SPONSORED RESEARCH COLLABORATION AGREEMENT

THIS SPONSORED RESEARCH AGREEMENT (the "Agreement") is entered into as of
November 7, 2007 (the "Effective Date"), by and between DART THERAPEUTICS, LLC
(the "Sponsor"), having its principal place of business located at 4 Button Ball
Lane, South Egremont MA 01258, and COMBINATORX, INCORPORATED ("CombinatoRx"),
having its principal place of business located at 245 First Street, Sixteenth
Floor, Cambridge, MA 02142.

RECITALS

WHEREAS, CombinatoRx has developed a proprietary combination drug discovery
platform and is engaged in the identification and development of new combination
therapies;

WHEREAS, Charley's Fund and Nash Avery Foundation are dedicated to accelerating
the development of a treatment for Duchenne's Muscular Dystrophy;

WHEREAS, Charley's Fund and Nash Avery Foundation have formed the Sponsor for
purposes of this Agreement;

WHEREAS, Charley's Fund and Nash Avery Foundation wish via the Sponsor to
sponsor, and CombinatoRx wishes to perform, research focused on identifying
clinical combination drug candidates as potential treatments for Duchenne's
Muscular Dystrophy, subject to the terms and conditions of this Agreement,
including the Research Plan.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and
premises contained in this Agreement, the parties hereto agree as follows:

1. DEFINITIONS.

1.1 "Additional Payments" shall mean all amounts actually paid to or on behalf
of CombinatoRx pursuant to Section 3.2.

1.2 "Affiliate" shall mean any corporation or other entity that controls, is
controlled by, or is under common control with, a party. A corporation or other
entity shall be regarded as in control of another corporation or entity if it
owns or directly or indirectly controls more than 50% of the voting securities
or other ownership interest of the other corporation or entity, or if it
possesses, directly or indirectly, the power to direct or cause the direction of
the management and policies of the corporation or other entity. Notwithstanding
the foregoing, Charley's Fund and Nash Avery Foundation shall be deemed to be
Affiliates of the Sponsor.

1.3 "BioFocus License" shall have the meaning provided in Section 6.3.

1.4 "Budget" shall have the meaning provided in Section 3.1.

1.5 "CombinatoRx Project Team" means the team of five (5) CombinatoRx scientific
FTEs who shall perform CombinatoRx's Research obligations under the Research

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Plan. All of CombinatoRx's activities under this Agreement shall be performed by
the CombinatoRx Project Team.

1.6 "CombinatoRx Technology" shall have the meaning provided in Section 6.1(b).

1.7 "Commercially Reasonable Efforts" shall mean efforts and resources
commensurate with the efforts and resources in research and development used by
a reasonable party for projects of commensurate economic value taking into
account the then state of scientific knowledge and available resources.

1.8 "Confidential Information" shall mean any confidential or proprietary
information of a party, including, without limitation, information relating to
any compound, product specifications, data, know-how, formulations, research
project, work in process, future development, scientific, engineering,
manufacturing, marketing, business plan, financial or personnel matter relating
to such party, its present or future products, sales, suppliers, customers,
employees, investors or business, whether in oral, written, graphic or
electronic form, subject to the limitations specified in Section 5.2 hereof.
Without limiting the generality of the foregoing, the terms of this Agreement
shall be deemed the Confidential Information of both parties.

1.9 "DMD" shall mean Duchenne's Muscular Dystrophy.

1.10 "DMD License" shall have the meaning provided in Section 4.3

1.11 "Drug Candidate" shall have the meaning provided in Section 2.3.

1.12 "Discontinued Drug Candidate" shall have the meaning provided in Section 7.

1.13 "Exploitation" shall mean research, development, making, having made,
importing, having imported, using, having used, selling, having sold, offering
for sale, having offered for sale, and otherwise exploiting.

1.14 "FDA" shall mean the United States Food and Drug Administration (or its
successor agency).

1.15 "Field" shall mean the treatment of DMD.

1.16 "First Commercial Sale" shall mean, with respect to any Product, the first
sale by CombinatoRx or any of its Affiliates or Licensees to the general public
of such Product in a country after all required marketing and pricing approvals
have been granted, or otherwise permitted, by the governing health authority of
such country. "First Commercial Sale" shall not include the provision of any
Drug Candidate or Product for use in clinical trials, treatment IND programs,
named patient programs or for compassionate use prior to the receipt of
necessary marketing approvals.

