Document:

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                                                                     EXHIBIT 4.9

                          ANTIBODY LICENSE AGREEMENT

                                    BETWEEN

                          HUMAN GENOME SCIENCES, INC.

                                      AND

                     CAMBRIDGE ANTIBODY TECHNOLOGY LTD./1/
                                                        -

                               FEBRUARY 29,2000

-----------------------------
/1/   [***] indicates that text has been deleted, which is subject to a
 -
confidential treatment request.  This text has been filed with the SEC on a
supplemental basis.
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                            ANTIBODY COLLABORATION,

                         OPTION AND LICENSE AGREEMENT

     This Agreement ("Agreement") dated as of the 29th of February 2000 (the
"Effective Date"), is entered into by Human Genome Sciences, Inc. ("HGS"), a
Delaware corporation, having its principal offices at 9410 Key West Avenue,
Rockville, Maryland 20850, United States of America and Cambridge Antibody
Technology, Ltd., ("CAT"), an English corporation having its registered office
at The Science Park, Melbourn Cambridgeshire SG8 6JJ, United Kingdom.

The parties hereby agree as follows:

1.   DEFINITIONS

     1.1  "AFFILIATE" shall mean any individual or entity directly or indirectly
controlling, controlled by or under common control with, the specified
individual or entity. For purposes of this Agreement, the direct or indirect
ownership of fifty percent (50%) or more of the outstanding voting securities of
an entity, or the right to receive fifty percent (50%) or more of the profits or
earnings of an entity shall be deemed to constitute control.

     1.2  "ANTIBODY" shall mean a molecule or a gene encoding such a molecule
comprising or containing one or more immunoglobulin variable domains or parts of
such domains or any existing or future fragments, variants, modifications or
derivatives thereof.

     1.3  "CAT ANTIBODY LIBRARY" shall mean CAT's complete scFv phage antibody
library in existence on the Effective Date, and all updates, additions and
improvements to such library made by CAT during the five-year period commencing
on the Effective Date.  This library shall not include an

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antibody library made by ribosome display, and such a ribosome display library
shall not be considered an update, addition or improvement to CAT ANTIBODY
LIBRARY.

     1.4 "CAT ANTIBODY PATENTS" shall mean (1) the Winter II Patent Rights
(European Patent Number, EPO36884/PCT/GB89/01334, and its US equivalents namely
the Winter/Lerner Applications, US Numbers 07/933,958, 07/933,959,
07/941/761,07/941,762, and their European equivalents), (2) the McCafferty
Patent Rights (European Patent Number EPO584877BI/PCTGB91/01134, and U.S.
equivalents) and (3) the Griffiths Patents Rights (US Number 5,885,793, and its
European equivalents) all licensed to CAT pursuant to the license agreement
dated January 7, 1997 between CAT and the Medical Research Council ("MRC").

     1.5 "CAT BACKGROUND IP" means all PATENT RIGHTS, KNOW-HOW and MATERIAL
(including the CAT ANTIBODY LIBRARY) which CAT owns or which CAT is licensed to
use which directly relate to ANTIBODIES at the Effective Date or during the
RESEARCH TERM or IMPROVEMENTS which CAT owns before or after the Effective Date
which directly relate to the ANTIBODIES, including, but not limited to, (1) the
Winter II Patent Rights (European Patent Number, EPO36884/PCT/GB89/01334, and
its US equivalents namely the Winter/Lerner Applications, US Numbers 07/933,958,
07/933,959, 07/941,761, 07/941,762, and their European equivalents), (2) the
McCafferty Patent Rights (European Patent Number EPO584877BI/PCTGB91/01134, and
U.S. equivalents) and (3) the Griffiths Patent Rights (US Number 5,885,793, and
its European equivalents) all licensed to CAT pursuant to the license agreement
dated January 7, 1997 between CAT and the Medical Research Council ("MRC"). In
addition, for the sake of clarity, CAT BACKGROUND IP shall include PATENT
RIGHTS, KNOW-HOW, and MATERIAL related to CAT's ProAb and ProxiMol technologies.

     1.6 "CAT RESEARCH ANTIGEN"shall mean an HGS ANTIGEN that is identified by
CAT after June 30, 2001 pursuant to Paragraph 5.1.

     1.7 "CAT THIRD PARTY ROYALTY OBLIGATIONS" means all Royalties payable by
CAT under license agreements with third parties subject to the mutual offset
provisions provided for in such

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agreements as of the Effective Date and which cover activities conducted by CAT
for itself or on behalf of HGS pursuant to Article 7 or by HGS pursuant to the
licenses granted to HGS by CAT pursuant to this Agreement including but not
limited to the agreements set out in Exhibit A.

     1.8  "CONFIDENTIAL INFORMATION" means any scientific, technical, trade or
business information disclosed by one Party to the other Party which is (a)
disclosed in writing or other tangible form and labeled "CONFIDENTIAL" at the
time of disclosure or (b) disclosed verbally and identified as confidential at
the time of disclosure and subsequently summarized and confirmed in writing as
confidential within twenty (20) days of such oral disclosure. "Confidential
Information" does not include information which (a) was known to the Receiving
Party at the time it was disclosed, other than by previous disclosure by the
Disclosing Party, as evidenced by written records at the time of disclosure: (b)
at the time of disclosure or later becomes publicly known under circumstances
involving no breach of this Agreement; (c) is lawfully and in good faith made
available to the Receiving Party by a third party who did not derive it from the
Disclosing Party and who imposes no obligation of confidence on the Receiving
Party; (d) is developed by the Receiving Party independent of any disclosure by
the Disclosing Party, as evidenced by the Receiving Party's written records; or
(e) is required by law or regulation to be disclosed.

     1.9  "COST OF GOODS" shall mean, with respect to a product, the sum of the
actual direct and indirect costs for active and other ingredients, materials,
packaging, labeling, salary and benefits for direct labor and an allocated
portion of direct overhead, incurred in manufacturing such product, consistently
applied among all products manufactured, as determined in accordance with
generally accepted accounting principles in the United States consistently
applied ("GAAP").

     1.10 "DIAGNOSTIC PRODUCT" shall mean a PRODUCT for use to predict, detect
or identify a disease in a human or to determine the presence of a pathologic
condition in a human.

     1.11 "DOSSIER" shall mean, with respect to an antigen, a written document,
together with copies of the data underlying the information contained therein,
satisfying the requirements of Paragraph

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8.2 and containing research information reasonably sufficient to demonstrate
that one or more ANTIBODIES to such antigen satisfies the requirements of
Exhibit B.

     1.12 "EXCLUSIVE CAT PRODUCT" shall mean a product for use in the FIELD
comprising an ANTIBODY which binds to an CAT RESEARCH ANTIGEN for which CAT has
exercised an option under Paragraph 2.10 and HGS is obligated to grant a license
pursuant to Paragraph 5.3.

     1.13 "EXCLUSIVE HGS PRODUCT" shall mean a product for use in the FIELD
comprising an ANTIBODY which binds to an HGS ANTIGEN for which HGS has exercised
an option under Paragraph 2.2 and CAT is obligated to grant a license pursuant
to Paragraph 3.1.

     1.14 "FIELD" shall mean any human therapeutic or diagnostic use.

     1.15 "FTE" shall mean a full time equivalent employee assigned to the HGS
pursuant to Paragraph 7.3.

     1.16 "HGS ANTIGEN" shall mean an antigen for which HGS has HGS BACKGROUND
IP.

     1.17 "HGS BACKGROUND IP" shall mean Patent Rights, Know-How and Material
which HGS owns or which HGS is licensed to use which directly relate to an
antigen at the Effective Date or during the RESEARCH TERM or IMPROVEMENTS which
HGS owns before or after the Effective Date which directly relate to an antigen.

     1.18 "HGS RESEARCH ANTIGEN" shall mean a HGS ANTIGEN for which HGS has a
PATENT RIGHT.

     1.19 "HGS RESEARCH PRODUCT" shall mean a product consisting of multiple
antibody-antigen combinations and/or multiple antibodies (whether on microarray
chips or in other format) sold by HGS to a THIRD PARTY for research purposes
only, provided that at least [***] of the antibodies contained in such product
are directed to HGS RESEARCH ANTIGENS and further provided that such

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product contains at least [***], such HGS RESEARCH ANTIGENS. An EXCLUSIVE HGS
PRODUCT cannot be a HGS RESEARCH PRODUCT.

     1.20 "IMPROVEMENT" shall mean any improvements, modifications, and
adaptations (whether patentable or otherwise) to any part of either CAT
BACKGROUND IP or HGS BACKGROUND IP which may arise under research conducted by
CAT and/or HGS pursuant to this Agreement. It is recognized and agreed that an
ANTIBODY to an HGS ANTIGEN and any improvements, modifications or adaptations to
such ANTIBODY will not be considered IMPROVEMENTS for the purposes of this
Agreement.

     1.21 "IND" shall mean an Investigational New Drug application filed with
the Food and Drug Administration in the United States of America, or the
successor agency thereto (the "FDA"), or any equivalent filing with the
applicable foreign regulatory authority to commence human clinical testing of a
PRODUCT in any other country.

     1.22 "SUBSCRIPTION AGREEMENT" shall mean the Subscription Agreement between
the parties executed simultaneously with this Agreement.

     1.23 "KNOW-HOW" shall mean all unpatented information, whether or not
patentable, relating to materials, methods, processes, techniques and data for
the development, manufacture, use or sale of an antigen, ANTIBODY or PRODUCT
which is known to a Party and which a Party is free to transfer or disclose
without violating contractual obligations to any third party.

     1.24 "MATERIAL" shall mean any chemical or biological substances, including
but not limited to any: (a) organic or inorganic chemical element or compound;
(b) nucleotide or nucleic acid sequences, including DNA and RNA sequences,
derived by natural or synthetic means; (c) gene; (d) vector or construct,
including but not limited to plasmids phagemids, phages or viruses; (e) host
organism, including bacteria, fungi, algae, protozoa and yeast; (f) other
genetic material or micro-organism; (g) gene product, including but not limited
to any peptide or amino acid sequence, protein, enzyme or ANTIBODY, and any
fragment thereof conferring targeting properties in vitro and/or in vivo; (h)
eukaryotic or prokaryotic cell line

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or expression system or any development strain or produce of that cell line or
expression system; (i) ANTIBODY or ANTIBODY producing cell line, including
hybridomas; (j) drug or pro-drug; or (k) assay or reagent.

     1.25 "NET SALES" shall mean the amounts invoiced on the sales of a product
by a Party, its sublicensees and AFFILIATES to independent, unrelated third
parties in bona fide arms' length transactions, less the following deductions
properly documented actually allowed and taken by such third parties and not
otherwise recovered by or reimbursed by the Party, its AFFILIATES or
sublicensees: (a) trade, cash and quantity discounts, including charge backs;
(b) taxes on sales (such as sales or use taxes) to the extent added to the sales
price and set forth separately as such in the total amount invoiced; (c)
freight, insurance and other transportation charges to the extent added to the
sales prices and set forth separately as such in the total amount invoiced; (d)
amounts repaid or credited by reason of rejections, defects or returns, or
because of retroactive price reductions, or due to governmental laws or
regulations requiring rebates; (e) import duties; and means further the amount
of fair market value of all other consideration received by the Party, or its
sublicensees or AFFILIATES in respect of the product, whether such consideration
is in cash, payments in kind, exchange or other forms; but does not mean sales
of the product between or among a Party and its sublicensees and/or AFFILIATES.
In the event a product is sold in combination with other active components
("Combination Product"), NET SALES for purposes of royalty payments on the
Combination Products shall be calculated by multiplying the NET SALES of the
Combination Product by the fraction A/(A/B), where A is the gross selling price
of the product sold separately (i.e., without the other active components) and B
is the gross selling price of the other active components. In the event that no
such separate sales are made NET SALES of the Combination Product by C/(C+D)
where C is the fully allocated cost of the product (not including the other
active components) and D is the fully allocated cost of such other active
components such costs being determined using generally accepted accounting
procedures consistently applied.

     1.26 "OPERATING PROFIT" shall mean with respect to a product sold by either
party or AFFILIATES, NET SALES less (i) COST OF GOODS; (ii) costs and expenses
of Phase IV studies (i.e.,

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post-marketing clinical studies); and (iii) marketing, promotion, distribution
and selling expenses of HGS or CAT or their AFFILIATES as the case may be, all
as determined in accordance with GAAP.

     1.27 "PATENT RIGHTS" shall mean patent applications or patents, author
certificates, inventor certificates, utility certificates, improvement patents,
and models and certificates of addition, and all foreign counterparts of them
and includes divisions, renewals, continuations, continuations-in-part,
extensions, reissues, substitutions, confirmations, registrations,
revalidations, or additions of or to them as well as any supplementary
protection certificate or any other post patent expiration extension of patent
protection in respect to them.

     1.28 "PRODUCT" shall mean an EXCLUSIVE CAT PRODUCT and/or an EXCLUSIVE HGS
PRODUCT.

     1.29 "RESEARCH PROGRAM IP" shall mean all PATENT RIGHTS and KNOW-HOW that
arises under research conducted by CAT and/or HGS pursuant to this Agreement.

     1.30 "RESEARCH TERM" shall mean the period beginning on the Effective Date
and ending on December 31, 2009.

     1.31 "SPC" shall mean a right based upon an underlying patent such as a
Supplementary Protection Certificate.

     1.32 "THERAPEUTIC PRODUCT" shall mean a PRODUCT for use in the treatment or
prevention of a disease or disorder in humans.

     1.33 "THIRD PARTY" shall mean any party, other than HGS or CAT or an
AFFILIATE of CAT or HGS.

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     2.  LICENSE GRANTS AND COVENANTS

         HGS Antibody Products
         ---------------------

         2.1    CAT grants to HGS a royalty-free non-exclusive, worldwide
license (without the right to grant sublicenses) under CAT BACKGROUND IP to
perform research and development with respect to HGS ANTIGENS during the
RESEARCH TERM.

         2.2   CAT hereby grants to HGS non-exclusive, non-transferable options
to obtain a license under Paragraph 2.3 for EXCLUSIVE HGS PRODUCTS directed to
HGS ANTIGENS, with each such option being exercisable in accordance with the
provisions of Paragraph 3.1 until the end of the RESEARCH TERM.

         2.3   With respect to EXCLUSIVE HGS PRODUCTS directed to each HGS
ANTIGEN for which HGS has exercised an option under Paragraph 2.2 and CAT has
the right and is obligated to grant a license pursuant to Paragraph 3.1, CAT
hereby grants to HGS an exclusive worldwide license (with the right to grant
sublicenses) under CAT BACKGROUND IP to research, develop, make, have made, use,
import, offer to sell and sell such EXCLUSIVE HGS PRODUCTS in the FIELD.

         HGS Research Products
         ---------------------

         2.4   Subject to the rights and obligations set out in the agreements
listed in Exhibit C, CAT hereby grants to HGS non-exclusive, non-transferable
options to obtain a license under Paragraph 2.5 for HGS RESEARCH PRODUCTS, with
each such option being exercisable in accordance with the provisions of
Paragraph 4.1 until the end of the RESEARCH TERM.

         2.5   With respect to HGS RESEARCH PRODUCTS for which HGS has exercised
an option under Paragraph 2.4 and CAT has the right and is obligated to grant a
license pursuant to Paragraph 4.1, CAT hereby grants to HGS a nonexclusive
worldwide license (with the right to grant sublicenses) under CAT BACKGROUND IP
to research, develop, make, have made, use, import, offer to sell and sell such
HGS RESEARCH PRODUCTS.

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         2.6   CAT hereby grants to HGS nonexclusive, non-transferable options
to obtain a license for a THIRD PARTY under Paragraph 2.7 for an antibody
directed to an HGS RESEARCH ANTIGEN contained in an HGS RESEARCH PRODUCT, with
each such option being exercisable in accordance with the provisions of
Paragraph 4.2 until the end of the RESEARCH TERM, provided that (i) HGS shall
pay to CAT a payment of [***] when a THIRD PARTY obtains a license under
Paragraph 2.7 and (ii) if the THIRD PARTY does not file an IND in respect of
such HGS RESEARCH ANTIGEN within [***] of the grant of the license, such license
shall become non-exclusive.

         2.7   With respect to an antibody directed to an HGS ANTIGEN contained
in an HGS RESEARCH PRODUCT for which HGS has exercised an option under Paragraph
2.6 and CAT has the right and is obligated to grant a license pursuant to
Paragraph 4.2, CAT hereby grants to HGS an exclusive worldwide license, with the
right to grant a sublicense to a THIRD PARTY, and for the sole purpose of
granting such a sublicense, under CAT BACKGROUND IP to research, develop, make,
have made, use, import, offer to sell and sell such antibody.

         2.8   It is expressly understood by both parties that the license
granted pursuant to Paragraph 2.7 is solely for the benefit of a THIRD PARTY who
has purchased an HGS RESEARCH PRODUCT and who has used such product to identify
an antibody for which such THIRD PARTY desires to obtain a license to CAT
BACKGROUND IP. HGS' ability to grant such a license is not intended to be a
blanket right to grant licenses to CAT BACKGROUND IP and is not to be used by
HGS or a THIRD PARTY to avoid milestone and royalty payments that would
otherwise be owed pursuant to a license granted pursuant to Paragraph 2.3. HGS
shall only grant such licenses in good faith. If at any time, CAT reasonably
determines that HGS is in breach of its obligations under this paragraph, CAT
may initiate the dispute resolution procedure set out in Exhibit D. During the
pendency of the dispute, HGS shall not be entitled to grant any licenses for the
benefit of a THIRD PARTY.

         CAT Antibody Products
         ---------------------

         2.9   Effective 12:01 am EST, July 1, 2001, HGS grants to CAT a non-
exclusive, non-transferable, worldwide license (without the right to grant
sublicenses) under HGS BACKGROUND IP to

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perform research and development with respect to CAT RESEARCH ANTIGENS during
the RESEARCH TERM.

         2.10  Subject to the terms and conditions of this Agreement, including
but not limited to Paragraphs 5.3.4 and 5.7, HGS hereby grants to CAT non-
exclusive, non-transferable options to obtain a license under Paragraph 2.11 for
EXCLUSIVE CAT PRODUCTS for each of up to six (6) CAT RESEARCH ANTIGENS, with
each such option being exercisable in accordance with the provisions of
Paragraph 5.3 until the end of the RESEARCH TERM.

         2.11  With respect to EXCLUSIVE CAT PRODUCTS directed to each CAT
RESEARCH ANTIGEN for which CAT has exercised an option under Paragraph 2.10 and
HGS has the right and is obligated to grant a license pursuant to Paragraph 5.3,
HGS hereby grants to CAT an exclusive worldwide license (with the right to grant
sublicenses) under HGS BACKGROUND IP to research, develop, make, have made, use,
import, offer to sell and sell such EXCLUSIVE CAT PRODUCTS in the FIELD. Any
such exclusive license shall be subject to HGS' right to develop, make and use
antibodies (other than such EXCLUSIVE CAT PRODUCTS) to such CAT RESEARCH ANTIGEN
(and to grant an AFFILIATE or a THIRD PARTY such right) solely for the internal
research and development of products that do not comprise an ANTIBODY.

         Miscellaneous
         -------------

         2.12  CAT shall use HGS BACKGROUND IP only as (sub)licensed and
permitted hereunder HGS shall use CAT BACKGROUND IP only as (sub)licensed and
permitted hereunder.

         2.13  The rights and (sub)licenses granted to HGS by CAT are
(sub)licensable and/or transferable by HGS only with respect to an EXCLUSIVE HGS
PRODUCT or an HGS RESEARCH PRODUCT and in accordance with the provisions of this
Agreement. The rights and (sub)licenses granted to CAT by HGS are
(sub)licensable and/or transferable by CAT only with respect to an EXCLUSIVE CAT
PRODUCT and in accordance with the provisions of this Agreement.

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     2.14 No rights, other than those expressly set forth in this Agreement,
are granted to CAT or HGS hereunder, and no additional rights shall be granted
to CAT or HGS by implication, estoppel or otherwise.

     2.15 For the purposes of this Agreement, but without limitation, CAT shall
not have the right or the obligation to grant HGS a license under CAT BACKGROUND
IP to use an antigen to research, develop, make, have made, use, offer to sell
and import related EXCLUSIVE HGS PRODUCTS OR HGS RESEARCH PRODUCTS in the FIELD,
[***].

     2.16 For the purposes of this Agreement, but without limitation, HGS shall
not have the right or the obligation to grant CAT a license under HGS BACKGROUND
IP to use an antigen to research, develop, make, have made, use, offer to sell,
sell and import related EXCLUSIVE CAT PRODUCTS in the FIELD, [***].

3.   HGS ANTIBODY PRODUCTS

     3.1  HGS' option under Paragraph 2.2 shall be exercisable as follows:

          3.1.1     If HGS desires to exercise its option for an HGS ANTIGEN,
HGS shall so notify CAT in writing and deliver to CAT a DOSSIER in accordance
with Article 8.  HGS may not exercise its option for any HGS ANTIGEN unless one
or more ANTIBODIES developed by HGS to such HGS ANTIGEN satisfies the
requirements of Exhibit B.

          3.1.2     Within [***] after receipt of such notice and DOSSIER, CAT
shall notify HGS in writing if CAT does not have the right or obligation as
defined in Paragraph 2.15) to grant HGS the license under Paragraph 2.3 for such
HGS ANTIGEN.  If CAT does not have such right, CAT shall have no obligation to
grant HGS the license under Paragraph 2.3 for such HGS ANTIGEN.  Unless CAT
timely notifies HGS in writing that it does not have such a right or obligation,
the exclusive license grant under Paragraph 2.3 for EXCLUSIVE HGS PRODUCTS
directed to such HGS ANTIGEN shall be effective upon the expiration of such
[***] period.

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     3.2  HGS or its AFFILIATES or sublicensees shall not (and shall not attempt
or purport to) administer to humans any ANTIBODY or HGS RESEARCH PRODUCT or
submit any regulatory application or other submission to obtain approval
therefor, unless and until HGS has obtained a license under Paragraph 2.3 for
EXCLUSIVE HGS PRODUCTS directed to such HGS ANTIGEN or a THIRD PARTY has
obtained a license for an antibody directed to such HGS RESEARCH ANTIGEN
pursuant to Paragraph 2.7.

4.   HGS RESEARCH PRODUCTS

     4.1  HGS' option under Paragraph 2.4 shall be exercisable as follows:

          4.1.1     If HGS desires to exercise its option for an HGS RESEARCH
PRODUCT, HGS shall so notify CAT in writing and deliver to CAT a list of all
antibodies contained in the product which are directed to HGS RESEARCH ANTIGENS
or other antigens.

          4.1.2     Within [***] after receipt of such notice and list, CAT
shall notify HGS in writing if CAT does not have the right or obligation as
defined in Paragraph 2.15 to grant HGS the nonexclusive license under Paragraph
2.5 for each antibody contained in such product.  If CAT does not have such a
right, CAT shall have no obligation to grant HGS the license under Paragraph 2.5
for such HGS RESEARCH PRODUCT.  Unless CAT timely notifies HGS in writing that
it does not have such right or obligation, the exclusive license grant under
Paragraph 2.5 for such HGS RESEARCH PRODUCT shall be effective upon the
expiration of such [***] period.

     4.2  HGS' option under Paragraph 2.6 shall be exercisable as follows:

          4.2.1     If HGS desires to exercise its option to obtain a license
for a THIRD PARTY under Paragraph 2.7 for an antibody directed to an HGS ANTIGEN
contained in an HGS RESEARCH PRODUCT, HGS shall so notify CAT in writing.

          4.2.2     Within [***] days after receipt of such notice, CAT shall
notify HGS in writing if CAT does not have the right or obligation as defined in
Paragraph 2.15 to grant HGS the license under

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Paragraph 2.7 for such antibody. If CAT does not have such a right, CAT shall
have no obligation to grant HGS the license under Paragraph 2.7 for such
antibody. Unless CAT timely notifies HGS in writing that it does not have such a
right or obligation, the exclusive license grant under Paragraph 2.7 for such
antibody shall be effective upon the expiration of such [***] period.

5.   CAT ANTIBODY PRODUCTS

     5.1  Beginning July 1, 2001 and continuing throughout the RESEARCH TERM,
CAT shall notify HGS in writing of each CAT RESEARCH ANTIGEN, with which CAT
desires to conduct research and development pursuant to Paragraph 2.10 and in
accordance with the provisions of this Agreement.  Within [***] after receipt of
such notice, HGS shall notify CAT in writing if HGS does not have the right or
the obligation as defined in Paragraph 2.15 to grant CAT an exclusive license
under Paragraph 2.11 for such antigen.  Notwithstanding anything to the contrary
in this Agreement, not more than [***] antigens, for which CAT has not exercised
its option under Paragraph 2.9 and has not been granted a license under
Paragraph 2.11, may be designated as CAT RESEARCH ANTIGENS at any one time.

