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Collaboration Agreement - Ixsys Inc. and Bio-Management Inc.

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                            COLLABORATION AGREEMENT

         This COLLABORATION AGREEMENT (the "Agreement") dated as of November 29,
1999 (the "Effective Date"), is entered into between Ixsys, Inc., a Delaware
corporation ("Ixsys"), having a place of business at 3520 Dunhill Street, San
Diego, CA 92121, and Bio-Management Inc., a Nevada corporation
("Bio-Management"), having a place of business at Four Hook Road, Sharon Hill,
PA 19079.

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

                                    ARTICLE 1
                                   DEFINITIONS

         For purposes of this Agreement, the terms defined in the Article 1
shall have the respective meanings set forth below:

         1.1      "Affiliate" shall mean, with respect to any Person, any other
Person which directly or indirectly controls, is controlled by, or is under
common control with, such Person. A Person shall be regarded as in control of
another Person if it owns, or directly or indirectly controls, at least forty
percent (40%) of the voting stock or other ownership interest of the other
Person, or if it directly or indirectly possesses the power to direct or cause
the direction of the management and policies of the other Person by any means
whatsoever.

         1.2      "BLA" shall mean a Biologics License Application, Product
License Application, New Drug Application, or other application for marketing
approval of a product for use in any human or veterinary therapeutic application
submitted to the applicable governing health authority of any country.

         1.3      "Candidate Molecules" shall mean, collectively, monoclonal
antibody ("mAb") HUIV26 and mAb HUI77 as provided by Bio-Management to Ixsys
hereunder.

         1.4      "Confidential Information" shall mean, with respect to a
party, all information of any kind whatsoever (including without limitation,
data, compilations, formulae, models, patent disclosures, procedures, processes,
projections, protocols, results of experimentation and testing, specifications,
strategies and techniques), and all tangible and intangible embodiments thereof
of any kind whatsoever (including without limitation, apparatus, compositions,
documents, drawings, machinery, patent applications, records, reports), which is
disclosed by such party to the other party and is marked, identified as or
otherwise acknowledged to be confidential at the time of disclosure to the other
party. Notwithstanding the foregoing, Confidential Information of a party shall
not include information which the other party can establish by written
documentation (a) to have been publicly known prior to disclosure of such
information by the disclosing party to the other party, (b) to have become
publicly known, without fault on the part of the other party, subsequent to
disclosure of such information by the disclosing party to the other party, (c)
to have been received by the other party at any time from a source, other than
the disclosing party, rightfully having possession of and the right to disclose
such information, (d) to

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have been otherwise known by the other party prior to disclosure of such
information by the disclosing party to the other party, or (e) to have been
independently developed by employees or agents of the other party without access
to or use of such information disclosed by the disclosing party to the other
party.

         1.5      "Derived" or "derived" shall mean obtained, developed,
created, synthesized, designed, derived or resulting from, based upon or
otherwise generated (whether directly or indirectly, or in whole or in part).

         1.6      "Field" shall mean human and veterinary therapeutic and
diagnostic applications.

         1.7      "First Commercial Sale" shall mean, with respect to any
Product, the first sale of such Product by a party, its Affiliates or
sublicensees to customers who are not Affiliates in any country after all
applicable marketing and pricing approvals (if any) have been granted by the
applicable governing health authority of such country.

         1.8      "FDA" shall mean the United States Food and Drug
Administration, or the successor thereto.

         1.9      "IND" shall mean an Investigational New Drug application, or
any other filing with the governing regulatory of any country to commence
clinical testing of a product for use in any human or veterinary therapeutic
application submitted to the applicable governing health authority of any
country.

         1.10     "Materials" shall mean the Candidate Molecules, DNA sequence
information and the cDNA to encode Candidate Molecules and the hybridoma cell
lines expressing the Candidate Molecules.

         1.11     "Net Sales" shall mean, with respect to each Product, the
gross sales price charged by Bio-Management, its Affiliates and sublicensees or
Ixsys, its Affiliates and sublicensees for sales of such Product to
non-Affiliate customers, less, to the extent such amounts are deducted by the
customer from the amounts paid to the seller: (i) normal and customary trade,
cash and quality credits, discounts, refunds or government rebates; (ii) credits
for claims, allowances or returns; retroactive price reductions; chargebacks or
the like; and (iii) sales taxes, duties and other governmental charges
(including value added tax), but excluding what is commonly known as income
taxes. Net Sales shall not include sales among Bio-Management, its Affiliates
and sublicensees or Ixsys its Affiliates and sublicensees for resale, provided
that Net Sales shall include the amounts invoiced by Bio-Management, its
Affiliates and sublicensees or Ixsys its Affiliates and sublicensees to Third
Parties on the resale of such Products.

         1.12     "Person" shall mean an individual, corporation, partnership,
limited liability company, trust, business trust, association, joint stock
company, joint venture, pool, syndicate, sole proprietorship, unincorporated
organization, governmental authority or any other form of entity not
specifically listed herein.

         1.13     "Phase II Clinical Trial" shall mean a human clinical trial in
any country that is intended to initially evaluate the effectiveness of a
product for a particular indication or

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indications in patients with the disease or indication under study, or that
would otherwise satisfy requirements of 21 CFR 312.21(b), or its foreign
equivalent.

         1.14     "PMA" shall mean a Product Marketing Application, 510(k)
application or other application for marketing approval of a product for use in
any human or veterinary diagnostic application submitted to the applicable
governing health authority of any country.

