Document:

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                                                                   Exhibit 10.16

                                               CONFIDENTIAL MATERIAL OMITTED AND
                                            FILED SEPARATELY WITH THE SECURITIES
                                                        AND EXCHANGE COMMISSION.
                                                ASTERISKS DENOTE SUCH OMISSIONS.

                 CONFIDENTIALITY AND MATERIAL TRANSFER AGREEMENT

This Agreement, made effective as of the latter of the signature dates, by and
between Athersys, Inc. of 3201 Carnegie Avenue, Cleveland, Ohio 44115-2634
(hereinafter called "Athersys" or the "Company"), and The St. Luke's Roosevelt
Institute for Health Sciences (hereinafter called "Recipient").

                                   WITNESSETH

Whereas, Athersys is in possession of reagents, cell lines and/or other
materials related to a technology known as RAGE, (Random Activation of Gene
Expression) (hereinafter called "Material") and has the right to supply said
Material to persons and companies for the use and evaluation thereof; and
Whereas, Recipient desires to receive Material in connection with the
performance of the research project as described in Exhibit A ("Research
Project"),

         Now, Therefore, in order to protect their rights with respect to any
such Material, the parties hereto, intending to be legally bound, agree as
follows:

(1)      The Material to be transferred to Recipient is comprised of the
         following: Recipient shall use the Material only for the purposes
         described in Exhibit A, and shall not transfer such materials to any
         third party without the expressed written consent of the Company.

(2)      Nothing in this Agreement is to be construed as a license to Recipient
         to utilize the Materials except as provided in this Agreement, in any
         way whatsoever or under any patent or patent application owned by
         Athersys, unless a separate license agreement is executed. Any
         modification to this Agreement, and further contract or license
         agreement between Athersys and Recipient regarding Material, shall be
         in writing.

(3)      Recipient shall have the right to transfer Material only to employees
         under the direct supervision of the Recipient, as designated in Exhibit
         B ("Authorized Personnel"). The Recipient shall ensure that Authorized
         Personnel to whom the material may be transferred under this paragraph
         will have undertaken obligations substantially similar to those
         undertaken hereunder.

(4)      Recipient will take all reasonable steps to insure that the Material is
         not distributed for other's use and to prevent its employees from
         violating this Agreement.

(5)      Title and rights to all Materials under this Agreement remain vested in
         Athersys. Title to any subject matter of any discovery or invention,
         whether patentable or not, generated or developed in conjunction with
         the use of this Material ("Invention") shall be jointly owned. The
         parties shall cooperate in the preparation and filing of patent
         applications covering all Inventions. Athersys shall have the exclusive
         right to negotiate with

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                                               CONFIDENTIAL MATERIAL OMITTED AND
                                            FILED SEPARATELY WITH THE SECURITIES
                                                        AND EXCHANGE COMMISSION.
                                                ASTERISKS DENOTE SUCH OMISSIONS.

         Recipient for an exclusive royalty-bearing license covering Recipient's
         ownership interest in any Invention ("License"). The terms of any
         License negotiated between the parties shall be based on terms for
         terms for licenses for inventions comparable to the Invention in size
         of potential market, necessary development efforts to be borne by
         Athersys, and other usual and customary licensing parameters. If, after
         negotiating in good faith, the parties shall be unable to agree to
         terms of a License, then Recipient shall be free to negotiate a license
         with any third party, provided, that any such license shall include a
         [***](1) royalty on net sales of products, payable to Athersys.

(6)      Upon completion of the Research Project, and in the absence of further
         agreement of the parties, Recipient shall cease all use and make no
         further use of the Material, and the Material and any materials related
         thereto shall be returned to Athersys upon written request.

(7)      Recipient agrees that the transfer of Material to any third party
         without the explicit written consent of Athersys, may cause irreparable
         harm and that any breach of this agreement by Recipient may enable
         Athersys to injunctive relief, in addition to any other legal remedies
         available to it, in any court of competent jurisdiction.

(8)      Recipient will not administer Material to humans. If animals are to be
         used in any screening or studies of the Material by Recipient, in vitro
         approaches will be considered and NIH guidelines will be followed, and
         such animals will not be kept as domestic animals, nor their tissues or
         products (e.g. milk, eggs) used for food.

(9)      ATHERSYS MAKES NO REPRESENTATION OR WARRANTY WITH REGARD TO PURITY OR
         BIOLOGICAL ACTIVITY OF MATERIAL. MATERIAL IS SUPPLIED "AS IS" WITH NO
         WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF
         MERCHANTABILITY, TITLE, OR FITNESS FOR A PARTICULAR PURPOSE.

(10)     No Material will be transferred by Recipient to any third party. Any
         Material unused by Recipient will be properly disposed of pursuant to
         all governmental regulations or returned to Athersys. Upon the request
         of Athersys, Recipient shall return the Material and all reports,
         written material, composition reagents and other material relating to
         the Material to Athersys; provided that Recipient may retain one copy
         of all written material for its legal files.

--------
         (1) CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.

