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                                                                   Exhibit 10.17


[*] CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
    BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
    EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES EXCHANGE ACT OF
    1933, AS AMENDED.

                       COLLABORATION AND LICENSE AGREEMENT

         THIS COLLABORATION AND LICENSE AGREEMENT (the "Agreement") is made
effective as of the 20th day of June, 2001 ("Effective Date") by and between
Cytokinetics, Inc., a Delaware corporation ("CK") and Glaxo Group Limited, a
GlaxoSmithKline company, a United Kingdom corporation ("GSK"). CK and GSK are
each referred to herein by name or as a "Party" or, collectively, as "Parties".

                                    RECITALS

         A.       CK has developed certain proprietary technology related to KSP
(as defined below) and other human mitotic kinesins, which are potential targets
for the discovery and development of pharmaceutical products for the treatment,
prophylaxis and diagnosis of cancer and other diseases and conditions in humans.
As a result of its on-going research, CK has established a leadership position
in the field of human mitotic kinesins.

         B.       CK is the owner of all right, title and interest in, or
otherwise controls, certain CK Patents (as defined below) hereto, and CK
Know-How (as defined below) relating to KSP and certain novel targets and
compounds having activity against human mitotic kinesins.

         C.       GSK possesses pharmaceutical research, development,
manufacturing and commercialization capabilities, as well as proprietary
technology in a broad range of therapeutic fields. GSK desires to engage in
collaborative research with CK to discover, develop, make, market and sell
worldwide pharmaceutical products directed to human mitotic kinesins.

         D.       In addition, CK has identified certain novel, proprietary
compounds having activity against human mitotic kinesins, including that certain
compound designated as [*], which CK is pursuing as a development compound
for cancer and for which CK has commenced preclinical development activities.
GSK is interested, subject to Section 2.5 below, in developing certain of the
compounds identified by CK, and, subject to Section 3.1.1 below, intends to
consider [*] as a potential Development Compound (as defined below) after the
Effective Date.

         E.       CK desires to grant to GSK, and GSK desires to obtain, an
exclusive license throughout the world under this Agreement to discover,
develop, make, have made, market and sell certain Licensed Products (as defined
below) throughout the world under the aforesaid CK Patents and CK Know-How.

         F.       Contemporaneously with the execution of this Agreement, the
Parties have executed a Stock Purchase Agreement under which GSK shall purchase
preferred stock of CK at the Closing of the transactions (as defined below).

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         Now, therefore, in consideration of the premises and mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:

                             ARTICLE I - DEFINITIONS

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

         1.1      " [*] " shall have the meaning ascribed to it in
Section  [*] .

         1.2      "AFFILIATE" shall mean any corporation or other entity which
is directly or indirectly controlling, controlled by or under common control of
a Party hereto for so long as such control exists. For the purposes of this
Section 1.2, "control" shall mean the direct or indirect ownership of at least
fifty percent (50%) of the outstanding shares or other voting rights of the
subject entity having the power to vote on or direct the affairs of the entity,
or if not meeting the preceding, the maximum voting right that may be held by
the particular Party under the laws of the country where such entity exists.

         1.3      "CK" shall mean CK and any Affiliate of CK.

         1.4      "CK EXISTING TECHNOLOGY" shall mean, subject to Sections
5.2.2(a) and 5.5 below, CK Patents and CK Know-How, other than Collaboration
Technology and Post-Collaboration Technology, Controlled by CK, and created,
prior to the Effective Date or prior to the end of the Exclusivity Period that
are [*] or [*] for the Parties to conduct their respective
activities under the Research Program and for GSK to develop, make, have made,
use, import, offer to sell and sell Compounds, Development Compounds or Licensed
Products in the Field. Notwithstanding the foregoing, a CK Library Compound and
CK Patents and CK Know-How with respect thereto shall be deemed to be CK
Existing Technology only to the extent provided in Section 5.2.2 below.