         1.15     "Product" shall mean any product for use in the Field, which
is a composition that incorporates one or more Program Antibodies or is derived
from one or more Program Antibodies.

         1.16     "Program" shall mean the collaborative research program
described in Section 3.1 below to optimize and humanize the Candidate Molecules,
and to use the Program Antibodies (as defined below) to evaluate their
diagnostic and therapeutic potential.

         1.17     "Program Antibody" shall mean the optimized and humanized
compositions of matter developed under the Program, and the cDNA encoding such
compositions of matter, delivered to Bio-Management hereunder.

         1.18     "Program Invention" shall mean any invention, discovery,
composition, technology, data or information (whether or not patentable), made
or conceived by employees or others on behalf of Ixsys, Bio-Management or both
in the performance of the Program during the term of the Program, excluding
Program Antibodies.

         1.19     "Research Plan" shall mean the written research work plan
established by the parties pursuant to Section 3.2 below, as modified from time
to time pursuant to Section 3.2.

         1.20     "Third Party" shall mean any Person other than Ixsys,
Bio-Management and their respective Affiliates.

                                    ARTICLE 2
                         REPRESENTATIONS AND WARRANTIES

         Each party hereby represents and warrants to the other party as
follows:

         2.1      Corporate Existence. Such party is a corporation duly
organized, validly existing and in good standing under the laws of the state in
which it is incorporated.

         2.2      Authorization and Enforcement of Obligations. Such party (a)
has the corporate power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder, and (b) has taken all
necessary corporate action on its part to authorize the execution and delivery
of this Agreement and the performance of its obligations hereunder. This
Agreement has been duly executed and delivered on behalf of such party, and
constitutes a legal, valid, binding obligation, enforceable against such party
in accordance with its terms.

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         2.3      Consents. All necessary consents, approvals and authorizations
of all governmental authorities and other Persons required to be obtained by
such party in connection with this Agreement have been obtained.

         2.4      No Conflict. The execution and delivery of this Agreement and
the performance of such party's obligations hereunder (a) do not conflict with
or violate any requirement of applicable laws or regulations and (b) do not
conflict with, or constitute a default under, any contractual obligation of such
party.

         2.5      DISCLAIMER OF WARRANTIES. NEITHER PARTY MAKES ANY
REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE MATERIALS
(INCLUDING BUT NOT LIMITED TO THE CANDIDATE MOLECULES), INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR
NONINFRINGEMENT OF THE PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY RIGHTS OF
ANY OTHER PERSON.

                                    ARTICLE 3
                                   THE PROGRAM

         3.1      Collaborative Research. The goal of the Program is: (a)
humanize and optimize Candidate Molecules, and (b) to perform certain
preclinical development.

         3.2      Conduct of Program. An initial Research Plan is attached as
Schedule A. Either party may recommend changes to the Research Plan at any time
during the Program Term. Such change shall only be effective if in a written
amendment duly executed by the parties.

         3.3      Specific Obligations of Bio-Management. Bio-Management shall
provide Ixsys with sufficient quantities of the Materials, sufficient quantities
of a single soluble antigen per Candidate Molecule for purposes of screening and
affinity determination (such single soluable antigen per Candidate molecule
shall be specified in writing prior to the transfer of the Materials to Ixsys),
antigens to which the Materials are directed, and any Bio-Management technology
necessary or useful for the humanization and optimization in accordance with the
Program, and any information known and available to Bio-Management concerning
the storage of the Materials that may be unique or peculiar to the Materials.
Bio-Management shall use its commercially reasonable efforts to perform its
obligations under the Program in accordance with the Research Plan.
Bio-Management shall perform its obligations under the Program in accordance
with high scientific and professional standards, and in compliance with all
material respects within the requirements of applicable laws and regulations and
shall provide all reasonable assistance to Ixsys in connection with Ixsys'
performance of the Program.

         3.4      Specific Obligations of Ixsys. Ixsys shall optimize and
humanize the Candidate Molecules as set forth in the Research Plan. Ixsys shall
use its commercially reasonable efforts to perform its obligations under the
Program in accordance with the Research Plan. Ixsys shall provide the personnel,
materials, equipment and other resources required to conduct its obligations
under the Program. Ixsys shall perform its obligations under the Program in

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accordance with high scientific and professional standards, and in compliance in
all material respects with the requirements of applicable laws and regulations.

         3.5      Materials. Ixsys shall use the Materials solely for purposes
of conducting the Program, at its address listed above, under commercially and
scientifically reasonable containment conditions, and not for any commercial,
business or other use or purpose, without the prior express written consent of
Bio-Management. Notwithstanding anything to the contrary in this Agreement,
Ixsys shall not transfer or provide access to the Materials to any Third Party,
without the prior express written consent of Bio-Management. Ixsys shall not
transfer or transport the Materials from its address identified above to any
other location. Ixsys shall limit access to the Materials to those of its
employees working on its premises, to the extent such access is reasonably
necessary in connection with its activities as expressly authorized by this
Agreement; provided, however that each such employee shall be bound by
confidentiality obligations at least as stringent as those in Section 5.1.

         3.6      Funding of the Program. In consideration of Ixsys' performance
of its obligations under the Research Plan or the identification of a Program
Antibody demonstrating an affinity equal to or greater than [***] times the
initial affinity of the Candidate Molecule from which that Program Antibody was
derived as determined by an in vitro assay to be agreed upon by the parties,
Bio-Management shall pay to Ixsys the amounts set forth in Schedule B.