                                       2
<PAGE>   3

(11)     Recipient shall be free to publish results of research conducted with
         Materials; provided, that all data and any biological results obtained
         from the screening, testing, or use of the Material by Recipient will
         be reported to Athersys either: (1) 30 days prior to any public
         disclosure to provide the parties with the ability to determine whether
         an Invention is patentable or, (2) concurrently with the submission of
         a research article by Recipient to a journal review committee,
         whichever is earlier. All such information shall be maintained in
         confidence by Athersys; provided that Athersys shall have the right to
         disclose the results to consultants and other third parties who are
         under obligations of confidentiality as restrictive as those contained
         herein.

(12)     Recipient will not utilize the Material for commercial purposes, nor
         will the data or results of research performed with the Material be
         disseminated or distributed to any third party without the express
         written consent of Athersys.

(13)     Recipient, to the extent permitted by governing law, will hold Athersys
         harmless from any claims or liability to the extent that they result
         from Recipient's negligent or intentionally tortious use of Material.
         Recipient shall not be liable for any claim or liability arising from
         Athersys' use of data or results provided by Recipient unless such
         claim arises from the negligence or legal wrongdoing of Recipient.

(14)     Athersys and Recipient warrant that: (1) they have the exclusive right
         and authority to enter into this Agreement, (2) under such authority no
         third party shall have the right to make a claim of ownership of any
         Invention or proceeds from any royalty or other amount paid pursuant to
         Section 5 herein, and (3) the terms of this Agreement are not
         inconsistent with any other contractual obligation that Athersys or
         Recipient may have, including any contractual term or obligation which
         may exist between Recipient and any affiliated hospital and/or medical
         school.

(15)     Notwithstanding anything hereinabove, no party hereto shall be
         obligated to enter into any further agreement regarding Material or use
         thereof.

                                       3
<PAGE>   4

(16)     This Agreement is binding upon the parties hereto and their successors
         in business, but is not otherwise assignable.

ACCEPTED AND AGREED TO:

         Athersys, Inc.

         By: /s/ Gil Van Bokkelen
             ---------------------
Name:  Dr. Gil Van Bokkelen

Title:    President & CEO

Date:     April 5, 2000

Recipient:

By: /s/ William Rosner, MD
    ----------------------
Name:  William Rosner, MD

Title:    Director

Date:     April 5, 2000

                                       4<PAGE>   1
                                                                   EXHIBIT 10.19

                 COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT

         THIS AGREEMENT entered into on this the 21st day of September, 2000,
(hereinafter "Execution Date") between the BOARD OF TRUSTEES OF THE UNIVERSITY
OF ALABAMA FOR THE UNIVERSITY OF ALABAMA AT BIRMINGHAM having its principal
place of business at 701 20th Street South, Room 1030, Birmingham, Alabama
35294-0111 (hereinafter "UAB") and THE UAB RESEARCH FOUNDATION (hereinafter
"UABRF") having its principal place of business at 701 20th Street South, Room
1120G, Birmingham, Alabama 35294-0111 (hereinafter "UABRF") and ATHERSYS, INC.,
having its principal place of business at 3201 Carnegie Avenue, Cleveland, Ohio
44115 (hereinafter "ATHERSYS").

                                   BACKGROUND

         WHEREAS, UAB, and in particular, Dr. Lawrence J. DeLucas, (hereinafter
"Dr. DeLucas"), a faculty member at UAB, in the Center for Biophysical Science
and Engineering, formerly known as the Center for Macromolecular
Crystallography, in conjunction with ATHERSYS are interested in sustaining
research in the development of materials/ideas pertaining to the use and
application of high-throughput screening for macromolecule crystallization
screens, protein expression and purification; and

         WHEREAS, ATHERSYS has developed materials/ideas pertaining to the use
and application of producing human proteins, or proteins from other species
based upon the ATHERSYS RAGE process; and

         WHEREAS, UAB and ATHERSYS shall provide personnel, operating expenses,
equipment and other support services necessary for the operation of the
identified cooperative research as defined herein below pursuant to attachment
titled "Research Plan"; and

         WHEREAS, the Research and Development Program contemplated by this
Agreement is of mutual interest to UAB, UABRF and ATHERSYS and furthers the
educational, scholarship and research objectives of UAB as an educational
institution.

         NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and intending to be legally bound hereby, the parties hereto
agree as follows:

ARTICLE 1.    INTRODUCTION

This Cooperative Research and Development Agreement (hereinafter "CRADA")
between UAB, UABRF and ATHERSYS will be effective when signed by all parties.
The research and development project(s), which will be undertaken by each of the
Parties in the course of this CRADA, are detailed in the Research Plan (RP)
which is attached as Appendix B.

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ARTICLE 2.    DEFINITIONS

As used in this CRADA, the following terms shall have the indicated meanings:

2.1      "Cooperative Research and Development Agreement" or "CRADA" means this
         Agreement.

2.2      "Parties" means UAB, UABRF and ATHERSYS.