         1.5      "CK COMPOUND" shall mean, except as otherwise provided herein,
a chemical entity that meets the Compound Criteria for a CK Target, which is
identified by CK using CK Existing Technology, GSK Existing Technology,
Collaboration Technology, and/or Post-Collaboration Technology prior to or
during the Exclusivity Period. Any such chemical entity shall not be subject to
development as a Compound in accordance with Section 2.7 of this Agreement, and
GSK is not obligated to conduct any research or development activities with
respect thereto. Notwithstanding the foregoing:

                     (a)      A chemical entity that meets the Compound Criteria
for a CK Target and which is identified by CK after the end of the Exclusivity
Period shall also be a CK Compound, if such chemical entity was derived from a
compound within the GSK Existing Technology, Collaboration Technology or
Post-Collaboration Technology or from a GSK Library Compound licensed to CK
under Section 5.3.2 below.


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                     (b)      Except as provided in Section 5.6, in the event
that a Mitotic Kinesin Target becomes a CK Target (i.e., in the events provided
in this Agreement), any chemical entity that had been identified as a Compound
with respect to such Mitotic Kinesin Target prior to the time such Mitotic
Kinesin Target becomes a CK Target shall be deemed a CK Compound, except as
provided in Section 1.5(c) below.

                     (c)      A GSK Library Compound shall be deemed a CK
Compound only to the extent that it is GSK Existing Technology, as provided in
Section 5.3.2 below.

         1.6      "CK KNOW-HOW" shall mean Information that (a) CK discloses to
GSK under this Agreement or under the Non-Disclosure Agreement executed by CK
and GSK dated [*] , as amended and (b) is within the Control of CK.
Notwithstanding anything herein to the contrary, CK Know-How excludes published
CK Patents.

         1.7      "CK LIBRARY COMPOUND" shall mean a chemical entity (i) that is
Controlled by CK as of the Effective Date, but which CK has not identified as
meeting the Compound Criteria or criteria similar to the Compound Criteria for a
Mitotic Kinesin Target as of the Effective Date, or (ii) which is developed or
acquired by CK outside of the Research Program with no use of GSK Existing
Technology or GSK Library Compounds, Collaboration Technology or
Post-Collaboration Technology, and, during the Exclusivity Period or any
Extension Period, in activities not directed to the discovery, development,
manufacture or use of Mitotic Kinesin Targets or inhibitors of such Mitotic
Kinesin Targets. It is understood that the term CK Library Compound shall
include both chemical entities that have actually been synthesized as well as
those that have not been synthesized but that are claimed in a CK Patent, so
long as the conception and reduction to practice of such chemical entity were
made in the manner described in clause (ii) above.

         1.8      "CK PATENTS" shall mean all Patents in the Territory owned or
Controlled by CK, including, without limitation, those provided to GSK under the
Non-Disclosure Agreement executed by CK and GSK dated [*] , as amended.
CK shall update GSK regarding any CK Patents within the Licensed Technology (i)
on an annual basis commencing after the Effective Date in accordance with
Section 2.4 below, and (ii) upon request by GSK after the end of the Research
Term, with respect to CK Patents to which GSK retains a license hereunder.

         1.9      "CK PRODUCT" shall mean pharmaceutical preparations for human
use, incorporating a CK Compound as one of or its main active ingredient.

         1.10     "CK TARGET" shall mean those Mitotic Kinesin Targets
designated as CK Targets in accordance with Section 2.7 or another provision of
this Agreement.

         1.11     "CO-FUNDING OPTION" shall mean the option of CK to fund a
portion of the Later Stage Development Costs of a Licensed Product as provided
in Section 3.4.


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         1.12     "COLLABORATION TARGET" shall mean those Mitotic Kinesin
Targets that are selected as Collaboration Targets in accordance with Section
2.7 or Section 2.8, except as otherwise provided in this Agreement.