         3.7      Term of the Program. Unless earlier terminated as provided
herein, the term of the Program and this Agreement shall begin on the Effective
Date and continue for the subsequent seven (7) months (the "Program Term").
Bio-Management shall have the right (in its sole discretion), exercisable by
giving Ixsys express written notice of such exercise not less than thirty (30)
days prior to the expiration of the Program Term, to extend the Program Term
with respect to the following Candidate Molecules: mAb XL313 and mAb FM155, for
the period commencing on the date ninety (90) days following the date Ixsys
timely receives such notice of exercise from Bio-Management and continuing for
the subsequent seven (7) months.


         3.8      Results.

                  3.8.1    Reports. Within thirty (30) days following the end of
the initial seven (7) month period of the Program, within thirty (30) days
following the expiration or termination of the Program (if extended), and within
thirty (30) days after the end of each six (6) month period thereafter for the
following ten (10) years, each Party shall prepare, and provide to the other
party, a reasonably detailed written report which shall describe the work
performed by such party during that period, and the results achieved, to date
under this Agreement, together with copies of all data resulting from the tests
and evaluation performed by such party to date under the Agreement. Such reports
shall include, without limitation, pre-clinical animal studies of efficacy,
toxicity and immunogenicity; and regulatory filings such as Investigational New
Drug ("IND") applications, and Phase I, Phase II and Phase III FDA reports.

                  3.8.2    Records. Each party shall maintain records, in
sufficient detail and in good scientific manner appropriate for patent purposes,
which shall be complete and accurate and shall fully and properly reflect all
work done and results achieved in the performance of the Program.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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                  3.8.3    Inspection of Records. Each party shall have the
right, during normal business hours and on reasonable written notice, to inspect
and copy such records of the other party regarding the work done and results
achieved in the performance of the Program, to the extent reasonably necessary
to enable such party to conduct its obligations under the Program or to exercise
its rights hereunder. Each party shall maintain such records of the other party
(together with the information contained therein) in confidence in accordance
with Article 5 below and shall not use such records (or information) except to
the extent otherwise permitted by this Agreement.

         3.9      Program Leaders. Each party shall appoint a person (a "Program
Leader") to coordinate its part of the Program. The Program Leaders shall be the
primary contacts between the parties with respect to the Program. Each party
shall notify the other within thirty (30) days after the date of this Agreement
of the appointment of its Program Leader and shall notify the other party as
soon as practicable upon changing this appointment.

         3.10     Subcontracts. Ixsys may not subcontract portions of the
Program to be performed by it in the normal course of its business without the
prior written consent of Bio-Management.


         3.11     Sale of Program Antibodies. Subject to the terms and
conditions herein, Ixsys hereby sells, assigns, transfers and conveys to
Bio-Management all right, title and interest in and to the Program Antibodies.
Ixsys shall not use the Program Antibodies, or the suboptimized and humanized
compositions of matter derived by Ixsys from the Candidate Molecules under the
Program (or the cDNA encoding such compositions of matter), for any purpose
other than the performance of its obligations under this Agreement.


         3.12     Materials and Program Antibodies. The parties hereby
acknowledge that the Materials and the Program Antibodies are experimental in
nature and that they are provided "AS IS" AND WITHOUT ANY REPRESENTATION OR
WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY
OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR ANY WARRANTY THAT
THE USE OF THE MATERIALS OR THE PROGRAM ANTIBODIES WILL NOT INFRINGE OR VIOLATE
ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

         3.13     Each party hereby represents that all employees and other
persons acting on its behalf in performing its obligations under the program
shall be obligated under a binding written agreement to assign to it, or as it
shall direct, all Inventions made or conceived by such employees or other
persons.

         3.14     Prosecution, Maintenance and Enforcement.


                  3.14.1   Bio-Management shall have the right, at its sole
discretion, to control the preparation, filing, prosecution, maintenance and
enforcement of all patent applications and patents which claim Program
Antibodies, with the exception that Campbell & Flores LLP, or another
intellectual property counsel with biotechnology expertise specifically in the
field of human antibodies, shall be appointed by mutual agreement between the
parties and retained as





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the intellectual property counsel for the prosecution and maintenance of all
patent applications and patents which claim Program Antibodies.


                  3.14.2   Bio-Management hereby assigns to Ixsys all right,
title and interest in the Program Inventions and all patent rights and other
intellectual property rights therein. Ixsys shall have the right, at its sole
discretion, to control the preparation, filing, prosecution, maintenance and
enforcement of all patent applications and patents which claim Program
Inventions. Nothing in this Section 3.14.2 shall relieve Ixsys from its
confidentiality obligations set forth in Article 5 below.

                                    ARTICLE 4
                                  CONSIDERATION

         4.1      Financial Terms.

                  4.1.1    Notice of First Commercial Sale. Within thirty (30)
days following the First Commercial Sale for each Product in each country, and
within thirty (30) days after the occurrence of each of the milestone events
described in Section 4.1.4 below, Bio-Management shall give written notice to
Ixsys thereof.


                  4.1.2    Royalties. In consideration for the sale of Program
Antibodies to Bio-Management pursuant to Section 3.11 above, Bio-Management
shall pay to Ixsys royalty equal to [***] of Net Sales of Products sold by
Bio-Management, its Affiliates and sublicensees; provided, however, in the event
that a Program Antibody demonstrates an affinity equal to or greater than [***]
times the initial affinity of the Candidate Molecule from which that Program
Antibody was derived, Bio-Management shall pay to Ixsys a royalty equal to [***]
of Net Sales of Products sold by Bio-Management, its Affiliates and
sublicensees.