1.17 "Grant Back License" shall have the meaning provided in Section 7.

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1.18 "IND" shall mean an Investigational New Drug Application filed with the
FDA.

1.19 "Information" shall mean all tangible and intangible techniques,
technology, practices, trade secrets, inventions (whether or not patentable),
methods, knowledge, know-how, skill, experience, test data and results
(including pharmacological, toxicological andclinical test data and results),
analytical and quality control data, results or descriptions, software,
algorithms, compositions of matter, cells, cell lines, assays, animal models and
physical, biological or chemical material.

1.20 "Licensee" shall mean a Third Party to whom CombinatoRx or any of its
Affiliates or licensees has granted a license or sublicense of the right to
develop, make, have made, use, distribute for sale, promote, market, offer for
sale, sell, have sold, import or export Drug Candidate or Product, beyond the
mere right to purchase Drug Candidate or Product from CombinatoRx or its
Affiliates.

1.21 "Net Sales" shall mean the gross amounts received by CombinatoRx and its
Affiliates or their respective Licensees for sales of Products approved in the
Field to Third Parties that are not Affiliates or Licensees of the selling party
(unless such Affiliate or Licensee is the end user of such Product, in which
case the amount billed therefor shall be deemed to be the amount that would be
billed to a Third Party end user in an arm's-length transaction), less the
following items, as allocable to such Product (if not previously deducted from
the amount invoiced): (i) trade discounts, credits or allowances; (ii) credits
or allowances additionally granted upon returns, rejections or recalls; (iii)
freight, shipping and insurance charges; (iv) taxes, duties or other
governmental tariffs (other than income taxes); and (v) government mandated
rebates. Net Sales shall not include royalties or any other payments received by
CombinatoRx or its Affiliates or their respective Licensees from any of their
respective Licensees.

1.22 "Patents" shall mean (a) United States and foreign patents,
re-examinations, reissues, renewals, extensions and term restorations, and
foreign counterparts thereof, and (b) pending applications for United States and
foreign patents, including, without limitation, provisional applications,
continuations, continuations-in-part, divisional and substitute applications,
including, without limitation, inventors' certificates, and foreign counterparts
thereof.

1.23 "Product" shall mean a pharmaceutical product comprising or containing a
Drug Candidate, or any analog or derivative of any such Drug Candidate,
including, in each case, all formulations, line extensions and modes of
administration thereof.

1.24 "Research" shall mean the activities conducted pursuant to the Research
Plan.

1.25 "Research Funds" shall mean all amounts actually paid to CombinatoRx
pursuant to Section 3.1 or 3.2(i) and (ii).

1.26 "Research Plan" shall mean the research plan attached hereto as Exhibit A.

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1.27 "Research Intellectual Property" shall mean (a) Information developed in
the course of performing the Research and (b) Patents claiming such Information.
Without limiting the generality of the foregoing, "Research Intellectual
Property" shall include any and all Drug Candidates, other candidate co-therapy
regimens, combination drugs, drug admixtures, drug co-formulations and
processing technology, in each case, to the extent developed in the course of
performing the Research.

1.28 "Research Term" shall have the meaning provided in Section 2.5.

1.29 "Third Party" shall mean any entity other than the Sponsor, Charley's Fund,
Nash Avery Foundation or CombinatoRx or an Affiliate of the Sponsor, Charley's
Fund, Nash Avery Foundation or CombinatoRx.

2. CONDUCT OF THE RESEARCH.

2.1 Objective. Subject to the terms and conditions of this Agreement, the
parties agree that, during the Research Term, CombinatoRx shall use Commercially
Reasonable Efforts to perform the Research with the CombinatoRx Project Team in
accordance with the Research Plan with the goal of identifying Drug Candidates
for the treatment of DMD.

2.2 Research Plan; Contributions. The Research Plan sets forth the activities to
be conducted by CombinatoRx, the anticipated duration of the Research, as well
as the anticipated costs and timing of the Research. CombinatoRx agrees to use
Commercially Reasonable Efforts to perform the Research with the CombinatoRx
Project Team on the schedule specified in the Research Plan. The parties may, by
mutual written agreement, amend the Research Plan from time to time during the
course of the Research and, in connection therewith, may modify the funding
amounts and schedule set forth in Section 3.1 or provide for Additional
Payments, as appropriate provided that, no amendment to the Research Plan shall
(i) change the scope of the Research Plan in a manner that would require
CombinatoRx without its express written approval to devote more than the
CombinatoRx Project Team in the performance of all of its obligations under this
Agreement or materially increase the materials and capital equipment required
for CombinatoRx to perform its activities under the Research Plan or (ii)
increase Sponsor's payment or materially increase any other obligation
thereunder, without the express written approval of Sponsor. Each party shall
contribute to the Research the materials and services specified in the Research
Plan.