         1.13     "COLLABORATION TECHNOLOGY" shall mean, subject to Sections
5.2.2, 5.3.2 and 5.5 below, all inventions and Information, invented, conceived
or created solely or jointly by employees, agents or consultants of GSK and/or
CK in the course of performing their respective activities in connection with
the Research Program, or their activities specifically directed to the research,
development, manufacture or use of Compounds, Development Compounds or Licensed
Products, in each case during the Research Term. Collaboration Technology shall
include all CK Patents and GSK Patents in and to any inventions described in
this Section 1.13.

         1.14     "COMBINATION PRODUCT" shall mean a Licensed Product that is a
pharmaceutical preparation for human use incorporating two or more
therapeutically active ingredients, including a Development Compound, as its
main active ingredients. Notwithstanding the foregoing, drug delivery vehicles,
adjuvants, and excipients shall not be deemed to be "therapeutically active
ingredients," and their presence shall not be deemed to create a Combination
Product under this Section 1.14.

         1.15     "COMPLETION OF SCREENING" shall mean the date on which the
screenings described in Section 2.7.1 have been completed, in accordance with
the criteria set forth in Section 2.7.4.

         1.16     "COMPOUND" shall mean, except as otherwise provided herein, a
chemical entity that meets the Compound Criteria for a Mitotic Kinesin Target,
which chemical entity (i) is discovered, synthesized or identified by CK or GSK
using CK Existing Technology, GSK Existing Technology, Collaboration Technology,
and/or Post-Collaboration Technology prior to, during, or, in the case of GSK
(subject to (a) below), after the Exclusivity Period or any Extension Period,
and which, (ii) at GSK's discretion, may be subject to development as a
Development Compound under Section 2.5 of this Agreement. Notwithstanding the
foregoing:

                     (a)      A chemical entity that is first identified by GSK
after the end of the Exclusivity Period, or after any Extension Period under
Section 4.2.2 below (whichever is later), shall not be deemed a Compound unless
such chemical entity was discovered, synthesized or identified using CK Existing
Technology, Collaboration Technology or Post-Collaboration Technology.

                     (b)      Those chemical entities Controlled by a Party
prior to the Effective Date, which such Party identified as meeting the Compound
Criteria (or criteria substantially similar to the Compound Criteria) as of the
Effective Date, shall also be deemed Compounds for all purposes of this
Agreement. In the case of CK, these compounds shall include certain of those
compounds that are referred to by CK as the "Series [*] Compounds," as well as
certain other compounds, that CK has so identified as meeting the Compound
Criteria (or such substantially similar criteria) prior to the Effective Date.


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                     (c)      Notwithstanding (b) above, at such time as a
chemical entity becomes a CK Compound, the same shall be deemed excluded from
the definition of Compounds under this Section 1.16 for all purposes (including,
without limitation, for purposes of Sections 1.21 and 1.44).

                     (d)      For purposes of clarity, a compound developed by
either Party outside the Research Plan and provided for screening or other use
under this Agreement shall not be deemed a Compound unless and until such
compound is shown to meet the Compound Criteria.

         1.17     "COMPOUND CRITERIA" shall mean (i) those criteria set forth in
Exhibit 1.17, and (ii) such other criteria as are approved by the JRC and agreed
in writing by the Parties. No criteria shall be deemed Compound Criteria under
(ii) unless such criteria are formally approved by the JRC and agreed in writing
by the Parties, regardless of whether such criteria are used informally or
discussed by the Parties in the course of the Research Program.

         1.18     "CONTRACT YEAR" shall mean a year of 365 days (or 366 days in
a leap year) beginning on the Effective Date and ending one (1) year thereafter
and so on year-by-year. "CONTRACT YEAR ONE" shall mean the first such year;
"CONTRACT YEAR TWO" shall mean the second such year, and so on, year-by-year.