                  4.1.3    Length of Royalty Obligations. Bio-Management's
obligation to pay royalties with respect to each Product in such country shall
commence on the First Commercial Date for such Product in such country, and
shall continue for such Product in such country until the date ten (10) years
from the First Commercial Sale.


                  4.1.4    Milestone Payments.

                           a.       Within thirty (30) days after the first
occurrence of each of the following milestone events with respect to each
Product for use in any human or veterinary therapeutic application,
Bio-Management shall pay to Ixsys the applicable non-refundable, non-creditable
milestone payment set forth below:

        ***     upon submission of the first IND for such Product

        ***     upon enrollment of the first patient in the first Phase II
                Clinical Trial for such Product

        ***     upon submission of the first BLA for such Product

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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        ***     upon receipt of the first marketing approval (and pricing
                approval,

If any milestone event listed in this Section 4.1.4(a) is achieved with respect
to a Product for use in any human or veterinary therapeutic application, and at
such time any one or more of the milestone events previously listed in this
Section 4.1.4(a) has not been achieved with respect to such Product, then at the
time of the payment of the milestone payment for such achieved milestone event,
Bio-Management shall pay to Ixsys the previously listed and unpaid payments for
such unmet milestone events. At the time of the First Commercial Sale of a
Product for use in any human or veterinary therapeutic application, if any one
or more of the milestone events listed in this Section 4.1.4(a) has not been
achieved with respect to such Product, then within thirty (30) days after the
First Commercial Sale of such Product, Bio-Management shall pay to Ixsys all
payments for such unmet milestone events for such Product.

                           b.       Within thirty (30) days after the first
occurrence of each of the following milestone events with respect to each
Product for use in any human or veterinary diagnostic application,
Bio-Management shall pay to Ixsys the applicable non-refundable, non-creditable
milestone payment set forth below:

        ***     upon initiation of the first clinical trials of a Product
                intended to gather data to be incorporated into a PMA for such
                Product

        ***     upon submission of the first PMA for such Product

If any milestone event listed in this Section 4.1.4(b) is achieved with respect
to a Product for use in any human or veterinary diagnostic application, and at
such time any one or more of the milestone events previously listed in this
Section 4.1.4(b) has not been achieved with respect to such Product, then at the
time of the payment of the milestone payment for such achieved milestone event,
Bio-Management shall pay to Ixsys the previously listed and unpaid payments for
such unmet milestone events. At the time of the First Commercial Sale of a
Product for use in any human or veterinary diagnostic application, if any one or
more of the milestone events listed in this Section 4.1.4(b) has not been
achieved with respect to such Product, then within thirty (30) days after the
First Commercial Sale of such Product, Bio-Management shall pay to Ixsys all
payments for such unmet milestone events for such Product.

                           c.       Within thirty (30) days after Bio-Management
first grants or transfers to, or authorizes, any other Person any license or
other right to conduct research (other than basic research conducted at academic
or non-profit institutions), develop or commercialize any Product,
Bio-Management shall pay to Ixsys [***] per Product.

                           d.       Notwithstanding anything to the contrary in
this Agreement, Bio-Management shall not be obligated to pay each milestone
payment set forth above more than once with respect to each milestone event
described above, beyond one series of milestone payments as encompassed by the
provisions of this Section 4.1.4, for all such Products derived from the same
Candidate Molecule.

         4.2      Royalty Reports and Payment Terms.

                  4.2.1    Royalty Reports. Within thirty (30) days after the
end of each calendar quarter during the term of this Agreement following the
First Commercial Sale of a Product by Bio-Management, its Affiliate, licensees
or sublicensee, Bio-Management shall furnish to Ixsys a written report showing
in reasonably specific detail, on a Product-by-Product and country-by-

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

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country basis, (a) the gross sales of all Products sold by Bio-Management, its
Affiliates, licensees, and sublicensees during such calendar quarter and the
calculation of Net Sales from such gross sales; (b) the calculation of the
royalties, if any, which shall have accrued based upon such Net Sales; (c) the
withholding taxes, if any, required by law to be deducted with respect to such
sales; and (d) the exchange rates, if any, used in determining the amount of
United States dollars.

                  4.2.2    With respect to sales of Products invoiced in United
States dollars, all such amounts shall be expressed in United States dollars.
With respect to sales of Products invoiced in a currency other than United
States dollars, all such amounts shall be expressed both in the currency in
which the distribution is invoiced and in the United States dollar equivalent.
The United States dollar equivalent shall be calculated using the exchange rate
(local currency per US$1) published in The Wall Street Journal, Western Edition,
under the heading "Currency Trading," on each of the last business day of each
month during the applicable calendar quarter.

                  4.2.3    Bio-Management shall keep complete and accurate
records in sufficient detail to properly reflect all gross sales and Net Sales
and to enable the royalties payable to be determined.

         4.3      Audits.

                  4.3.1    Upon the written request of Ixsys and not more than
once in each calendar year, Bio-Management shall permit an independent certified
public accounting firm of nationally recognized standing, selected by Ixsys and
reasonably acceptable to Bio-Management, at Ixsys' expense, to have access
during normal business hours to such of the records of Bio-Management as may be
reasonably necessary to verify the accuracy of the royalty reports hereunder for
any year ending not more than thirty-six (36) months  prior to the date of such
request. The accounting firm shall disclose to Ixsys only whether the reports
are correct or not and the specific details concerning any discrepancies. No
other information shall be shared.