     5.2  For each CAT RESEARCH ANTIGEN, during the RESEARCH TERM, HGS shall
provide CAT with (a) such reasonable quantities of such purified protein, cell
lines or other biological material for the production, screening or assaying of
ANTIBODIES, as HGS has reasonably available and CAT requests, and (b) such
reasonable quantities of available isolated clones as CAT requests.

     5.3  CAT's option under Paragraph 2.10 shall be exercisable as follows:

          5.3.1     If CAT desires to exercise its option for a CAT RESEARCH
ANTIGEN, CAT shall so notify HGS in writing and deliver to HGS a DOSSIER in
accordance with Article 8.  CAT may exercise its option for any CAT RESEARCH
ANTIGEN unless one or more ANTIBODIES developed by CAT to such CAT RESEARCH
ANTIGEN satisfies the requirements of Exhibit B.

          5.3.2     Within [***] after receipt of such notice and DOSSIER, HGS
shall notify CAT in writing if HGS does not have the right (or the obligation as
defined in Paragraph 2.15) to grant CAT the

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license under Paragraph 2.11 for such CAT RESEARCH ANTIGEN. If HGS does not have
such right or obligation, HGS shall not be obligated to grant to CAT the
exclusive license under Paragraph 2.11 for such CAT RESEARCH ANTIGEN. Unless HGS
timely notifies CAT in writing that it does not have such a right or obligation,
the exclusive license grant under Paragraph 2.11 for EXCLUSIVE CAT PRODUCTS
directed to such CAT RESEARCH ANTIGEN shall be effective upon the expiration of
such [***] period.

          5.3.3     CAT may not exercise the options under Paragraph 2.10 to
obtain exclusive licenses under Paragraph 2.11 for EXCLUSIVE CAT PRODUCTS
directed to more than six (6) CAT RESEARCH ANTIGENS during the term of this
Agreement, except as provided in Paragraphs 5.3.4 and 5.7.

          5.3.4     If, after exercising its option to an EXCLUSIVE CAT PRODUCT,
CAT determines that development and commercialization of such product is
commercially unfeasible, CAT shall have the option to claim pursuant to this
Paragraph 5.3 a different CAT RESEARCH ANTIGEN as a replacement for the CAT
RESEARCH ANTIGEN originally claimed.  This option may only be exercised within
one year of HGS' grant of the original license pursuant to Paragraph 5.3.2 or
prior to filing of an IND for the original EXCLUSIVE CAT PRODUCT, whichever is
earlier.  In no event, may CAT exercise its option pursuant to this paragraph
more than six (6) times in total for all EXCLUSIVE CAT PRODUCTS, except that in
the event that HGS exercises its option pursuant to Paragraph 5.5 to co-
develop/co-market an EXCLUSIVE CAT PRODUCT for which CAT had exercised one of
its six replacement options, such replacement shall not count against CAT's six
replacement options.

     5.4  CAT or its AFFILIATES or sublicensees shall not (and shall not attempt
or purport to) administer to humans any ANTIBODY directed to an CAT RESEARCH
ANTIGEN, or file or submit any regulatory application or other submission to
obtain approval therefor, unless and until CAT has exercised an option under
Paragraph 2.10 and obtained a license under Paragraph 2.11 for an EXCLUSIVE CAT
PRODUCT directed to such CAT RESEARCH ANTIGEN.

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     5.5  Upon the filing of an IND by CAT for an EXCLUSIVE CAT PRODUCT, CAT
shall offer to HGS by written notice the option to co-develop/co-market such
EXCLUSIVE CAT PRODUCT. Such written notice shall contain a complete description
of the product and all preclinical data on the product and shall include a copy
of the IND filing. Such notice shall also include a detailed accounting of the
out-of-pocket expenses expended by CAT with respect to manufacturing and pre-
clinical studies of such product. Within [***] receipt of such notice by HGS,
HGS shall notify CAT whether it wishes to exercise its option to co-develop/co-
market such product. If HGS notifies CAT that it wishes to exercise its option,
the parties shall promptly form a JOINT MANAGEMENT COMMITTEE ("JMC"") which
shall be responsible for the management of all future preclinical, clinical and
commercial activities.

     5.6  The JMC shall consist of three (3) representatives of each party, but
each party shall have only one vote.  All decisions of the JMC shall be by
unanimous vote.

          5.6.1     Each party shall notify the other party in writing of its
initial representatives to the JMC within thirty (30) days after exercise by HGS
of its option.  Each party may substitute one or more representatives from time
to time effective upon written notice to the other party.

          5.6.2     The JMC shall meet not less than once each quarter so long
as development and commercialization of a product is being diligently pursued by
the parties hereunder, at such times and places as mutually agreed by the
parties, alternating between Cambridge, England and Rockville, Maryland or such
other places as the parties mutually agree.  If the parties mutually agree, any
meeting of the JMC may be held by telephone or video conference.  At each such
meeting, the JMC representatives shall discuss and make decisions with respect
to the development of the products.

          5.6.3     The JMC shall direct and coordinate all activities related
to the planning and implementation of clinical trials with respect to a product.
As soon as reasonably practicable, the JMC will prepare and approve a
development plan for the product, which shall describe in detail the development
work with respect to such product, which party shall perform which tasks, the
budget for such work for the ensuing year and including, in the case of the
first such annual budget, the remaining months of the then

                                       15
<PAGE>

current year, as well as milestones, time frames and operating plans (as amended
from time to time by the JMC, the "DEVELOPMENT PLAN"). The DEVELOPMENT PLAN
shall be reviewed annually by the JMC and the annual budget for the ensuing year
shall be approved by the JMC no later than December 15/th/ of the then current
year. The DEVELOPMENT PLAN shall allocate responsibilities to the respective
parties consistent with their respective capabilities and, to the extent
possible, so as to maximize the expeditious and cost-effective development of
the product.

     5.7  Notwithstanding Section 5.5, HGS shall not have the option to co-
develop/co-market more than eighteen (18) EXCLUSIVE CAT PRODUCTS, unless the
parties otherwise mutually agree.  In addition, HGS shall only have the right to
exercise its option rights under this paragraph [***] without the prior
agreement of CAT.  Each EXCLUSIVE CAT PRODUCT for which HGS exercises its option
shall not count against the total number of CAT EXCLUSIVE PRODUCTS that CAT may
develop and commercialize.

     5.8  Upon exercise of its option, HGS shall reimburse CAT the [***]
exclusivity fee paid pursuant to Paragraph 6.12(a) and fifty percent (50%) of
the out-of-pocket expenses expended by CAT with respect to manufacturing and
pre-clinical studies of such product.  Each party shall fund or contribute fifty
percent (50%) of the future effort involved in all development, marketing, sales
and other costs associated with the development and commercialization of such
EXCLUSIVE CAT PRODUCT and shall share equally in such activities as mutually
agreed to by the parties, in return for fifty percent (50%) of the OPERATING
PROFIT therefrom, in lieu of the royalties and milestones set forth in Article
6.  At any time after completion of a clinical trial, either HGS or CAT may opt
out of further co-development/co-marketing of such EXCLUSIVE CAT PRODUCT, in
which event the remaining party shall pay to the other the royalties and future
milestones set out in Article 6 as if such product had not been jointly
developed, provided that if HGS is the party who opts out, then the remaining
EXCLUSIVE CAT PRODUCT shall not count against the total number of CAT EXCLUSIVE
PRODUCTS that CAT may develop and commercialize.

6.   PAYMENTS AND ROYALTIES

                                       16
<PAGE>

     6.1  In consideration of the licenses granted and to be granted hereunder,
HGS will pay to CAT on the Effective Date twelve million U.S. dollars
($12,000,000).

     Exclusive HGS Products
     ----------------------

     6.2  Subject to Paragraphs 6.4, 6.5, and 6.6, for each EXCLUSIVE HGS
PRODUCT which is a THERAPEUTIC PRODUCT, HGS shall pay to CAT the following
royalties and milestone payments (which milestone payments under this Paragraph
6.2 shall be due and payable within thirty (30) days after the applicable
milestone event is achieved by or on behalf of HGS, its AFFILIATE or
(sub)licensee):

          (1)  [***] upon the effective date of the license granted pursuant to
               Paragraphs 2.3 and 3.1.2 for such EXCLUSIVE HGS PRODUCT

          (2)  [***] upon the start of a Phase I clinical trial for such
               EXCLUSIVE HGS PRODUCT;

          (3)  [***] upon start of a Phase III clinical trial for such EXCLUSIVE
               HGS PRODUCT;

          (4)  [***] upon first submission of a BLA for such EXCLUSIVE HGS
               PRODUCT;

          (5)  [***] upon the first regulatory approval of such EXCLUSIVE HGS
               PRODUCT for commercial sale; and

          (6)  a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT
               sold by HGS, its AFFILIATES and (sub)licensees.

HGS shall have no obligation to pay each milestone payment to CAT under this
Paragraph 6.2 more than once for each different EXCLUSIVE HGS PRODUCT.  For
purposes of determining the milestone payments owing under this Paragraph 6.2,
an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any
other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the
same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the
formulation or means of administration thereof.

                                       17
<PAGE>

     6.3  Subject to Paragraph 6.4, for each EXCLUSIVE HGS PRODUCT which is a
DIAGNOSTIC PRODUCT, HGS shall pay to CAT  the following royalties and milestone
payments (which milestone payments under this Paragraph 6.3 shall be due and
payable within thirty (30) days after the applicable milestone event is achieved
by or on behalf of HGS, its AFFILIATES or (sub)licensees):

          (1)  [***] upon first submission of a BLA for such EXCLUSIVE HGS
               PRODUCT;

          (2)  [***] upon the first regulatory approval of such EXCLUSIVE HGS
               PRODUCT for commercial sale; and

          (3)  a royalty of [***] of NET SALES of such EXCLUSIVE HGS PRODUCT
               sold by HGS, its AFFILIATES and (sub)licensees.

HGS shall have no obligation to pay each milestone payment to CAT under this
Paragraph 6.3 more than once for each different EXCLUSIVE HGS PRODUCT.  For
purposes of determining the milestone payments owing under this Paragraph 6.3,
an EXCLUSIVE HGS PRODUCT shall constitute the same EXCLUSIVE HGS PRODUCT as any
other EXCLUSIVE HGS PRODUCT, if such EXCLUSIVE HGS PRODUCT is directed to the
same HGS ANTIGEN as the other EXCLUSIVE HGS PRODUCT, without regard to the
formulation or means of administration thereof.

     6.4  Royalty obligations under Paragraphs 6.2 and 6.3, with respect to an
EXCLUSIVE HGS PRODUCT, shall terminate on a country-by-country basis and on an
EXCLUSIVE HGS PRODUCT by EXCLUSIVE HGS PRODUCT basis on the later of (i) [***]
after first country-wide launch of such EXCLUSIVE HGS PRODUCT in such country or
(ii) expiration of the last to expire patent on CAT BACKGROUND IP Licensed to
HGS under this Agreement which covers the process, method of making, making,
having made, importing, offering to sell or using or selling of such EXCLUSIVE
HGS PRODUCT in the country in which such EXCLUSIVE HGS PRODUCT was developed,
made, sold or used.

     6.5  In the event that HGS is required to pay a royalty to a THIRD PARTY in
order to practice or have practiced the technology claimed in CAT's ANTIBODY
PATENTS with respect to an EXCLUSIVE

                                       18
<PAGE>

HGS PRODUCT, HGS shall be able to offset [***] of such third party royalties
against the royalties owed to CAT pursuant to Paragraph 6.2, provided that the
royalty owed to CAT on any such EXCLUSIVE HGS PRODUCT shall not be less than
[***] of Net Sales in any year in which such royalty is owed.

     6.6  In the event that CAT THIRD PARTY ROYALTY OBLIGATIONS are reduced from
the amounts that CAT owes or would owe as of the Effective Date taking into
account all applicable offsets, CAT shall promptly notify HGS in writing of such
reduction, and HGS' royalty obligation under Paragraph 6.2 shall be reduced by
an amount equal to [***] of such reduction.

     Nonexclusive HGS RESEARCH PRODUCTS
     ----------------------------------

     6.7  Subject to Paragraph 6.11, HGS shall pay to CAT [***]of all revenue
received by HGS from the sale of a HGS RESEARCH PRODUCT, [***] of the antibodies
contained in such HGS RESEARCH PRODUCT are directed to an HGS ANTIGEN, or [***]
of all revenue received by HGS from the sale of a HGS RESEARCH PRODUCT, [***] of
the antibodies contained in such HGS RESEARCH PRODUCT are directed to an HGS
ANTIGEN.

     6.8  Notwithstanding Paragraph 6.7 but subject to Paragraph 6.11, in no
event shall HGS pay to CAT an amount less than the amount equivalent to [***] of
the NET SALES of such HGS RESEARCH PRODUCT in any year in which such royalty is
owed.

     6.9  Subject to Paragraph 6.11, in the event that HGS grants a license to a
THIRD PARTY for an antibody pursuant to its license grant under Paragraph 2.7,
HGS shall pay to CAT a royalty of [***] of NET SALES of such antibody sold by
such THIRD PARTY and its (sub)licensees

     6.10 Subject to Paragraph 6.11, in the event that HGS grants a license to a
THIRD PARTY for the sale of a product (e.g., a small molecule or a non-antibody
protein product) derived from the use of a HGS RESEARCH PRODUCT, other than a
license granted to a THIRD PARTY for an antibody pursuant to a license grant
under Paragraph 2.7, HGS shall pay to CAT [***] of all revenue received by HGS
from such THIRD PARTY.

                                       19
<PAGE>

     6.11 Royalty obligations under Paragraphs 6.7, 6.8, 6.9, and 6.10, with
respect to an HGS RESEARCH PRODUCT or other product shall terminate on a
country-by-country basis and on a product by product basis on the later of (i)
ten (10) years after first country-wide launch of such product in such country
or (ii) expiration of the last to expire patent on CAT BACKGROUND IP licensed to
HGS under this Agreement which covers the process, method of making, making,
having made, importing, offering to sell or using or selling of such product in
the country in which such product was developed, made, sold or used.

     Exclusive CAT Products
     ----------------------

     6.12 Subject to Paragraph 6.14, for each EXCLUSIVE CAT PRODUCT which is a
THERAPEUTIC PRODUCT, CAT shall pay to HGS the following royalties and milestone
payments (which milestone payments under this Paragraph 6.12 shall be due and
payable within thirty (30) days after the applicable milestone event is achieved
by or on behalf of CAT, its AFFILIATE or (sub)licensee):

          (1)  [***] upon the effective date of the license granted pursuant to
               Paragraph 2.11 and 5.3.2 for such EXCLUSIVE CAT PRODUCT;

          (2)  [***] upon the start of a Phase I clinical trial for such
               EXCLUSIVE CAT PRODUCT;

          (3)  [***] upon the start of a Phase III clinical trial for such
               EXCLUSIVE CAT PRODUCT;

          (4)  [***] upon first submission of a BLA for such EXCLUSIVE CAT
               PRODUCT;

          (5)  [***] upon the first regulatory approval of such EXCLUSIVE CAT
               PRODUCT for commercial sale; and

          (6)  a royalty of [***] of NET SALES of such EXCLUSIVE CAT PRODUCT
               sold by CAT, its AFFILIATES and (sub)licensees.

                                       20
<PAGE>

CAT shall have no obligation to pay each milestone payment to HGS under this
Paragraph 6.12 more than once for each different EXCLUSIVE CAT PRODUCT.  For
purposes of determining the milestone payments owing under this Paragraph 6.12,
an EXCLUSIVE CAT PRODUCT shall constitute the same EXCLUSIVE CAT PRODUCT as any
other EXCLUSIVE CAT PRODUCT, if such EXCLUSIVE CAT PRODUCT is directed to the
same CAT RESEARCH ANTIGEN as the other EXCLUSIVE CAT PRODUCT, without regard to
the formulation or means of administration thereof.

     6.13 Subject to Paragraph 6.14, for each EXCLUSIVE CAT PRODUCT which is a
DIAGNOSTIC PRODUCT, CAT shall pay to HGS the following royalties and milestone
payments (which milestone payments under this Paragraph 6.13 shall be due and
payable within thirty (30) days after the applicable milestone event is achieved
by or on behalf of CAT, its AFFILIATE or (sub)licensee):

          (1) [***] upon first submission of a BLA for such EXCLUSIVE CAT
              PRODUCT;

          (2) [***] upon the first regulatory approval of such EXCLUSIVE CAT
              PRODUCT for commercial sale; and

          (3) a royalty of [***] of NET SALES of such EXCLUSIVE CAT PRODUCT by
              CAT, its AFFILIATES and (sub)licensees.

CAT shall have no obligation to pay each milestone payment to HGS under this
Paragraph 6.13 more than once for each different EXCLUSIVE CAT PRODUCT.  For
purposes of determining the milestone payments owing under this Paragraph 6.13,
an EXCLUSIVE CAT PRODUCT shall constitute the same EXCLUSIVE CAT PRODUCT as any
other EXCLUSIVE CAT PRODUCT, if such EXCLUSIVE CAT PRODUCT is directed to the
same CAT RESEARCH ANTIGEN as the other EXCLUSIVE CAT PRODUCT, without regard to
the formulation or the means of administration thereof.

     6.14 Royalty obligations under Paragraph 6.12 and 6.13, with respect to an
EXCLUSIVE CAT PRODUCT, shall terminate on a country-by-country basis and on an
EXCLUSIVE CAT PRODUCT by EXCLUSIVE CAT PRODUCT basis on the later of (i) ten
(10) years after first country-wide launch of such

                                       21
<PAGE>

EXCLUSIVE CAT PRODUCT in such country or (ii) expiration of the last to expire
patent in HGS BACKGROUND IP licensed to CAT under this Agreement which covers
the making, having made, importing, offering to sell or using or selling of such
EXCLUSIVE CAT PRODUCT in the country in which such EXCLUSIVE CAT PRODUCT was
developed, made, sold or used.

     6.15    In the event that CAT is required to pay a royalty to a THIRD PARTY
in order to practice or have practiced the technology claimed in HGS' BACKGROUND
IP with respect to an EXCLUSIVE CAT PRODUCT, CAT shall be able to offset [***]
of such THIRD PARTY royalties against the royalties owed to HGS pursuant to
Paragraph 6.12, provided that the royalty owed to HGS on any such EXCLUSIVE CAT
PRODUCT shall not be less than [***] of Net Sales in any year in which such
royalty is owed.

     Miscellaneous
     -------------

     6.16    For purposes of this Article 6, (a) "Phase I clinical trial" shall
mean a human clinical trial in any country that is intended to initially
evaluate the safety of a PRODUCT in subjects, or that would otherwise satisfy
the requirements of 21 CFR 312.21(a); (b) "Phase III clinical trial" shall mean
a human clinical trial in any country the results of which could be used as
pivotal to establish safety and efficacy of a PRODUCT as a basis for a marketing
approval application submitted to the FDA or the appropriate regulatory
authority of such other country, or that would otherwise satisfy the
requirements of 21 CFR 312.21(c); (c) a trial shall be "started" upon the
enrollment of the first patient for such trial; and (d) a "BLA" shall mean a
Biologics License Application, Product License Application, New Drug Application
or other application for marketing approval of a product submitted to the FDA
for its foreign equivalent submitted to the appropriate regulatory authority of
any other country.

     6.17    If, at the time when any milestone payment listed in the applicable
Paragraph under this Article 6 with respect to a PRODUCT is due from a party,
such party has not paid all other milestone payments (if any) previously listed
in such Paragraph with respect to such PRODUCT, then at such time such party
shall pay all such unpaid milestone payments (if any) previously listed in such
Paragraph with respect to such PRODUCT. If, at the time of the first commercial
sale of a PRODUCT by a party, its AFFILIATE or permitted (sub)licensee, such
party has not paid all milestone payments (if any) listed in the

                                       22
<PAGE>

applicable Paragraph under this Article 6 with respect to such PRODUCT, then at
such time such party shall pay all such unpaid milestone payments (if any)
listed in such Paragraph with respect to such PRODUCT.

     6.18    The manner in which statements and remittances of royalty and other
payments are handled is as set forth in Article 13 hereof.

     6.19    CAT shall have the sole responsibility for payment, and shall pay
all of CAT's THIRD PARTY ROYALTY OBLIGATIONS owed on PRODUCTS under this
Agreement.

7.   TECHNOLOGY TRANSFER, TRAINING AND SUPPORT

     7.1     Within thirty (30) days of the Effective Date, CAT shall provide to
HGS phage aliquots corresponding to the CAT ANTIBODY LIBRARY. Thereafter on a
monthly basis, CAT shall provide to HGS sufficient phage aliquots to support
HGS's research efforts. CAT shall provide updates, additions and improvements to
the CAT ANTIBODY LIBRARY on annual basis during the [***] period commencing on
the Effective Date, provided that if CAT makes any substantial update, addition
or improvement to the CAT ANTIBODY LIBRARY, CAT shall provide such substantial
update, addition or improvements to HGS within thirty (30) days.

     7.2     Within forty-five (45) days of the Effective Date, CAT will send to
HGS facilities for a period of [***] an employee of appropriate experience and
technical proficiency who will use reasonable efforts to train HGS employees in
the use of the CAT ANTIBODY LIBRARY, including training in methods of phage
antibody selection, phage amplification in E. Coli, and ELISA analysis of phage
antibody specificity, high throughput analysis of protein tissue expression
patterns using CAT's ProAb technology, and epitope function analysis and
agonist/antagonist lead generation using CAT's ProxiMol technology, as far as
such items may be capable of training.

     7.3     CAT shall provide to HGS at CAT's facilities [***] FTEs per year
(including space and material supplies for such FTEs) for three years commencing
on the Effective Date.  Such FTEs, at HGS'

                                       23
<PAGE>

direction, shall be available to perform phage antibody selection, phage
amplification, ELISA analysis, antibody optimization, high throughput analysis
of protein tissue expression patterns using CAT's ProAb technology, and epitope
function analysis and agonist/antagonist lead generation using CAT's ProxiMol
technology and other related activities. Subject to CAT's agreement which shall
not be unreasonably withheld, HGS shall have the option to purchase additional
CAT assistance at a rate of [***] per FTE during the three years commencing on
the Effective Date, and thereafter at a mutually agreed upon rate.

          7.3.1     CAT shall appoint a project manager ("CAT PROJECT MANAGER")
to supervise the work of the [***] FTEs and such CAT Project Manager shall
coordinate with an HGS designated project leader ("HGS PROJECT LEADER") all work
to be done pursuant to this Paragraph.

          7.3.2     Within thirty (30) days of the Effective Date, the HGS
PROJECT LEADER, in consultation with the CAT Project Manager, shall prepare a
six-month work plan for the [***] FTEs.

          7.3.3     The CAT PROJECT MANAGER shall be responsible for supervising
the [***] FTEs and insuring that all diligent efforts are made to complete the
objectives of the work plan in a timely and efficient manner.

          7.3.4     At least once a quarter, the HGS PROJECT LEADER and the CAT
PROJECT MANAGER shall meet to discuss the progress made with respect to the work
plan, and based on that progress, the HGS PROJECT LEADER shall prepare a work
plan for the following six months.

     7.4  To assist CAT with the selection of CAT RESEARCH ANTIGENS, beginning
July 1, 2001 and continuing throughout the RESEARCH TERM, HGS shall conduct
searches of its functional genomic database and shall provide CAT with the
results of such searches as set forth below:

          7.4.1     CAT shall provide to HGS specific therapeutic opportunities
for which CAT wishes to identify proteins as potential CAT RESEARCH ANTIGENS and
the criteria by which HGS should search its database.  To assist CAT in
formulating such searches.  HGS shall make available to CAT an HGS
bioinformatics specialist and an HGS scientist to work with CAT to identify
search criteria for

                                       24
<PAGE>

selecting HGS genes and proteins most likely to meet the specific therapeutic
opportunities identified by CAT.

          7.4.2     HGS shall permit [***] CAT employees access to HGS personnel
at HGS' facilities during normal business hours during the RESEARCH TERM for
[***] per employee per year to design such searches of HGS' database for the
sole purpose of identifying CAT RESEARCH ANTIGENS.

          7.4.3     HGS will screen its database using the mutually agreed upon
search criteria to identify candidate genes, and will provide to CAT a list of
[***] based on the search criteria.  For each such gene, HGS will provide to CAT
all data and information related to the gene and the protein encoded by the
gene, which is owned by HGS with the right to grant access or to which HGS
otherwise has the right to grant access, regarding (i) sequence data with
respect to such gene and protein; (ii) the tissue or cellular distribution
relating to such gene and protein; (iii) references to any literature
publications; (iv) patent status (i.e., information related to HGS filing dates,
priority claim(s) and any related patents and patents applications, and any non-
confidential information known by HGS regarding THIRD PARTY patents and patent
applications) related to such gene and protein; and (v) the biological function
of such gene and protein that is derived from HGS' high throughput biological or
functional assays or screens and DNA array analyses.  HGS will not provide to
CAT data and information resulting from HGS' research programs specifically
directed toward individual genes or proteins.

8.   DOSSIER

     8.1   Subject to the terms and conditions of this Agreement, HGS and CAT
shall obtain license rights under Paragraph 2.3 and 2.11 by being the first to
exercise the applicable option in accordance with Paragraphs 3.1 and 5.3.