         1.19     "CONTROL," "CONTROLS," "CONTROLLED" or "CONTROLLING" shall
mean possession of the ability to grant the licenses or sublicenses as provided
herein without violating the terms of any agreement or other arrangements with
any Third Party.

         1.20     "CYTOMETRIX(TM) TECHNOLOGY" shall mean that certain subject
matter as further described in CK publication "Cytometrix(TM) Cellular
Phenotyping Technologies Version 0.5 Development Partner Program" (publication
February 2001), and modifications, improvements, extensions or derivatives to
such automated cell biology platform.

         1.21     "DEVELOPMENT COMPOUND" shall mean a Compound that is
designated for product development, in accordance with Section 2.5 below.

         1.22     "DEVELOPMENT MILESTONE" shall mean a milestone described in
Section 6.4.

         1.23     "DEVELOPMENT PLAN" shall mean the workplan with respect to the
development of a Development Compound as set forth in Section 3.2.

         1.24     "EFFECTIVE DATE" shall mean the date first written above.

         1.25     "EXCLUSIVITY PERIOD" shall mean the period of time commencing
with the Effective Date and ending upon the [*] anniversary of the end of the
Research Term and any extensions thereto under Section 2.8.


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         1.26     "EXTENSION PERIOD" shall mean a [*] period during which
GSK has extended its exclusivity with respect to a particular Collaboration
Target or Extendable Unselected Target, in accordance with Section 4.2.2.

         1.27     "EXTENDED TARGET" and "EXTENDABLE UNSELECTED TARGET" shall
have the meanings set forth in 4.2.2.

         1.28     "FDA" shall mean, with respect to the United States, the U.S.
Food and Drug Administration, any successor entity thereto, or any equivalent
foreign regulatory authority(ies) in the particular country of the Territory.

         1.29     "FIELD" shall mean, subject to Section 2.6.4, (i) the [*] or
[*] treatment of cancer and other diseases and conditions in humans through the
use of a Licensed Product; and (ii) [*] of the [*] or [*] of a patient,
including the [*] of the [*] (e.g., [*] or [*] or [*] ) to [*] of a Licensed
Product, for the [*] of a Licensed Product(s) [*] for the [*] or [*] treatment
of cancer and other diseases and conditions in a human patient. All other uses
not specifically set forth in (i) or (ii) above are excluded from the Field.

         1.30     "FTE" shall mean a full-time person employed by CK, or by a
Third Party pursuant to Section 6.2.2, dedicated full-time to the Research
Program, or in the case of less than a full-time dedicated person, a full-time,
equivalent person year, based upon a total of one thousand eight hundred eighty
(1,880) hours per year of work on the Research Program.

         1.31     "GSK" shall mean GSK and any Affiliate of GSK.

         1.32     "GSK EXISTING TECHNOLOGY" shall mean, subject to Section 5.3.2
below, GSK Patents and GSK Know-How, other than Collaboration Technology and
Post-Collaboration Technology, Controlled by GSK, and created, prior to the end
of the Exclusivity Period or any Extension Period under Section 4.2.2 below,
that: (i) are [*] for the discovery, development, manufacture, use or sale of
Compounds, Development Compounds, Licensed Products, or (ii) GSK has [*] or [*]
in connection with its activities under the Research Program or the development,
manufacture, use or sale of Compounds, Development Compounds or Licensed
Products. In addition, GSK Existing Technology shall be subject to the
following:

                     (a)      Notwithstanding (i) and (ii) above, a GSK Library
Compound and GSK Patents and GSK Know-How with respect thereto shall be deemed
GSK Existing Technology only to the extent provided in Section 5.3.2 below.