2.3      "Proprietary/Confidential Information" means confidential scientific,
         business or financial information which derives economic value from not
         being known by the general public or which would constitute a trade
         secret under the U.S. Uniform Trade Secrets Act, provided that such
         information does not include:

         2.3.1    information that is publicly known or available from other
                  sources who are not under a confidentiality obligation to the
                  source of the information;

         2.3.2    information which has not been made available by its owners to
                  others without a confidentiality obligation;

         2.3.3    information which is already known by or available to the
                  receiving Party without a confidentiality obligation; or

         2.3.4    information which relates to potential hazards or cautionary
                  warnings associated with the production, handling or use of
                  the subject matter of the Research Plan of this CRADA.

2.4      "Subject Data" means all recorded information produced during the
         performance of this CRADA.

2.5      "Research Materials" means all tangible materials other than Subject
         Data first produced in the performance of this CRADA.

2.6      "Subject Invention" means any invention, conceived or first actually
         reduced to practice as a result of the performance of research under
         this CRADA, that is or may be patentable under 35 U.S.C.(beta)101
         or(beta) 161, protectable under 7 U.S.C.(beta)2321, or otherwise
         protectable by other types of U. S. or foreign "Intellectual Property"
         ("IP") rights.

2.7      "Government" means the U.S. Government and any of its agencies.

2.8      "Research Plan" or "RP" means the statement in Appendix B of the
         respective research and development commitments of the Parties to this
         CRADA.

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2.9      "Principal Investigator(s)" or "PIs" means the persons designated
         respectively by the Parties to this CRADA who will be responsible for
         the scientific and technical conduct of the RP.

2.10     "Research License" shall mean a nontransferable, nonexclusive license
         to make and use a licensed invention for purposes of research including
         human clinical trials and not for purposes of commercial manufacture or
         distribution or in lieu of purchase if licensed products or licensed
         processes are marketed by licensee as research tools.

ARTICLE 3. COOPERATIVE RESEARCH

3.1      Research Team. The Parties agree to establish a joint research and
         development team (hereinafter referred to as the "Team") comprising at
         least the Principal Investigators designated pursuant to Article 3.3 to
         conduct and monitor the research in accordance with the RP. Although
         the members of the Team shall be considered as having been delegated to
         the Team, they shall continue to remain employed by their respective
         employers under their respective terms of employment.

3.2      Review of Work. Quarterly conferences (or according to such other
         schedule as the Parties may agree) shall be held by the Team to review
         work progress. It is understood that the nature of this cooperative
         research precludes a guarantee of its completion within the specified
         period of performance or limits of allocated financial or staffing
         support. Accordingly, research under this CRADA is to be performed on a
         best efforts basis.

3.3      Principal Investigators. UAB research work under this CRADA will be
         performed by the Center for Biophysical Science and Engineering
         (hereinafter "CBSE") identified in the RP, and the UAB Principal
         Investigator (PI) designated in the RP will be responsible for the
         scientific and technical conduct of this project on behalf of UAB. Also
         designated in the RP is the ATHERSYS PI who will be responsible for the
         scientific and technical conduct of this project on behalf of ATHERSYS.

3.4      Research Plan Change. The RP may be modified by mutual written consent
         of the Principal Investigators. Material changes in the scope of the RP
         will be treated as amendments under Article 14.6.

ARTICLE 4. REPORTS

4.1      Interim Reports. The Parties shall exchange formal written interim
         progress reports on a quarterly basis. Such reports shall set forth the
         technical progress

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         made, identifying such problems as may have been encountered and
         establishing goals and objectives requiring further effort.

4.2      Final Reports. The Parties shall exchange final reports of their
         results within four (4) months after completing the projects described
         in the RP or after the termination of this CRADA.

ARTICLE 5. FINANCIAL OBLIGATIONS

5.1      Cost incurred by the Parties. Each Party shall be responsible for its
         own costs incurred and associated with fulfilling its respective
         research obligations under this CRADA.

5.2      Accounting Records. UAB and ATHERSYS shall maintain separate and
         distinct current accounts, records, and other evidence supporting all
         its obligations under this CRADA, and shall provide an annual report
         reflecting the use of funds and a final such fiscal report at the time
         that final reports are exchanged pursuant to Article 4.2. The Parties
         shall keep these records for the purpose of obtaining reimbursement for
         work expenses incurred during the collaboration in the event of an
         assignment, sublicensing or transfer agreement of Subject Inventions to
         a third party.

ARTICLE 6. TITLE TO PROPERTY

6.1      Capital Equipment. The purchase or use of capital equipment to carry
         out this CRADA does not affect the ownership rights that would
         otherwise apply. All capital equipment provided under this CRADA by one
         party for the use of another Party remains the property of the
         providing Party unless other disposition is mutually agreed upon by in
         writing by the PIs. If title to this equipment remains with the
         providing Party, that Party is responsible for maintenance of the
         equipment and the costs of its transportation to and from the site
         where it will be used.