2.3 The Research. As more fully described in the Research Plan, the Research
will be conducted by the CombinatoRx Project Team as follows:

CombinatoRx shall use Commercially Reasonable Efforts to (i) develop assays for
two targets (Myostatin and NFkB) and validate two assays (Utrophin and
alpha-7-integrin) contributed or sourced by Sponsor and (ii) perform in vitro
screening activities for three of the four targets deemed suitable for screening
by the JRC as described in the Research Plan. CombinatoRx shall disclose the
results of such screening to the Sponsor in accordance with Section 2.6, and the
parties shall consult with each other to select one or more single agents or
combination drug candidates meeting the criteria set forth in the Research Plan
(or otherwise

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mutually agreed upon by the parties) for further evaluation in animal models
(each such single agent or combination drug candidate being hereinafter referred
to as a "Drug Candidate").

2.4 Performance Standards. CombinatoRx shall conduct the Research in good
scientific manner, and in compliance in all material respects with the
requirements of applicable laws and regulations and with applicable good
laboratory practices, to attempt to achieve its objectives efficiently and
expeditiously. CombinatoRx shall maintain laboratories, offices and all other
facilities and personnel reasonably necessary to carry out the activities to be
performed by it pursuant to the Research Plan. In conformity with standard
pharmaceutical and biotechnology industry practices and the terms and conditions
of this Agreement, CombinatoRx shall prepare and maintain, or shall cause to be
prepared and maintained, written records, reports and data with respect to
activities conducted pursuant to the Research Plan.

2.5 Research Term. The Research is expected to require two years (the "Research
Term") to reach the primary overall objective of identifying a set of Drug
Candidates that have demonstrated activity in one or more of the DMD in vitro
assays developed under the Research Plan to be potential candidates for testing
in the in vivo mdx model of DMD.

2.6 Research Reports. CombinatoRx shall deliver to the Sponsor quarterly reports
within forty five (45) days of the end of each calendar quarter summarizing the
Research Intellectual Property arising during the preceding calendar quarter.
CombinatoRx shall deliver to the Sponsor within ninety (90) days of the end of
the activities to be performed under the Research Plan a final written report to
summarize all experimental protocols and describe the results of candidate
combinations screened.

2.7 Subcontracts. CombinatoRx may perform some of its obligations under the
Research Plan through one or more subcontractors, provided that (a) none of the
Sponsor's rights hereunder are diminished or otherwise adversely affected as a
result of such subcontracting, and (b) CombinatoRx will at all times be
responsible for the performance and, except as otherwise expressly agreed by the
parties in writing, payment of such subcontractor.

2.8 Joint Research Committee.

2.8.1. Composition and Purposes. CombinatoRx and the Sponsor will establish a
Joint Research Committee ("JRC") consisting initially of four (4) members (as
may be increased or decreased by the JRC) with the requisite experience and
seniority to enable them to make recommendations on behalf of the Parties with
respect to the initiation, planning and performance of the activities of the
Research Program, half of whom shall be designated from time to time by each
party. If the JRC chooses to designate a Committee Chair, the Chair will be
appointed from among the members of the JRC designated by CombinatoRx.
CombinatoRx shall designate a person, who shall be the project manager for the
Research, and such project manager shall make reports to the JRC, and will
provide the JRC with notice of any replacement project manager, and any such
notice shall include the qualifications of such project manager. The JRC shall
meet, in person or by conference telephone, formally no less frequently than
once in each three (3) month period during the Research Program, and at such
time and location or by such means, as may be established by the JRC, for the
purpose of reviewing and discussing the Research and evaluating and considering
any proposed revisions to the Research Plan except that

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no such revisions shall increase the costs of the Research Plan without the
Sponsor's express written approval. The final meeting will be held during the
last month of the Research Term to review all synergistic combinations and
recommend a set of Drug Candidates for testing in the in vivo mdx model.
CombinatoRx shall prepare and deliver minutes of the meetings to the members of
the JRC, within thirty (30) days after the adjournment date of each meeting,
setting forth, inter alia, all recommendations of the JRC. The JRC shall
terminate upon completion of the Research Plan.