                     (b)      Notwithstanding (i) above, in the event a
Compound, Development Compound or Licensed Product becomes a CK Compound or CK
Product, or a Mitotic Kinesin Target is designated a CK Target, then with
respect to such CK Compound, CK Product or CK Target (and any other CK Compounds
and CK Products directed to such CK Target), the GSK Existing Technology within
(i) and (ii) above shall include only subject matter that was (x) identified


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as [*] for the discovery, development, manufacture, use or sale of such CK
Compound or CK Product, or (y) [*] or [*] at least in part to such CK Compound,
CK Product or CK Target, each prior to its being designated as such.
Accordingly, for example, a drug delivery technology that had not been [*] to a
Compound prior to its becoming a [*] shall not [*] become GSK Existing
Technology with respect to such [*] (or a [*] incorporating [*] ) regardless of
whether such GSK drug delivery technology is [*] to commercialize such CK
Compound.

         1.33     "GSK KNOW-HOW" shall mean Information which (a) GSK discloses
to CK under this Agreement or under the Non-Disclosure Agreement executed by CK
and GSK dated [*] , as amended and (b) is within the Control of GSK.
Notwithstanding anything herein to the contrary, GSK Know-How excludes published
GSK Patents.

         1.34     "GSK LIBRARY COMPOUND" shall mean a chemical entity (i) that
is Controlled by GSK as of the Effective Date, or (ii) which is developed or
acquired by GSK outside of the Research Program with no use of CK Existing
Technology or CK Library Compounds, Collaboration Technology or
Post-Collaboration Technology, and, during the Exclusivity Period or any
Extension Period, in activities not directed to the discovery, development,
manufacture or use of Mitotic Kinesin Targets or inhibitors of such Mitotic
Kinesin Targets. It is understood that the term "GSK Library Compound" shall
include both chemical entities that have actually been synthesized as well as
those that have not been synthesized but that are claimed in a GSK Patent, so
long as the conception and reduction to practice of such chemical entity were
made in the manner described in clause (ii) above.

         1.35     "GSK PATENTS" shall mean all Patents in the Territory owned or
Controlled by GSK. GSK shall update CK regarding any GSK Patents within the
Licensed Technology (i) on an annual basis commencing after the Effective Date
in accordance with Section 2.4 below, and (ii) upon request by CK after the end
of the Research Term, with respect to GSK Patents to which CK retains a license
hereunder.

         1.36     "IND" shall mean any investigational new drug application
filed with the FDA as more fully defined in 21 C.F.R. Section 312.3 or its
equivalent in any country.

         1.37     "IND ENABLING STUDIES" shall mean studies which are
specifically required for an IND, including without limitation, ADME and GLP
toxicology studies, or studies required for the preparation of the CMC section
of an IND including studies relating to analytical methods and purity analysis,
and formulation and manufacturing development studies, all as necessary to
obtain the permission of regulatory authorities to begin human clinical testing.

         1.38     "INFORMATION" shall mean information and materials relating to
the subject matter of this Agreement and including (i) techniques and data,
including, but not limited to, screens, models, inventions, methods, test data,
including but not limited to, pharmacological, lexicological and clinical test
data, analytical and quality control data, marketing, pricing, distribution,
costs, and sales data, manufacturing information, and patent and legal data or
descriptions (to the extent that


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disclosure thereof would not result in loss or waiver of privilege or similar
protection) and (ii) compositions of matter, including but not limited to
compounds, biological materials and assays. As used herein, "clinical test data"
shall be deemed to include all information related to the clinical or
preclinical testing of a Compound, Development Compound, CK Compound, Licensed
Product or CK Product, including without limitation, patient report forms,
investigators'reports, biostatistical, pharmaco-economic and other related
analyses, regulatory filings and communications, and the like.

         1.39     "JOINT RESEARCH COMMITTEE" (or"JRC"), "JOINT DEVELOPMENT
COMMITTEE" (or "JDC"), "JOINT COMMERCIALIZATION COMMITTEE" (or "JCC") and "JOINT
STEERING COMMITTEE" (or "JSC") shall mean the committees established under
Sections 2.2, 3.5, 7.2 and 12.2, respectively.

         1.40     "KSP" shall mean any protein expressed by the human gene
located at the locus [*] .