ARTICLE 7. INTELLECTUAL PROPERTY RIGHTS AND PATENT APPLICATIONS

7.1      Reporting. The Parties shall promptly report to each other in writing
         each Subject Invention resulting from the research conducted under this
         CRADA within thirty (30) days of said Subject Invention being disclosed
         to the appropriate Party representative. Such reports shall be treated
         in confidence by the receiving Party subject to Article 9. Because of
         the royalty sharing provisions for inventors under the UAB Intellectual
         Property Policy as well as UAB's obligations under to report all
         inventions under the Federal Technology Transfer Act of 1986, and in
         view of

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         Article 8.4 of this CRADA which grants UAB only a research license for
         noncommercial purposes to Subject Inventions, ATHERSYS acknowledges a
         special duty to report all Subject Inventions to UAB so that UAB may
         determine whether or not inventorship properly includes UAB
         investigators.

7.2      ATHERSYS Employee Inventions. Each Subject Invention made solely by
         ATHERSYS shall be solely owned by ATHERSYS.

7.3      UAB Employee Inventions. Each Subject Invention made solely by UAB
         shall be solely owned by UAB.

7.4      Joint Inventions. Each Subject Invention made jointly by UAB and
         ATHERSYS employees shall be jointly owned by UABRF and ATHERSYS.

7.5      Filing of Patent Applications. (A) Separate Technology. Each Party
         shall retain control over and bear all expenses associated with the
         filing, prosecution, and maintenance of all patents related to that
         Party's rights pursuant to Articles 7.2 or 7.3, as the case may be, in
         the Subject Inventions; provided, however, if ATHERSYS instructs UABRF
         to file a patent to protect a UAB Employee invention, then the expenses
         will be born by ATHERSYS. (B) Joint Technology. With respect to Subject
         Inventions made jointly by UAB and ATHERSYS as described in Article
         7.4, each Party agrees to cooperate in order to file a patent or other
         IP applications in a timely manner and the expense shall be born
         equally by UAB and ATHERSYS, unless otherwise agreed in writing. The
         Team shall supervise and direct the filing, prosecution and maintenance
         of all such Subject Inventions, including selection of outside counsel,
         reasonably acceptable to the Parties, to handle such filing,
         prosecution, and maintenance. The Team shall provide each Party with
         (i) drafts of any new patent application that covers inventions in such
         Subject Invention prior to filing that application, allowing adequate
         time for review and comment by the Party if possible; and (ii) copies
         of all correspondence from any and all patent offices concerning patent
         applications covering such Subject Inventions and an opportunity to
         comment on any proposed responses, voluntary amendments and submissions
         of any kind to be made to any and all such patent offices.

7.6      Patent Expenses for ATHERSYS' License. If an exclusive license to any
         Subject Invention is granted to ATHERSYS, ATHERSYS shall reimburse UAB
         for the reasonable past and ATHERSYS-approved ongoing funds expended
         worldwide for filing, prosecuting and maintaining any applications
         claiming such exclusively-licensed inventions and any patents or other
         IP grants that may issue on such applications which UAB has expended to
         protect the IP rights exclusively licensed to ATHERSYS. ATHERSYS may
         waive its exclusive license rights on any application, patent or other
         IP grant at any time, and incur no subsequent compensation obligation
         for that application, patent or IP grant.

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7.7      Prosecution of Intellectual Property Applications. Each Party shall
         provide the other Party with copies of the applications it files on any
         Subject Invention along with the power to inspect and make copies of
         all documents retained in the patent or other IP application files by
         the applicable patent or other IP office. The Parties agree to consult
         with each other with respect to the prosecution of all Subject
         Inventions.

7.8      Enforcement of Patent Rights. (i) Each Party shall have the sole right,
         but not the obligation, to institute, prosecute or control any action
         or proceeding with respect to infringement by a third party of one or
         more issued patents covering the Party's pre-existing technologies
         and/or rights to the Subject Invention under Article 7.2 or 7.3, as the
         case may be. (ii) If either Party becomes aware of conduct by a third
         party that potentially infringes one or more patents claiming the
         rights to the Subject Invention that is owned jointly under Article
         7.4, that Party shall notify the other Party in writing (the "Notice")
         of the potential infringement within ten (10) days of becoming aware of
         such infringement. The Parties shall promptly confer to discuss the
         potential infringement and, within thirty (30) days of the Notice,
         shall determine a course of action including, without limitation, the
         commencement of legal action by either or both of ATHERSYS and UABRF to
         terminate any such infringement. If only one Party takes such legal
         action at its sole cost, that Party shall be entitled to reimbursement
         of all reasonable direct cost arising from the legal action and the
         remainder of said damages awarded or settlement paid as a result of
         such legal action shall be allocated to reflect the percentage of the
         royalty payment(s) payable under the license agreement for the patent
         the basis for the legal action. If both Parties commence such legal
         action jointly, the Parties shall share equally all costs and all
         recovered damages or settlement payments arising from such legal
         action.