     8.2   A DOSSIER regarding ANTIBODIES to an antigen (whether an HGS ANTIGEN
or a CAT RESEARCH ANTIGEN), at a minimum, shall contain the following
information: (a) summaries of all research and pre-clinical development results
available to the submitting party regarding the applicable

                                       25
<PAGE>

antigen and ANTIBODIES directed thereto and (b) such information as is
reasonably sufficient to demonstrate that one or more ANTIBODIES to such antigen
satisfies the requirements of Exhibit B.

     8.3   Within [***] after HGS or CAT delivers to the other party the
applicable notice of exercise and DOSSIER regarding ANTIBODIES to an antigen
pursuant to Paragraph 3.1 or 5.3 (as applicable), the other party shall notify
the submitting party if at least one (1) ANTIBODY to such antigen described in
such DOSSIER meets the requirements of Exhibit B. The failure of the other party
to respond within such period shall be deemed to be notification that at least
one (1) such ANTIBODY to such antigen meets the requirements of Exhibit B.

     8.4   Within [***] after the receipt of any written notification pursuant
to Paragraph 8.3 that a DOSSIER does not meet the requirements of this
Agreement, the parties shall meet to discuss such notification. If the parties
are unable to agree, within [***] after the receipt of any written notification
pursuant to Paragraph 8.3, whether or not at least one (1) ANTIBODY to such
antigen described in such DOSSIER meets the requirements of Exhibit B, the
parties shall immediately submit such DOSSIER , and any supporting data that
either party reasonably desires, to a neutral expert qualified to determine
whether or not at least one (1) ANTIBODY to such antigen described in such
DOSSIER meets the requirements of Exhibit B. If the parties remain unable to
agree, [***] after the receipt of any written notification pursuant to Paragraph
8.3, whether or not at least one (1) ANTIBODY to such antigen described in such
DOSSIER meets the requirements of Exhibit B, then either party shall have the
right to submit such dispute to binding arbitration under Article 17.

     8.5   While a dispute is pending as to whether HGS or CAT is entitled to
exclusive rights to an antigen and ANTIBODIES to such antigen, all notices and
DOSSIERS submitted to HGS and CAT under this Agreement regarding ANTIBODIES to
such antigen shall be dated and held and no rights shall be granted by either
party hereunder to such antigen and ANTIBODIES to such antigen pending
resolution of the dispute to such antigen and ANTIBODIES to such antigen.

                                       26
<PAGE>

     8.6   It is understood that any sequence ID number used under this
Agreement is for identification purposes, and a claim to exclusivity to a given
antigen shall include ANTIBODIES directed to all clones, sequences and
polypeptides associated with each such antigen as to which rights are obtained
under this Agreement and shall further include ANTIBODIES directed to muteins
and fragments of such antigen.

9.   PRODUCT DILIGENCE

     9.1  HGS shall use reasonable efforts to actively research, develop and
obtain regulatory approvals as expeditiously as reasonably practicable to market
in major markets throughout the world at least one EXCLUSIVE HGS PRODUCT for
each HGS ANTIGEN for which it has exercised its option under Paragraph 2.2 and
has obtained a license under Paragraph 2.3, and following such approval to
market such PRODUCT.

          9.1.1     During the term of this Agreement and for a period of five
(5) years thereafter, HGS shall keep complete and accurate records of its
activities conducted under this Agreement regarding the commercialization of
EXCLUSIVE HGS PRODUCTS and the results thereof.  Within thirty (30) days after
the end of each calendar year during the term of this Agreement, HGS shall
prepare and provide CAT with a reasonably detailed written report of such
activities and results, through such date.

          9.1.2    If the diligence requirements set forth in this Paragraph
9.1 are not met with respect to any EXCLUSIVE HGS PRODUCT, CAT shall have the
right to terminate this Agreement pursuant to Paragraph 14.3 with respect to
such EXCLUSIVE HGS PRODUCT.

     9.2  CAT shall use reasonable efforts to actively research, develop and
obtain regulatory approvals as expeditiously as reasonably practicable to market
in major markets throughout the world at least one EXCLUSIVE CAT PRODUCT for
each CAT RESEARCH ANTIGEN for which it has exercised its option under Paragraph
2.10 and has obtained a  license under Paragraph 2.11, and following such
approval to market such PRODUCT.

                                       27
<PAGE>

            9.2.1    During the term of this Agreement and for a period of five
(5) years thereafter, CAT shall keep complete and accurate records of its
activities conducted under this Agreement regarding the commercialization of
EXCLUSIVE CAT PRODUCTS and the results thereof.  Within thirty (30) days after
the end of each calendar year during the term of this Agreement, CAT shall
prepare and provide HGS with a reasonably detailed written report of such
activities and results, through such date.

            9.2.2    If the diligence requirements set forth in this Paragraph
9.2 are not met with respect to any EXCLUSIVE CAT PRODUCT, HGS shall have the
right to terminate this Agreement pursuant to Paragraph 14.3 with respect to
such EXCLUSIVE CAT PRODUCT.

     9.3    In the event that a party or its AFFILIATE sells PRODUCT to a THIRD
PARTY that also purchases other products or services from such party or its
AFFILIATE, and such party or its AFFILIATE discounts the purchase price of such
PRODUCT to a greater degree than it generally discounts the price of its other
products to such customer, then in such case the NET SALES for the sale of such
PRODUCT to such THIRD PARTY shall be deemed to equal the arm's length price that
third parties would generally pay for such PRODUCT alone when not purchasing any
other product or service from such party or its AFFILIATE.  For purposes of this
provision "discounting"" includes establishing the list price at a lower-than-
normal level.

10.  CONFIDENTIALITY

     10.1   During the term of this Agreement and for a period of five (5) years
following the expiration or earlier termination hereof, each party shall
maintain in confidence the CONFIDENTIAL INFORMATION of the other party, and
shall not disclose, use or grant the use of the CONFIDENTIAL INFORMATION of the
other party except on a need-to-know basis to such party's AFFILIATES,
directors, officers and employees, such party's THIRD PARTY licensors of
intellectual property rights (sub)licensed hereunder, and such party's
consultants and collaborators, to the extent such disclosure is reasonably
necessary in connection with such party's activities as expressly authorized by
this Agreement.  To the extent that disclosure to any person is authorized by
this Agreement, prior to disclosure, a party shall

                                       28
<PAGE>

obtain written agreement of such person to hold in confidence and not disclose,
use or grant the use of the CONFIDENTIAL INFORMATION of the other party except
as expressly permitted under this Agreement. Each party shall notify the other
party promptly upon discovery of any unauthorized use or disclosure of the other
party's CONFIDENTIAL INFORMATION. Upon the expiration or earlier termination of
this Agreement, each party shall return to the other party all tangible items
regarding the CONFIDENTIAL INFORMATION of the other party and all copies
thereof, provided, however, that each party shall have the right to retain one
         --------  -------
(1) copy for its legal files for the sole purpose of determining its obligations
hereunder.

     10.2   No public announcement concerning (i) the existence or terms of this
Agreement, (ii) research and/or discoveries made by one party, (iii) milestones
achieved by one party, or (iv) exercise by one party of rights and options
granted under this Agreement, shall be made, either directly or indirectly, by
any other party to this Agreement without prior written notice and, except as
may be legally required, or as may be legally required for a public offering of
securities, or as may be required for recording purposes, without first
obtaining the approval of the other party and agreement upon the nature and text
of such announcement, such agreement and/or approval not to be unreasonably
withheld. The party desiring to make any such public announcement shall inform
the other party of the proposed announcement of disclosure at least five (5)
business days prior to public release and shall provide the other party with a
written copy thereof, in order to allow such other party to comment upon such
announcement or disclosure. This Paragraph shall not apply to any information in
a public announcement that is information essentially identical to that
contained in a previous public announcement agreed to pursuant to this
paragraph.

     10.3   The confidentiality obligations under Paragraphs 10.1 and 10.2 shall
not apply to the extent that a party is required to disclose information by
applicable law, regulation or order of a governmental agency or a court of
competent jurisdiction; provided, however, that to the extent practicable, such
                        --------  -------
party (a) shall provide advance written notice thereof to the other party and
consult with the other party prior to such disclosure with respect thereto, and
(b) shall provide the other party with

                                       29
<PAGE>

reasonable assistance, as requested by the other party, to object to any such
disclosure or to request confidential treatment thereof, and (c) shall take
reasonable action to avoid and/or minimize the extent of such disclosure.

11.  INTELLECTUAL PROPERTY OWNERSHIP

     11.1   Nothing in this Agreement transfers or licenses any right, title or
interest to CAT BACKGROUND IP or HGS BACKGROUND IP except as expressly set out
herein.

     11.2   Any and all RESEARCH PROGRAM IP shall be owned by HGS from the
moment of its development or other origination, and CAT hereby assigns and will
assign any and all rights, title and interest in RESEARCH PROGRAM IP to HGS.

     11.3   Notwithstanding Paragraph 11.2, any and all IMPROVEMENTS shall be
owned by the Party who owns the underlying technology to which the IMPROVEMENTS
are made regardless of which Party makes the IMPROVEMENT.

12.  PATENT PROSECUTION AND LITIGATION

     12.1   In connection with the preparation, filing, prosecution (including
oppositions) and maintenance of patents on RESEARCH PROGRAM IP related to
EXCLUSIVE CAT PRODUCTS, HGS shall endeavor to obtain commercially reasonable
patent protection (under the circumstances) in the RESEARCH PROGRAM IP and shall
consider in good faith the interests of CAT in so doing.  HGS (a) shall consult
with CAT regarding the preparation of such patents, and shall implement all
reasonable requests of CAT; (b) shall supply CAT with a copy of each such patent
application as filed, together with notice of its filing date and serial number;
(c) shall consult with CAT regarding the prosecution and maintenance of such
patents, and shall implement all reasonable requests of CAT; and (d) shall
inform CAT promptly of the allowance and issuance of each such patent, together
with the date and patent number thereof, and shall provide CAT with a copy of
such patent as allowed and then as issued; and (e) shall prosecute all
reexaminations and reissues as reasonably requested by CAT.

                                       30
<PAGE>

     12.2 If HGS elects to abandon any patent application (for which it does not
file a continuation application), not to pursue the filing of any foreign patent
application or not to maintain any patent directed to an EXCLUSIVE CAT PRODUCT,
HGS shall give CAT written notice thereof not less than (90) days prior to the
last day permitted to timely continue such patent application or to maintain
such patent and protect its rights under this Paragraph 12.2.   CAT shall have
the right, at its sole cost and in its sole cost and in its sole discretion, to
assume control of the preparation, filing, prosecution (including oppositions)
and maintenance of such patent application or patent.

     12.3 Each party shall cooperate with the other, execute all lawful papers
and instruments and make all rightful oaths and declarations as may be
reasonably necessary in the preparation, filing, prosecution and maintenance of
the patents or any other rights related to RESEARCH PROGRAM IP.

     12.4 Both parties will provide the other reasonable assistance to enable
the other to prepare, file, prosecute and maintain patents pursuant to this
Article 11.

     12.5 In the event of the institution of any suit by a THIRD PARTY,

          12.5.1    against CAT, its AFFILIATES or (sub)licensees (other than
HGS) to the extent it is for patent infringement involving the manufacture, use,
import, offer for sale, sale, distribution or marketing of EXCLUSIVE CAT
PRODUCT, CAT shall promptly notify HGS in writing.  As between HGS and CAT, CAT
shall be solely responsible for the cost and expense of such action and any
liability that results therefrom.

          12.5.2    against HGS, its AFFILIATES or (sub)licensees (other than
CAT) to the extent it is for patent infringement involving the manufacture, use,
import, offer for sale, sale, distribution or marketing of EXCLUSIVE HGS
PRODUCT, HGS shall promptly notify CAT in writing.  As between HGS and CAT, HGS
shall be solely responsible for the cost and expense of such action and any
liability that results therefrom.

                                       31
<PAGE>

The party defending an action under this Paragraph 12.5 shall have full control
over the conduct of the action, including settlement thereof provided such
settlement shall not be made without the prior written consent of the other
party if it would adversely affect the rights of such other party.

     12.6 In the event that HGS or CAT becomes aware of actual or threatened
infringement of a patent related to CAT BACKGROUND IP, HGS BACKGROUND IP or
RESEARCH PROGRAM IP that claims an EXCLUSIVE CAT PRODUCT or EXCLUSIVE HGS
PRODUCT, or the use thereof, that party shall promptly notify the other in
writing. The owner of such patent shall have the first right but not the
obligation to bring, at its own expense, an infringement action against any
THIRD PARTY and to use the other party's name in connection therewith. If the
owner of the patent does not commence a particular infringement action within
ninety (90) days, the other party, after notifying the owner in writing, shall
be entitled to bring such infringement action, in its own name and/or in the
name of the patent owner, at its own expense to the extent that such party is
licensed thereunder. The foregoing notwithstanding, in the event that an alleged
infringer certifies pursuant to 21 U.S.C. (S) 355(b)(2)(A)(iv) against an issued
patent related to CAT BACKGROUND IP, HGS BACKGROUND IP or RESEARCH PROGRAM IP
that claims an EXCLUSIVE CAT PRODUCT or EXCLUSIVE HGS PRODUCT, or the use
thereof, as between the patent owner and the owner of the product, the party
receiving notice of such certification shall immediately notify the other party
of such certification, and if fourteen (14) days prior to expiration of the
forty five (45) day period set forth in 21 U.S.C. (S) 355(c)(3)(C), the owner of
the patent fails to commence an infringement action, the party receiving notice,
in its sole discretion, at its own expense and to the extent that it is licensed
under the patent, shall be entitled to bring such infringement action in its own
name and/or in the name of the patent owner. The party conducting an action
under this Paragraph 12.6 shall have full control over its conduct, including
settlement thereof provided such settlement shall not be made without the prior
written consent of the other licensing party or licensed party if it would
adversely affect the rights of such other party. The licensing party (i.e., the
patent owner) and the licensed party (i.e., the owner of the product) shall
reasonably assist one another and cooperate in any such litigation at the
other's request, each such party paying its own costs and expenses. The party
conducting the litigation shall reimburse the other party for its reasonable and
actual out-of-pocket expenses incurred at the request of

                                       32
<PAGE>

the party conducting the litigation for assisting in the litigation, which
reimbursement shall be made within thirty (30) days of receipt by the party
conducting the litigation of itemized invoices from the assisting party
documenting such expenses.

     12.7 Any recovery made by a party as the result of an action for patent
infringement it has conducted under Paragraph 12.6 shall be distributed as
follows:

          (1)   The party conducting the action shall recover its [***], and
                then shall reimburse the other party for any [***].

          (2)   To the extent that the recovery from such action exceeds the
                total of item (a), [***]; provided, however, that to the extent
                                          --------  -------
                that (i) the recovery is based on an [***], and (ii) the party
                conducting the action would have incurred [***], the party to
                whom such [***] shall receive a proportion of the excess
                recovery corresponding to [***].

     12.8 The parties shall periodically keep one another reasonably informed of
the status of their respective activities regarding any such litigation of
settlement thereof.

     12.9 To the extent that the owner of a patent related to CAT BACKGROUND IP,
or HGS BACKGROUND IP or RESEARCH PROGRAM IP also owns a product (for which human
clinical trials or commercial sales have commenced) which is covered by a
granted claim of said patent, the owner of said patent shall have the first
right to seek extensions of the terms of the patent and to seek to obtain SPCs.
If the owner of a patent does not own a product covered by a grant claim of said
patent, then the owner of a PRODUCT (for which human clinical trials or
commercial sales have commenced) which is licensed under and is covered by a
granted claim of said patent shall have the right to seek extensions of the
terms of the patent and to seek to obtain SPCs.  Where more than one (1) product
is covered by a granted claim of a patent, as between CAT and HGS, the patent
owner shall have the right to seek extensions of the terms of the patent and to
obtain SPCs, provided that the other party may submit to the patent owner, in

                                       33
<PAGE>

writing, a request to obtain such extensions or SPCs.  Each party shall
reasonably assist the other in the obtaining of such extensions or SPCs.

13.  STATEMENTS AND REMITTANCES

     13.1 CAT and HGS, as the case may be, shall keep and require its AFFILIATES
and (sub)licensees to keep complete and accurate records of all sales and
calculations of all amounts owing hereunder.  Each party shall have the right,
at its expense, through an independent certified public accounting firm of
nationally recognized standing reasonably acceptable to the other party, to
examine pertinent financial records during regular business hours upon advance
written notice during the life of this Agreement and for twelve (12) months
after its termination for the purpose of verifying and reporting to HGS or CAT
as to the computation of the payments made hereunder not more than twenty four
(24) months prior to the date of such notice; provided, however, that such
                                              --------  -------
examination shall not take place more often than once a year; provided further
that such accountant shall report only as to the accuracy of the statements and
payments hereunder, including the magnitude and source of any discrepancy.  CAT,
HGS, and their respective AFFILIATES and (sub)licensees shall be required to
maintain such records for twenty four (24) months.  The accountant shall execute
customary confidentiality agreements prior to any examination, reasonably
satisfactory in form and substance to both parties, to maintain in confidence
all information obtained during the course of any such examination, except for
disclosure to the parties, as necessary for the above purpose.  Each such
examination conducted under this Paragraph 13.1 shall be at the expense of the
party conducting such examination, unless a variation or error producing an
increase exceeding [***] of the amount stated for any period is established in
the course of any such examination, whereupon the reasonable out-of-pocket
expenses of conducting such examination for such period will be paid by the
other party.

     13.2 Within sixty (60) days after the close of each calendar quarter, CAT
and HGS, as the case may be, shall deliver to the other party a true accounting
of all amounts owing hereunder during such calendar quarter and shall at the
same time pay all amounts due.

                                       34
<PAGE>

     13.3 All royalties and other payments due under this Agreement shall be
payable in U.S. dollars.

     13.4 Royalties payable on sales in countries other than the United States
shall be calculated by multiplying the appropriate royalty rate times the sales
in each currency in which they are made and converting the resulting amount into
United States dollars, at the rates of exchange as reported in The Wall Street
                                                               ---------------
Journal under the caption "Currency Trading" on the last business day in New
-------
York, New York of each royalty period.  If The Wall Street Journal ceases to be
                                           -----------------------
published, then the rate of exchange to be used shall be that reported in such
other business publication of national circulation in the United States as the
parties reasonably agree.  Such payments shall be without deduction of exchange,
collection, or other charges.  If, due to restrictions or prohibitions imposed
by a national or international authority, payments cannot be made as aforesaid,
the parties shall consult with a view to finding a prompt and acceptable
solution, and the parties will deal with such monies as the other party may
lawfully direct at no additional out-of-pocket expense to the party owned the
royalty.  Notwithstanding the foregoing, if royalties cannot be remitted for any
reason within six (6) months after the end of the calendar quarter during which
they are earned, then the party owning the royalty shall be obligated to deposit
the royalties in a bank account in Switzerland in the name of the other party.
Each party shall deduct any taxes which the party is obligated to pay and/or
withhold in a country based on royalties due to the other based on sales in such
country from royalty payments due for such country under this Agreement and pay
them to the proper authorities as required by applicable laws.  Each party shall
maintain official receipts of payment of any such taxes and forward these
receipts to the other within sixty (60) days.

     13.5 All payments to be made hereunder shall be by wire transfer of
immediately available funds to an account designated by CAT or HGS, whoever is
to be the recipient of such funds.

     13.6 Any payment due from a party to the other party under this Agreement
that is not paid on the date such payment is due shall bear interest at a rate
per annum equal to the lesser of (a) the prime rate as reported in The Wall
                                                                   --------
Street Journal as published under the caption "Money Rates" in New York, New
--------------
York, on the date such payment is due, plus an [***], or (b) the maximum rate
permitted by applicable

                                       35
<PAGE>

law, in each case calculated on the number of days such payment is delinquent.
If The Wall Street Journal ceases to be published, then the prime rate to be
   -----------------------
used shall be that reported in such other business publication of national
circulation in the United States as the parties reasonably agree. This Section
13.6 shall in no way limit any other remedies available to a party.

14.  TERM AND TERMINATION

     14.1 This Agreement shall come into effect as of the Effective Date, and
unless earlier terminated as provided in this Article 14, shall remain in full
force and effect until the last to expire of the parties' respective royalty
obligations under this Agreement.

     14.2 Upon written notice, HGS may terminate at any time the license granted
by CAT to HGS with respect to a specific EXCLUSIVE HGS PRODUCT, and HGS shall
not have any further obligation to CAT with respect to such product.  Upon
written notice, CAT may terminate at any time the license granted by HGS with
respect to a specific EXCLUSIVE CAT PRODUCT and CAT shall not have any further
obligation to HGS with respect to such product.

     14.3 A party shall have the right to terminate this Agreement with respect
to any PRODUCT (a) upon the breach by the other party of the other party's
obligations to pay any amounts owing hereunder with respect to such PRODUCT, if
such breach is not cured within thirty (30) days after receipt of written notice
from such party thereof, or (b) upon the material breach by the other party of
the other party's obligations under Article 9 with respect to such PRODUCT, if
such breach is not cured within sixty (60) day after receipt of written notice
from such party thereof.  Notwithstanding the foregoing, a party may not
terminate this Agreement during the pendency of an arbitration proceeding under
this Agreement in which the other party reasonably contests whether a royalty or
other amount is due hereunder, or whether it has failed to meet its obligations
under Article 9.

     14.4 A party shall have the right to terminate this Agreement in its
entirety (a) upon the breach by the other party of the other party's obligations
to pay any amounts owning hereunder, if such breach is not cured within thirty
(30) days after receipt of written notice from such party thereof, or (b) upon
the

                                       36
<PAGE>

material breach by the other party of the other party's obligations (other than
obligations under Article 9 or obligations to pay any amounts owing hereunder),
if such breach is not cured within sixty (60) days after receipt of written
notice from such party thereof. Notwithstanding the foregoing, a party may not
terminate this Agreement during the pendency of an arbitration proceeding under
this Agreement in which the other party reasonably contests whether a royalty or
other amount is due hereunder, or whether it has failed to satisfy its other
obligations hereunder.

     14.5 Notwithstanding expiration or termination of this Agreement, the
rights and obligations of the parties under Articles 10, 11, 12, 13, 14, 16, and
18, shall survive such expiration or termination, as well as any provision not
specified in this Paragraph 14.5 which is expressly stated to survive
termination of this Agreement.  Upon expiration of a party's royalty obligations
under this Agreement with respect to a product, the licenses granted with
respect to such PRODUCT under CAT BACKGROUND IP, HGS BACKGROUND IP and RESEARCH
PROGRAM IP (as applicable) shall survive on a non-exclusive basis.  Upon
termination of this Agreement (other than termination as to a PRODUCT as a
result of a breach of Article 9), whether as to any PRODUCT or in its entirety,
if the (sub)licensee of a party with respect to a Product hereunder requests by
written notice to the other party hereunder within thirty (30) days after the
effective date of such termination, the other party shall grant to such
(sub)licensee a direct license with respect to such PRODUCT on the applicable
terms and conditions of this Agreement, provided that such (sub)licensee agrees
in writing to be bound by such terms and conditions.

     14.6 The provisions of Paragraphs 14.3 and 14.4 shall not limit the rights
and remedies that may be otherwise available to a party under this Agreement, at
law or in equity.

15.  WARRANTIES AND REPRESENTATIONS

     15.1 Each of HGS and CAT hereby represents, warrants and covenants to the
other, as of the date of this Agreement, as follows:

          15.1.1    it is a corporation duly organized and validity existing
under the laws of the state of its incorporation;

                                       37
<PAGE>

          15.1.2    the execution, delivery and performance of this Agreement by
such party has been duly authorized by all requisite corporate action;

          15.1.3    it has the power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, including, without
limitation, the right, power and authority to grant the licenses under Article
2;

          15.1.4    the execution, delivery and performance by such party of
this Agreement and its compliance with the terms and provisions hereof to such
party's best knowledge does not conflict with or result in a breach of any of
the terms and provisions of or constitute a default under (i) a loan agreement,
guaranty, financing agreement, agreement affecting a product or other agreement
or instrument binding or affecting it or its property; (ii) the provisions of
its charter documents or bylaws; or (iii) any order, writ, injunction or decree
of any court or governmental authority entered against it or by which any of its
property is bound;

          15.1.5    this Agreement constitutes such party's legal, valid and
binding obligation enforceable against it in accordance with its terms subject,
as to enforcement, to bankruptcy, insolvency, reorganization and other laws of
general applicability relating to or affecting creditor's rights and to the
availability of particular remedies under general equity principles.

     15.2 After the Effective Date, (a) HGS shall not enter into any agreement,
or amend, modify, restate or waive any provisions of any other agreement to
which it is or becomes a party, that would materially and adversely affect the
rights and licenses granted to CAT, and (b) CAT shall not enter into any
agreement, or amend, modify, restate or waive any provisions of any agreement to
which it is or becomes a party, that would materially and adversely affect the
rights and licenses granted to HGS.