         1.41     "LATER STAGE DEVELOPMENT" and "LATER STAGE DEVELOPMENT COSTS"
shall have the meanings defined in Sections 3.4.3(a) and 3.4.3(c), respectively.

         1.42     "LEAD TARGET" shall mean a Mitotic Kinesin Target identified
in accordance with the procedures set forth in Section 2.7.

         1.43     "LEAD TARGET SELECTION DATE" shall mean the date set forth in
Section 2.7.1.

         1.44     "LICENSED PRODUCT" shall mean a pharmaceutical preparation for
human use incorporating a Development Compound as one of or its main active
ingredient or designated as such under Section 4.5.2.

         1.45     "LICENSED TECHNOLOGY" shall mean CK Existing Technology; GSK
Existing Technology; Collaboration Technology; and Post-Collaboration
Technology.

         1.46     "MAJOR EUROPEAN COUNTRY" shall mean France, Germany, Italy,
Spain, or the United Kingdom.

         1.47     "MARKETING APPROVAL" shall mean all approvals, licenses,
registrations or authorizations of any federal, state or local regulatory
agency, department, bureau or other governmental entity, necessary for the
manufacturing, use, storage, import, transport and sale of Licensed Products in
a regulatory jurisdiction. Marketing Approval shall be deemed to occur upon
first receipt of notice from the FDA, EMEA or similar agency that sale of a
Licensed Product has been approved. For countries where governmental approval is
required for pricing or reimbursement for the Licensed Product to be reimbursed
by national health insurance (i.e., other than the United States), "Marketing
Approval" shall not be deemed to occur until such pricing or reimbursement
approval is obtained; provided, that if a Party has not accepted the pricing or
reimbursement offered by the governmental authority of a particular country
within eighteen (18) months after the date the first MAA is approved in such
country, then the Party shall continue to use diligent efforts to obtain such
pricing or reimbursement. Marketing Approval shall be deemed to have occurred in
such


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country where government approval of pricing has not been obtained if, at any
time, the Party begins the commercial sale of such Licensed Product in the
country without obtaining pricing approval, with the date of MAA approval to
occur on the date of the first commercial sale of the Licensed Product in the
country.

         1.48     "MARKETING APPROVAL APPLICATION" or "MAA" shall mean a New
Drug Application (as defined in 21 C.F.R. Section 314.50 et. seq.), or a
comparable filing for Marketing Approval (not including pricing or reimbursement
approval) in a country, in each case with respect to a Licensed Product in the
Territory.

         1.49     "MITOTIC KINESIN TARGET" shall mean (i) the human kinesin
motor proteins KSP [*] ; and (ii) those other human proteins which are
kinesin motor proteins which are discovered or acquired by either Party prior to
the [*] anniversary of the end of the Research Term, excluding any extension
thereof under Section 2.8, and which meet the criteria set forth in a separate
written memorandum signed by both Parties expressly referencing this Section
1.49.

         1.50     "Net SALES" shall mean the gross invoice price by GSK or its
Affiliates or Sublicensees, as the case may be, for all Licensed Products sold
by GSK, its Affiliates or Sublicensees ("Selling Party"), in finished product
form, packaged and labeled for sale, under this Agreement in arm's length sales
to Third Parties less deductions allowed to the Third Party customer by the
Selling Party, to the extent actually taken by such Third Party customer, on
such sales for:

                     (a)      trade, quantity, and cash discounts;

                     (b)      credits, rebates and chargebacks (including those
to managed-care entities and government agencies), and allowances or credits to
customers on account of rejection or returns (including, but not limited to,
wholesaler and retailer returns) or on account of retroactive price reductions
affecting such Licensed Product;

                     (c)      freight, postage and duties, and transportation
charges relating to Licensed Product, including handling and insurance thereto;
and

                     (d)      sales (such as VAT or its equivalent) and excise
taxes, other consumption taxes, customs duties and compulsory payments to
governmental authorities and any other governmental charges imposed upon the
importation, use or sale of such Licensed Product to Third Parties.