7.9      Election Not to Prosecute. If either Party elects not (i) to pursue the
         filing, prosecution, or maintenance of a Subject Invention in a
         particular country, or (ii) to take any other action with respect to a
         Subject Invention in a particular country that is necessary or
         reasonably useful to establish or preserve rights thereto, then in each
         such case such Party shall so notify the other Party promptly in
         writing and in good time to enable such other Party to meet any
         deadlines by which an action must be taken to establish or preserve any
         such rights in such joint Subject Invention, as applicable, in such
         country. Upon receipt of each such notice by such other Party or if, at
         any time, such Party fails to initiate any such action within thirty
         (30) days after a request by such other Party that it do so (and
         thereafter diligently pursue such action), such other Party shall have
         the right, but not the obligation, to pursue the filing or
         registration, or support the continued prosecution or maintenance, of
         such Subject Invention at its expense in such country. If such other
         Party elects to pursue such filing or registration, as the case may be,
         or continue such support, then such other Party shall notify such Party
         of such election and such Party shall, and cause its affiliates to (x)
         reasonably cooperate with such other Party in this regard, and (y)
         promptly release or assign to such other Party, all right, title, and
         interest in and to such Subject Invention, in

<PAGE>   7

         such country as to UAB to extent the Patent Policy of UAB does not
         prohibit said release or assignment.

ARTICLE 8. LICENSING

8.1      Option for Exclusive Commercialization License. With respect to rights
         to any Subject Invention not made solely by ATHERSYS' employees for
         which a patent or other IP application is filed, UABRF hereby grants to
         ATHERSYS an option to negotiate, in good faith, the terms of an
         exclusive or nonexclusive commercialization license that fairly
         reflects the relative contributions of the Parties. The license will
         specify the licensed fields of use and other applicable terms and
         obligations. Exclusive licensees will be expected to reimburse UAB as
         well as its operating unit CBSE or UABRF for IP expenses related to
         each licensed intellectual property.

8.2      Exercise of License Option. The option of Article 8.1 must be exercised
         by written notice mailed within six (6) months after disclosure in
         writing of Subject Invention to ATHERSYS. Exercise of this option by
         ATHERSYS initiates a negotiation period that expires six (6) months
         after the patent or other IP application filing date. If UABRF and
         ATHERSYS are unable to come to terms during the initial six (6) month
         period, UABRF will be free to negotiate a license covering a UAB
         Invention to a third party. If UAB and ATHERSYS are unable to come to
         terms during the initial six month period, UABRF will be free to
         negotiate a license covering a UAB Invention to a third party.
         Notwithstanding the above, Article III of the MTA, as herein defined,
         shall govern the rights of ATHERSYS as to the fifty (50) proteins
         contemplated to be transferred to UAB under the MTA.

8.3      UAB Intellectual Property Rights. For Subject Inventions developed by
         UAB investigators or jointly with ATHERSYS, under this CRADA, pursuant
         to Articles 7.3 and 7.4, UAB is required to retain at least a
         nonexclusive, irrevocable, paid-up license to practice the invention or
         to have the invention practiced by UAB and its subsidiaries,
         affiliates, Health Services Foundation, Health System, UAB Hospital for
         noncommercial and patient care purposes only.

8.4      Research Licenses. For Subject Inventions developed under this CRADA,
         pursuant to Article 7.3 and 7.4, ATHERSYS agrees to grant UAB a
         Research License for noncommercial purposes only.

8.5      Joint Inventions not Exclusively Licensed. In the event that ATHERSYS
         does not acquire an exclusive commercialization license (pursuant to
         Article 8.1 and 8.2) to IP rights in joint Subject Inventions described
         in Article 7.4, then each Party shall have the right to use the joint
         Subject Invention and to license its use to others. The Parties may
         agree to a joint licensing approach for such IP rights.

<PAGE>   8

ARTICLE 9. PROPRIETARY RIGHTS AND PUBLICATION

9.1      Right of Access. UAB and ATHERSYS agree to exchange all Subject Data
         produced in the course of research under this CRADA, whether developed
         solely by UAB, ATHERSYS, or jointly. Research Materials will be shared
         equally by the Parties to the CRADA unless other disposition is agreed
         to by the Parties. All Parties to this CRADA will be free to utilize
         Subject Data and Research Materials for their own purposes, consistent
         with their obligations under this CRADA.

9.2      Ownership of Subject Data and Research Materials. Subject to the
         sharing requirements of Paragraph 9.1, the producing Party will retain
         ownership of and title to all Subject Inventions, all Subject Data and
         all Research Materials produced solely by their investigators. Jointly
         developed Subject Inventions, Subject Data and Research Materials will
         be jointly owned and Intellectual Property sharing agreements (i.e.
         inventors percent contribution) shall be negotiated on a fair and
         equitable basis. Notwithstanding the foregoing, all RAGE technology,
         including RAGE libraries, RAGE cell lines, genes identified through the
         use of such RAGE cell lines, any protein expression constructs or any
         derivative material generated by ATHERSYS or UAB from RAGE Technology,
         and any proteins produced through the use of the RAGE Technology shall
         remain the sole and exclusive property of ATHERSYS (collectively
         "ATHERSYS Materials") and are subject to potential intellectual
         property rights of UAB employees as determined under U.S. Patent Law.

