MASTER PRODUCTION AGREEMENT

This Master Production Agreement (this Agreement) is made as of this 1^st day of December, 1998 between Bio Science Contract Production Corp., a Maryland corporation (BSCP), and Transkaryotic Therapies Inc, a Delaware corporation (Client).

RECITALS

A.            BSCP operates a multi-client production facility, operated in accordance with the U.S.  Food and Drug Administrations (the FDA) current Good Manufacturing Practices, located at 5901 East Lombard Street, Baltimore, Maryland 21224 (the Facility).

B.            Client is a development-stage biotechnology company active in research and development of drug products.

C.            From time to time, Client desires to have BSCP produce, and BSCP is willing to produce, one or more Products (as hereinafter defined) at the Facility.  Each Product shall be described in a separate Schedule A-( ) (each Product produced pursuant to this Agreement and the Schedules hereto shall be separately sequentially numbered and identified, beginning with 1, and the blank spaces set forth within the parentheses to each Schedule shall contain such number, for example, the Schedules for the first Product shall be Schedule A-(1), Schedule B-(1), etc.).  Each Product shall be produced in accordance with the terms and subject to the conditions hereinafter set forth and contained in the Schedules hereto.

D.            BSCP shall produce each Product pursuant to the Production Record for each Product and the Operating Documents.  Based on the information provided to BSCP pursuant to Paragraph 1 below, BSCP shall prepare, and Client shall approve, the Production Record for each Product in accordance with the terms of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the mutual promises and covenants hereinafter set forth, BSCP and Client, intending to be legally bound, hereby agree as follows:

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DEFINITIONS

The following capitalized terms used in this Agreement shall have the following meanings:

BSCP Parties means BSCP, its employees, agents and affiliates.

Commencement Date with respect to each Product will be set forth on Schedule B-(__) attached hereto, relating to that Product.

Product shall mean each bulk substance that BSCP has agreed to produce pursuant to the Production Record relating thereto.

Production Record shall mean the Client-specific batch production records required for BSCP to produce each Product in the Facility.

Production Term shall mean, for each Product, that period commencing on the Commencement Date and terminating on the Termination Date.

BSCP Operating Documents shall mean the standard operating procedures, standard manufacturing.  procedures, protocols, validation documentation, and supporting documentation, such as environmental monitoring, for operation and maintenance of the Facility and BSCP equipment.

Client Operating Documents shall mean the standard operating procedures, standard manufacturing procedures, protocols and validation documentation specific to the Clients Product and Client equipment.

Termination Date for each Product will be set forth on Schedule B-(__) attached hereto, relating to that Product.

cGMP means FDAs current good manufacturing practices as specified in 21 CFR Article 210 and FDAs guidance documents, and all successor regulations and guidance documents thereto.

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1.             Production Record.  The Production Record shall be prepared by BSCP under Clients direction pursuant to the information provided by Client.  Client shall provide information and procedures required to create an approvable Production Record and to produce the Product, and any intermediate or by-products thereof, including:

(a)           Process information, SOPs, production records, development reports

(b)           Quality control assays

(c)           Raw materials and raw materials test specifications

(d)           Product packing and shipping instructions

(e)           Product specific cleaning and decontamination information

If Client is unable to provide the items listed above, Client shall cooperate reasonably with BSCP to enable BSCP to write the Production Record.  When BSCP finalizes the Production Record, it shall deliver it to Client for its approval and acceptance.  Client shall notify BSCP in writing of any objections it has to the Production Record, and upon such notification, BSCP and Client shall work together promptly to resolve such objections.  Upon Clients written notification to BSCP that the Production Record is satisfactory, the Production Record shall be deemed approved and accepted by Client.  The ownership of the Production Record shall remain with Client at all times.  The cost of the preparation of the Production Record shall be as set forth on Schedule B-(__) attached hereto.

2.             [**]  In connection with the production of each Product hereunder in the Production Area, BSCP shall supply [**].  Client shall be responsible for providing to BSCP, in a timely manner, [**], other than those to be supplied by BSCP required to produce each Product pursuant to its Production Record (unless BSCP otherwise agrees in writing, to provide such items).  Any Client-provided items with respect to the production of a Product are as set forth in Schedule C-(__) attached hereto.  Client provided equipment, materials, consumables, or other Client provided items shall only be used for Client production or testing.

3.             Production Term.

(a)           Each Product shall be produced in the suite identified on Schedule B-(  ), such suite being called the Production Area.  The Production Term is set forth in Schedule B-(__) attached hereto relating to that Product.  The term of this Agreement shall continue in full force and effect for a period ending on the later of 10 years from the date hereof or the Termination Date of the final Product to-be produced hereunder unless terminated earlier in accordance with the following provisions of this Section 3.

(b)           Each party (the Terminating Party) shall have the right to terminate this Agreement upon six (6) months prior written notice (the Termination Period) to the other party in accordance with the following:

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(i)            If Client is the Terminating Party, it shall have the option (if set forth in Clients notice of termination to BSCP), in lieu of requiring BSCP to continue its performance under the Agreement during the Termination Period, to elect to pay BSCP, within [**] of the delivery of the termination notice, immediately available funds equal to [**] production fee at the then current rate, together with the costs of all materials and consumables purchased by BSCP through the end of the Termination Period.  All materials and consumables purchased by BSCP through the end of the Termination Period should be delivered to the Client or its subsidiaries/designees at the Clients cost.

(ii)           If BSCP is the Terminating Party, then BSCP and Client shall continue to perform their respective obligations under this Agreement throughout the Termination Period unless otherwise agreed to in writing by the parties.

All materials and consumables purchased by BSCP through the end of the Termination Period should be delivered to the Client or its subsidiaries/designees at the Clients cost.

(c)           BSCP shall have the right to terminate this Agreement [**].

(d)           Each party shall have the right to terminate this Agreement (i) following a material breach of this Agreement that the breaching party fails to remedy within [**] after written notice thereof by the non-breaching party; and (ii) immediately upon the bankruptcy, insolvency, dissolution, or winding up of the other party.

(e)           The expiration or earlier termination of this Agreement shall not relieve the parties of any obligation accruing prior to such expiration or termination including, without limitation, all monetary obligations for work, services, materials, and costs previously performed or incurred by BSCP pursuant to this Agreement.  The confidentiality and indemnification provisions contained in the Agreement, the warranty provisions in Sections 5 (f) and 5 (g) and the miscellaneous provisions in Section 9 shall survive the expiration or earlier termination of this Agreement.

4.             Compensation.  Compensation for BSCPs production of each Product under this Agreement shall be payable by Client to BSCP as follows:

(a)           Set-Up Fee.  Simultaneously with its execution of the Schedules attached hereto for the production of each Product, Client shall pay to BSCP a non-refundable Set-Up fee per Production Term (a Set-Up Fee) as set forth on Schedule B-(__) attached hereto.  A Set-Up Fee shall compensate BSCP for the work performed prior to commencement of the per diem charge for each Product.

BSCP shall not commence preparation for the production of the Product prior to its receipt of a Set-Up Fee and, if applicable, a separate fee to write the Production Record, in connection with each Product production run.

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