         Sales between GSK and its Affiliates or Sublicensees shall be excluded
from the computation of Net Sales and no payments will be payable on such sales
except where such Affiliates or Sublicensees are end users. In addition, the
Selling Party may exclude from Net Sales a reasonable provision for
uncollectible accounts, to the extent such reserve is determined in accordance
with U.S. generally accepted accounting standards, consistently applied across
all product lines of the particular Party, until such amounts are actually
collected.


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         In the event a Licensed Product is sold which is a Combination Product
under Section 1.14, for purposes of determining payments due CK under Section
4.5.2(b) and (d) or Section 6.6, Net Sales of Combination Products shall be
calculated by multiplying the Net Sales of the Combination Product by the
fraction A over A+B, in which A is the Gross Selling Price of the Licensed
Product when such Product is sold in substantial quantities comprising a
Development Compound as the sole therapeutically active ingredient during the
applicable accounting period in which the sales of the Licensed Product were
made, and B is the Gross Selling Price of the other therapeutically active
ingredients contained in the Combination Product sold separately in substantial
quantities during the accounting period in question. All Gross Selling Prices of
the therapeutically active ingredients of the Licensed and Combination Products
shall be calculated as the average Gross Selling Price of the therapeutically
active ingredients in such Products during the applicable accounting period for
which the Net Sales are being calculated. In the event that no separate sale of
either the Licensed Product comprising a single Development Compound as the sole
therapeutically active ingredient or the other therapeutically active
ingredients of the Combination Product are made during the accounting period in
which the sale was made or if the Gross Selling Price for a particular
therapeutically active ingredient cannot be determined for an accounting period,
Net Sales allocable to the Licensed Product and Combination Product shall be
determined by mutual agreement reached in good faith by the Parties prior to the
end of the accounting period in question based on an equitable method of
determining same that takes into account, in the Territory, variations in
potency, the relative contribution of each therapeutically active ingredient in
the Combination Product, and relative value to the end user of each
therapeutically active ingredient. For purposes of this Section 1.50, "Gross
Selling Price" shall mean the gross price at which an active ingredient is sold
to a Third Party, before discounts, deductions, credits, taxes or allowances.

         1.51     "PATENT" shall mean (i) issued and unexpired Letters Patent,
including any extension, registration, confirmation, reissue, continuation, SPC,
divisional, continuation-in-part, re-examination or renewal thereof, (ii)
pending applications for Letters Patents, and (iii) foreign counterparts of any
of the foregoing; in each case to the extent the same has not been held, by a
court or governmental agency of competent jurisdiction, to be invalid or
unenforceable in a decision from which no appeal can be taken.

         1.52     "PHASE I," "PHASE II," "PHASE III" and "PHASE IV" shall have
the following meanings:

                     (a)      "PHASE I" shall mean, subject to Section 6.4.3(c),
the first clinical trial in which a particular Licensed Product is administered
to either a patient or healthy volunteer.

                     (b)      "PHASE II" with respect to cancer indications
shall mean a clinical trial, the purpose of which is to investigate the activity
of a Licensed Product in cancer using a dose studied in a Phase I clinical trial
for such Licensed Product. "Phase II" with respect to non-cancer indications
shall mean a dose-ranging study or a study exploring efficacy in a disease other
than cancer.

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                     (c)      "PHASE III" shall mean a pivotal efficacy trial
required to demonstrate substantial evidence of the efficacy and safety of a
Licensed Product for submission of an MAA.

                     (d)      "PHASE IV" shall mean a clinical trial conducted
for a Licensed Product under an IND in a particular country after the Licensed
Product has received Marketing Approval and has been marketed and commercially
sold in that country, which is conducted primarily to continue testing the
Licensed Product to collect information about its safety and/or efficacy in
broader or various populations, long-term safety and side effects associated
with long- term use, and its use in additional indications other than that for
which Marketing Approval was initially granted.