     15.3 NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS A WARRANTY THAT ANY
PATENT INCLUDED WITHIN CAT BACKGROUND IP, HGS BACKGROUND IP OR RESEARCH PROGRAM
IP ARE VALID OR ENFORCEABLE OR THAT THEIR EXERCISE OR THE EXERCISE OF HGS
BACKGROUND IP, CAT BACKGROUND IP or RESEARCH PROGRAM IP PROPERTY DOES

                                       38
<PAGE>

NOT INFRINGE ANY PATENT RIGHTS OF THIRD PARTIES. A HOLDING OF INVALIDITY OR
UNENFORCEABILITY OF ANY SUCH PATENT, FROM WHICH NO FURTHER APPEAL IS OR CAN BE
TAKEN, SHALL NOT AFFECT ANY OBLIGATION HEREUNDER, BUT SHALL ONLY ELIMINATE
ROYALTIES OTHERWISE DUE UNDER SUCH PATENT FROM THE DATE SUCH HOLDING BECOMES
FINAL.

     15.4 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN HGS AND CAT MAKE NO
REPRESENTATIONS OR EXTEND ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE OR NONINFRINGEMENT.

     15.5 Each party shall use any materials provided by the other party under
this Agreement in compliance with all applicable laws and regulations.

16.  INDEMNIFICATION

     16.1 CAT shall defend, indemnify and hold harmless HGS, its AFFILIATES,
licensors of HGS and each of their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, actions or proceedings by any THIRD PARTY which are made or instituted
against any of them arising out of the development, manufacture, possession,
distribution, use, testing, sale or other disposition of any EXCLUSIVE CAT
PRODUCT by or through CAT, its AFFILIATES or any THIRD PARTY granted rights by
CAT under this Agreement.  CAT's obligation to defend, indemnify and hold
harmless shall include claims, demands, actions or proceedings, whether for
money damages or equitable relief by reason of alleged personal injury
(including death) to any person or alleged property damage, provided, however,
the indemnity shall not extend to any claims against an indemnified party which
result from the gross negligence or willful misconduct of an indemnified party.
CAT shall have the exclusive right to control the defense of any action which is
to be indemnified in whole by CAT hereunder, including the right to select
counsel reasonably acceptable to HGS to defend HGS and the indemnified parties
hereunder,

                                       39
<PAGE>

and to settle any claim, demand, action or proceeding, provided that, without
the prior written consent of HGS (which shall not be unreasonably withheld or
delayed), CAT shall not agree to settle any claim, demand, action or proceeding,
to the extent such settlement would have a material adverse effect on HGS. The
provisions of this paragraph shall survive and remain in full force and effect
after any termination, expiration or cancellation of this Agreement and CAT's
obligations hereunder shall apply whether or not such claims are rightfully
brought. CAT shall require each (sub)licensee hereunder to agree to indemnify
HGS, in a manner consistent with this Paragraph 16.1.

     16.2 HGS shall defend, indemnify and hold harmless CAT, its AFFILIATES,
licensors of CAT and each of their respective directors, officers, shareholders,
agents and employees, from and against any and all liability, loss, damages and
expenses (including reasonable attorneys' fees) as the result of claims,
demands, actions or proceedings by any THIRD PARTY which are made or instituted
against any of them arising out of the development, manufacture, possession,
distribution, use, testing, sale or other disposition of any EXCLUSIVE HGS
PRODUCT or HGS RESEARCH PRODUCT by or through HGS, its AFFILIATES or any THIRD
PARTY granted rights by HGS under this Agreement.  HGS' obligation to defend,
indemnify and hold harmless shall include claims, demands, actions or
proceedings, whether for money damages or equitable relief by reason of alleged
personal injury (including death) to any person or alleged property damage,
provided, however, the indemnity shall not extend to any claims against an
indemnified party which result from the gross negligence or willful misconduct
of an indemnified party.  HGS shall have the exclusive right to control the
defense of any action which is to be indemnified in whole by HGS hereunder,
including the right to select counsel reasonably acceptable to CAT to defend CAT
and the indemnified parties hereunder and to settle any claim, demand, action or
proceeding, provided that, without the prior written consent of CAT (which shall
not be unreasonably withheld or delayed), HGS shall not agree to settle any
claim, demand, action or proceeding to the extent such claim, demand, action or
proceeding has a material adverse effect on CAT.  The provisions of this
paragraph shall survive and remain in full force and effect after any
termination, expiration or cancellation of this Agreement and HGS' obligation
hereunder shall apply whether or not such claims are rightfully brought.  HGS
shall require each (sub)licensee hereunder to agree to indemnify CAT in a manner
consistent with this Paragraph 16.2.

                                       40
<PAGE>

     16.3  A person or entity that intends to claim indemnification under this
Article 15 (the "Indemnitee") shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or proceeding for which the
Indemnitee intends to claim such indemnification, and the Indemnitor, after it
determines that indemnification is required of it, shall assume the defense
thereof with counsel selected by the Indemnitor and reasonably acceptable to the
other party; provided, however, that an Indemnitee shall have the right to
retain its own counsel, with the fees and expenses to be paid by the Indemnitor
if the Indemnitor does not assume the defense or if representation of such
Indemnitee by the counsel retained by the Indemnitor would be inappropriate due
to actual or potential conflicts of interest between such Indemnitee and any
other party represented by such counsel in such proceedings. The indemnity
agreement in this Article 15 shall not apply to amounts paid in settlement of
any claim, demand, action or proceeding if such settlement is effected without
the consent of the Indemnitor, which consent shall not be unreasonably withheld
or delayed. The failure to deliver notice to the Indemnitor within a reasonable
time after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 15, but failure to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Article 15. The Indemnitee under this
Article 15, its employees and agents, shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigations of any claim,
demand, action or proceeding covered by this indemnification. In the event that
each party claims indemnity from the other and one party is finally held liable
to indemnify the other, the Indemnitor shall additionally be liable to pay the
reasonable legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.

17.  FORCE MAJEURE

     17.1 If the performance by a party of any obligation under this Agreement
(other than an obligation for the payment of money) is prevented, restricted,
interfered with or delayed by reason of any reasonably unforeseeable cause
beyond the reasonable control of the party liable to perform, the party so
affected shall, upon giving written notice to the other party, be excused from
such performance to the

                                       41
<PAGE>

extent of such prevention, restriction, interference or delay by such reasonably
unforeseeable cause beyond its reasonable control, provided that the affected
party shall use commercially reasonable efforts to avoid or remove such causes
of non-performance and shall continue performance with the utmost dispatch
whenever such causes are removed. When such circumstances arise, the parties
shall discuss what, if any, modification of the terms of this Agreement may be
required in order to arrive at an equitable solution.

18.  DISPUTE RESOLUTION

     18.1 All other disputes between the Parties arising out of the
circumstances and relationships contemplated by this Agreement including
disputes relating to the validity, construction or interpretation of this
Agreement and including disputes relating to pre-contractual representations
shall be in the first instance referred to the respective Chief Executive
Officers of the Parties. If they fail to agree then any dispute shall be settled
by arbitration as follows:

     18.2 The arbitration shall be conducted in the English language in
accordance with the Commercial Arbitration Rules of the International Chamber of
Commerce (ICC). The arbitration shall be conducted by one arbitrator chosen by
mutual agreement of the parties. If the parties are unable to agree on an
arbitrator, they shall each pick one arbitrator and the two arbitrators shall
choose a third arbitrator. The parties will cooperate with each other in causing
the arbitration to be held in as efficient and expeditious a manner as
practicable. Any arbitration proceeding instituted under this Agreement shall be
brought in London, England if instituted by HGS and in Washington D.C. if
instituted by CAT.

     18.3 Any award rendered by the arbitrator(s) shall be final and binding
upon the parties hereto. Judgement upon the award may be entered in any court of
record of competent jurisdiction. Each party shall pay its own expenses of
arbitration and the expenses of the arbitrator(s) shall be equally shared unless
the arbitrator(s) assesses as part of his, her or their award all or any part of
the arbitration expenses of one party (including reasonable attorneys' fees)
against the other party.

                                       42
<PAGE>

     18.4 The award of the Arbitration Tribunal shall be final and judgment upon
such an award may be entered in any competent court or application may be made
to any competent court for judicial acceptance of such an award and order of
enforcement.

     18.5 This Agreement shall be construed and enforced in accordance with the
laws of the State of New York (with reference to the conflicts of law principles
thereof).

19.  ENTIRE AGREEMENT

     19.1 This Agreement (including Exhibits A, B, C and D) and together with
the SUBSCRIPTION AGREEMENT, constitutes the entire agreement between the parties
regarding the subject matter hereof and supersedes all previous writings,
understandings, representations and agreements, except for the Collaboration
Agreement dated August 9, 1999 between the parties. No terms or provisions of
this Agreement shall be varied or modified by any prior or subsequent statement,
conduct or act of either of the parties, except that the parties may amend this
Agreement by written instruments specifically referring to and executed in the
same manner as this Agreement.

20.  NOTICES

     20.1 Any notice required or permitted under this Agreement shall be in
writing, and shall be delivered to the following addresses of the parties:

     HUMAN GENOME SCIENCES, INC.
     9410 Key West Avenue
     Rockville, Maryland 20850
     Attention:  Business Development
     Fax:  301-762-5181

     copy to:

     HUMAN GENOME SCIENCES, INC.
     9410 Key West Avenue
     Rockville, Maryland  20850
     Attention:  General Counsel
     Fax:  301-309-8439

     CAMBRIDGE ANTIBODY TECHNOLOGY LTD.
     The Science Park

                                       43
<PAGE>

     Melbourn, Cambridgeshire SG8 6JJ
     Attn:  Company Secretary
     Fax:  (44) 1763 263413

     20.2 Any notice required or permitted to be given concerning this Agreement
shall be effective upon receipt by the party to whom it is addressed.

21.  ASSIGNMENT AND CHANGE OF CONTROL

     21.1 This Agreement and the licenses herein granted shall be binding upon
and inure to the benefit of the parties and their respective permitted assignees
and successors in interest. Neither this Agreement nor any interest hereunder
shall be assignable by a party without the prior written consent of the other
party and any attempted assignment contrary to this Paragraph 21.1 shall be void
and without force and effect. Notwithstanding the foregoing, a party may assign
this Agreement and all of its rights and obligations hereunder to any AFFILIATE
or to any THIRD PARTY in connection with the transfer or sale of all or
substantially all of its business, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, or in the event
of its merger, consolidation, change in control or similar transaction, without
obtaining the consent of the other party, provided that the assigning party
remains liable under this Agreement and that the THIRD PARTY assignee or
surviving entity assumes in writing all of its obligations under this Agreement.

     21.2 Notwithstanding Paragraph 21.1, (a) if CAT is acquired by a
Pharmaceutical Company (as defined below), transfers or sells all or
substantially all of its business or its assets to which this Agreement relates
to such a company, or in the event of its merger, consolidation, change in
control or similar transaction with such a company, then CAT shall have no
further ability to require HGS to search its database as provided in Paragraph
7.4, but CAT shall still have the right to designate CAT RESEARCH ANTIGENS based
on information available in public databases or other databases to which CAT may
have lawful access; and (b) if HGS is acquired by a Pharmaceutical Company,
transfers or sells all or substantially all of its business or its assets to
which this Agreement relates to such a company, or in the event of its merger,
consolidation, change in control or similar transaction with such a company, HGS
shall

                                       44
<PAGE>

no longer have the right to grant a license to a THIRD PARTY for an antibody
pursuant to Paragraph 2.7, although HGS shall have the right to grant such a
license if HGS exercises its option under Article 3 and such license is subject
to the terms and conditions of such option. For the purposes of this paragraph,
a Pharmaceutical Company shall mean a pharmaceutical or biotechnology company
whose business includes any material segment involved in the discovery,
development and/or enhancement of pharmaceutical products and their subsequent
licensing, production, distribution and/or sale and/or the carrying out of
biological, chemical, biochemical, pharmaceutical, medical and/or scientific
research.

22.  COUNTERPARTS

     22.1 This Agreement may be executed in any number of counterparts, and each
such counterpart shall be deemed an original instrument, but all such
counterparts together shall constitute but one agreement.

23.  WAIVER

     23.1 Any delay or failure 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 such party's rights to the future enforcement of its
rights under this Agreement, nor operate to bar the exercise or enforcement
thereof at any time or times thereafter, excepting only as to an express written
and signed waiver as to a particular matter for a particular period of time.

     23.2 Notwithstanding the foregoing, in the event CAT or HGS challenges
whether any payments contemplated hereunder (including, without limitation
royalties or milestones) are due, it shall have the right, but not the
obligation, to make such payments under protest (reserving all rights hereunder)
pending resolution of such dispute.

24.  INDEPENDENT RELATIONSHIP

     24.1 Nothing herein contained shall create an employment, agency, joint
venture or partnership relationship between the parties hereto or any of their
agents or employees, or any other legal

                                       45
<PAGE>

arrangement that would impose liability upon one party for the act or failure to
act of the other party. No party shall have any power to enter into any
contracts or commitments or to incur any liabilities in the name of, or on
behalf of, the other party, or to bind the other party in any respect
whatsoever.

25.  FURTHER ACTIONS

     25.1 Each party agrees to execute, acknowledge and deliver such further
instruments and to do all such other acts, as may be necessary or appropriate in
order to carry out the purposes and intent of this Agreement.

                                       46
<PAGE>

     IN WITNESS WHEREOF, the parties, through their authorized officers, have
executed this Agreement as of the Effective Date.

     CAMBRIDGE ANTIBODY TECHNOLOGY LTD.

     BY:  /s/ David J.  Chiswell
          ----------------------
          David J. Chiswell, Ph.D.
          Chief Executive Officer

     HUMAN GENOME SCIENCES, INC.

     BY:  /s/ Arthur M.  Mandell
          ----------------------
          Arthur M. Mandell
          Senior Vice President, Corporate and
           Business Development

                                       47
<PAGE>

                                   EXHIBIT A

                  EXISTING CAT THIRD PARTY ROYALTY OBLIGATIONS

1.   License Agreement, dated January 7, 1997, between CAT and MRC, with certain
     royalty rates, as may be amended from time to time which shall include all
     royalty payments due to The Scripps Research Institute and Stratagene
     pursuant to an agreement dated 25 June 1999 (the AMRC License").

2.   Therapeutic Antibodies Agreement, dated December 31, 1997, between CAT and
     Dyax Corp., with a royalty rate of [***], as may be amended from time to
     time (the "Dyax License").

3.   Diagnostic Antibodies Agreement, dated December 31, 1997, between CAT and
     Dyax Corp., with a royalty rate of [***], as may be amended from time to
     time (the "Dyax License").

                                       48
<PAGE>

                                   EXHIBIT B
              Requirements for Claiming Exclusivity to an Antigen

Pursuant to Paragraph 8.2, a DOSSIER must demonstrate that one or ANTIBODIES to
an antigen meets the following criteria:

[***]

                                       49
<PAGE>

                                   EXHIBIT C
[***]

                                       50
<PAGE>

                                   EXHIBIT D

                          THIRD PARTY LICENSE RELATED
                               DISPUTE RESOLUTION

In the event of any dispute under Paragraph 2.8, the parties shall submit the
dispute to binding arbitration.

Arbitration shall be initiated by CAT notifying HGS of its claimed dispute and
proposing its proposed resolution and the basis in facts between the parties and
law for the proposed resolution. The other shall respond to the claimed dispute
and shall either agree with other parties proposed solution or shall make a
counter proposal based upon its assertion of facts and law as to the resolution
of the dispute. If the initiating party is dissatisfied with the response of the
receiving party, or the receiving party makes no response within five (5)
working days, the initiating party may convene a one day arbitration panel by
demand to the receiving party. Within three (3) working days of dispatch and
receipt of the demand for arbitration each party shall submit to the other three
(3) names of qualified arbitrators, not in conflict of interest in the matter
and willing to serve on an arbitration panel. In the event either party fails to
nominate an appropriate list of potential arbitrators, one of any three (3)
approximately nominated arbitrators may be selected to nominate three additional
arbitrators on behalf of the non-responding party, who shall thereby become the
nominees of such party.

The arbitration shall proceed in twenty give (25) business days by CAT selecting
from the six (6) nominated arbitrators one (1) arbitrator. The receiving party
shall nominate one (1) arbitrator from the list of arbitrators. The appointed
arbitrators shall jointly nominate the third arbitrator. In the event of failure
of a party to nominate an arbitrator, the already nominated arbitrator(s) shall
make the selection not made.

The arbitration shall be held in not more than 3 working days with briefs of not
more than ten (10) pages and not more than one hour's oral argument of each of
the parties in support of each party's proposed resolution. The resolution of
dispute shall be made by the three (3) arbitrator panel selecting one (1) of the
two (2) proposed resolutions on behalf of the prevailing party. Such proposed
resolution shall be the judgment of the arbitration panel. There shall be no
judicial appear or reconsideration of the ruling of the arbitrators panel, which
shall be immediately and specifically enforceable against both parties. The
losing party shall pay all of the costs of the arbitration including reasonable-
attorney's fees.

                                       51
<PAGE>

DISCLOSURE LETTER PURSUANT TO CLAUSE 5.2 OF THE
SUBSCRIPTION AGREEMENT DATED 29 FEBRUARY 2000

<TABLE>
<S>                                                                                 <C>
---------------------------------------------------------------------------------------------------
Cambridge Antibody Technology
---------------------------------------------------------------------------------------------------
Share Capital disclosure as at 29 Feb 2000
---------------------------------------------------------------------------------------------------
Issued share capital - ordinary shares of 10p
---------------------------------------------------------------------------------------------------
Issued share capital - ordinary shares of 10p (per 1999 accounts)
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
Shares under option:
---------------------------------------------------------------------------------------------------
As at 30 September 1999 (see attached extract from 1999 annual report):
---------------------------------------------------------------------------------------------------
Options to Directors, consultants and employees
---------------------------------------------------------------------------------------------------
Contractual options
---------------------------------------------------------------------------------------------------
Options lapsed post 30 September 1999 (leavers)
---------------------------------------------------------------------------------------------------
Options granted to directors and staff December 1999 (note)
---------------------------------------------------------------------------------------------------
Options exercised - Dec 29                                                          (209,620)
                                                                                  -----------
---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
Shares issued to Monsanto Europe
---------------------------------------------------------------------------------------------------

In addition to a further 74,743 shares are issuable to The Scripps Research
Institute pursuant to a corporate agreement

Note:

These options were granted at a price of 287p per share and are exercisable
between 3 Dec 2002 and Dec 2006

---------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------
</TABLE>

29 February 2000

<PAGE>

Called-up share capital and share premium contract
Certain options were granted in one scheme in parallel with options in a
different scheme under arrangements whereby the exercise of options in one
scheme would cause a corresponding number of options to lease in the other
scheme.
Where relevant pairs of linked options are counted as a single option.

There also existed warrants which were issued to a shareholder giving the holder
an entitlement to subscribe for shares and certain contractual rights to
subscribe for shares

Up to a further 149,486 shares are issuable to The Scripps Research Institute
and Stratagene pursuant to a corporate agreement. These shares are not included
in the figures given below.

At 30 September 1999 the various share options, warrants and rights were as
follows:

<TABLE>
<CAPTION>

                                                                                                                     Minimum number
------------------------------------------------------------------------------------------------------------------------------------
Options to Directors, consultants and employees  2,148,006
Warrants to a shareholder  50,000
Contractual options    25,500
------------------------------------------------------------------------------------------------------------------------------------
Total  2,223,506
------------------------------------------------------------------------------------------------------------------------------------
                             Earliest price     Earliest date exercisable  Latest date exercisable    Number     Number
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>                        <C>                        <C>        <C>
Old schemes                  (Pounds)1.28       15 September 1996          14 September 2003          1          80,350
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)1.28       13 September 1997          12 September 2004          1          37,500
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)1.28           28 April 1998              27 April 2005          1         227,422
------------------------------------------------------------------------------------------------------------------------------------
                                  US$5.05           28 April 1998              28 April 2005                     27,025
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)2.97           12 March 1999              12 March 2003                     87,500
------------------------------------------------------------------------------------------------------------------------------------
                                  US$4.80           19 April 1999              19 April 2006          2         225,000
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)2.98             10 May 1999                 9 May 2006          1          40,000
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)3.00        4 September 1999           3 September 2006        1.3         360,000
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)3.00       16 December 1999           15 December 2003           4         150,000
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
CSOP                         (Pounds)5.00          24 March 2000              23 March 2004           4         135,540
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)5.00          24 March 2000              23 March 2007           4         131,960
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)5.58            2 June 2000                1 June 2004           4           3,584
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)5.58            2 June 2000                1 June 2007           4          25,536
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)5.00       19 December 2000           18 December 2004           4         141,800
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>

------------------------------------------------------------------------------------------------------------------------------------
<S>                          <C>                <C>                        <C>                        <C>    <C>
                             (Pounds)5.00       19 December 2000           18 December 2007           4      108,000
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)5.00           25 June 2001               24 June 2008           4       90,000
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)5.00            2 July 2001                1 July 2008           4        2,500
------------------------------------------------------------------------------------------------------------------------------------
CSOP - granted in year       (Pounds)5.00       27 November 2001           26 November 2008           4        17,500
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)2.42       27 November 2001           26 November 2005           4       180,828
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)2.42       27 November 2001           26 November 2008           4        69,711
------------------------------------------------------------------------------------------------------------------------------------
                             (Pounds)2.10            28 May 2002                27 May 2009           4         6,750
                                                                                                               ------
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            2,148,006
------------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------------
1 Includes linked options.
2 Staged exercise.
3 87,500 subject to conditions.
4 Subject to conditions.

A shareholder held a warrant to subscribe for 50,000 shares at $4.80 which expired on 18 October 1999.
Certain consultancy agreements contain the right to subscribe, subject to conditions for up to 25,500 shares at ,3 per share
____________________________________  ____________________________
------------------------------------------------------------------------------------------------------------------------------------
</TABLE><PAGE>

                                                                    EXHIBIT 4.10

               RESEARCH COLLABORATION AND SERVICE AGREEMENT/1/

                               (EXECUTION COPY)

     THIS COLLABORATION AGREEMENT (together with the attached Exhibits, the
"Agreement") is made as of March 29, 1999 (the "Effective Date") by and among
Genetics Institute, Inc., a Delaware corporation with a business address at 87
Cambridge Park Drive, Cambridge, Massachusetts 02140 ("GI"), and Cambridge
Antibody Technology Limited ("CAT"), with a business address at The Science
Park, Melbourn, Cambridgeshire, SG8 6JJ, UK.

1.   Background.

WHEREAS, CAT is an entity in the field of rapid human antibody discovery,
engineering and other related activities,

WHEREAS, GI is an entity working in the field of drug discovery, and

WHEREAS, CAT and GI wish to enter into this research collaboration and contract
research arrangement on the terms and conditions set forth in this Agreement.

2.   Definitions.  As used in this Agreement, the following terms shall have the
     meanings set forth below.

     2.0  "Ab Engineering Services" means the antibody engineering services
          contemplated by Article 21 hereof.

     2.1  "Accepted Antigen" means (a) the antigens set forth in Exhibit A
          hereof and (b) any Additional Target Antigen accepted by the RMC
          pursuant to Section 3.3(b).

     2.2  "Additional Target Antigens" means those additional target antigens
          offered by GI or CAT to the RMC for consideration for inclusion in the
          Product Collaboration pursuant to Section 3.3 hereof.

     2.3  "Affiliate" means any corporation, company, partnership, joint venture
          and/or firm which controls, is controlled by or is under common
          control with a Party. For purposes of this Section 2.3, "control"
          means (a) in the case of corporate entities, direct or indirect
          ownership of at least fifty percent (50%) of the stock or shares
          entitled to vote for the election of directors; and (b) in the case of
          non-corporate entities, direct or indirect ownership of at least fifty
          percent (50%) of the equity

_______________________
/1/ [***] indicates that text has been deleted, which is subject to a
confidential treatment request. This text has been filed with the SEC on a
supplemental basis.
<PAGE>

          interest with the power to direct the management and policies of such
          noncorporate entities.

     2.4  "Antibody" or "Ab" means a molecule or a gene encoding such a
          molecule, developed or identified in performance of the Product
          Collaboration or Contract Research Program, as applicable, and
          comprising or containing one or more immunoglobulin variable domains
          or parts of such domains or any fragments, variants, modifications or
          derivatives thereof.

     2.5  "Available Abs" means any Collaborative Ab selected by the RMC for
          inclusion in the Selection Pool.

     2.6  "CAT" shall mean Cambridge Antibody Technology Limited.

     2.7  "CAT Ab" means any Available Ab selected by CAT pursuant to Article 9
          hereof.

     2.8  "CAT Background IP" shall mean all patents and patent applications of
          CAT (including those licensed to CAT by a third party which CAT has
          the right to sublicense hereunder), which relate to an Antibody,
          Accepted Antigen or a Collaborative Ab, and are reasonably necessary
          to research, develop, use, register, import, manufacture, have
          manufactured, formulate, fill and finish, distribute and/or sell
          Licensed Product(s).