2.8.2 Decision-Making. The objective of the JRC shall be to reach consensus on
all matters within the scope of the Research Plan. CombinatoRx's representatives
shall have the ultimate decision-making authority if the JRC is unable to reach
a consensus on any matter. Each party shall retain the rights, powers, and
discretion granted to it under this Agreement, and the JRC shall not be
delegated or vested with any such rights, powers or discretion except as
expressly provided in this Agreement. The JRC shall not have the power to amend
or modify this Agreement, which may only be amended or modified in a writing
executed by the Parties.

3. PAYMENTS.

3.1 Research Funding by the Sponsor. For the conduct of the Research, the
Sponsor shall pay a total of US$3,000,000 to CombinatoRx. Payments shall be made
to CombinatoRx quarterly in advance in the amounts specified in the budget
attached hereto as Exhibit B (the "Budget") with the first such payment due
within 5 business days of the date hereof and each quarterly payment due within
five business days of the beginning of the calendar quarter, and as further
described in the Budget. In addition, except as agreed pursuant to Section 3.2,
the foregoing payments reflect the full cost of doing the Research, and the
Sponsor will not be obligated or expected to pay any additional amounts in
connection with the Research.

3.2 Additional Payments. In addition to the amounts specified in Section 3.1,
the Sponsor shall pay, or reimburse CombinatoRx for, (i) in the event that the
Sponsor requests in writing that CombinatoRx screen in assays that require
special capital equipment, reagents or other consumables, the cost of acquiring
this equipment and/or reagents and consumables, it being agreed and understood
that, notwithstanding the foregoing, the equipment described in the Budget
attached hereto as Exhibit B, if required for utilization of the Utrophin
upregulation assay shall be paid by the Sponsor at the rate of 50% of the costs
thereof, and with respect to other special capital equipment not described in
the Budget, reagents or other consumables, the Sponsor shall be responsible for
the first $20,000 in special reagent costs, and CombinatoRx shall be responsible
for costs after that up to $40,000 of total costs, with the parties equally
sharing costs thereafter; and (ii) upon mutual written agreement of the parties,
additional research funding payments in connection with any modification of the
Research Plan.

3.3 Reporting of Net Sales. From and after such time as CombinatoRx, or any
Affiliate or Licensee thereof makes a First Commercial Sale and until such time
as CombinatoRx has paid in full the amount due under Section 4.3 (if any),
CombinatoRx shall deliver to the Sponsor quarterly written reports of Net Sales
received by CombinatoRx its Affiliates or Licensees. CombinatoRx shall keep, and
shall cause its Affiliates and Licensees to

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keep, complete and accurate records pertaining to the receipt of Net Sales in
sufficient detail to permit the Sponsor to confirm the accuracy of such reports.

3.4 Exchange Rate; Manner and Place of Payment. All payments hereunder shall be
payable in U.S. dollars. When conversion of payments from any foreign currency
is required for purposes of calculating Net Sales, such conversion shall be at
the exchange rate used by CombinatoRx throughout its accounting system (which
shall, in any event, be commercially reasonable) during the quarter for which
such report is due. All payments owed under this Agreement shall be made by
check or by wire transfer in immediately available funds to a bank and account
designated in writing by party entitled to receive payment, unless otherwise
specified in writing by such party.

3.5 Taxes. If any taxes are required by law to be withheld by CombinatoRx,
CombinatoRx will (a) deduct such taxes from the payment made to the Sponsor, (b)
timely pay the taxes to the proper taxing authority, and (c) send proof of
payment to the Sponsor and certify its receipt by the taxing authority within 30
days following such payment.

3.6 Audits. The Sponsor shall have the right to cause an independent, certified
public accountant reasonably acceptable to CombinatoRx to audit the records of
CombinatoRx and its Affiliates and Licensees to confirm the accuracy of
CombinatoRx's reports of Net Sales for a period covering not more than the
preceding three (3) calendar years. Such audits may be exercised during normal
business hours upon reasonable prior written notice to CombinatoRx and no more
than once per year. Prompt adjustments shall be made by the parties to reflect
the results of such audit. The Sponsor shall bear the full cost of such audit
unless such audit discloses an underreporting of payments due by CombinatoRx to
the Sponsor of more than 5%, in which case, CombinatoRx shall bear the full cost
of such audit.

4. COMMERCIALIZATION; REPAYMENTS

4.1 Marketing and Promotion. CombinatoRx and/or its Licensees shall have
exclusive rights to manufacture, market, sell and distribute all Products
anywhere in the world.