9.3      Dissemination of Subject Data and Research Materials. To the extent
         allowed under law, UAB agrees to use the same degree of care as UAB
         uses for its own proprietary/confidential information to keep Subject
         Data and Research Materials confidential, until published or until
         corresponding patent applications are filed. UAB may delay disclosure
         of Subject Data for a reasonable time in order for patent applications
         to be filed. Generally, UAB will not further limit disclosure of
         Subject Data or Research Materials.

9.4      Proprietary/Confidential Information. Each Party agrees to limit its
         disclosure of Proprietary/Confidential Information to the amount
         necessary to carry out the Research Plan of this CRADA, and shall place
         a confidentiality notice on all such information. Each Party receiving
         Proprietary/Confidential Information agrees that any information so
         designated shall be used by it only for the purposes described in the
         attached Research Plan. Any Party may object to the designation of
         information as Proprietary/Confidential Information by another Party
         and may decline to accept such information. Data and research materials
         developed solely by ATHERSYS may be designated as
         Proprietary/Confidential Information when they are wholly separable
         from the Subject Data and Research Materials developed under this
         Agreement, and advance designation of such data and material categories
         is set forth in the RP. The exchange of other confidential information,
         e.g., patient data, should be similarly limited and treated.

<PAGE>   9

9.5      Protection of Proprietary/Confidential Information. Each Party agrees
         to use its best efforts to maintain the confidentiality of
         Proprietary/Confidential Information. Each Party agrees that another
         Party is not liable for the disclosure of Proprietary/Confidential
         Information which, after notice to and consultation with the concerned
         Party, another Party in possession of the Proprietary/Confidential
         Information determines may not lawfully be withheld, provided the
         concerned Party has been given an opportunity to obtain a court order
         to enjoin disclosure.

9.6      Duration of Confidentiality Obligation. The obligation to maintain the
         confidentiality of Proprietary/Confidential Information shall expire at
         the earlier of the date when the information is no longer Proprietary
         Information defined in Article 2.3 or three (3) years after the
         expiration or termination date of this CRADA. ATHERSYS may request an
         extension to this term when necessary to protect
         Proprietary/Confidential Information relating to products not yet
         commercialized.

9.7      Publication. The Parties are encouraged to make publicly available the
         results of their research. Before either Party submits a paper or
         abstract for publication or otherwise intends to publicly disclose
         information about a Subject Invention, Subject Data or Research
         Materials, the other Party shall be provided thirty (30) days to review
         the proposed publication or disclosure to assure that
         Proprietary/Confidential Information is protected. The publication or
         other disclosure shall be delayed for up to (thirty) 30 additional days
         upon written request by any Party as necessary to preserve U. S. or
         foreign patent or other IP rights.

9.8      Disclosure. Notwithstanding the obligations in Articles 9.4, 9.5, 9.6,
         and 9.7, a Party may disclose the Proprietary/Confidential Information
         of the other Party to the extent such disclosure is (i) made in
         response to a valid order of a court of competent jurisdiction; (ii)
         otherwise required by regulation or law; (iii) made by such Party to
         any applicable federal, national, regional, state, or local regulatory
         agencies, departments, bureaus, commissions, councils, or other
         governmental entities; (iv) made by such Party, in connection with the
         performance of this Agreement, to affiliates, permitted sublicensees,
         research collaborators, employees, consultants, or agents (each of whom
         must, prior to such disclosure, be required to be bound by the
         confidentiality obligations of this Agreement); and (v) made by such
         Party to existing or potential investment bankers, investors, and/or
         merger and acquisition parties (each of whom must, prior to such
         disclosure, be required to be bound by the confidentiality obligations
         of this Agreement). If a Party is required to make any disclosure of
         another Party's Proprietary/Confidential Information pursuant to
         subsection (i), (iv), or (v), then it will give the other Party advance
         notice of such disclosure and will use its reasonable efforts to secure
         confidential treatment of such disclosure.

<PAGE>   10

ARTICLE 10. REPRESENTATIONS AND WARRANTIES

10.1     Representations and Warranties of UAB and UABRF. UAB and UABRF hereby
         represent and warrant to ATHERSYS that (i) each is a corporation duly
         organized validly existing and in good standing under the laws of the
         state of its respective incorporation; (ii) each has all requisite
         power and authority to enter into this Agreement and to consummate the
         transactions contemplated by this Agreement; (iii) the execution and
         delivery of this Agreement and the consummation of the transactions
         contemplated hereby have been duly authorized by all necessary
         corporate action on the part of each UAB and UABRF; and (iv) this
         Agreement has been duly executed and delivered by UAB and UABRF and
         constitute the legal, valid and binding obligations of each UAB and
         UABRF enforceable against it in accordance with their terms.