     2.9  "CAT Library Technology" means the collection of bacteriophages each
          of which displays an Antibody or a collection of host cells containing
          such collection of bacteriophages possessed by CAT as of the date GI
          exercises its Library Option pursuant to Section 20.1.

     2.10 "CAT Background Technology" shall mean any proprietary information or
          materials, patentable or otherwise, of CAT (including that licensed to
          CAT by a third party which CAT has the right to sublicense hereunder,
          excluding those Independent Developments described in Section 3.1(c)),
          which relate to an Antibody, Accepted Antigen, or Collaborative Ab,
          and are necessary to research, develop, use, register, import,
          manufacture, formulate, fill and finish, distribute and/or sell
          Licensed Therapeutic Product(s) and Licensed Diagnostic Product(s),
          including, without limitation, scientific discoveries and results,
          developments, preclinical data, clinical data, regulatory filings and
          records related thereto. The Parties acknowledge that it is not their
          intention that CAT Background Technology include general proprietary
          research tools or technologies used to make discoveries or
          formulations, process development and/or manufacturing technologies
          that are not specifically and solely related to the Collaborative Ab.

                                       2
<PAGE>

     2.11      "Collaborative Abs" means an Antibody selected for engineering by
               the RMC pursuant to Section 3.5(a) hereof.

     2.12      "Confidential Information" includes, without limitation, any
               scientific, technical, trade or business information disclosed by
               one Party to the other Party which is (a) disclosed in writing or
               other tangible form and labeled "CONFIDENTIAL" at the time of
               disclosure or (b) disclosed verbally.

               "Confidential Information" does not include information which (a)
               was known to the receiving Party at the time it was disclosed,
               other than by previous disclosure by the disclosing Party, as
               evidenced by written records at the time of disclosure; (b) is at
               the time of disclosure or later becomes publicly known under
               circumstances involving no breach of this Agreement; (c) is
               lawfully and in good faith made available to the receiving Party
               by a third party who did not derive it from the disclosing Party
               and who imposes no obligation of confidence on the receiving
               Party; or (d) is developed by the receiving Party independent of
               any disclosure by the disclosing Party, as evidenced by written
               records or (e) is required by law to be disclosed, provided prior
               to any such disclosure, the disclosing party shall give the other
               party a reasonable opportunity to contest the requested
               disclosure.

     2.13      "Contract Research Program" shall mean the Contract Research
               Program as set forth in Articles 15, 16, 17 and 18, 19 and 21
               hereof.

     2.14      "Contract IP" shall have the meaning given such term in Section
               15.3 hereof.

     2.15      "Date of First Commercial Sale" means with respect to any
               Licensed Product(s) or Research Product(s), the date of the first
               sale for end use or consumption of such Licensed Product(s) or
               Research Product(s) in a country.

     2.16      "Diagnostic Licensed Product(s)" shall mean any product in
               whatever form (a) incorporating substantially all of or at least
               one variable region of an Available Ab and (b) used for a
               diagnostic purpose.

     2.17      "Engineering Criteria" means the criteria for the engineering of
               antibodies, established and agreed upon by the Parties at such
               time as engineering is undertaken pursuant to Section 3.5.

     2.18      "Exclusive Licensee" shall have the meaning given such terms in
               Section 10.1 hereof.

     2.19      "First Available Ab" means the first Available Ab introduced into
               the Selection Pool.

                                       3
<PAGE>

     2.20      "GI" shall mean Genetics Institute, Inc., American Home Products
               Corporation, and any wholly owned subsidiaries thereof.

     2.21      "GI Ab" means Available Abs selected by GI pursuant to Article 9.

     2.22      "GI Background IP" shall mean all patents and patent applications
               of GI (including those licensed to GI by a third party which GI
               has the right to sublicense hereunder and excluding (a) those
               previously exclusively licensed by GI to a thirty party and (b)
               those Independent Developments described in Section 3.1(c)),
               which relate to a Accepted Antigen, Antibody, or a Collaborative
               Ab and are necessary to research, develop, use, register, import,
               manufacture, have manufactured, formulate, fill and finish,
               distribute and/or sell Licensed Product(s).

     2.23      "GI Background Technology" shall mean any proprietary information
               or materials, patentable or otherwise, of GI (including that
               licensed to GI by a third party which GI has the right to
               sublicense hereunder and excluding information or materials (a)
               previously exclusively licensed by GI to a third party and (b)
               those Independent Developments described in Section 3.1(c)),
               which relate to a Accepted Antigen, Antibody, or Collaborative Ab
               and is necessary to research, develop, use, register, import,
               manufacture, formulate, fill and finish, distribute and/or sell
               Licensed Therapeutic Product(s) and Licensed Diagnostic
               Product(s), including, without limitation, scientific discoveries
               and results, developments, preclinical data, clinical data,
               regulatory filings and records related thereto. The Parties
               acknowledge that it is not their intention that GI Background
               Technology include general proprietary research tools or
               technologies used to make discoveries or formulations, process
               development and/or manufacturing technologies that are not
               specifically and solely related to the Collaborative Ab.

     2.24      "ICC Data" shall mean all immunocytochemistry data generated
               under the Contract Research Program.

     2.25      "ICC Tissue Panel" means the tissue identified in Exhibit C, as
               may be amended from time to time by the parties.

     2.26      "Improvements" means any improvements, modifications and
               adaptations solely (whether patentable or otherwise) to either
               CAT or GI Background IP, arising from the Product Collaboration.

     2.27      "Independent Development(s)" shall mean any information, or
               Materials, know-how or inventions of GI (a) arising outside the
               Product Collaboration and (b) discovered without the use of any
               Product Collaboration IP, CAT Background IP or CAT Background
               Technology.

                                       4
<PAGE>

     2.28      "Intellectual Property" shall mean, collectively, Product
               Collaboration IP and Contract Research Program IP.

     2.29      "Introduction Date" means the date the RMC, pursuant to Section
               3.6 hereof, introduces a Collaborative Ab to the Selection Pool.

     2.30      "Licensed Product(s)" shall mean collectively, Therapeutic
               Licensed Product(s) and Diagnostic Licensed Product(s), in
               whatever form (including without limitation, bulk active,
               formulated or unformulated bulk, final or packaged final labeled
               forms).

     2.31      "Major Market" shall mean United States, Europe or France,
               Germany, Italy, Japan, or the United Kingdom.

     2.32      "Minimum Performance Requirements" shall have the meaning given
               such term in Section 16.3 hereof.

     2.33      "Net Sales" means the aggregate United States dollar equivalent
               of gross revenues derived by or payable to a selling Party, its
               Affiliates and sublicensees from or on account of the sale or
               distribution of Licensed Product(s) or Research Product(s)
               ("Products") to third parties, less (a) reasonable credits or
               allowances, if any, actually granted on account of price
               adjustments, recalls, rejection or return of items previously
               sold, (b) excises, sales taxes, value added taxes, consumption
               taxes, duties or other taxes imposed upon and paid with respect
               to such sales (excluding income or franchise taxes of any kind)
               and (c) separately itemized insurance and transportation costs
               incurred in shipping Products to such third parties. No deduction
               shall be made for any item of cost incurred by a selling party,
               its Affiliates or sublicensees in preparing, manufacturing,
               shipping or selling Products except as permitted pursuant to
               clauses (a), (b) and (c) of the foregoing sentence. Net Sales
               shall not include any transfer between a selling Party and any of
               its Affiliates or sublicensees for resale, but shall include the
               resale price to a third party payable to such Affiliates or
               sublicensees.

               If a selling Party or an Affiliate or sublicensee sells Products
               to a distributor which is not an Affiliate, the gross revenues
               derived by or payable to that selling Party or the applicable
               Affiliate or sublicensee on account of such sale shall be the
               gross revenues received by the selling Party and/or the
               applicable Affiliate or sublicensee from the sale of Products to
               the distributor. If the distributor is an Affiliate, then gross
               revenues derived by or payable to that selling Party or the
               applicable Affiliate or sublicensee shall be those received from
               the sale to the first third party which is not an Affiliate.

               In addition, in order to ensure the full royalty payments
               contemplated under this Agreement, in the event any Product is
               sold to any corporation, firm or association

                                       5
<PAGE>

               with which GI or CAT, as the case may be, has an agreement,
               understanding or other arrangement with respect to other forms of
               consideration (for example, an option to purchase stock or actual
               stock ownership; an arrangement involving division of profits or
               special rebates or allowances) royalties shall be calculated for
               sales of such Products based upon the greater of (a) the price at
               which the purchaser of such Products resells such Products to the
               end user or (b) the fair market value of such Products or (c) the
               price of such Products paid by the purchaser.

               Unless otherwise specified herein, in the event that a selling
               Party or any of its Affiliates or sublicensees shall make any
               transfer of Products to third parties for other than (a) in a
               bona fide arms-length transaction exclusively for monetary value
               or (b) upon use of Licensed Product for purposes which do not
               result in a disposal of such Licensed Product in consideration of
               sales revenue customary in the country of use, such transfer or
               other disposition, such shall be considered a sale hereunder for
               accounting and royalty purposes. Net Sales for any such transfers
               shall be determined on a country-by-country basis and shall be
               the average price of "arms length" sales by that selling Party,
               its Affiliates or sublicensees in such country during the royalty
               reporting period in which such transfer occurs or, if no such
               "arms length" sales occurred in such country during such period,
               during the last period in which such "arms length" sales
               occurred. If no "arms length" sales have occurred in a particular
               country, Net Sales for any such transfer in such country shall be
               the average price of "arms length" sales in all countries by that
               selling Party.

               In the event a Licensed Product is sold in combination with other
               active components ("Combination Product"), Net Sales for purposes
               of royalty payments shall be calculated by multiplying the Net
               Sales of the Combination Product by the fraction A/(A/B), where
               "A" is the gross selling price of the Product sold separately
               (i.e. without the other active components) and "B" is the gross
               selling price of the other pharmaceutically active components. In
               the event that no separate sales are made, Net Sales for royalty
               payments shall be negotiated in good faith.

               Notwithstanding the foregoing, no transfer of Products for
               testing, pre-clinical, clinical or developmental purposes or as
               samples shall be considered a sale hereunder for accounting and
               royalty purposes.

     2.34      "Non-Ab Licensed Product(s)" means any human therapeutic or
               diagnostic product developed or identified in performance of the
               Product Collaboration, excluding Licensed Product(s).

     2.35      "Notice of Intent" shall have the meaning given such term in
               Section 9.3(a) hereof.

     2.36      "Offering Party" shall have the meaning given such term in
               Section 9.1 hereof.

                                       6
<PAGE>

     2.37      "Oncology Rights" means the use of any Product Collaboration IP
               and/or Product Collaboration Technology in the field of oncology.

     2.38      "Option Acceptance" means the written notice submitted by the
               Recipient Party to the Picking Party pursuant to Section 9.2
               hereof.

     2.39      "Option Payment" shall have the meaning given such terms in
               Section 9.2.

     2.40      "Option Payment Date" means the date on which a Party pays an
               Option Payment pursuant to Section 9.2 hereof.

     2.41      "Option Price" means the irrevocable cash amount set forth in a
               Party's Firm Offer (as defined in Section 9.1).

     2.42      "Party" or "Parties" means GI and/or CAT.

     2.43      "Purchasing Party" shall have the meaning given such term in
               Section 9.3 hereof.

     2.44      "Product Collaboration" means the collaborative activities
               between GI and CAT described in Articles 3-14 hereof.

     2.45      "Product Collaboration IP" shall mean the intellectual property
               described in Section 4(a) hereof.

     2.46      "Product Collaboration Plan" means the three (3) year research
               plan developed by the RMC pursuant to Section 3.2 hereof, which
               sets forth the Product Collaboration, as amended from time to
               time by the RMC.

     2.47      "Product Collaboration Term" means the term of the Product
               Collaboration as set forth in Article 5 hereof.

     2.48      "Research Abs" shall mean all antibodies generated under the
               Contract Research Program.

     2.49      "Research Antigens" shall mean any antigen offered by GI to the
               Contract Research Program.

     2.50      "Research Product(s)" means products for human therapeutic or
               diagnostic use, incorporating substantially all of at least one
               region of any Antibody arising from the Contract Research
               Program.

     2.51      "Recipient Party" shall have the meaning given such term in
               Section 9.1 hereof.

                                       7
<PAGE>

     2.52      "RMC" shall mean the Research Management Committee as defined in
               Section 3.2 hereof.

     2.53      "Selection Period" shall have the meaning given such term in
               Section 9.3.

     2.54      "Selection Pool" means the pool of Available Abs from which the
               Parties select such Available Abs, pursuant to Article 9.

     2.55      "Hardware/Software" means the items set forth in Exhibit D
               hereof.

     2.56      "Therapeutic Licensed Product(s)" shall mean products, for any
               human therapeutic use, incorporating substantially all or at
               least one variable region of an Available Ab.

     2.57      "Valid Patent Rights" shall mean a claim of an issued or granted
               patent which shall not have expired or been withdrawn, canceled
               or disclaimed, nor held invalid or unenforceable, in an
               unappealed or unappealable decision, by a court or other
               governmental body of competent jurisdiction or in an interference
               proceeding.

     2.58      "Contract Background IP" means any proprietary information or
               materials, patentable or otherwise of CAT, including ProAb and
               any other general research tools or technologies used to make
               discoveries or formulations, process development or manufacturing
               technologies which (a) relate to a Research Ab and (b) are
               necessary to research, develop, use, register, import,
               manufacture, formulate, fill and finish, distribute and/or sell
               Research Product(s).

     2.59      "CAT Antibody Patents" means [***].

     2.60      "Full Length Sequence" means an amino acid sequence that is
               anticipated by GI to be encoded by the open reading frame of a
               full-length cDNA.

     2.61      "GI/MRC/Dyax Sublicensee Royalties" means the royalties on Net
               Sales of Licensed Products and Research Products relating to the
               MRC License and the Dyax License and payable by GI for the
               benefit of MRC and Dyax, as set forth in Exhibit B.

3.   Product Collaboration.

     3.1       Goal.

               (1)  Except as otherwise expressly provided by this Agreement,
                    the Parties shall each conduct the Product Collaboration
                    with the goal of rapidly discovering Collaborative Abs for
                    evaluation, selection and development by GI and/or CAT, and

                                       8
<PAGE>

     (2)  During the Product Collaboration Term and subject to any rights
          granted pursuant to Article 10 hereof, GI and CAT shall not knowingly
          develop, for itself or with a third party, any antibody product
          directed to an Accepted Antigen.

     (3)  Notwithstanding anything herein to the contrary, the parties hereby
          agree that any antibody acquired by or licensed to GI or CAT in
          connection with (a) an acquisition by GI or CAT of all or a portion of
          the assets of another entity or (b) a merger, consolidation or sale of
          all or substantially all of GI's or CAT's assets, shall not be subject
          to restriction set forth in subparagraph (b) of this Section 3.1 and
          shall be deemed an Independent Development. CAT and GI shall have no
          rights in and to any Independent Development.

3.2  Product Collaboration Activities; RMC.

     (1)  Within thirty (30) days following the Effective Date, GI and CAT shall
          form a Research Management Committee ("RMC") to

          (1)  develop a Product Collaboration Plan and advise the Parties on
               the direction of the Product Collaboration,

          (2)  coordinate the Parties' activities under the Product
               Collaboration, and

          (3)  facilitate the exchange of ideas and information by GI and CAT
               under the Product Collaboration. The RMC shall consist of four
               (4) members, two (2) of whom shall be designated by GI and two
               (2) of whom shall be designated by CAT. Each member shall have
               appropriate technical credentials, experience and knowledge, and
               ongoing familiarity with the Product Collaboration. GI and CAT
               may assign its members to the RMC as it deems appropriate, and
               designated substitutes may represent RMC members at regularly
               scheduled meetings at the discretion of the substituting Party.
               The RMC will meet at least once per calendar quarter, alternating
               between GI and CAT locations, to review their progress under the
               Product Collaboration and other activities under this Agreement.
               Actions by and decisions of the RMC shall require the affirmative
               vote of all RMC members, provided however, in the event that the
               RMC cannot or does not, after good faith efforts, reach agreement
               on an issue, the resolution and/or course of action shall be
               determined by senior executives from GI and CAT. In addition, GI
               and CAT shall each designate an overall project manager to
               coordinate preparation of short written reports summarizing each
               Party's research efforts, to be

                                       9
<PAGE>

               provided to each of the RMC members in advance of each quarterly
               RMC meeting. Meetings shall be minuted and copies of the minutes
               shall be circulated to all members of the RMC.

     (2)  In conducting its activities under the Product Collaboration, each
          party shall at their own expense allocate at least [***] full time
          equivalent scientists, together with such technical staff, equipment
          and supplies as are reasonably necessary to support such scientists.

3.3  Phase I:  Validation of Accepted Antigens.

     (1)  Pursuant to the Product Collaboration Plan, GI shall supply to the RMC
          the Accepted Antigens set forth in Exhibit A and all material and GI
          Background IP related to such Accepted Antigens and necessary for and
          the sole purpose of the performance of the RMC's obligations under
          this Article 3. GI and CAT shall work diligently to validate such
          Accepted Antigens as therapeutic targets and shall promptly report all
          results of such work to the RMC. Such validation may involve use of
          the antibodies generated pursuant to Section 3.4

     (2)  Additionally, at any time during the Product Collaboration, CAT or GI
          may propose Additional Target Antigens to the RMC for acceptance. If
          the RMC accepts such Additional Target Antigens for inclusion into the
          Product Collaboration, the proposing Party shall supply to the RMC
          such related material and Background IP (GI or CAT Background IP, as
          appropriate) necessary for the performance of the RMC's obligations
          under this Article 3.

3.4  Phase II:  Generation of Antibodies.

     (1)  With respect to each Accepted Antigen identified pursuant to Section
          3.3, CAT, utilizing its process, shall

          (1)  make diligent efforts, using any available CAT technology to
               generate Antibodies specific for each Accepted Antigen and

          (2)  deliver such Antibodies to GI for further analysis directed to
               the development of characterization and validation data.

     (2)  With respect to each Antibody delivered pursuant to subparagraph (a)
          of this Section 3.4, each Party shall, on a quarterly basis, supply to
          the RMC the characterization/validation data derived from such Party's
          analysis of the Antibody.

                                       10
<PAGE>

     3.5  Phase III: Decision to Engineer Collaborative Antibodies.

          (1)  Promptly following its review and analysis of the data
               contemplated by Section 3.4(b) hereof, the RMC shall promptly
               select those Antibodies to be further engineered by CAT pursuant
               to subparagraph (b) of this Section 3.5.

          (2)  With respect to each Antibody selected by the RMC pursuant to
               subparagraph (a) of this Section 3.5, CAT shall, pursuant to the
               Engineering Criteria, make diligent efforts to engineer such
               Antibodies into Collaborative Abs.

          (3)  CAT shall devote at least [***] to the engineering work
               contemplated by subparagraph (b) of this Section 3.5, at a cost
               to CAT of [***] (the "Engineering Cost"). GI shall be obligated
               to reimburse CAT [***] and such reimbursement shall be due within
               thirty (30) days of GI's receipt of a quarterly invoice from CAT.

     3.6  Phase IV: Introduction of Collaborative Abs to Selection Pool.

          With respect to each Collaborative Ab and upon completion of the
          engineering (as contemplated by Section 3.5(b)) of such Collaborative
          Ab, CAT shall promptly submit to the RMC each Collaborative Ab and all
          related data. The RMC shall promptly evaluate each such Collaborative
          Ab to determine if the Engineering Criteria has been met. Upon a
          determination by the RMC that the Engineering Criteria has been
          satisfied, such Collaborative Ab shall be introduced into the
          Selection Pool for selection by the Parties pursuant to Article 9
          ("Introduction Date").

          Upon a determination by the RMC that the Engineering Criteria has not
          been met, the RMC shall determine the appropriate disposition of such
          Collaborative Ab.

4.   Intellectual Property.

          (1)  Except as provided in subparagraphs (b), (c), (d) and (e) of this
               Article 4, the entire right, title, and interest in all
               discoveries, improvements, processes, formulas, data, inventions,
               know-how, and trade secrets, patentable or otherwise, arising
               from the Product Collaboration, shall be owned jointly by the
               Parties ("Product Collaboration IP").

               Each party shall promptly disclose to the other party the making,
               conception, or reduction to practice of all Product Collaboration
               IP.

          (2)  Product Collaboration IP shall not include GI Background IP, GI
               Background Technology, CAT Background IP or CAT Background
               Technology.

                                       11
<PAGE>

          (3)  GI Background IP and GI Background Technology shall be owned by
               GI and CAT Background IP and CAT Background Technology shall be
               owned by CAT.

          (4)  Except as expressly provided herein, nothing in this Agreement
               transfers or licenses any right, title or interest in and to GI
               Background IP, GI Background Technology, CAT Background IP or CAT
               Background Technology.

          (5)  Any Improvements to Background IP (GI or CAT Background IP, as
               appropriate), shall be owned by the party who owns the underlying
               CAT or GI Background IP.

          (6)  Each Party shall, pursuant to Article 10, have the first option
               to exclusively license the other Party's rights and interests in
               and to Product Collaboration IP.

          (7)  Except as expressly provided herein, nothing in this Agreement
               transfers or licenses to a Party any right, title or interest in
               and to the Independent Developments of the other Party.

5.   Term of Product Collaboration.

          (1)  Except as otherwise provided in this Agreement, the term of the
               Product Collaboration shall commence on the Effective Date and
               expire on the date three (3) years thereafter, provided, if there
               are any Collaborative Ab(s) in the Selection Pool at such time,
               the term of the Products Collaboration shall be extended until
               the later of:

               (1)  such time when the last of such Collaborative Ab(s) is
                    selected pursuant to Article 9, or

               (2)  the end of the Product Collaboration Term as determined
                    pursuant to subparagraph (b) hereof, as appropriate.

          (2)  If at the end of the Product Collaboration Term an Antibody(ies)
               are, pursuant to Section 3.5(b), being engineered by CAT, the
               Product Collaboration shall be extended to the extent necessary
               to

               (1)  complete engineering of such Antibodies and

                                       12
<PAGE>

               (2)  complete selection of any corresponding Collaborative Abs,
                    pursuant to Article 9. The disposition of all other
                    Antibodies will be determined on a case by case basis by the
                    RMC. Upon the expiration of the Product Collaboration and
                    subject to any rights granted pursuant to Article 10 hereof,
                    each Party shall retain a royalty free research license
                    (with right of sublicense to Affiliates) to any and all
                    Product Collaboration IP.

6.   Termination of Product Collaboration: Effect of Termination.

     6.1  Termination for Cause. The Product Collaboration may be terminated by
          notice by either Party at any time during the term of the Product
          Collaboration if the other Party is in breach of its material
          obligations under the Product Collaboration by reasons and causes
          within its control, and has not, to the extent curable, cured such
          breach within sixty (60) days following written notice requesting cure
          of the breach.

     6.2  Effect of Termination.

          (1)  In the event GI terminates this Product Collaboration pursuant to
               Section 6.1, all of CAT's rights in and to Product Collaboration
               IP shall hereby terminate and GI shall retain sole ownership of
               all Product Collaboration IP.

          (2)  In the event CAT terminates this Product Collaboration pursuant
               to Section 6.1, all of GI's rights in and to Product
               Collaboration IP shall hereby terminate and CAT shall retain sole
               ownership of all Product Collaboration IP.

          (3)  Notwithstanding anything herein to the contrary, expiration or
               termination of the Product Collaboration shall not relieve the
               parties of any obligation, right or license accruing prior to
               such expiration or termination and all confidentiality
               obligations shall survive this Agreement for five (5) years.

7.   Supply of Materials. Each Party shall use reasonable and diligent efforts
     to supply to the other Party such reasonable quantities of Additional
     Target Antigens, Accepted Antigens, Collaborative Abs and other materials
     in that Party's possession as the Parties may agree are reasonably required
     to carry out their respective obligations under this Agreement.

8.   Work with Academic Collaborators. Either Party shall be permitted to
     transfer Additional Target Antigens, Accepted Antigens, Antibodies,
     Collaborative Abs and related Confidential Information (collectively,
     "Product Collaboration information") to academic third party collaborators,
     (a) pursuant to the terms set forth in this Article 8 and (b) only to the
     extent necessary to effect the Product Collaboration.

                                       13
<PAGE>

     8.1  No Right of Further Transfer. The academic collaborator shall not have
          the right to transfer any Product Collaboration Information to any
          third party.

     8.2  Permitted Use. The academic collaborator's use of Product
          Collaboration Information shall be (a) clearly set forth in a written
          collaboration agreement ("Collaboration Agreement") and (b) limited to
          laboratory research and preclinical development work.

     8.3  Confidentiality. Any Product Collaboration Information transferred to
          an academic collaborator shall be transferred under confidentiality
          and publication provisions which are no less restrictive than those
          set forth in his Agreement.