                  4.3.2    If such accounting firm concludes that additional

royalties were owed during the audited period, Bio-Management shall pay the
additional royalties within thirty (30) days of the date Ixsys delivers to
Bio-Management such accounting firm's written report so concluding. The fees
charged by such accounting firm shall be paid by Ixsys; provided, however, if
the audit discloses that the royalties payable by Bio-Management for such period
are more than [***] of the royalties actually paid for such period, then
Bio-Management shall pay the reasonable fees and expenses charged by such
accounting firm.

                  4.3.3    Ixsys shall treat all financial information subject
to review under this Section 4.3 as confidential, and shall cause its accounting
firm to retain all such financial information in confidence.

                  4.3.4    Payment Terms. All royalties shown to have accrued by
each royalty report provided for under Section 4.1 above shall be payable on the
date such royalty report is due. Payment of royalties in whole or in part may be
made in advance of such due date.

                  4.3.5    Payment Method. All payments by Bio-Management to
Ixsys under this Agreement shall be paid in United States dollars, and all such
payments shall be originated from

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.



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a United States bank located in the United States and made by bank wire transfer
in immediately available funds to such account as Ixsys shall designate before
such payment is due.

                  4.3.6    Exchange Control. If at any time legal restrictions
prevent the prompt remittance of part or all royalties with respect to any
country where the Product is sold, Bio-Management shall have the right, at its
option, to make such payments by depositing the amount thereof in local currency
to Ixsys' account in a bank or other depository in such country. If the royalty
rate specified in this Agreement should exceed the permissible rate established
in any country, the royalty rate for sales in such country shall be adjusted to
the highest legally permissible or government-approved rate.

                  4.3.7    Withholding Taxes. Bio-Management shall be entitled
to deduct the amount of any withholding taxes, value-added taxes or other taxes,
levies or charges with respect to such amounts, other than United States taxes,
payable by Bio-Management, or any taxes required to be withheld by
Bio-Management, to the extent Bio-Management pays to the appropriate
governmental authority on behalf of Ixsys such taxes, levies or charges. Bio-
Management shall use reasonable efforts to minimize any such taxes, levies or
charges required to be withheld on behalf of Ixsys by Bio-Management.
Bio-Management promptly shall deliver to Ixsys proof of payment of all such
taxes, levies and other charges, together with copies of all communications from
or with such governmental authority with respect thereto.

                                    ARTICLE 5
                                 CONFIDENTIALITY

         5.1      Confidential Information. 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 all Confidential
Information disclosed by the other party, and shall not use, disclose or grant
the use of the Confidential Information except on a need-to-know basis to those
directors, officers, employees, consultants, clinical investigators,
contractors, sublicensees, distributors or permitted assignees, 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 is authorized by this Agreement, prior to disclosure, each party
hereto shall obtain agreement of any such Person to hold in confidence and not
make use of the Confidential Information for any purpose other than those
permitted by this Agreement. Each party shall notify the other promptly upon
discovery of any unauthorized use or disclosure of the other party's
Confidential Information.

         5.2      Terms of this Agreement. Except as otherwise provided in
Section 5.1 above, neither party shall disclose any terms or conditions of this
Agreement to any Third Party without the prior written consent of the other
party. Notwithstanding the foregoing, prior to execution of this Agreement, the
parties shall agree upon the substance of information that can be used to
describe the terms of this transaction, and each party may disclose such
information, as modified by mutual agreement from time to time, without the
other party's consent.

         5.3      Permitted Disclosures. The confidentiality obligations
contained in this Article 5 shall not apply to the extent that the receiving
party (the "Recipient") is required (a) to disclose

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information by law, order or regulation of a governmental agency or a court of
competent jurisdiction, or (b) to disclose information to any governmental
agency for purposes of obtaining approval to test or market a Product, provided
in either case that the Recipient shall provide written notice thereof to the
other party and sufficient opportunity to object to any such disclosure or to
request confidential treatment thereof.

         5.4      Notice of Publication. During the term of the Agreement, Ixsys
and Bio-Management each acknowledge the other party's interest in publishing
certain of its results to obtain recognition within the scientific community and
to advance the state of scientific knowledge. Each party also recognizes the
mutual interest in obtaining valid patent protection and protecting business
interests. Consequently, either party, its employees or consultants wishing to
make a publication (including any oral disclosure made without obligation of
confidentiality) relating to work performed by such party as part of the Program
(the "Publishing Party") shall transmit to the other party (the "Reviewing
Party") a copy of the proposed written publication at least forty-five (45) days
prior to the presentation. The Reviewing Party shall have the right (a) to
propose modifications to the publication for patent reasons, (b) to request a
reasonable delay in publication in order to protect patentable information and
(c) to edit the publication in a manner reasonably acceptable to the Publishing
Party to protect its Confidential Information.