10.2     Representations and Warranties of the ATHERSYS. ATHERSYS hereby
         represents and warrants to UAB and UABRF that (i) it is a corporation
         duly organized validly existing and in good standing under the laws of
         the State of Delaware; (ii) it has all requisite power and authority to
         enter into this Agreement and to consummate the transactions
         contemplated by this Agreement; (iii) the execution and delivery of
         this Agreement and the consummation of the transactions contemplated
         hereby have been duly authorized by all necessary corporate action on
         the part of ATHERSYS; and (iv) this Agreement has been duly executed
         and delivered by ATHERSYS and constitute the legal, valid and binding
         obligations of ATHERSYS enforceable against it in accordance with their
         terms.

ARTICLE 11. TERMINATION

11.1     Termination By Mutual Consent. UAB and ATHERSYS may terminate this
         CRADA, or portions thereof, at any time by mutual written consent. In
         such event the Parties shall specify the disposition of all property,
         inventions, patent or other IP applications and other results of work
         accomplished or in progress, arising from or performed under this
         CRADA.

11.2     Unilateral Termination. Either UAB or ATHERSYS may unilaterally
         terminate this entire CRADA at any time by giving written notice at
         least thirty (30) days prior to the desired termination date, and any
         rights accrued in property, patents or other IP rights shall be
         disposed of as provided in paragraph 11.1. In the event of a unilateral
         termination by either Party, then all ATHERSYS Materials in the
         possession of UAB shall be promptly returned to ATHERSYS. In the event
         that UAB transfers Research Material to ATHERSYS that is the sole and
         exclusive property of UAB, then upon termination by either Party, such
         material shall be promptly returned to UAB by ATHERSYS.

<PAGE>   11

11.3     New Commitments. No Party shall make new commitments related to this
         CRADA after a mutual or unilateral termination and shall, to the extent
         feasible, cancel all outstanding commitments and contracts by the
         termination date.

11.4     Termination Costs. The Parties agree that upon termination by either
         party that the Parties shall within a reasonable time after termination
         to submit to each other for payment a statement of all reasonable costs
         incurred prior to the date of termination, including the cost of
         returning property or removal of abandoned property as well as any
         patent expenses.

ARTICLE 12. DISPUTES

12.1     Settlement. Any dispute arising under this CRADA, which is not disposed
         of by agreement of the Principal Investigators, shall be submitted
         jointly to the signatories of this CRADA to jointly resolve the dispute
         within thirty (30) days after notification thereof. Nothing in this
         article shall prevent any Party from pursuing any and all
         administrative and/or judicial remedies which may be available.

12.2     Continuation of Work. Pending the resolution of any dispute or claim
         pursuant to this Article, the Parties agree that performance of all
         obligations shall be pursued diligently in accordance with the mutually
         agreed upon and joint direction of ATHERSYS' PI and UAB'S PI.

ARTICLE 13. LIABILITY

13.1     Property. UAB shall not be responsible for damages to any property of
         ATHERSYS provided to it or acquired by it pursuant to this CRADA.

13.2     NO WARRANTIES. EXCEPT AS SPECIFICALLY STATED IN ARTICLE 10, THE PARTIES
         MAKE NO EXPRESS OR IMPLIED WARRANTY AS TO ANY MATTER WHATSOEVER,
         INCLUDING THE CONDITIONS OF THE RESEARCH OR ANY INVENTION OR PRODUCT,
         WHETHER TANGIBLE OR INTANGIBLE, MADE, OR DEVELOPED UNDER THIS CRADA, OR
         THE OWNERSHIP, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF
         THE RESEARCH OR ANY INVENTION OR PRODUCT.

13.3     Indemnification. ATHERSYS agrees to hold the UAB and UABRF harmless and
         to indemnify UAB and UABRF for all liabilities, demands, damages,
         expenses and losses arising out of the use by ATHERSYS for any purpose
         of the Subject Data, Research Materials and/or Subject Inventions
         produced in whole or part by

<PAGE>   12

         UAB employees under this CRADA, unless due to the negligence of UAB or
         UABRF, its employees, or agents. ATHERSYS shall be liable for any
         claims or damages it incurs in connection with this CRADA. UAB has no
         authority to indemnify ATHERSYS under Alabama State Law.

13.4     Force Majeure. Neither Party shall be liable for any unforeseeable
         event beyond its reasonable control not caused by the fault or
         negligence of such Party, which causes such Party to be unable to
         perform its obligations under this CRADA, and which it has been unable
         to overcome by the exercise of due diligence. In the event of the
         occurrence of such a force majeure event, the Party unable to perform
         shall promptly notify the other Party. It shall further use its best
         efforts to resume performance as quickly as possible and shall suspend
         performance only for such period of time as is necessary as a result of
         the force majeure event.

ARTICLE 14. MISCELLANEOUS

14.1     Governing Law. The construction, validity, performance and effect of
         this CRADA shall be governed by the Laws of the State of Alabama in the
         Northern District of Alabama.

14.2     Entire Agreement. This CRADA and the Materials Transfer Agreement,
         dated as of September 20, 2000 between the Parties (the "MTA")
         constitutes the entire agreement between the Parties concerning the
         subject matter of this CRADA and supersedes any prior understanding or
         written or oral agreement. In the event this CRADA contains terms or
         provisions, which conflict with or are inconsistent with the MTA, the
         terms of this CRADA shall govern, except where indicated in Article
         8.2.