     8.4  Disposition of Intellectual Property. In each Collaboration Agreement,
          GI and CAT, as applicable, shall obtain from the academic
          collaborator:

          (1)  an automatic, irrevocable, non-exclusive royalty-free license
               (with right of sublicense), to all know-how, inventions and
               discoveries (patentable and unpatentable) made by the academic
               collaborator ("Academic IP"), or

          (2)  joint ownership of all such Academic IP, and
                                                        ---

          (3)  an option to negotiate an exclusive, royalty bearing license
               (with right of sublicense) to all Academic IP.

     8.5  Identity of Academic Collaborator. At the request of the other Party,
          each Party shall, under confidentiality, disclose (to the extent
          permitted under its third party agreement), the identity of any
          academic collaborator.

9.   Ab Selection. GI and CAT may each select Available Abs, pursuant to the
     following procedures:

     9.1  Selection of First Available Ab: Firm Offer. At any time following the
          Introduction Date of the First Available Ab, GI or CAT may submit in
          writing to the other Party ("Recipient Party") a firm offer for any
          Available Ab ("Firm Offer"). Such Firm Offer shall include [***] to
          secure, pursuant to Article 10 hereof, exclusive rights in and to such
          Available Ab for the development and commercialization of Therapeutic
          Licensed Product(s) and Diagnostic Licensed Product(s).

     9.2  Election to Match Firm Offer.

          (1)  Within [***] of a Recipient Party's receipt of a Firm Offer, such
               Recipient Party may by written notice ("Option Acceptance") to
               the Offering Party,

                                       14
<PAGE>

               elect to match the Firm Offer by agreeing to promptly pay the
               Offering Party an amount equal to the Option Price. In the event
               Recipient Party elects to match the Firm Offer, Recipient Party
               shall, pursuant to Section 10.1 and as consideration for Offering
               Party's grant of it rights and interests in and to such Available
               Ab, pay to Offering Party an amount equal to the Option Price
               ("Option Payment").

          (2)  In the event Recipient Party does not, pursuant to subparagraph
               (a) of this Section 9.2, send such Option Acceptance to Offering
               Party, the Offering Party shall promptly pay the Option Payment
               to the Recipient Party. As consideration for payment of the
               Option Payment, Recipient Party shall, pursuant to Section 10.1,
               grant to Offering Party all of Recipient Party's rights and
               interests in and to the Available Ab selected.

     9.3  Subsequent Ab Selections. GI and CAT shall alternate selections of
          Available Abs (after the First Available Ab), pursuant to the
          following procedures:

          (1)  At any time following a Party's initial selection of an Available
               Ab pursuant to Section 9.2 hereof (the "Purchasing Party"), the
               other Party ("Non-Purchasing Party") shall, during the Exclusive
               Selection Period (defined below), have the exclusive opportunity
               to select an Available Ab from the Selection Pool by (i) giving
               written notice to the Purchasing Party of its intention to make a
               selection ("Notice of Intent") and (ii) making such selection,
               provided, however, at any time following the date [***] from the
               Option Payment Date ("Exclusive Selection Period"), such
               exclusive opportunity shall become non-exclusive and the
               Purchasing Party may also submit a Notice of Intent with respect
               to any Available Ab. In the event there are no Available Abs
               remaining in the Selection Pool as of the Option Payment Date,
               the term of the Exclusive Selection Period shall be [***] from
               the Introduction Date of the next Available Ab.

               If, following the Exclusive Selection Period, the Purchasing
               Party delivers a Notice of Intent, the Non-Purchasing Party shall
               have [***] from the date of its receipt of such Notice of Intent
               ("Selection Period") to select an Available Ab.

          (2)  In the event the Non-Purchasing Party selects an Available Ab
               pursuant to subparagraph (a) of this Section 9.3, the Purchasing
               Party shall, pursuant to Section 10.1 hereof, grant to the Non-
               Purchasing party all of its rights and interests in and to the
               selected Available Ab.

          (3)  In the event the Non-Purchasing Party does not select an
               Available Ab within the Selection Period pursuant to subparagraph
               (a) above, the Purchasing party

                                       15
<PAGE>

               shall have [***] from the end of such Selection Period to select
               an Available Ab from the Selection Pool.

               (1)  If during this [***] period, such Purchasing Party gives the
                    Non-Purchasing Party written notice of its selection of an
                    Available Ab, the Non-Purchasing Party shall, pursuant to
                    Section 10.1, hereof, grant to such Purchasing Party, all of
                    its rights and interests in and to such selected Available
                    Abs.

               (2)  If during this [***] period, such Purchasing Party fails to
                    provide the Non-Purchasing Party written notice of its
                    selection of an Available Ab, the Non-Purchasing Party's
                    right to select an Available Ab is restored and for the next
                    [***] period, such Non-Purchasing Party shall have an
                    exclusive opportunity to select an Available Ab.

          (4)  Thereafter, each Party shall alternate in their selection of
               Available Abs. If it is a Party's turn to select an Available Ab,
               it may do so at any time, provided such selection is made, as
               applicable within [***].

               (1)  of the previous selection of an Available Ab, if at such
                    time, there exist Available Ab(s) in the Selection Pool or,

               (2)  Introduction Date of the next Available Ab, if at such time,
                    no Available Ab(s) are in the Selection Pool.

     9.4  References to Days and Dollars. Unless otherwise specifically set
          forth herein, all references to "days" in this Agreement shall refer
          to calendar days and all references to "dollars" shall refer to United
          States currency.

10.  Product Collaboration License Grant.

     10.1 Therapeutic Licensed Products. (a) Upon a Party's (the "Exclusively
          Licensee") payment of an Option Payment for an Available Ab pursuant
          to Section 9.2, or selection of an Available Ab pursuant to Section
          9.3, the other Party ("Granting Party") shall, with respect to such
          Available Ab grant to such Exclusive Licensee:

               (1)  A worldwide exclusive license (with rights of sublicense) to
                    all of Granting Party's rights and interests in and to
                    Product Collaboration IP,

               (2)  A worldwide, non-exclusive license (with right of
                    sublicense) to all of Granting Party's rights and interests
                    in and to the Granting Party's Background IP and Background
                    Technology as is necessary to

                                       16
<PAGE>

                      develop, make, have made, use, sell, offer to sell or
                      import Therapeutic Licensed Product(s), and Diagnostic
                      Licensed Products, provided however, any rights granted by
                                         ----------------
                      GI to CAT pursuant to this Section 10.1 are:

               1.     subject to CAT's obligations and GI's rights pursuant to
                      Article 12 and

               2.     includes only those [***] which GI is permitted to license
                      under its existing arrangements. GI acknowledges that,
                      with respect to such arrangements, it shall use good faith
                      efforts to remove restraints on its ability to sublicense
                      [***] hereunder.

               (b) Additionally, Granting Party shall promptly transfer to the
               Exclusive Licensee Party all physical embodiments of Product
               Collaboration IP, including all information, improvements,
               processes, formulas, data, inventions, know-how, and trade
               secrets.

     10.2 Non-Ab Licensed Product(s). Pursuant to the terms of the Product
          Collaboration, from time to time each Party may, pursuant to Section
          3.3(b), submit Additional Target Antigens to the Product
          Collaboration. For purposes of this Section 10.2, the Party who
          submits the Additional Target Antigen to the Product Collaboration
          shall be called the Target Antigen Provider.

          (1)  Option to Exclusive License. Each Party grants the Target Antigen
               Provider an option to license exclusively such rights as are set
               forth in subparagraph (b) of this Section 10.2. Notwithstanding
               anything herein to the contrary, at any time from the Effective
               Date to the date [***] following the end of the term of the
               Product Collaboration, a Target Antigen Provider may exercise
               such option by (I) written notice to the other Party and (II)
               acceptance of the obligations set forth under this Agreement with
               respect to Licensed Product(s).

          (2)  License Grant. Upon exercise by a Target Antigen Provider ("Non-
               Ab Licensee") of an option pursuant to subparagraph (a) above,
               the other Party ("Granting Party") shall grant to such Non-Ab
               Licensee a worldwide, exclusive license (with right of
               sublicense) to all of Granting Party's rights and interests in
               and to Product Collaboration IP:

               to develop, make, have made, use, sell, offer to sell or import
               Non-Ab Licensed Product(s).

                                       17
<PAGE>

          (3)  Royalties. In the event a Party commercializes a Non-Ab Licensed
               Product, such Party shall, for each Non-Ab Licensed Product, pay
               to the other Party on a country-by-country basis, royalties in an
               amount equal to [***] of Net Sales of Non-Ab Licensed Products,
               the sales of which would, but for the license hereunder, infringe
               Valid Patent Rights in the country of sale.

               Royalties with respect to Non-Ab Licensed Product(s) shall be
               payable from the Date of First Commercial Sale until the
               expiration of the last Valid Patent Right, provided:

               (1)  only one royalty shall be due with respect to the same unit
                    of Non-Ab Licensed Product, and

               (2)  no royalties shall accrue on the disposition of Non-Ab
                    Licensed Product in reasonable quantities by a Party or its
                    sublicensees as samples (promotion or otherwise) or as
                    donations (for example, to non-profit institutes or
                    government agencies for a non-commercial purpose).

          (4)  Third Party Licenses . In the event that one or more patent
               licenses from third parties are required by a Party or its
               sublicensee in order to develop, make, have made, import, use, or
               sell Non-Ab Product(s) ("Third Party Licenses"), any
               consideration actually paid under such Third Party License(s) by
               a Party or its sublicensee, shall not be creditable against any
               royalty payments due under this Agreement.

     10.3 Payments Due Third Parties.

          (1)  In the event a Non-Ab Licensee exercises a license pursuant to
               Section 10.2, thereafter such Non-Ab Licensee shall, subject to
               subparagraphs (b) and (c) of this Section 10.3, be responsible
               for paying [***] on sales or other dispositions of Non-Ab
               Licensed Product(s), whether such payments are required to be
               paid directly by Non-Ab Licensee or are required to be paid
               directly by Granting Party [***].

          (2)  All required fees and royalties relating to CAT Background IP and
               Technology and payable under agreements entered into by CAT as of
               the date of this Agreement are set forth in Exhibit B.

          (3)  Upon receipt of the written notice set forth in Section 10.2(a),
               Granting Party shall advise Non-Ab Licensee in writing as to
               whether or not the royalties and fees ("Third Party Obligations")
               set forth in Exhibit B or any additional Third Party Obligations
               will attach to the Non-Ab Licensed Product which Non-Ab

                                       18
<PAGE>

                         Licensee is seeking to license. With respect to solely
                         those sublicenses that Non-Ab Licensee elects to have
                         granted to it by Granting Party, Non-Ab Licensee shall
                         agree to the Third Party Obligations incident to such
                         sublicenses and thereafter shall be responsible for
                         paying any and all fees and royalties due such third
                         parties on sales of Non-Ab Licensed Product(s), whether
                         such payments are required to be paid directly by
                         Granting Party to such Third Party.

11.  Product Collaboration Benchmark Payments. In the event a Party develops
     and/or commercializes a License Product(s), such Party shall be required to
     make the following benchmark payments to the other Party with respect to
     each Licensed Product(s):

     Therapeutic Licensed Product(s)
     ------------------------------

     Initiation of Phase I/II                   [***]
     Initiation of Phase III                          [***]
     First regulatory filing (BLA or equivalent)
             in any Major Market                      [***]
     First Approval of a marketing application
             in any Major Market                      [***]

     Provided, however, the benchmark payment of [***] in respect of initiation
     of Phase I/II shall not be payable by CAT.

     Diagnostic Licensed Product(s)
     ------------------------------

     IND or IDE or equivalent                          [***]
     PMA or BLA or equivalent                          [***]
     Regulatory marketing Approval                    [***]

     With respect to each Licensed Product, a benchmark payment shall be payable
     only upon the initial achievement of such benchmark and no amounts shall be
     due for subsequent or repeated achievement of such milestone. All benchmark
     payments set forth in this Article II shall be made within thirty (30) days
     of the related event.

12.  CAT's Conditional Right of Sublicense:

     12.1 GI Option Right.

          (1)  In the event CAT develops a Licensed Product following completion
               of Phase II clinical trials in the first Major Market Country, GI
               shall have the exclusive option to negotiate an agreement under
               which CAT shall grant to GI a worldwide, exclusive, sublicensable
               license under CAT's rights under

                                       19
<PAGE>

                 Product Collaboration IP and under Product Collaboration
                 Technology relating to the Licensed Product, to develop,
                 manufacture, use and sell such Licensed Product. CAT shall

                 (1)  pursuant to applicable laws, provide to GI a comprehensive
                      Phase II Clinical Trial written report setting out the
                      data, including, but not limited to, patient
                      characteristics (e.g. demographics), patient
                      inclusion/exclusion criteria, study design (e.g.
                      randomized, blinded, unblinded, etc.), protocol, results
                      of the primary efficacy outcome by treatment and adverse
                      effects/events by treatment, patient drop-out data, and
                      statistical data, all in sufficient detail to enable GI to
                      reasonably enter such Licensed Product into Phase III, and

                 (2)  disclose to GI all required fees and royalties, if any,
                      payable under agreements entered into by CAT as of such
                      filing date and all third party rights under option or
                      license to CAT which specifically relate to the Licensed
                      Product, so GI can undertake a reasoned evaluation of its
                      interest in exercising its option under this Section 12.1.

     12.2   GI Exercise. If GI exercises its option to negotiate an agreement
            with CAT under Section 12.1, such agreement shall be negotiated in
            accordance with the following terms and conditions:

            (1)  GI will have [***] after receiving a comprehensive Phase II
                 Clinical Trial written report from CAT to negotiate in good
                 faith with CAT and provide CAT an offer of terms to the
                 Licensed Product. If, pursuant to a binding letter of intent,
                 the parties can agree to terms for such Licensed Product, GI
                 shall take over all future development of the Licensed Product,
                 and CAT shall grant to GI the license referred to in Section
                 12.1.

                 Any offer made by GI pursuant to this Section 12.2(a) shall at
                 a minimum provide for royalties sufficient to discharge any
                 required third party royalties disclosed by CAT pursuant to
                 Section 12.1(a)(ii).

            (2)  If CAT is not satisfied with the GI offer made in accordance
                 with Section 12.2(a), CAT shall have [***] to seek an
                 alternative partner to develop the Licensed Product and enter
                 into a binding letter of intent with such partner in accordance
                 with the following provisions.

                 (1)  Benchmark payments offered by any third party and accepted
                      by CAT for the Licensed Product must [***]. The discount
                      rate [***] will be the Citicorp USA Inc. prime rate at
                      time of negotiation [***]. For the purpose of calculating
                      [***] under this Section 12.2(b) the following

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<PAGE>

                   timing definitions will apply: (a) Phase III Clinical Trials
                   shall be [***] the completion and receipt by GI of the Phase
                   II Clinical Trial report, (b) registration submission will
                   occur [***] and, (c) registration approval will occur [***].

              (2)  Royalty rates offered by any third party and accepted by CAT
                   must exceed those offered by GI to CAT by [***] for example,
                   if GI offers [***], then royalty rates offered by any third
                   party and accepted by CAT must exceed [***].

              (3)  If a third party offer for the Licensed Product exceeds the
                   GI offer by the guidelines outlined in this Section 12.2 and
                   is accepted by CAT, GI shall receive from CAT the benchmark
                   payments and running royalty that would be owed by CAT to GI
                   hereunder as if CAT were to have developed and sold the
                   Licensed Product. GI shall forego any other rights in such
                   Licensed Product.

         (3)  If CAT cannot exceed the GI offer by the guidelines outlined in
              this Section 12.2, then CAT shall accept the GI offer.

         (4)  Any offer made by GI pursuant to this Section 12.2 shall be deemed
              Confidential Information and shall not be disclosed to any third
              parties.

    12.3 In the event that GI does not exercise its option to negotiate an
         agreement with CAT under Section 12.1, and CAT therefore seeks a
         partner after the initiation of Phase III Clinical Trials for global or
         local rights, GI shall be notified and allowed a reasonable first
         opportunity to negotiate in good faith to acquire such rights.

13. Development and Commercialization of Licensed Products.

         (1)  Each Party shall use reasonable efforts, consistent with the usual
              practices followed by such Party in pursuing drug development and
              commercialization, at its own expense, to develop and
              commercialize its Licensed Product(s) on a commercially reasonable
              basis in such countries in the world where in the Party's opinion,
              it is commercially viable to do so.

          (2) The obligations of a Party with respect to any Licensed Product(s)
              under subparagraph (a) above is expressly conditioned upon the
              continuing absence of any adverse condition or event relating to
              the safety or efficacy of the Licensed Product(s), and such
              obligations of a Party shall be delayed or suspended so long as in
              such Party's opinion any such condition or event exists.

                                       21
<PAGE>

14.  Product Collaboration Royalties.

     14.1 Payment. In the event a Party commercializes a Licensed Product(s),
          such Party shall, for each Licensed Product(s), pay to the other Party
          royalties on a country-by-country basis in an amount equal to:

          (1)  [***] of Net Sales of Therapeutic Licensed Products, and

          (2)  [***] of Net Sales of Diagnostic Licensed Products.

          Royalties with respect to Licensed Product(s) shall be payable for the
          later of a period:

          (a)  of ten (10) years from the Date of First Commercial Sales or

          (b)  from the Date of First Commercial Sales to the last to expire of
               the Valid Patent Rights of the CAT Antibody Patents, on such
               sales that, but for the license granted pursuant to Section 10.1,
               would infringe such CAT Antibody Patents, provided

               (1)  only one royalty shall be due with respect to the same unit
                    of Licensed Product, and

               (2)  no royalties shall accrue on the disposition of Licensed
                    Product in reasonable quantities by a Party or its
                    sublicensees as samples (promotion or otherwise) or as
                    donations (for example, to non-profit institutes or
                    government agencies for a non-commercial purpose.)

     14.2 Third Party Licenses.

          (1)  MRC and Dyax Licenses. Under the terms of the MRC License (as
               ---------------------
               defined in Exhibit B) and the Dyax License (as defined in Exhibit
               B), CAT represents that GI, as consideration for GI's rights
               under such licenses, is obligated to pay CAT (for the benefit of
               Dyax and MRC) certain royalties on Net Sales of Licensed Products
               and Research Products ("GI/MRC/Dyax Sublicenses Royalties" at the
               royalty rates set forth in Exhibit B). In addition to the
               royalties due pursuant to Section 14.1, GI hereby agrees to (a)
               pay to CAT such GI/MRC/Dyax Sublicensee royalties as are due
               under the terms of the MRC and Dyax License and (b) make such
               payments directly to CAT (for the benefit of Dyax and MRC).

                                       22
<PAGE>

          As provided in Section 15.7, for Research Products, such GI/MRC/Dyax
          Sublicense Royalties are included in the royalty amounts set forth in
          subparagraphs (a) and (b) of Section 15.7.

          (2)  CAT Representations. CAT hereby agrees that during the term of
               this Agreement:

               (1)  With respect to royalty payments payable by GI hereunder, it
                    will apply all applicable offsets available under the MRC
                    and/or Dyax Agreement

               (2)  the Dyax and/or MRC License shall not be amended or modified
                    [***] and

               (3)  a) in the event the Dyax and/or MRC license are amended or
                    modified to create more favorable GI/MRC/Dyax Sublicense
                    Royalties than those existing on the Effective Date, such
                    more favorable terms shall be offered to GI or b) in the
                    event more favorable commercial terms with respect to the
                    Dyax and/or MRC License are available to other licensees of
                    CAT ("Other Licensee"), CAT shall be obligated to use
                    diligent efforts to cause such more favorable terms to be
                    offered to GI. GI shall have the right to accept such more
                    favorable terms or retain the terms set forth in this
                    Agreement. b) With respect to (b) of this subparagraph
                    (iii), such notification shall set forth the more favorable
                    terms, as well as any less favorable terms and conditions
                    agreed upon by the Other Licensee in exchange for such more
                    favorable terms. GI shall have the right to accept or reject
                    all of the varying terms, but shall not have the right to
                    accept solely the more favorable GI/MRC/Dyax Sublicensees
                    Royalties.

               Subject to (a) CAT obligations as set forth in subparagraphs (i),
               (ii), and (iii) of this Section 14.2(b) and (b) GI's rights to
               the MRC License and Dyax License granted under this Agreement,
               CAT may, in its sole discretion, modify or amend such MRC and/or
               Dyax License(s), provided no such modification or amendment shall
               adversely affect GI's rights hereunder.

          (3)  Third Party Licenses Relating to CAT Antibody Patents. In the
               -----------------------------------------------------
               event CAT determines in its sole discretion during the term of
               the Product Collaboration to enter into one or more additional
               third party patent licenses ("Third Party Antibody License(s)"),
               which, but for such licenses, the practice hereunder of the
               technology claimed by the CAT Antibody Patents, would infringe
               such Third Party Antibody License(s), CAT shall notify GI of

                                       23
<PAGE>

               any additional royalties payable by sublicensees under such Third
               Party Antibody License(s). The first [***] on Net Sales of
               Licensed Products, due under such Third Party Antibody
               License(s), shall be borne by CAT and such royalties in excess of
               [***] shall be subject to the provision of Section 14.2(c).

          (4)  Other Third Party Licenses. In the event that one or more patent
               --------------------------
               licenses from third parties (excluding MRC and Dyax Licenses and
               Third Party Antibody Licenses) are required by a Party or its
               sublicense in order to develop, make, have made, import, use, or
               sell Licensed Product(s) ("Other Third Party Licenses"), any
               consideration actually paid under such Third Party License(s) by
               a Party or its sublicense, shall not be creditable against any
               royalty payments due under this Agreement.

     14.3 Reporting and Auditing (or Payment) Reports and Payment. Each Party
          shall deliver to the Party to which royalties are owed, within sixty
          (60) days after the end of each calendar quarter, a written report
          showing its computation of royalties due under this Agreement upon Net
          Sales by such Party, and sublicensees during such calendar quarter.
          All Net Sales shall be segmented in each such report according to
          sales by such Party, and such sublicensee, as well as on a country-by-
          country basis, including the rates of exchange used to convert such
          royalties to United States Dollars from the currency in which such
          sales were made. Simultaneously with the delivery of each such report,
          the paying Party shall tender payment in United States Dollars of all
          royalties shown to be due therein.

          For purposes hereof, the rates of exchange to be used for converting
          royalties hereunder to United States Dollars shall be the closing
          price published for the purchase of United States Dollars in the East
          Coast Edition of the Wall Street Journal for the last business day of
          the calendar quarter for which payment is due.

     14.4 Foreign Royalties. Where royalties are due hereunder for sales of
          Licensed Products in a country where, by reason of currency
          regulations or taxes of any kind, it is impossible or illegal for such
          Party or its sublicensee to transfer royalty payments to the licensor
          Party for Net Sales in that country, such royalties shall be deposited
          in whatever currency is allowable by the person or entity not able to
          make the transfer for the benefit or credit of the licensor Party in
          an accredited bank in that country that is reasonably acceptable to
          the licensor Party.

     14.5 Taxes. Any and all income or similar taxes imposed or levied on
          account of the receipt of royalties payable under this Agreement which
          are required to be withheld by a Party shall be paid by such Party or
          its sublicensees on behalf of the licensor Party and shall be paid to
          the proper taxing authority. Proof of payment shall be secured and
          sent to the licensor Party by such Party or sublicensees as evidence
          of

                                      24
<PAGE>

           such payment in such form as required by the tax authorities having
           jurisdiction over such Party or its sublicensees. Such taxes shall be
           deducted from the royalty that would otherwise be remittable by the
           Party or its sublicensees.

     14.6  Records. Each Party shall keep, and shall require all sublicensees to
           keep, for a period of at least three (3) years, full, true and
           accurate books of accounts and other records containing all
           information and data which may be necessary to ascertain and verify
           the royalties payable thereunder. During the term of this Agreement
           and for a period of three (3) years following its termination, each
           Party shall have the right from time to time (not to exceed once
           during each calendar year) to inspect in confidence, or have an
           agent, accountant or other representative inspect in confidence, such
           books, records and supporting data.

15.  Contract Research Program - General.

     The following provisions of this Article 15 shall be applicable to the
Contract Research Program:

     15.1  General. GI and CAT shall engage in a Contract Research Program upon
           the terms and conditions set forth in this Agreement. The activities
           which may be undertaken in the course of the Contract Research
           Program are set forth in this Article 15, which may be amended from
           time to time upon the mutual agreement of the Parties.

     The Contract Research Program consists of the following components:

           a)    Section 16 -  ProAb Services,
           b)    Section 17 -  SKIM Services,
           c)    Section 18 -  ProAb/SKIM Installation and Support
           d)    Section 19 -  Contract FTE Services,
           e)    Section 20 -  CAT Library Services, and
           f)    Section 21 -  Optional Antibody Engineering Services

     15.2  Conduct of Contract Research Program. GI and CAT shall conduct the
           Contract Research Program in good scientific manner, and in
           compliance in all material respects with all requirements of
           applicable laws, rules and regulations and all applicable good
           laboratory practices to achieve their objectives efficiently and
           expeditiously. GI and CAT each shall use commercially reasonable and
           diligent efforts in undertaking the work set out in the Contract
           Research Program.