                                    ARTICLE 6
                                    DILIGENCE

         Bio-Management shall use its best efforts to actively research, develop
and obtain regulatory approvals to market in major markets throughout the world
at least one Product hereunder as expeditiously as possible, and following such
approval to maximize sales of such Product. Without limiting the foregoing,
Bio-Management shall meet the following diligence milestones by the dates set
forth below:

         6.1      Filing of IND. Bio-Management, its licensees or sublicensees
shall file an IND with the U.S. FDA for one or more Products under this
Agreement within five (5) years of the Effective Date. After the filing of an
IND for a Product, Bio-Management, its licensees or sublicensees, shall be
required to have an active IND and to be actively and diligently conducting
clinical trials in pursuit of regulatory approval for such Product in the U. S.
until such Product may be sold commercially in the U.S.

         6.2      Conduct of Clinical Trials. Bio-Management, its licensees or
sublicensees shall use its best efforts to conduct, as soon as commercially
practicable, such human clinical trials as are necessary or desirable to obtain
all regulatory approvals to develop and commercialize in the U.S. each Product
for which an IND has been filed.

         6.3      Obtain Regulatory Approvals. Bio-Management, its licensees or
sublicensees shall use its best efforts to obtain, as soon as commercially
practicable, regulatory approval to market in the U.S. at least one Product, and
(b) shall obtain regulatory approval to market in the United States at least one
Product within ten (10) years after the Effective Date.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                     - 11 -



<PAGE>

                                    ARTICLE 7
                              TERM AND TERMINATION

         7.1      Expiration. Unless terminated earlier pursuant to Section 7.2
below, this Agreement shall expire on the expiration of Bio-Management's
obligations to pay royalties under this Agreement.

         7.2      Termination for Cause. A party may terminate this Agreement
upon or after the breach of any material provision of this Agreement by the
other party, if the breaching party has not cured such breach within thirty (30)
days after notice thereof from the other party; provided, however, that if the
breach is due to Bio-Management's failure to pay under Article 4 or Section 3.6,
Ixsys shall provide an additional notice of failure to pay and allow
Bio-Management a second thirty (30) day period to cure such breach. If
Bio-Management fails to cure such breach during the second [***] period, Ixsys
shall provide a third and final notice of failure to pay and allow
Bio-Management a third and final [***] period to cure such breach prior to any
termination hereunder.

         7.3      Effect of Expiration and Termination. Expiration or
termination of this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination. The provisions of Articles 2,
5, 8, and Sections 3.8.1, 3.12, 7.4 and 9.11 shall survive the expiration or
termination of this Agreement.

         7.4      Effect of Certain Breaches. In addition to all other rights
and remedies available by law or otherwise, in the event of a breach of the
provisions of Section 3.6 or Article 4 or 6 above, Ixsys shall have the right to
terminate the Agreement pursuant to Section 7.2 thereof. In the event of such
termination, Bio-Management shall grant to Ixsys an exclusive license under all
Bio-Management's patent rights relating to Program Antibodies, Products and the
use of thereof in the Field. In addition, Bio-Management shall deliver to Ixsys
copies of all data and information in Bio-Management's control resulting from
research related to the Program Antibodies and Products, and shall assign and
deliver to Ixsys all copies of any and all regulatory filings related to Program
Antibodies and Products. In consideration of the foregoing, Ixsys shall pay to
Bio-Management the following: (a) [***] of cash consideration received by Ixsys
or its Affiliates in consideration for sublicenses (including modified or
renegotiated sublicenses) granted thereunder (excluding royalties on sales) and
(b) with respect to sales, all royalties received on Net Sales of Products
covered by Bio-Management's patents on Program Antibodies or Products except for
[***] of which shall be retained by Ixsys; provided, however, that in the event
that Ixsys sells Products directly, Ixsys shall only pay to Bio-Management a
royalty equal to [***] of Net Sales on Products sold by Ixsys. In the event that
such termination occurs and an exclusive license to Ixsys is granted pursuant to
this Section 7.4 and Bio-Management previously has granted license or sublicense
rights to any third party, Ixsys shall enter into a license or sublicense, as
the case may be, on substantially the same terms provided that such third party
agrees in writing to be bound by all of the terms and conditions therein.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                     - 12 -

<PAGE>

                                    ARTICLE 8
                                    INDEMNITY

         8.1      Indemnity.

                  8.1.1    By Ixsys. Ixsys shall indemnify and hold
Bio-Management harmless, and hereby forever releases and discharges
Bio-Management, from and against all losses, liabilities, damages and expenses
(including reasonable attorneys' fees and costs) resulting from all claims,
demands, actions and other proceedings by any Third Party to the extent arising
from (a) the breach of any representation, warranty or covenant of Ixsys under
this Agreement, (b) the use of the Materials by Ixsys or, its Affiliates, or (c)
the gross negligence or willful misconduct of Ixsys, its Affiliates or licensees
in the performance of its obligations, and its permitted activities, under this
Agreement.

                  8.1.2    By Bio-Management. Bio-Management shall indemnify and
hold Ixsys harmless, and hereby forever releases and discharges Ixsys, from and
against all losses, liabilities, damages and expenses (including reasonable
attorneys' fees and costs) resulting from all claims, demands, actions and other
proceedings by any Third Party to the extent arising from (a) the breach of any
representation, warranty or covenant of Bio-Management under this Agreement, (b)
the use of the Materials by Bio-Management, its Affiliates or licensees (other
than Ixsys), (c) the making, using or selling of Products (including claims,
demands, actions or other proceedings based on strict liability), or (d) the
gross negligence or willful misconduct of Bio-Management, its Affiliates or
licensees (other than Ixsys) in the performance of its obligations, and its
permitted activities, under this Agreement.