14.3     Headings. Titles and headings of the articles and subarticles of this
         CRADA are for the convenience of reference only, do not form a part of
         this CRADA and shall in no way affect its interpretation.

14.4     Waivers. None of the provisions of this CRADA shall be considered
         waived by any Party unless such waiver is given in writing to the other
         Party. The failure of a Party to insist upon strict performance of any
         of the terms and conditions hereof, or failure or delay to exercise any
         rights provided herein or by law, shall not be deemed a waiver of any
         rights of any Party.

14.5     Severability. The illegality or invalidity of any provisions of this
         CRADA shall not impair, affect or invalidate the other provisions of
         this CRADA.

14.6     Amendments. If either Party desires a modification to this CRADA, the
         Parties shall, upon reasonable notice of the proposed modification or
         extension by the Party desiring the change, confer in good faith to
         determine the desirability of such modification or extension. Such
         modification shall not be effective until a

<PAGE>   13

         written amendment is signed by the signatories to this CRADA or by
         their representatives duly authorized to execute such amendment.

14.7     Assignment. Neither this CRADA nor any rights or obligations of any
         Party hereunder shall be assigned or otherwise transferred by either
         Party without the prior written consent of the other Party.

14.8     Notices. All notices pertaining to or required by this CRADA shall be
         in writing and shall be signed by an authorized representative and
         shall be delivered by hand or sent by certified mail, return receipt
         requested, with postage prepaid, to the addresses indicated on the
         signature page for each Party. Notices regarding the exercise of
         license options shall be made pursuant to Article 8.2. Any Party may
         change such address by notice given to the other Party in the manner
         set forth above.

14.9     Independent Contractors. The relationship of the Parties to this CRADA
         is that of independent contractors and not as agents of each other or
         as joint venturers or partners. Each Party shall maintain sole and
         exclusive control over its personnel and operations. ATHERSYS employees
         who will be working at UAB facilities may be asked to sign a Guest
         Researcher or some other type of agreement appropriately drafted in
         view of the terms of this CRADA.

14.10    Use of Name or Endorsements. By entering into this CRADA, UAB does not
         directly or indirectly endorse any product or service provided, or to
         be provided, whether directly or indirectly related to either this
         CRADA or to any patent or other IP license or agreement which
         implements this CRADA by its successors, assignees, or licensees.
         ATHERSYS shall not in any way state or imply that this CRADA is an
         endorsement of any such product or service by UAB or any of its
         organizational units or employees. Unless required by law, the use of
         the name, The University of Alabama at Birmingham or the name of any
         campus of the University of Alabama is expressly prohibited without
         prior written approval, except for filings with the SEC or required by
         law. Prior to public domain publication, UAB and ATHERSYS shall
         mutually agree upon the text of any publication as to the relationship
         of the Parties under this CRADA or the MTA.

14.11    Reasonable Consent. Whenever a Party's consent or permission is
         required under this CRADA, such consent or permission shall not be
         unreasonably withheld.

ARTICLE 15. DURATION OF AGREEMENT

15.1     Duration. It is mutually recognized that the duration of this project
         cannot be rigidly defined in advance, and that the contemplated time
         periods for various phases of the RP are only good faith guidelines
         subject to adjustment by mutual agreement to fit circumstances as the
         RP proceeds. In no case will the term of

<PAGE>   14

         this CRADA extend beyond the term indicated in the RP unless it is
         revised in accordance with Article 14.6.

15.2     Survivability. The provisions of Articles 4.2, 5.2, 5.3, 6.1, Articles
         7-9, 11.3-11.5, 11.5, 12.1, 13.2-13.4, 14.1, 14.10 and 15.2 shall
         survive the termination of this CRADA.

                                  [END OF PAGE]

<PAGE>   15

            CRADA SIGNATURE PAGE

FOR UAB:
/s/ Peter V. O'Neil     9/20/2000
---------------------------------------         -------------------------
                     Date
Peter V. O'Neil, Provost
-------------------------------------------------------------------------
Mailing Address for Notices:

701 20th Street South
-------------------------------------------------------------------------

Birmingham, Alabama 35205
-------------------------------------------------------------------------

FOR UABRF:
/s/ Peter V. O'Neil     9/20/2000
---------------------------------------
                     Date
Peter V. O'Neil, Provost
---------------------------------------         -------------------------

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

Mailing Address for Notices:

701 20th Street South, AB-1120
-------------------------------------------------------------------------
Birmingham, Alabama 35205
-------------------------------------------------------------------------

FOR ATHERSYS:
/s/ Gil Van Bokkelen 9/25/00
---------------------------------------         -------------------------
                     Date
/p/ Gil Van Bokkelen, President and Chief Executive Officer
-------------------------------------------------------------------------

Mailing Address for Notices:

3201 Carnegie Avenue
-------------------------------------------------------------------------
Cleveland, Ohio 44115-2634
-------------------------------------------------------------------------

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