.2 Any matter or disagreement under Section 3.4 or 6.2, which this
Agreement specifies is to be resolved by arbitration shall be submitted to a
mutually selected three member panel of arbitrators to so decide any such
matter or disagreement.  The panel shall conduct the

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -39-
<PAGE>

arbitration in accordance with the Rules of the American Arbitration
Association, unless the parties agree otherwise.  If the parties are unable to
mutually select such panel, the panel shall be selected in accordance with the
procedures of the American Arbitration Association.  The decision and award
rendered by the panel shall be final and binding.  Judgment upon the award may
be entered in any court having jurisdiction thereof.  Any arbitration pursuant
to this section shall be held in Washington, D.C. or such other place as may be
mutually agreed upon in writing by the parties.

     13.3 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and supersedes all prior
agreements in this respect.  There shall be no amendments or modifications to
this Agreement, except by a written document which is signed by both parties.

     13.4 This Agreement shall be construed and enforced in accordance with the
laws of the State of Delaware without regard to the conflicts of law principles
thereof.

     13.5 The headings in this Agreement have been inserted for the convenience
of reference only and are not intended to limit or expand on the meaning of the
language contained in the particular article or section.

     13.6 Any delay in enforcing a party's rights under this Agreement or any
waiver as to a particular default or other matter shall not constitute a waiver
of a party's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to a
particular matter for a particular period of time.

     13.7 Any notices given pursuant to this Agreement shall be in writing,
delivered by any means, addressed to the other party at its address indicated
below, or to such other address as

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -40-
<PAGE>

the addressee shall have last furnished in writing to the addresser and (except
as otherwise provided in this Agreement) shall be effective upon receipt by the
addressee.

             To MEDIMMUNE:   MedImmune, Inc.
                             35 West Watkins Mill Road
                             Gaithersburg, MD 20878

             Copy to:        Carella, Byrne, Bain, Gilfillan,
                             Cecchi, Stewart & Olstein
                             6 Becker Farm Road
                             Roseland, New Jersey 07068
                             Fax No. (973) 994-1744
                             Attn: Elliot M. Olstein, Esq.

             To GENAERA:     Genaera Corporation
                             5110 Campus Drive
                             Plymouth Meeting, PA 19462
                             Attention:  President

             Copy to:        Morgan, Lewis & Bockius LLP
                             502 Carnegie Center
                             Princeton, NJ 08540
                             Fax No. (609) 919-6639
                             Attn: Randall B. Sunberg, Esq.

     13.8 This Agreement may be executed in two counterparts, each of which
shall be deemed an original agreement.

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -41-
<PAGE>

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

GENAERA CORPORATION                             MEDIMMUNE, INC.

By:  /s/ Roy Clifford Levitt, M.D.              By:  /s/ David M. Mott
     -----------------------------                   -----------------

Name:  Roy Clifford Levitt, M.D.                Name:  David M. Mott
       -------------------------                       -------------

Title:  President and Chief Executive Officer   Title:  Chief Executive Officer
        -------------------------------------           -----------------------

----------------
**Certain portions of this exhibit have been omitted based upon a request for
confidential treatment that has been filed with the Commission. The omitted
portions have been filed separately with the Commission.

                                      -42-
<PAGE>

APPENDIX A        Current Genaera Patents

APPENDIX B        Ludwig License Agreement(s)

APPENDIX C        Current Ludwig Patents

APPENDIX D        Research Plan

APPENDIX E        Form of Ludwig Consent

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