         8.2      Procedure. A party (the "Indemnitee") that intends to claim
indemnification under this Article 8 shall promptly notify the other party (the
"Indemnitor") of any claim, demand, action or other proceeding for which the
Indemnitee intends to claim such indemnification. The Indemnitor shall have the
right to participate in, and to the extent the Indemnitor so desires jointly
with any other indemnitor similarly noticed, to assume the defense thereof with
counsel selected by the Indemnitor; provided, however, that the Indemnitee shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the Indemnitor, if representation of the Indemnitee by the counsel retained
by the Indemnitor would be inappropriate due to actual or potential differing
interests between the Indemnitee and any other party represented by such counsel
in such proceedings. The indemnity obligations under this Article 8 shall not
apply to amounts paid in settlement of any claim, demand, action or other
proceeding if such settlement is effected without the prior express written
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 notice of any such claim or demand, or the commencement of any such
action or other proceeding, if prejudicial to its ability to defend such claim,
demand, action or other proceeding, shall relieve such Indemnitor of any
liability to the Indemnitee under this Article 8 with respect thereto, but the
omission so to deliver notice to the Indemnitor shall not relieve it of any
liability that it may have to the Indemnitee otherwise than under this Article
8. The Indemnitor may not settle or otherwise consent to an adverse judgment in
any such claim, demand, action or other proceeding, that diminishes the rights
or interests of the Indemnitee without the prior express written consent of the
Indemnitee, which consent shall not be unreasonably withheld or delayed. The
Indemnitee, its employees and agents, shall reasonably cooperate with the
Indemnitor and its legal representatives in the investigation of any claim,
demand, action or other proceeding covered by this Article 8.

                                     - 13 -

<PAGE>

         8.3      Insurance. Each party shall maintain insurance with respect to
the development, manufacture and sales of Products by such party, its Affiliates
or sublicensees in such amounts as such party customarily maintains with respect
to the development, manufacture and sales of its other products. Each party
shall maintain such insurance for so long as it continues to develop,
manufacture or sell Products, and thereafter for so long as it customarily
maintains insurance for itself covering the development, manufacture and sales
of its other products.

                                    ARTICLE 9
                                  MISCELLANEOUS

         9.1      Notices. Any consent, notice or report required or permitted
to be given or made under this Agreement by one of the parties to the other
shall be in writing and addressed to such other party at its address indicated
below, or to such other address as the addressee shall have last furnished in
writing to the addressor, and shall be effective upon receipt by the addressee.

                  If to Ixsys:             Ixsys, Inc.
                                           3520 Dunhill Street
                                           San Diego, California 92121
                                           Attention: Lawrence E. Bloch, M.D.,
                                                      M.B.A.

                  with a copy to:          Pillsbury Madison & Sutro LLP
                                           235 Montgomery Street, 16th Floor
                                           San Francisco, California 94104
                                           Attention: Thomas E. Sparks, Jr.

                  If to Bio-Management:    Bio-Management Inc.
                                           Four Hook Road
                                           Sharon Hill, PA 19079
                                           Attention: Mr. Raymond A. Mirra, Jr.

                  with a copy to:          Bio-Management Inc.
                                           Four Hook Road
                                           Sharon Hill, PA 19079
                                           Attention: Joseph A. Troilo, Jr.

         9.2      Assignment. Except as otherwise expressly provided under this
Agreement neither this Agreement nor any right or obligation hereunder may be
assigned or otherwise transferred (whether voluntarily, by operation of law or
otherwise), without the prior express written consent of the other party;
provided, however, that either party may, without such consent, assign this
Agreement and its rights and obligations hereunder in connection with the
transfer or sale of all or substantially all of its business related to this
Agreement or in the event of its merger, consolidation, change in control or
similar transaction. Any permitted assignee shall assume all obligations of its
assignor under this Agreement. Any purported assignment or transfer in violation
of this Section 9.2 shall be void.

                                     - 14 -

<PAGE>

         9.3      Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, without regard
to the conflicts of law principles thereof.

         9.4      Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof. All
express or implied representations, agreements and understandings, either oral
or written, heretofore made are expressly superseded by this Agreement. This
Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by both parties.

         9.5      Headings. The captions to the several Articles and Sections
hereof are not a part of this Agreement, but are merely guides or labels to
assist in locating and reading the several Articles and Sections hereof.

         9.6      Independent Contractors. Each party hereby acknowledges that
the parties shall be independent contractors and that the relationship between
the parties shall not constitute a partnership, joint venture or agency. Neither
party shall have the authority to make any statements, representations or
commitments of any kind, or to take any action, which shall be binding on the
other party, without the prior consent of the other party to do so.

         9.7      Waiver. The waiver by a party of any right hereunder, or of
any failure to perform or breach by the other party hereunder, shall not be
deemed a waiver of any other right hereunder or of any other breach or failure
by the other party hereunder whether of a similar nature or otherwise.

         9.8      Force Majeure. A party shall neither be held liable or
responsible to the other party, nor be deemed to have defaulted under or
breached this Agreement, for failure or delay in fulfilling or performing any
obligation under this Agreement (other than an obligation for the payment of
money) to the extent, and for so long as, such failure or delay is caused by or
results from causes beyond the reasonable control of such party including but
not limited to fire, floods, embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, acts of God or acts, omissions or delays in acting by
any governmental authority or the other party.

         9.9      Other Activities. Except as otherwise expressly provided in
this Agreement, nothing in this Agreement shall preclude either party from
conducting other programs (either for its own benefit or with or for the benefit
of any other Person) to conduct research, or to develop or commercialize
products or services, for use in any field.