4.2 Trademarks. CombinatoRx shall have the right to choose, at its sole
discretion, the trademarks under which the Products may be marketed anywhere in
the world. CombinatoRx shall be the sole owner of such trademarks.

4.3 Repayments. In consideration of the Sponsor's payments pursuant to this
Agreement, CombinatoRx shall make to the Sponsor the following repayments:

(a) A one-time payment in the amount equal to 100% of the Research Funds shall
be paid within 90 days after the earlier to occur of:

(i) CombinatoRx entering into a license that grants to any Third Party under
CombinatoRx's interest in any Research Intellectual Property a right to make,
use or sell any Product in the Field (a "DMD License"); or

(ii) the First Commercial Sale.

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(b) On the first anniversary of the First Commercial Sale, a second one-time
payment to the Sponsor equal to 100% of the Research Funds; and

(c) Within 90 days after the first occurrence of cumulative Net Sales equaling
$100 million, a one-time payment to the Sponsor equal to 200% of the Research
Funds.

CombinatoRx shall provide Sponsor with written notice of the occurrence of any
event giving rise to a payment under this section 4.3 within 30 days of such
occurrence.

5. CONFIDENTIALITY.

5.1 Confidentiality. Except to the extent expressly authorized by this Agreement
or otherwise agreed in writing by the parties, the parties agree that, during
the Research Term and for a period of five years thereafter, each party (the
"Receiving Party") will maintain in confidence all Confidential Information
disclosed by the other party (the "Disclosing Party"). For the avoidance of
doubt, all Research Intellectual Property shall be deemed Confidential
Information of CombinatoRx. The Receiving Party may use the Confidential
Information of the Disclosing Party only to the extent required or permitted
hereunder to accomplish the purposes of this Agreement. The Receiving Party
shall use at least the same standard of care as it uses to protect proprietary
or confidential information of its own to ensure that its employees, agents,
consultants and other representatives do not disclose or make any unauthorized
use of the Disclosing Party's Confidential Information. Each party will promptly
notify the other upon discovery of any unauthorized use or disclosure of the
other party's Confidential Information. Each party shall be entitled to disclose
the other party's Confidential Information to its officers, employees,
consultants, Affiliates and other representatives who have a duty, contractual
or otherwise, to keep such information in confidence (its "Representatives"),
provided that such party shall be liable for any use and disclosure of the other
party's Confidential Information by such Representatives.

5.2 Exceptions. The obligations of confidentiality contained in Section 5.1 will
not apply to the extent that it can be established by the Receiving Party by
competent proof that such Confidential Information: (a) was already known to the
Receiving Party, other than under an obligation of confidentiality, at the time
of disclosure by the Disclosing Party; (b) was generally available to the public
or otherwise part of the public domain at the time of its disclosure to the
Receiving Party; (c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the Receiving Party in breach of this Agreement; (d) is
independently discovered or developed by the Receiving Party, without the use of
Confidential Information of the Disclosing Party; or (e) was disclosed to the
Receiving Party, other than under an obligation of confidentiality, by a Third
Party who had no obligation to the Disclosing Party not to disclose such
information to others.

5.3 Authorized Disclosure. Notwithstanding any other provision of this
Agreement, disclosure of Confidential Information shall not be precluded if such
disclosure is in response to a valid order of a court or other governmental body
of competent jurisdiction of the United States or any political subdivision
thereof or is otherwise required by law or regulation; provided, however, that
the Receiving Party shall first have given notice to the Disclosing Party

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and shall have made a reasonable effort to obtain a protective order requiring
that the Confidential Information so disclosed be used only for the purposes for
which the order was issued or the law or regulation required or to seek other
confidential treatment of such information.

5.4 Publicity. It is understood that the parties intend to issue a joint press
release announcing the execution of this Agreement, and the parties agree that
each party may desire or be required to issue subsequent press releases or
public announcements relating to this Agreement or activities hereunder. The
parties agree to consult with each other reasonably and in good faith with
respect to the text and timing of such press releases or public announcements
prior to the issuance thereof, provided that a party may not unreasonably
withhold consent to such releases or public announcements, and that either party
may issue such press releases as it determines, based on advice of counsel, are
reasonably necessary to comply with laws or regulations or for appropriate
market disclosure. In addition, following the initial joint press release
announcing this Agreement, either party shall be free to disclose, without the
other party's prior written consent, the existence of this Agreement, the
identity of the other party and those terms of the Agreement which have already
been publicly disclosed in accordance herewith.