     15.3  Intellectual Property. Except as provided in Article 20 hereof, the
           entire right, title and interest in all discoveries, improvements,
           processes, formulas, data (including, but not limited to all ICC
           Data), inventions, know-how, and trade secrets, patentable or
           otherwise, arising from the Contract Research Program ("Contract
           IP"), shall be

                                       25
<PAGE>

          owned by GI. CAT shall promptly disclose to GI the making, conception
          or reduction to practice of all Contract Research Program IP.
          Improvements to Background IP (GI or CAT Background IP, as
          appropriate) shall not be included in Contract IP. GI shall have the
          right to seek or continue to seek or maintain patent prosecution on
          all Contract IP.

     15.4 Contract Research Program Term. Except as otherwise provided in this
          Agreement, the term of the Contract Research Program shall commence on
          the Effective Date and continue for the later of (a) three years or
          (b) completion by CAT of all of its performance obligations undertaken
          pursuant to the Contract Research Program. GI may extend the term of
          the Contract Research Program for an additional year by giving [***]
          written notice to CAT.

     15.5 Development and Commercialization of Research Product(s).

          (1)  GI shall use reasonable efforts, consistent with its usual
               practices in pursuing drug development and commercialization, at
               its own expense, to develop and commercialize Research Product(s)
               on a commercially reasonable basis in such countries of the world
               where in GI's opinion, it is commercially viable to do so.

          (2)  The obligations of GI with respect to any Research Product(s)
               under subparagraph (a) above are expressly conditioned upon the
               continuing absence of any adverse condition or event relating to
               the safety or efficacy of the Research Product(s), and such
               obligation shall be delayed or suspended so long as in GI's
               opinion any such condition or event exists.

          (3)  Notwithstanding anything in this Agreement to the contrary, in
               the event GI breaches its obligations under this Section 15.5, GI
               shall grant to CAT a non-exclusive patent license to develop and
               commercialize such Research Product. CAT's sole remedy with
               respect to such Research Product, shall be this grant of a non-
               exclusive patent license.

     15.6 Contract Research Benchmark Payments. In the event that GI develops
          and/or commercializes a Research Product(s), GI shall be required to
          make the following benchmark payments to CAT with respect to each
          Research Product:

     Therapeutic Research Product(s)
     -------------------------------

     License Fee                                       [***]
     Initiation of Phase I/II                    [***]
     Initiation of Phase III                           [***]
     First Regulatory Filing in any Major Market [***]

                                       26
<PAGE>

     First Approval of a marketing application
     in any Major Market                               [***]

     [***] of all such benchmark payments (excluding License Fees) shall be
     creditable against royalties due with respect to such Research Products(s).

     The License Fee shall not be owing if GI elects to purchase Ab engineering
     services under the Contract Research Program.

     Diagnostic Research Product(s)
     ------------------------------

     IND or IDE or equivalent        [***]
     PMA or BLA or equivalent        [***]
     Regulatory marketing Approval   [***]

     With respect to each Research Product, a benchmark shall be payable only
     upon the initial achievement of such benchmark and no amounts shall be due
     for subsequent or repeated achievement of such milestone.  All benchmark
     payments set forth in this Section 15.6 shall be made within thirty (30)
     days of the related event.

     15.7    Contract Research Royalties. In the event GI commercializes a
             Research Product(s), such Party shall, for each Research
             Product(s), pay to CAT royalties on a country-by-country basis in
             an amount equal to:

             (1)  Therapeutic Research Products. A royalty totaling [***] of Net
                  -----------------------------
                  Sales of Therapeutic Research Products, [***].

             (2)  Diagnostic Research Products. A royalty totaling [***] of Net
                  ----------------------------
                  Sales of Diagnostic Research Products,  [***].

Royalties with respect to Research Product(s) shall be payable for the later of:
(a) a period of ten (10) years from the Date of First Commercial Sale or (b) a
period from the Date of First Commercial Sales to the last to expire of the
Valid Patent Rights of the CAT Antibody Patents, on such sales that, but for the
rights granted by CAT to GI under such CAT Antibody Patents, would infringe such
CAT Antibody Patents, provided

                  (1)  only one royalty shall be due with respect to the same
                       unit of Licensed Product, and

                  (2)  no royalties shall accrue on the disposition of Research
                       Product in reasonable quantities by a Party or its
                       sublicensees as samples (promotion or otherwise) or as
                       donations (for example, to non-profit institutes or
                       government agencies for a non-commercial purpose).

                                       27
<PAGE>

     15.8 Third Party Licenses.

          (1)  CAT represents that as of the Effective Date, to the best of its
               knowledge, there are no Third Party Licenses (defined below)
               which are needed by GI in order to develop, make, have made,
               import, use or sell Research Products.

          (2)  Notwithstanding anything herein to the contrary, in the event
               that one or more additional third party licenses are required by
               GI or its sublicensee in order to develop, make, have made,
               import, use or sell Research Products ("Third Party Licenses")
               because absent such Third Party Licenses, the practice of the
               technology covered by the CAT Antibody Patents would infringe the
               granted patent rights of such Third Party Licenses, any royalty
               payments due third parties under such Third Party Licenses shall
               be

               (1)  [***], and

               (2)  creditable against royalties due CAT pursuant to Section
                    15.7, provided however, under no circumstances shall the
                    royalty payment due CAT be less than [***] of Net Sales on
                    Research Products or [***] on Diagnostic Products.

          Further provided, it is understood by the Parties that the royalty
          ------- --------
          rates set forth in this subparagraph (ii) ("Minimum Rate") include and
          are based on the GI/MRC/Dyax Sublicense Royalty existing on the
          Effective Date and that reductions in such GI/MRC/Dyax Sublicensee
          Royalty pursuant to Section 14.2 hereof, shall result in a
          corresponding reduction in the Minimum Rate, however, under no
          circumstances shall the Minimum Rate be less than [***].

          (3)  Subject to subparagraphs (a) and (b) of this Section 15.8, In the
               event that one or more additional patent licenses from third
               parties are required by GI or its sublicensee in order to
               develop, make, have made, import, use, or sell Research
               Product(s) ("Future Third Party Licenses"), any consideration
               actually paid under such Future Third Party License(s) by GI or
               its sublicensee, shall not be creditable against any royalty
               payments due under this Agreement.

     15.9 Most Favored Customer. During the term of the Contract Research
          Program CAT shall not offer to any third party more favorable terms
          for the ProAb and/or SKIM Services provided under the Contract
          Research Program that the terms available to GI.

                                       28
<PAGE>

     15.10  Grant of CAT Contract Background IP. As consideration for payment by
            GI to CAT of a License Fee (pursuant to Section 15.6), or purchase
            by GI of Ab Engineering Services (pursuant to Section 21,) CAT
            shall, with respect to the Research Product(s) for which such
            License Fee or Ab Engineering Services applies, grant to GI a
            worldwide, exclusive license (with right of sublicense) to all of
            CAT's rights and interests in and to all CAT Contract Background IP
            to develop, make, have made, use, sell, offer to sell or import
            Research Product(s), provided however, such grant shall, to the
                                 ----------------
            extent evidenced in its contemporaneous written records, be subject
            to (a) any prior non-exclusive or exclusive grant by CAT of such
            rights to third parties with respect to such Research Product(s) or
            (b) CAT's exclusive right to continue any current bona fide internal
            development project directed to the research, development and
            commercialization of such Research Project.

16.  Contract Research Program (Part I - ProAb Services).

     16.0   Non-Exclusive Access. Subject to Section 15.10, the parties agree
            that CAT shall provide ProAb to GI on a non-exclusive basis and that
            during the term of the Contract Research, CAT may provide ProAb
            services to third parties, including ProAb services on any Research
            Antigens.

     16.1   GI Antigen Delivery.

            (1) Delivery. GI may deliver Ful Length Sequence or portions thereof
                for up to [***] antigens ("Research Antigens") per quarter,
                [***] will be Full Length Sequence.

            (2) Limited Right of Non-Acceptance. CAT shall be obligated to
                accept each Research Antigen delivered by GI and pursuant to
                Section 16.2, generate Research Abs and ICC Data for such
                Research Antigens, provided however, CAT shall not be obligated
                to accept any Research Antigen if within [***] business days of
                delivery of such Research Antigen by GI, as evidenced in its
                contemporaneous written records, CAT correctly determines:

                [***]

     If during the term of the Product Collaboration, any of the above projects,
     exclusive licenses or letter of intent terminate, GI's right to redeliver
     and CAT's obligation to accept such non-accepted Research Antigen is
     restored.

            (3) Replacement and Non-Acceptance Credit. For each Research Antigen
                CAT declines to accept pursuant to this Section 16.1, (i) GI
                shall have an opportunity to present an additional Research
                Antigen as a replacement, or

                                       29
<PAGE>

               (ii) an amount [***] shall be credited against any amounts due
               CAT pursuant to Section 17.2.

     16.2 CAT Diligence. Subject to Section 16.1 hereof, CAT shall use
          commercially reasonable and diligent efforts to generate Research Abs
          and ICC Data for each of up to [***] delivered by GI to CAT each
          quarter (the "Quarterly Maximum"), and with respect to each such
          Research Antigen,:

          (1)  if GI delivers Research Antigen polypeptide sequence,

               (1)  CAT shall select [***]

               (2)  [***], or

          (2)  if GI delivers [***]

          (3)  if GI delivers [***]

               (1)  CAT shall [***], provided however,

               (2)  for purposes of calculating the Quarterly Maximum in this
                    Section 16.2, [***]

          (4)  CAT shall screen at least [***] Research Abs to each peptide
               synthesized pursuant to this Section 16.2;

          (5)  CAT shall (i) maintain reasonable quantities of [***] and (ii)
               screen such Research Abs against the ICC Tissue Panel;

          (6)  CAT shall develop a method to transmit ICC Data to GI
               electronically; and

          (7)  Within seven (7) business days of a request from GI, CAT will
               dispatch an aliquot of any Research Ab to GI, in a form such that
               it can be used and propagated.

     16.3 ProAb Minimum Performance Requirements.

          (1)  CAT shall test all Research Abs in a ELISA format in which the
               protein or peptide immunogen is immobilized on the solid-phase. A
               Research Ab will be deemed to have satisfied the "Minimum
               Performance Requirements" if:

               (1)  [***]

                                       30
<PAGE>

               (2)  [***]

          (2)  With respect to all Research Abs generated by CAT pursuant to
               this Article 16, in any calendar quarter, [***]

          (3)  If during any quarterly period, any Research Abs fail to meet or
               exceed the Minimum Performance Requirements, for such period, GI
               research funding obligation shall be calculated as follows:

               Payment due CAT equals:

               [***]

          (4)  If with respect to any Research Antigen, CAT is unable to
               generate any Research Abs satisfying the Minimum Performance
               Requirements, GI shall be permitted to substitute such Research
               Antigen with another Research Antigen, provided this right of
               substitution shall only exist upon CAT's failure to satisfy its
               performance obligations under subparagraph (a) of this Section
               16.3.

17.  SKIM Service and Fees.

     17.1 General. GI may deliver the full-length sequences (or portions
          thereof) of [***]. These are expected to be (but are not limited to
          being) of non-human origin. CAT will generate antibodies against these
          sequences, as specified in section 16.2(a) and (b), but will not
          proceed further to the ICC analyses envisaged in that section. CAT
          will dispatch an aliquot of each antibody to GI in a form that can be
          used and propagated within [***] after the sequence has been delivered
          by GI. In addition, CAT will maintain a reasonable quantity of each
          antibody and dispatch aliquots to GI upon request. The Minimum
          Performance Requirements and conditions specified in Section 16.3 for
          ProAb will also apply to the antibodies generated in the SKIM service.

     17.2 SKIM and ProAb Fees. Subject to Sections 16.1(c) and 16.3, in
          consideration for its performance of (a) the SKIM services
          contemplated by this Article 17 and (b) the ProAb services
          contemplated by Article 16, GI shall pay CAT [***].

18.  ProAb and SKIM Services - Installation and Technical Support.

     18.1 Installation and Acceptance. CAT shall use commercially reasonable
          efforts to install the Hardware/Software within 120 days of the
          commencement of the Contract Research Program. Following such
          installation, GI shall have forty-five (45) days to

                                       31
<PAGE>

          conduct acceptance testing. Such installation shall be deemed complete
          upon written notice from GI to CAT indicating GI's acceptance of the
          Hardware/Software.

     In the event GI sends notice of non-acceptance to CAT, such non-acceptance
     notice shall identify the manner in which the Hardware/Software fails to
     satisfactorily perform, with sufficient specificity to permit CAT to
     correct such nonconformity. CAT shall have up to thirty (30) days to cure
     such deficiency. GI shall cooperate with CAT in correcting such deficiency.
     In the event of any deficiency, GI shall have the right to withhold those
     portions of the payments set forth in Article 17, allocable to ProAb
     indicating that the Hardware/Software does not perform to GI's
     satisfaction, CAT shall make reasonable efforts to promptly correct any
     such deficiency.

     18.2   User and Technical Support. GI shall be entitled to receive
            technical support services from CAT during the term of the Contract
            Research Program, as described below:

     18.2.1 Remote System Support.

            (1)  User Support. CAT will provide, at its expense, remote
                 consultation regarding the Hardware/Software, comprised of
                 support, problem determination and resolution service by
                 telephone and electronic mail Monday-Friday, between the hours
                 of 9:00 A.M. and 5:00 P.M. UK time, provided, such support
                 shall be limited to [***] consultations per month ("Basic User
                 Support"). Additional user support is available at a cost of
                 [***] ("Additional User Support").

            (2)  Response Time. With respect to all Basic User Support and
                 Additional User Support, GI shall receive from CAT

                 (1)  [***] response times for at least [***] of user
                      consultation requests and

                 (2)  [***] response times for all such requests.

            (3)  Technical Support. CAT shall provide unlimited support relating
                 to Hardware/Software performance ("Tech Support"). In the event
                 of a request for Tech Support,

                 (1)  for instances of non-performance of the Hardware/Software
                      (or portions thereof), within [***] of such request, CAT
                      shall cure such non-performance and

                                       32
<PAGE>

               (2)  for all other instances, CAT shall, within [***] of such
                    request, detail its proposed course of action for curing the
                    deficiency and shall cure such deficiency within [***]
                    thereafter.

18.3 On-site Training. Upon installation and a determination by GI pursuant to
     subparagraph (a) of this Section 18.4 that the Hardware/Software conforms
     to the Specifications, CAT shall provide (a) a total of [***] of on-site
     end user training and (b) a total of [***] of administrator training (i.e.,
     server side administration) at no additional charge to GI. Such training
     session is "open attendance" and any GI selected personnel may participate.
     Any training beyond the initial days of training described above, will be
     provided at a cost of [***] per hour.

18.4 Improvements.

     (1)  Improvements to ProAb. CAT will during the term of the Contract
          Research Program and the period [***] years thereafter, make available
          to GI, of such improvements in the ProAb database technology relating
          to GI's contemplated use of such technology hereunder, including, but
          not limited to, improvements relating to Hardware/Software and the
          production of information or analysis of data.

     (2)  Additional Technologies. In the event GI seeks from CAT software or
          hardware not contemplated under this Article 18, CAT agrees to consult
          with GI regarding such request at [***].

     (3)  Related Licenses. CAT hereby agrees that it has granted and/or will
          cause to be granted to GI all licenses relating to Hardware/Software
          that are necessary for GI to enjoy all of its rights concerning GI's
          use of such Hardware/Software as contemplated under this Agreement
          ("Related Hardware/Software Licenses").

     With respect to any such Related Hardware/Software Licenses, CAT represents
     and warrants that

     (a)  GI's sublicensed rights under such licenses shall be perpetual and
     irrevocable, in the absence of material breach by GI and

     (b)  the terms of such licenses shall be reasonable and shall not adversely
     effect the rights of GI contemplated under the Contract Research Program
     nor shall create any additional obligations not contemplated by the
     Contract Research Program.

18.5 With respect to any Related Hardware/Software Licenses, GI represents and
     warrants that it will use good faith efforts to accept the terms of such
     licenses.

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<PAGE>

     18.6 Indemnification. If any claim is made against GI asserting that any
          technology, including but not limited to the Hardware/Software, ProAb
          and SKIM technologies, infringes any patent, copyright or other
          intellectual property right, CAT shall indemnify and defend GI with
          respect to such claim.

19.  Contract FTE Services.

          (1)  GI shall pay to CAT [***] in increments of [***] for [***] to be
               supplied by CAT ("Research FTEs").

          (2)  Each Research FTE shall have appropriate technical credentials,
               experience and knowledge to perform the work associated with the
               Contract Research Program.

          (3)  The Research FTEs shall perform such work within the Contract
               Research Program, as GI selects, in its sole discretion,
               including, but not limited to, antibody engineering, Proximol
               services and SKIM, provided however, such tasks shall exclude
               performance of ProAb services.

20.  Contract Research Program- Liberty Research License.

     20.1

          (1)  Library Trial Use. At any time during the Contract Research
               Program, GI may elect and CAT shall transfer and grant to GI a
               license to utilize an aliquot of the CAT Library Technology
               sufficient to perform selections against up to [***] ("Aliquot of
               the CAT Library"), on a trial basis, pursuant to the terms of
               this Section 20.1(a), for the sole purpose of GI determining GI's
               ability to effectively manage and utilize such CAT Library
               Technology consistent with GI's expectations ("Trial Use"). In
               connection with such Trial Use, CAT hereby agrees to grant such
               licenses and to transfer such know-how as is necessary for GI to
               assess its liability to effectively and efficiently manage and
               utilize the CAT Library Technology. As part of the Contract
               Research Program, such Trial Use shall also be subject to Article
               15 hereof. Upon GI's completion of any Trial Use, GI shall,
               subject to subparagraph (b) of this Section 20.1, promptly return
               the Aliquot of the CAT Library to CAT.

          GI shall use the Aliquot of the CAT Library solely for the purposes
          expressly set forth in this Section 21.1(a) and shall not distribute
          such Aliquot of the CAT Library to any third party.

                                       34
<PAGE>

          GI shall limit the use of the Aliquot of the CAT Library to GI
          employees working on matters relating to the Contract Research Program
          and maintain the same degree of security with respect to the Aliquot
          of the CAT Library as is maintained by GI for its own similar
          material.

          GI shall comply with all applicable federal rules, regulations and
          guidelines applicable to GI's use of the Aliquot of the CAT Library
          and shall assume full responsibility for any claims or liabilities
          arising solely from GI's use of the Aliquot of the CAT Library
          hereunder.

          (2)  Library Option Right. At any time during the period eighteen (18)
               months following the Effective Date until six (6) months
               following the expiration of the term of the Contract Research
               Program, GI may elect and CAT shall grant to GI the right to
               utilize the CAT Library Technology for GI's research purposes in
               GI's sites. Each such site license includes:

               (1)  transfer of the CAT Library Technologies necessary for GI to
                    screen CAT's phage display library for scFvs and

               (2)  a non-exclusive license in the field of human health to use
                    such scFvs and any derivatives of progeny thereof for GI's
                    research purposes (including its work with collaborators).

     20.2 Exercise of Right. Upon exercise by GI of its rights set forth in
          Section 20.1 above,

          (1)  CAT shall promptly transfer the CAT Library Technology to GI and

          (2)  shall provide five (5) days of onsite technical support and
               training with respect to such CAT Library Technology.

     20.3 License Payment. As full consideration for

          (1)  CAT's grant to GI of a non-exclusive, fully paid up, worldwide,
               sublicensable (to GI collaborators for GI internal research only)
               site license to use the CAT Library Technology for any research
               purpose ("Site License"), and

          (2)  CAT's transfer and technical support of such CAT Library
               Technology, as contemplated by Section 20.2 hereof, GI shall make
               license payment(s) as follows:

               [***]

                                       35
<PAGE>

               With respect to such payments, as applicable, [***] shall be paid
               to CAT upon exercise by GI of its right to the Site License and
               [***] shall be payable upon completion of CAT's obligations as
               set forth in Section 20.2 hereof.

     20.4 Option for Commercial License. With respect to any Research Product(s)
          arising from GI's use of the CAT Library Technology, GI retains an
          option to exclusively license (with right of sublicense) from CAT all
          of CAT's rights and interests (owned by or licensable by CAT) in and
          to such intellectual property relating to CAT Library Technology
          reasonably necessary for GI to develop, make, have made, use, sell,
          offer to sell, or import such Research Products ("Library Option
          Rights") provided however, GI' right to exercise such
                   ----------------
          an option is subject to [***].

     20.5

          (1)  Library Options. Notwithstanding anything herein to the contrary,
               GI may, in its sole discretion, request [***] of the options set
               forth in Section 20.4 ("Library Options"), provided GI preserves
               the right to exercise and CAT is obligated to grant, additional
               Library Options so long as GI agrees with respect to such
               Research Products, benchmark and royalty payments as provided in
               Article 15.

          (2)  Exercise of Library Option. Subject to Section 15.10, GI may,
               with respect to any Research Product, at any time following the
               commencement of the Contract Research Program, exercise the
               exclusive development and commercialization rights set forth in
               Section 20.4, provided with respect to each such Research
               Product, GI shall be obligated to pay benchmark and royalty
               payments as provided in Article 15.

21.  Optional Antibody Engineering Services.

     21.1 Services. At any time during the term of the Contract Research Program
          and with respect to any Antibody, GI may request and CAT shall provide
          Ab Engineering Services pursuant to the terms set forth in Exhibit E.

     21.2 No Concurrent Projects. Under no circumstances shall CAT, with respect
          to engineering services procured by GI pursuant to this Article 21, be
          obligated to undertake more than one Ab Engineering Project at a time.

     21.3 Project Options. Notwithstanding anything herein to the contrary,
          during the term of the Contract Research Program, GI may, in its sole
          discretion, [***], provided, GI preserves the right to request and CAT
          is obligated to grant additional Ab Engineering Projects, provided GI
          agrees to compensate CAT pursuant to the terms set forth in Exhibit E.

                                       36
<PAGE>

22.  Patent Prosecution and Infringement.

     22.1 Responsibility for Patenting Product Collaboration IP.

          (1)  Product Collaboration IP. Subject to subparagraph (b) of this
               Section 22.1, GI shall, at its expense, have the right to seek or
               continue to seek or maintain Patent protection on any Product
               Collaboration IP, in any country. If GI elects not to seek or
               continue to seek or maintain patent protection on any such rights
               in any country, CAT shall have the right, at its expense, to
               file, procure and maintain in such countries patents on such
               rights.

          (2)  Rights Upon Exclusive License Exercise. Notwithstanding anything
               herein to the contrary, upon CAT's payment of an Option Payment
               for an Available Ab pursuant to Section 9.2, or selection of an
               Available Ab pursuant to Section 9.3,

               (1)  GI shall, with respect to the Product Collaboration IP to
                    which CAT has been granted an exclusive license, assign to
                    CAT (x) the right to seek or continue to seek or maintain
                    patent protection on any such Product Collaboration IP, in
                    any country and (y) with respect to such Product
                    Collaboration IP, to initiate an infringement or other
                    appropriate suit against any such third party and

               (2)  CAT shall reimburse GI for any and all patent related
                    expenses incurred by GI with respect to such licensed
                    Product Collaboration IP.

          (3)  CAT IP Rights. CAT shall have the right to seek or continue to
               seek or maintain patent protection on any CAT IP in any country.
               If CAT elects not to seek or continue to seek or maintain patent
               protection on any CAT IP in any country, GI shall have the right,
               at its expense, to file, procure and maintain in such countries
               Patents on such CAT IP.

          (4)  Patent Corporation. Each Party shall advise the other applicable
               Party of all decisions taken under this Article 22 in a timely
               manner in order to allow the other applicable Party to protect
               its rights under this Section. Each Party shall provide the other
               applicable Party (or Parties) with copies of all substantive
               communications from all patent offices regarding Intellectual
               Property, promptly after the receipt thereof. Each Party shall
               provide the other applicable Party with copies of all proposed
               substantive communications to such patent offices regarding
               Intellectual Property, in sufficient time before the due date in
               order to enable the other applicable Party an opportunity to
               comment on the content thereof. Each Party shall

                                       37
<PAGE>

               make available to the other applicable Party, or its authorized
               attorneys, agents or representatives, such of its employees whom
               the other applicable Party, in its reasonable judgment, deems
               necessary in order to assist it in obtaining patent protection
               for the applicable Intellectual Property, in the event the Party
               with first rights to seek or continue to seek or maintain Patent
               protection on any such Intellectual Property chooses not to do
               so. Each Party shall sign or use its best efforts to have signed
               all legal documents necessary to file and prosecute patents or to
               obtain or maintain Patents at no cost to the other Parties. [***]

     22.2 Infringement.

          (1)  Notice. Each Party shall promptly report in writing to the other
               Parties during the term of this Agreement any (i) known
               infringement or suspected infringement of any of the Intellectual
               Property or (ii) unauthorized use or misappropriation of the
               Confidential Information by a third party of which it becomes
               aware, and shall provide the other Parties with all available
               evidence supporting said infringement, suspected infringement or
               unauthorized use or misappropriation.