         9.10     Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         9.11     Arbitration. All controversies or claims under this Agreement,
the enforcement or interpretation hereof, or because of an alleged breach,
default or misrepresentation under the provisions hereof, shall be settled by
final and binding arbitration in San Diego, California in accordance with the
then-existing commercial arbitration rules (the "Rules") of the American
Arbitration Association ("AAA"), and judgment upon the award rendered by the
arbitrators may

                                     - 15 -

<PAGE>

be entered in any court having jurisdiction thereof; provided, however, that the
law applicable to any controversy shall be the law of the State of California,
regardless of its or any other jurisdiction's choice of law principles. In any
arbitration pursuant to this Agreement, the award or decision shall be rendered
by the majority of the members of a Board of Arbitration consisting of three (3)
members, one of whom shall be appointed by each party and the third of whom
shall be the chairman of the panel and shall be appointed be mutual agreement of
said two party-appointed arbitrators. In the event of a failure of said two
arbitrators to agree within sixty (60) days after the commencement of the
arbitration proceeding upon the appointment of the third arbitrator, the third
arbitrator shall be appointed by the AAA in accordance with the Rules. In the
event that either party shall fail to appoint an arbitrator within thirty (30)
days after the commencement of the arbitration proceedings, such arbitrator
shall be appointed by the AAA in accordance with the Rules. Notwithstanding the
foregoing, the parties may apply to any court of competent jurisdiction for a
temporary restraining order, as necessary, without breach of this arbitration
agreement and without abridgement of the powers of the arbitrator. In no event
shall the demand for arbitration be made after the date when institution of a
legal or equitable proceeding based on such claim, dispute or other matter in
question would be barred by the applicable statute of limitation.

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

Bio-Management, Inc.                   Ixsys, Inc.

Signature: /s/ Raymond A Mirra, Jr.    Signature: /s/Lawrence E. Bloch
Name:  Mr. Raymond A Mirra, Jr.        Name:  Lawrence E. Bloch, M.D.,M.B.A
Title: Vice President                  Title: Vice President of Business
                                              Development

                                     - 16 -

<PAGE>

                                   SCHEDULE A

                                  RESEARCH PLAN

                                  RESEARCH PLAN


        A.      Antibody Cloning
                a.      Sequence murine antibody DNA
                        i.      Use specific primers if protein sequence is
                                known
                        ii.     Design degenerate signal sequence primers if
                                protein sequence is unknown
                b.      Express chimeric antibody (human constant region fused
                        with murine variable region)
                        i.      Clone murine antibody into Ixsys' phage
                                expression system

        B.      Assay Development and Validation
                a.      Determine antigen labeling/detection system using murine
                        monoclonal antibody (ELISA format)
                b.      Establish and optimize capture lift parameters using
                        chimeric construct
                c.      Establish and optimize capture ELISA parameters using
                        chimeric construct
                d.      Establish and optimize direct ELISA parameters
                e.      Validate all assays to demonstrate:
                        i.      Time- and concentration-dependence of signal
                        ii.     Saturability of signal
                        iii.    Specificity of signal (competable)

        C.      Design and Synthesis of Humanization/Optimization Libraries
                ***
                ***
                ***
                ***
                        ***
                        ***
                        ***

        D.      Screening
                a.      High density capture lift screening of libraries
                b.      Plaque purification of optimal clones
                c.      Capture ELISA characterization of clones identified in
                        capture lift screening
                d.      Direct ELISA characterization of highest affinity clones

<PAGE>

        E.      Characterization
                a.      DNA sequencing to identify framework motif and
                        beneficial CDR mutations
                b.      Transfer best clones to expression vector
                c.      Purify variants
                d.      Determine precise affinity constants using BIAcore
                e.      Transfer to Bio-Management 2 mg of the best humanized
                        Fab variant (bacterially expressed)

        F.      Affinity Maturation
                ***
                ***
                ***
                ***
                ***
                ***

        G.      Iterative Affinity Maturation
                ***
                ***
                ***
                ***

        H.      Deliverables
                a.      Transfer to Bio-Management the DNA sequence encoding the
                        Fab of the best humanized and optimized variant
                b.      Transfer to Bio-Management the vector expressing the Fab
                        of the best humanized and optimized variant

<PAGE>
                                   SCHEDULE B

                                 PROJECT FUNDING


         1.       Fixed Fee. Bio-Management shall pay to Ixsys Five Hundred
Thousand Dollars ($500,000) each for the humanization and optimization of each
of the two (2) Candidate Molecules, to be paid in equal quarterly installments
over the six (6) months starting from the Effective Date. Payments shall be due
within thirty (30) days.


         2.       Milestone Payments. Bio-Management shall pay to Ixsys
milestone payments equal to [***] per Program Antibody demonstrating an affinity
equal to or greater than [***] times the initial affinity of the Candidate
Molecule from which that Program Antibody was derived as determined by an in
vitro assay to be agreed upon by the parties. These milestone payments shall be
paid within sixty (60) days following the demonstration of the Program Antibody
demonstrating an affinity equal to or greater than [***] times the initial
affinity of the Candidate Molecule from which that Program Antibody was derived.
In the event that a Program Antibody fails to demonstrate an affinity equal to
or greater than [***] times the initial affinity of that Candidate Molecule from
which that Program Antibody was derived, no milestone payment shall be payable
for that Program Antibody.

*** Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.