6. OWNERSHIP AND USE OF INTELLECTUAL PROPERTY.

6.1 Ownership.

(a) Research Intellectual Property. CombinatoRx shall solely own all Research
Intellectual Property.

(b) CombinatoRx Technology. CombinatoRx shall at all times retain sole ownership
of all Information which may be employed in the conduct of the Research and
which CombinatoRx can establish by competent evidence to have been proprietary
to CombinatoRx on the Effective Date, and all Patents claiming any of the
foregoing (collectively, "CombinatoRx Technology").

6.2 Patent Filings. CombinatoRx shall file, prosecute and maintain all Patents
on the Research Intellectual Property at its sole expense.

6.3 License to Certain Assays. Charley's Fund hereby grants to CombinatoRx a
non-exclusive, world-wide, royalty-free, license under all rights related to a
Utrophin upregulation assay and related methodologies and intellectual property
granted to Charley's Fund pursuant to the Research Services Agreement between
the Charley's Fund and BioFocus DPI, dated as of August 1, 2007 (the "BioFocus
License") to perform the Research and undertake all other activities related to
the Exploitation of Drug Candidates or Products.

6.4 Further Assurances. The Sponsor shall, at its own expense, take all actions
and execute all documents reasonably requested by CombinatoRx to effect these
provisions of this Section 6.

 

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7. THE SPONSOR'S RIGHT TO INTERRUPTION LICENSE.

In the event that CombinatoRx intends to discontinue pre-clinical or clinical
development activities with respect to any Drug Candidate and does not intend to
license its rights to such Drug Candidate to any Third Party for such
pre-clinical or clinical development or, after determining to license its rights
to such Drug Candidate, fails to do so after one (1) year of such determination
(a "Discontinued Drug Candidate"), it shall so notify the Sponsor. In such
event, the Sponsor may provide CombinatoRx with written notice that it intends
to exercise its rights pursuant to this Section 7. Upon receipt of notice from
the Sponsor that it desires to exercise its rights under this Section 7 with
respect to a Discontinued Drug Candidate, CombinatoRx shall be deemed to
automatically grant to the Sponsor a worldwide, exclusive, perpetual,
sublicenseable, fully paid license under CombinatoRx's interest in all Research
Intellectual Property related to or covering the Discontinued Drug Candidate to
develop, make, use and sell the Discontinued Drug Candidate in the Field (the
"Grant Back License"). If the Sponsor exercises its right to receive a Grant
Back License, CombinatoRx shall promptly provide the Information to the Sponsor
that the Sponsor reasonably needs to exercise its rights under the Grant Back
License and which was generated or developed pursuant to this Agreement and all
such Information shall thereafter constitute the Confidential Information of the
Sponsor.

8. TERM; TERMINATION.

8.1 Term. The term of this Agreement shall commence on the Effective Date and
shall continue until expiration of the Research Term, unless this Agreement is
earlier terminated in accordance with Section 8.2 or this Section 8.

8.2 Termination. Each party shall have the right to terminate this Agreement
upon 60 days' prior written notice to the other upon the occurrence of any of
the following:

(a) Upon or after the bankruptcy, insolvency, dissolution or winding up of the
other party (other than a dissolution or winding up for the purpose of
reconstruction or amalgamation); or

(b) 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 the 60-day
period following written notice of termination by the non-breaching party.

8.3 Consequences of Expiration or Termination. Expiration or termination of this
Agreement will not relieve the parties of any obligation accruing prior to such
expiration or termination (including, without limitation, any accrued obligation
of the Sponsor to make payments pursuant to Section 3.1 and/or 3.2).
Notwithstanding any other provision of this Agreement to the contrary, the
provisions of Sections 3.3, 3.4, 3.5, 3.6, 8.3 and 8.4, and Sections 4, 5, 6, 7,
9 and 10 will survive expiration or termination of this Agreement.