          (2)  First Right to Bring Suit. Subject to Section 22.1(b), GI shall,
               in the first instance, have the right and the obligation to elect
               whether or not to initiate an infringement or other appropriate
               suit against any third party who at any time has infringed, or is
               suspected of infringing, any of or of using without proper
               authorization all or any portion of Product Collaboration IP. GI
               shall give CAT sufficient advance notice of its intent to file or
               not to file said suit and the reasons therefore to afford CAT an
               opportunity to make suggestions and comments regarding such suit.
               GI shall keep CAT promptly informed and shall from time-to-time
               consult with CAT regarding the status of any such suit.

               If, with respect to the Product Collaboration IP, GI elects not
               to initiate an infringement or other appropriate suit against any
               such third party, CAT, at its own expense, shall have the right
               to initiate an infringement or other appropriate suit against any
               such third party.

               The Party bringing suit for infringement shall have the sole and
               exclusive right to select counsel for any suit referred to in
               this Section 22.2 and shall, except as provided below, pay all
               expenses of the suit, including without limitation attorneys'
               fees and court costs.  If necessary, the other Party shall join
               as a party to the suit but shall be under no obligation to
               participate except to the extent that such participation is
               required as the result of being a named party to the suit.  Such
               other Party shall offer reasonable assistance to the Party
               bringing suit in connection therewith at no charge to the

                                       38
<PAGE>

               Party bringing suit except for reimbursement of reasonable
               out-of-pocket expenses incurred in rendering such assistance.

          (3)  In any suit brought by GI pursuant to this Section 22.2, GI shall
               pay [***] and receive [***].

     22.3 Claimed Infringement.

          (1)  Notice; Cooperation. In the event that a third party at any time
               provides written notice of a claim to, or brings an action, suit
               or proceeding against, any Party or any of their respective
               Affiliates or sublicensees, claiming infringement of its patent
               rights or copyrights or unauthorized use or misappropriation of
               its Confidential Information, based upon an assertion or claim
               arising out of the manufacture, use and/or sale of Products, such
               Party shall promptly notify the other Parties of the claim or the
               commencement of such action, suit or proceeding, enclosing a copy
               of the claim and/or all papers served. Each Party agrees to make
               available to the other Parties its advice and counsel regarding
               the technical merits of any such claim at no cost to the other
               Party.

23.  Confidential Information.

     23.1 Nondisclosure of Confidential Information. Neither Party may directly
          or indirectly publish, disseminate or otherwise disclose, deliver or
          make available to any person outside its organization any of the other
          Parties' Confidential Information. Each Party may disclose the other
          Parties' Confidential Information to persons within its organization
          and to its Affiliates and sublicensees who/which have a need to
          receive such Confidential Information in order to further the purposes
          of this Agreement and who/which are bound to protect the
          confidentiality of such Confidential Information. Each Party may
          disclose the other Parties' Confidential Information to a governmental
          authority or by order of a court of competent jurisdiction, provided
          that such disclosure is subject to all applicable governmental or
          judicial protection available for like material and reasonable advance
          notice is given to the other Party.

     23.2 Use of Confidential Information. Each Party shall use the other
          Parties' Confidential Information solely for the purposes contemplated
          in this Agreement or for such other purposes as may be agreed upon by
          the Party in writing.

     23.3 Agreements with Personnel and Third Parties. The Parties have or shall
          obtain agreements with all personnel and third parties who will have
          access to the other

                                       39
<PAGE>

          Parties' Confidential Information which impose comparable
          confidentiality obligations as are set forth in this Agreement on such
          personnel and third parties.

     23.4 Publications.

          (1)  Any Party may publish any manuscripts or other scientific papers
               on work conducted exclusively by that Party under the Product
               Collaboration without the written consent of the other Party.
               However, a Party may not publish (or permit a third party to
               publish) any manuscript or other scientific paper that discloses
               or uses any Confidential Information without first obtaining that
               other Party's written consent.

          (2)  Prior to the publication or other public disclosure of any
               manuscripts or other forms of disclosure describing the results
               of its work hereunder, the publishing Party shall provide (a) the
               data to be disclosed in that manuscript or other form of public
               disclosure to the other Party as soon as practicable, but at
               least four (4) weeks prior to intended submission for publication
               or other method of public disclosure, (b) a copy of the draft
               manuscript to be published, or a detailed summary of any other
               public disclosure to the other Party as soon as practicable, but
               at least two (2) weeks prior to intended submission for
               publication or other method of public disclosure, (c) a copy of
               the completed manuscript or other form of public disclosure at
               the time of submission and (d) a copy of any reviewer's comments
               on the manuscript or other form of public disclosure with a
               revised copy thereof at least two (2) weeks prior to publication.

          (3)  A Party may request that the publishing Party delete from its
               manuscripts or other scientific papers or other forms of public
               disclosure reference to Confidential Information. In addition, if
               a Party notifies another Party that it desires patent
               applications to be filed on any information to be disclosed by
               that other Party in a public forum other than in manuscripts or
               other scientific papers, the presenting Party will defer such
               presentation for a period, not to exceed thirty (30) additional
               days, sufficient to permit the Party with rights to file any
               desired patent applications to do so.

24.  Product Liability Indemnification.

     24.1 CAT Indemnification. CAT agrees to defend GI and its respective
          Affiliates, sublicensees, agents, directors, officers, employees,
          students and licensees of rights to a Licensed Product, as applicable
          (the "indemnities") (other than in settlement of a claim of
          infringement), at CAT' cost and expense, and will indemnify and hold
          harmless such indemnities from and against any and all liabilities,
          losses, costs, damages, fees, or expenses claimed by or paid to a
          third party attributable to injury to

                                       40
<PAGE>

          persons or damage to property ("Losses") arising out of or in
          connection with the manufacture, use and/or sale of any Licensed
          Producer by CAT, its Affiliates, or sublicensees (other than GI);
          provided that such Losses do not arise out of the gross negligence or
          willful misconduct of GI (with respect to CAT' obligations to the GI
          indemnities under this Section).

     24.2 GI Indemnification. GI agrees to defend CAT and its respective
          Affiliates, permitted sublicensees, agents, directors, officers,
          employees, students and licensees of rights to a Licensed Product, as
          applicable (the "indemnitee")(other than in settlement of a claim of
          infringement), at GI's cost and expense, and will indemnify and hold
          harmless such indemnitee from and against any and all Losses arising
          out of or in connection with the manufacture, use and/or sale of any
          Licensed Product or Research Product by GI, its Affiliates, or
          sublicensees (other than CAT); provided that such Losses do not arise
          out of the gross negligence or willful misconduct of CAT (with respect
          to GI's obligations to the CAT indemnitee under this Section).

     24.3 Notice; Cooperation. In the event of any such indemnifiable claim, the
          indemnified Party shall promptly notify the indemnifying Party in
          writing of the claim and the indemnifying Party shall manage and
          control, at its sole expense, the defense of the claim and its
          settlement. The indemnified Party shall cooperate with the
          indemnifying Party and may, at its option and expense, be represented
          in any such action or proceeding. The indemnifying Party shall not be
          liable for any settlements, litigation costs, or expenses incurred by
          the indemnified Party without the indemnifying Party's written
          consent, such consent to be promptly given and not unreasonably
          withheld.

     24.4 Liability Limitation. Neither GI nor CAT shall be liable for special,
          incidental or consequential damages or for loss of profit or lost
          revenue, even another party had been advised of the possibility of
          such damages.

     24.5 Insurance. Prior to initial human testing or first commercial sale of
          any Licensed Product or Research Product in any particular country, GI
          and CAT each shall either (a) secure and maintain at its own expense
          during the term of this Agreement an insurance policy or policies with
          an insurer or insurers acceptable to the other Parties or (b) self
          insure at a level sufficient to protect the Parties against any and
          all risks typically insured against by businesses comparable to the
          Party, including without limitation general and products liability,
          arising or occurring upon or in connection with each Party's business.
          Such policy or policies shall include general and products liability
          coverage in an amount typically secured by businesses comparable to
          the Party. Each Party shall furnish the other Party with certificates
          evidencing all such insurance. Each Party shall name the other Party
          as additional insureds in such policy or policies.

                                       41
<PAGE>

25.  Term and Termination of Agreement.

     25.1 Term. This Agreement shall remain in effect until terminated in
          accordance with the provisions of this Section 25 or until the last to
          expire of any of the licenses granted pursuant to this Agreement.

     25.2 Termination for Breach. Each Party shall be entitled to terminate this
          Agreement by written notice to the other Parties in the event that any
          other Party shall be in default of any of its material obligations
          hereunder, and shall fail to remedy any such default within sixty (60)
          days after notice thereof by the non-breaching Party. Any such notice
          shall specifically state that the non'breaching Party intends to
          terminate this Agreement in the event that the breaching Party shall
          fail to remedy the default. Upon any termination of this Agreement
          pursuant to this Section 25.2, none of the Parties shall be relieved
          of any obligations incurred prior to such termination.

     25.3 Termination of Contract Research Program by GI. Notwithstanding
          anything herein to the contrary, GI shall, in its sole discretion,
          have the right to terminate the Contract Research Program at any time
          after the date one year following the Effective Date, by giving sixty
          (60) days written notice to CAT, provided however that if in the first
          year, CAT, pursuant to Section 16.1, rejects (a) [***] in the first
          [***] of the Contract Research Program or (b) more than [***] of the
          delivered Research Antigens, [***] GI shall have the right to promptly
          terminate the Contract Research Program by giving thirty (30) days
          notice to CAT.

     25.4 Survival of Obligations; Return of Confidential Information.
          Notwithstanding any termination of this Agreement, the obligations of
          the Parties under Article 2, Article 4, Article 6, Section 15.3 and
          Article 25, as well as under any other provisions which by their
          nature are intended to survive any such termination, shall survive and
          continue to be enforceable. Upon any termination of this Agreement
          pursuant to Section 25.2. hereof, each Party shall promptly return to
          the other Party all written Confidential Information, and all copies
          thereof, of the other Party which is not covered by a license
          surviving such termination.

26.  Miscellaneous.

     26.1 Publicity.

          (1)  General. No Party, nor any of its Affiliates, shall originate any
               publicity, news release or other public announcement, written or
               oral, relating to this Agreement without the prior written
               approval of the other Party, which approval shall not be
               unreasonably withheld, except as otherwise required by law. It is
               expressly understood that nothing in this Section 26 shall
               prevent a Party from making a disclosure in connection with any
               required filings with

                                       42
<PAGE>

               the Securities and Exchange Commission or the London Stock
               Exchange or in connection with the offering of securities or any
               financing.

          (2)  Initial Press Release. With respect to the press release set
               forth in Exhibit G, CAT represents that all disclosures relating
               to the actual and/or potential value of this Agreement to CAT
               ("Financial Disclosures") are accurate and necessary under the
               securities laws to which CAT is subject.

     26.2 Conduct of Studies. All studies, research and testing done by or on
          behalf of each Party under this Agreement shall be performed in strict
          compliance with any applicable federal, state, or local laws, rules,
          and regulations governing the conduct of studies, research, and
          testing at the site where such studies, research, and testing are
          being conducted.

     26.3 No Implied Licenses. Only the licenses granted pursuant to the express
          terms of this Agreement shall be of any legal force and effect. No
          license rights shall be created by implication or estoppel.

     26.4 No Agency. Nothing herein shall be deemed to constitute any Party as
          the agent or representative of the other Parties, or the Parties as
          joint venturers or partners for any purpose. Each Party shall be an
          independent contractor, not an employee or partner of the other
          Parties, and the manner in which each Party renders its services under
          this Agreement shall be within its sole discretion. No Party shall be
          responsible for the acts or omissions of the other Parties, and no
          Party will have authority to speak for, represent or obligate the
          other Parties in any way without prior written authority from the
          other Party or Parties.

     26.5 Notice. All notices required under this Agreement to be given by one
          Party to another shall be in writing and shall be given by addressing
          the same to the other at the address or facsimile number set forth
          below, or at such other addresses or facsimile numbers as the Parties
          may specify in writing. All notices shall become effective when
          deposited in the United States Mail with proper postage for first
          class registered or certified mail prepaid, return receipt requested,
          or when delivered personally, or, if promptly confirmed by mail as
          provided above, when dispatched by facsimile.

                    GI:  Genetics Institute, Inc.
                         87 Cambridge Park Drive
                         Cambridge, Massachusetts 02140
                         Telecopier (617) 876-5851
                         Attn: Legal Department

                    CAT: Cambridge Antibody Technology Limited

                                       43
<PAGE>

                          The Science Park
                          Melbourn Cambs
                          Telecopier: 1763263413
                          Attn: The Company Secretary

26.6   Assignment. This Agreement, and the rights and obligations hereunder, may
       not be assigned or transferred, in whole or in part, by any Party without
       the prior written consent of the other Party, except that (a) upon notice
       to the other Party, GI may assign this Agreement to an Affiliate
       controlled by GI, and following the first year of the Contract Research
       Program, CAT may assign this Agreement to an Affiliate which is
       controlled by CAT, provided that each such Party remains primarily liable
       and/or responsible for the performance of such obligations and such
       controlled Affiliate, and provided further that such controlled Affiliate
       agrees to be bound to the terms and conditions of this Agreement and (b)
       upon notice to the other Parties, GI may assign this Agreement in
       connection with the merger, consolidation or sale of all or substantially
       all of GI's assets.

26.7   Entire Agreement. This Agreement constitutes the entire agreement of the
       Parties with regard to its subject matter, and supersedes all previous
       written or oral representations, agreements and understandings between
       the Parties.

26.8   Development/Commercialization of [***]. At such time as GI, in its sole
       discretion, elects develop and commercialize a human pharmaceutical
       antibody product which specifically targets [***], GI shall undertake
       good faith discussions with CAT concerning possible joint development
       and/or commercialization of such [***].

       Nothing set forth in the immediately preceding sentence should be
       construed to create an obligation on GI to (a) research or develop or
       commercialize any [***] or (b) collaborate with or enter into any
       agreement with CAT concerning any [***].

26.9   No Modification. This Agreement may be changed only by a writing signed
       by the Parties.

26.10  Headings. The headings contained in this Agreement are for convenience of
       reference only and shall not be considered in construing this Agreement.

26.11  Waiver. The waiver by any Party of a breach or a default of any provision
       of this Agreement by another Party shall not be construed as a waiver of
       any succeeding breach of the same or any other provision, nor shall any
       delay or omission on the part of any Party to exercise or avail itself of
       any right, power or privilege that it has or may have hereunder operate
       as a waiver of any right, power, or privilege by such Party.

                                       44
<PAGE>

26.12  Severability. In the event that any one or more of the provisions
       contained in this Agreement shall, for any reason, be held to be invalid,
       illegal or unenforceable in any respect, such invalidity, illegality or
       unenforceability shall not affect any other provisions of this Agreement,
       and all other provisions shall remain in full force and effect. If any of
       the provisions of this Agreement is held to be excessively broad or
       invalid, illegal or unenforceable in any jurisdiction, it shall be
       reformed and construed by limiting and reducing it so as to be
       enforceable to the maximum extent permitted by law in conformance with
       its original intent. In the event that after such reformation, a party's
       rights or obligations are materially changed, then such Party may
       terminate this Agreement.

26.13  Successor and Assigns. This Agreement shall be binding upon and inure to
       the benefit of the Parties hereto and their successors and permitted
       assigns.

26.14  Counterparts. This Agreement may be executed in any number of
       counterparts, each of which shall be deemed an original but all of which
       together shall constitute one and the same instrument.

26.15  Applicable Law. This Agreement shall in all events and for all purposes
       be governed by, and construed in accordance with, the law of the State of
       New York without regard to any choice of law principle that would dictate
       the application of the law of another jurisdiction.

       In the event a Party institutes litigation against the other Party, the
       instigating Party (a) if GI, shall institute such litigation in London,
       England and (b) if CAT, shall institute such litigation in Boston,
       Massachusetts.

26.16  EC Notification. If the Parties decide to notify this Agreement to the
       Commission of the European Community, pursuant to Council Regulation
       17/62 of the Council of Ministers of the European Community, they shall
       cooperate in preparing the notification documents. Each Party shall be
       responsible for its own costs and expenses related to such notification.
       Each Party will give the other full and prompt cooperation in providing
       any necessary information the other may require in order to prepare such
       notification.

                                       45
<PAGE>

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

GENETICS INSTITUTE, INC.

By

Print Name

Title
       duly authorized

CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC

By

Print Name

Title
       duly authorized

                                       46
<PAGE>

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

GENETICS INSTITUTE, INC.

By

Print Name

Title
       duly authorized

CAMBRIDGE ANTIBODY TECHNOLOGY GROUP PLC

By

Print Name

Title
       duly authorized

          Final Draft - Research Collaboration and Service Agreement

                                       47
<PAGE>

                                   EXHIBIT A

                               ACCEPTED ANTIGENS

[***]
<PAGE>

                                   EXHIBIT B

                       EXISTING THIRD PARTY OBLIGATIONS

                      (GI/MRC/DYAX SUBLICENSEE ROYALTIES)

1.   License Agreement, dated January 7, 1997, between CAT and MRC, with certain
     royalty rates, as may be amended from time to time (the "MRC License"). For
     such royalty rate calculations, see Exhibit F for the applicable text of
     the MRC License.

2.   Therapeutic Antibodies Agreement, dated December 31, 1997, between CAT and
     Dyax Corp., with a royalty rate of [***] as may be amended from time to
     time (the "Dyax License").

3.   Diagnostic Antibodies Agreement, dated December 31, 1997, between CAT and
     Dyax Corp., with a royalty rate of [***] as may be amended from time to
     time (the "Dyax License").
<PAGE>

                                   EXHIBIT C

ProAb Tissue
------------

[***]

     It is agreed that, should any of the above tissue be unavailable, then CAT
     may substitute another tissue, with the prior written approval of GI.
<PAGE>

                                   EXHIBIT D

Software

The Software is defined as Cat's CONTINUITY product. It is defined as all CAT
server and client software components and database schema that CAT supplies that
to GI, and to any and all object modules, executables and database schema
derived from these schema or the compilation of these software components. These
components and database schema are part of CONTINUITY and are designed to allow
submission of data in an appropriate format to CAT and mining and visualization
of data and information supplied to GI by CAT.

Hardware

SUN ULTRA 10 workstation, 256 MB RAM for running CONTINUITY Object Transaction
Monitoring (OTM) framework.

Specifications

CONTINUITY is 100% Java. Server OTM framework supported under SUN Solaris 7.
CONTINUITY client software is supported under MS Windows 95/98/NT, MacOS 8.1 and
later, Sun Solaris 7, SGI Irix 6.2 and later. Backend database requirements
Oracle 8. CONTINUITY clients runs on machines with a minimum of 64 MB RAM.
Supported browsers, Netscape 4.05 and later (recommended Netscape 4.5) -
Netscape as opposed to IE required because of cross-platform support
requirements. CONTINUITY requires a Visibroker CORBA naming service.
<PAGE>

                                   EXHIBIT E

                         ANTIBODY ENGINEERING SERVICES

       In the event GI requests AB Engineering Services pursuant to Section 21.1
       hereof, GI shall pay to CAT the amount set forth in one of the following
       options:

Option 1
--------

       (a) [***] per year, payable quarterly and (b) engineering performance
       success payment in an amount equal to [***] payable following achievement
       of the antibody engineering performance criteria agreed upon by the
       parties prior to the commencement of Ab Engineering Services or

Option 2
--------

       (a) [***] per year, payable quarterly and (b) engineering performance
       success payment in an amount equal to [***] payable following achievement
       of the antibody engineering performance criteria agreed upon by the
       parties prior to the commencement of Ab Engineering Services.
<PAGE>

                                   EXHIBIT F

7.   FEES AND ROYALTIES

7.1  CAT shall pay MRC in consideration of the grant made in this Agreement the
     following sums (exclusive of VAT thereon);

     7.1.1.

     7.1.2.  Subject always to the provisions of Clause 7.2 a Royalty of [***]
             of the Net Invoice Price on each sale of the Products by CAT or its
             Affiliates;

     7.1.3   Subject always to the provisions of Clause 7.2 a Royalty calculated
             in respect of the Net Invoice Price ("NIP") of each sale of the
             Products by CAT's sub-licensees, such Royalty to be calculated as
             follows:-

             (a)    MRC to receive from [***] of the royalty percentage
                    calculated by reference to NIP payable to CAT by any sub-
                    licensee up to a maximum of [***] of the NIP of CAT's sub-
                    licensee's sale of Products provided always that MRC shall
                    not on any occasion receive payments which represent less
                    than [***] of the NIP of CAT's sub-licensees sale of
                    Products; and

             (b)    MRC to receive from CAT [***] of any additional royalty
                    percentage calculated by reference to NIP payable to CAT by
                    any sub-licensee in excess of [***] and up to [***] of the
                    NIP of CAT's sub-licensee's sale of Products.

7.2  There are 2 circumstances in which there will be a reduction to the
     royalties payable by CAT under Clauses 7.1.2 and 7.1.3 as follows:

     7.2.1   If CAT or its sub-licensees are required to licence any third party
             dominating patents in order to be able to exercise the rights
             granted to it hereunder involving use of the inventions disclosed
             in the patents and the corresponding patents listed in Schedule 1
             as number [***] and number [***] and numbers [***] and [***] CAT
             may deduct from the sums due to MRC all such sums payable to such
             third parties up to a maximum of [***] of the sums due to MRC
             provided that such a reduction shall not be made where a reduction
             has already been or is to be made under Clause 7.5 below.

     7.2.2   Where Products infringe only those of the Patent rights which deal
             with [***] being those patents referred to in Schedule 1 as numbers
             [***] royalties shall be payable at [***] of the normal rate.
<PAGE>

7.5  Royalties on Products paid by CAT to MRC under prior existing agreements
     between MRC and CAT shall be creditable against a maximum of [***] on
     Royalties payable on the same Products by CAT under clauses 7.1.2 and
     7.1.3.
<PAGE>

                                   EXHIBIT G

                                 PRESS RELEASE

FOR IMMEDIATE RELEASE
07.30 a.m. Tuesday 30 March 1999

                 CAMBRIDGE ANTIBODY TECHNOLOGY & WYETH-AYERST
                       LABORATORIES FORM MAJOR ALLIANCE

          Wyeth-Ayerst signs broad deal to harness CAT's technologies
           for target validation and therapeutic product development

Melbourn, UK and Cambridge, Mass...Cambridge Antibody Technology Group plc
("AT") (LSE : CAT"), and the research division of Wyeth-Ayerst Laboratories -
Wyeth Ayerst Research (NYSE : AHP), today announced that they have entered into
an agreement for the broad application of CAT's function genomics and antibody
engineering expertise the discovery and development of new therapeutics based on
targets identified by Wyeth Ayerst.

Summing up the alliance Dr. Steven C. Clark, Senior Vice President, Discovery
Research, Eyther-Ayest Research commented:

     "CAT has developed powerful technologies both to enhance and accelerate the
     selection of drug targets ad to develop fully human antibody therapeutics.
     This agreement will help Wyeth-Ayerst more efficiently mine the wealth of
     information generated by our research programmes and expand our portfolio
     of antibody therapeutics."

Dr. David Chiswell, Chief Executive Officer of CAT, said:

     "The alliance with Wyeth-Ayerst, a world leader in biopharmaceutical
     research provides CAT with outstanding potential targets and complementary
     target validation technologies to help fuel our antibody product pipeline
     as well as generating near-term revenue. It is a major endorsement of the
     capabilities we have established in functional genomics over the past two
     years, and of our antibody engineering expertise."

The agreement with Wyeth-Ayerst comprises a research collaboration, a product
collaboration and a library licence option.

Under the terms of the research collaboration, Wyeth-Ayerst has agreed to pay
CAT $4 million per annum in research funding for up to four years, for CAT to
apply its proprietary PROAB(R) and ProxiMol(R) functional genomics technologies
to potential protein targets based on gene
<PAGE>

sequence information provided by Wyeth, together with other research work. In
conjunction with this collaboration, CAT will establish its bioinformatics
software CONTINUITY(TM), at Wyeth's research facilities in the U.S., to
facilitate Wyeth's access to the large amounts of data supplied by CAT. Wyeth-
Ayerst has options to develop antibody products derived from the research
collaboration. Cat receives license fees, clinical milestone fees and royalties
in respect of these products.

Under the product collaboration, Wyeth-Ayerst and CAT will validate and develop
product candidates directed at novel proprietary Wyeth targets as well as
targets contributed by CAT, with the goal of developing a broad portfolio of
human antibody-based drug candidates. Each company has the opportunity to select
candidates for further development from this pool. The companies will share
equally the target and product validation costs. For those product candidates
developed by Wyeth, CAT will receive license fees, clinical milestone fees and
royalties. For those products developed by CAT, Wyeth-Ayerst will receive
license fees, clinical milestone fees and royalties and limited rights to
partner the programme after Phase II clinical trials.

CAT has also granted Wyeth-Ayerst multi-site options to license CAT's phage
library technology with associated product development options.

The total of research funding, potential library licence fees and potential fees
and milestones from the product collaboration is approximately $70 million. In
addition there are potential fees and milestones on product development options
under the research collaboration and library licence option.

                                   - ENDS -

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