8.4 Rights in Bankruptcy. All rights and licenses granted under or pursuant to
this Agreement by CombinatoRx are, and will otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of right to
"intellectual property" as defined under Section 101 of the U.S. Bankruptcy
Code. The parties agree that the Sponsor, as

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licensee of such rights under this Agreement, will retain and may fully exercise
all of its rights and elections under the U.S. Bankruptcy Code. The parties
further agree that, in the event of the commencement of a bankruptcy
proceeding-by or against CombinatoRx under the U.S. Bankruptcy Code, the Sponsor
will be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in the Sponsor's possession,
will be promptly delivered to the Sponsor (a) upon any such commencement of a
bankruptcy proceeding upon its written request therefor, unless CombinatoRx
elects to continue to perform all of its obligations under this Agreement, or
(b) if not delivered under clause (a) above, following the rejection of this
Agreement by or on behalf of CombinatoRx upon written request therefor by the
Sponsor.

9. INDEMNIFICATION.

9.1 Indemnification by CombinatoRx. CombinatoRx hereby agrees to save, defend,
indemnify and hold harmless the Sponsor, its Affiliates and their respective
trustees, officers, employees and agents (each, a "Sponsor Indemnitee") from and
against any and all losses, damages, liabilities, expenses and costs, including
reasonable legal expenses and attorneys' fees ("Losses"), to which a Sponsor
Indemnitee may become subject as a result of any claim, demand, action or other
proceeding by any Third Party to the extent such Losses arise directly or
indirectly out of (a) the development, manufacture, handling, storage, sale or
other disposition of any Drug Candidate or Product by CombinatoRx, its Affiliate
or Licensee, or (b) the breach of this Agreement by CombinatoRx or the gross
negligence or willful misconduct of any CombinatoRx Indemnitee, except in each
case to the extent such Losses result from the breach of this Agreement by the
Sponsor or the negligence or willful misconduct of any Sponsor or Sponsor
Indemnitee.

9.2 Conditions to Indemnification. Sponsor shall deliver written notice to
CombinatoRx of any potential Losses which may be indemnifiable hereunder
promptly after the Sponsor becomes aware of such potential Losses, provided that
the failure to deliver such notice in a timely fashion shall not relieve
CombinatoRx of its indemnification obligation hereunder except to the extent it
is actually and materially prejudicial thereby. CombinatoRx shall have the right
to assume the defense of any suit or claim related to the Losses if it has
assumed responsibility for the suit or claim in writing within forty-five (45)
days of notice of the suit or claim. If CombinatoRx defends the suit or claim,
the Sponsor may participate in (but not control) the defense thereof at its sole
cost and expense.

9.3 Settlements. Neither party may settle a claim or action related to any
Losses subject to indemnification under Section 9.1 without the consent of the
other party, if such settlement would impose any monetary obligation on the
other party or require the other party to submit to an injunction or otherwise
limit the other party, its Affiliates, trustees, employees, agents, officers or
directors.

9.4 Insurance. During any period when CombinatoRx, its Affiliate or any Licensee
is clinically developing or commercializing any Drug Candidate or Product and
for three years thereafter, CombinatoRx, at its own expense, shall maintain
clinical trial and/or product liability insurance, as applicable, in an amount
consistent with industry standards and

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shall name the Sponsor as an additional insured with respect to such insurance.
CombinatoRx shall provide a certificate of insurance evidencing such coverage to
the Sponsor upon request.

9.5 Liability of the Sponsor. The Sponsor assumes any and all risk of personal
injury and property damage attributable to the practice by the Sponsor or its
designee or sublicensee of any license granted by CombinatoRx to the Sponsor
hereunder, the breach of this Agreement by the Sponsor, or the negligence or
willful misconduct of any Sponsor Indemnitee.

10. MISCELLANEOUS.

10.1 Assignment. Except as expressly provided hereunder, neither this Agreement
nor any rights or obligations hereunder may be assigned or otherwise transferred
by CombinatoRx without the prior written consent of the Sponsor (which consent
shall not be unreasonably withheld); provided that, CombinatoRx may assign its
rights and obligations under this Agreement in connection with any merger,
business combination, sale of all of the outstanding shares of CombinatoRx or
sale of all or substantially all of the assets of CombinatoRx. The Sponsor shall
have the right to assign or transfer any or all of its rights or obligations
under this Agreement to a Third Party who is not a competitor of CombinatoRx
upon written notice to CombinatoRx, provided that the Sponsor shall remain
liable for any payment obligations accruing hereunder to the extent that such
Third Party does not comply with such obligations. The rights and obligations of
the parties under this Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of the parties. Any assignment not in
accordance with this Agreement shall be void.

10.2 Force Majeure. Neither party shall 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 term of the Agreement (except
with respect to payments due by the Sponsor under Section 3 of this Agreement)
when such failure or delay is caused by or results from causes beyond the
reasonable control of the affected party, including, without limitation, fire,
floods, earthquakes, natural disasters, 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.

10.3 Governing Law. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the Commonwealth of Massachusetts,
without regard to its choice of law provisions.

10.4 Waiver. Any waiver of a party's obligations hereunder shall only be
effective if in writing and signed by the other party. Except as specifically
provided for herein, the waiver from time to time by either party of any right
or failure to exercise any remedy shall not operate or be construed as a
continuing waiver of the same right or remedy or of any other of such party's
rights or remedies provided under this Agreement.

10.5 Severability. In case any provision of this Agreement shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

 

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10.6 Independent Contractors. It is expressly agreed that CombinatoRx and the
Sponsor shall be independent contractors and that the relationship between the
two parties shall not constitute a partnership, joint venture or agency of any
kind. 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 written consent of the other
party.

10.7 Notices. All notices and other communications provided for hereunder shall
be in writing and shall be mailed by first-class, registered or certified mail,
postage paid, or delivered personally, by overnight delivery service or by
facsimile, with confirmation of receipt, addressed as follows:

If to the Sponsor: DART THERAPEUTICS, LLC

4 Button Ball Lane

South Egremont, MA., 01258

Attn: Benjamin Seckler, MD

With a copy to: George J. Vella, PhD

2 Ledgewood Rd.

Medway, MA., 02053

If to CombinatoRx: CombinatoRx, Incorporated

245 First St.

Sixteenth Floor

Cambridge, MA 02142

Fax: 617-301-7010

Attention: Daniel S. Grau, Chief Operating Officer

With a copy to: Ropes & Gray LLP

One International Place

Boston, MA 02110

Fax: (617) 951-7050

Attention: Marc Rubenstein, Esq.

Either party may by like notice specify or change an address to which notices
and communications shall thereafter be sent. Notices sent by facsimile shall be
effective upon confirmation of receipt, notices sent by mail or overnight
delivery service shall be effective upon receipt, and notices given personally
shall be effective when delivered.

10.8 Commitment to Fund. Charley's Fund and Nash Avery Foundation hereby agree
to fund the Sponsor with sufficient funds to comply with its obligations under
this Agreement, including its obligations to make payments under Section 3
hereof. Charley's Fund

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and Nash Avery Foundation shall be jointly and severally liable to CombinatoRx
for failure to comply with this Section 10.8.

10.9 Entire Agreement; Amendment. This Agreement (including the Exhibit hereto,
as such Exhibit may be amended from time to time by mutual written agreement of
the parties) sets forth all of the agreements and understandings between the
parties hereto with respect to the subject matter hereof and thereof, and
supersedes and terminates all prior agreements and understandings between the
parties with respect to the subject matter hereof and thereof. There are no
other agreements or understandings with respect to the subject matter hereof,
either oral or written, between the parties. Except as expressly set forth in
this Agreement, no subsequent amendment, modification or addition to this
Agreement shall be binding upon the parties hereto unless reduced to writing and
signed by the respective authorized officers of the parties.

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

subsections hereof.

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

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
Effective Date.

 

 

SPONSOR - DART THERAPEUTICS, LLC

By: /s/ Benjamin D. Seckler

Printed Name: Benjamin D. Seckler

Title: Manager

COMBINATORX, INCORPORATED

By: /s/ Alexis Borisy

Printed Name: Alexis Borisy

Title: President and Chief Executive Officer

CHARLEY'S FUND, INC., solely for purposes of Sections 6.3 and 10.8

By: /s/ Benjamin D. Seckler

Printed Name: Benjamin Seckler, MD

Title: President & Founder

 

NASH AVERY FOUNDATION, solely for purposes of Section 10.8

By: /s/ Tom Wicka

Printed Name: Tom Wicka

Title: President & Founder

 

 

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Exhibit A

Research Plan

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Exhibit B

Budget

Due Upon Execution - $125,000

First Quarter Due January 8, 2008 - $250,000

Second Quarter Due April 7, 2008 - $375,000

Third Quarter Due July 8, 2008 - $375,000

Fourth Quarter Due October 7, 2008 - $375,000

Fifth Quarter Due January 8, 2009 - $375,000

Sixth Quarter Due April 7, 2009 - $375,000

Seventh Quarter Due July 8, 2009 - $375,000

Eighth Quarter Due October 7, 2009 - $375,000

Total - $3,000,000

 

Capital equipment - ECL analyses - First Quarter estimated cost - $200,000.

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