         1.53     "POST-COLLABORATION TECHNOLOGY" shall mean, subject to
Sections 5.2.2, 5.3.2, 5.5 and 12.5.2 below, all inventions and Information
invented or created solely or jointly by employees, agents or consultants of GSK
and/or CK during the [*] ([*]) year period immediately following the end of the
Research Term or during any Extension Period, and which in each case are
invented or created in the course of performing activities specifically directed
to the research, discovery, characterization, optimization or development of
Compounds, Collaboration Targets or Unselected Targets, or to the development,
manufacture, use or sale of Compounds, Development Compounds or Licensed
Products. Notwithstanding the foregoing, Post-Collaboration Technology shall
also include all inventions and Information invented or created by or under
authority of GSK, which are created or invented in the course of performing such
activities after such period and during the term of this Agreement.
Post-Collaboration Technology shall include all CK Patents and GSK Patents in
and to any inventions described in this Section 1.53.

         1.54     "PRE-PROGRAM FTEs" and "[*] PROGRAM FTEs" shall have
the meanings ascribed to them in Section 2.6.1 and 2.6.2.

         1.55     "[*] PROGRAM" shall mean a formal research program established
in the discretion of [*] with respect to a particular Mitotic Kinesin Target for
the commitment of resources at GSK and at CK under the Research Program, which
program has undergone the detailed review of the [*] or [*]. At a minimum, a [*]
Program shall comprise those activities set forth in Exhibit 1.55.

         1.56     "PROJECT TEAM" shall mean the team of [*] personnel and
[*]([*])[*] formed in accordance with Section 3.2 to manage the development of a
Development Compound.

         1.57     "RESEARCH PERFORMANCE MILESTONE" shall mean the milestones set
forth in Section 6.3.1.

         1.58     "RESEARCH PLAN" shall mean the written workplan for the
Research Program to be conducted under this Agreement established in accordance
with Section 2.3 hereof.

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         1.59     "RESEARCH PROGRAM" shall mean the research, discovery,
characterization, optimization and pre-clinical development of inhibitors of
Mitotic Kinesin Targets, and the discovery and characterization of Mitotic
Kinesin Targets, conducted by CK and/or GSK which are undertaken during the
Research Term; provided that the Research Program shall not include any such
activities performed by CK with respect to a CK Compound or CK Target after such
Compound or Target becomes a CK Compound or CK Target, respectively.

         1.60     "RESEARCH TERM" shall mean the period commencing on the
Effective Date and ending on the first to occur of (i) termination of this
Agreement by either Party under Article XI below; or (ii) five (5) years after
the Effective Date, or if the Research Term is extended under Section 2.8 below,
the end of such extended Research Term.

         1.61     "SALES AND MARKETING PLAN" shall mean the plan and budget for
the marketing, promotion, sale and distribution of a Licensed Product
established by the JCC in accordance with Section 7.2.

         1.62     "SUBLICENSEE" shall mean, with respect to a particular
Licensed Product or CK Product, a Third Party to whom GSK or CK, respectively,
has granted a license or sublicense under any Licensed Technology to make and
sell such Licensed Product or CK Product. As used in this Agreement,
"Sublicensee" shall also include a Third Party to whom GSK or CK has granted the
right to distribute a Licensed Product or CK Product, respectively, provided
that such Third Party is responsible for marketing and promotion of such
Licensed Product or CK Product within its distribution territory.

         1.63     "TERRITORY" shall mean the entire world.

         1.64     "THIRD PARTY" shall mean any entity other than CK or GSK.

         1.65     "TRACTABLE COMPOUND" shall mean a Compound that, in the
reasonable determination of the JRC during the Research Term, or, with respect
to Compounds directed to Extendable Unselected Targets identified during any
Extension Period, in the reasonable determination of GSK, meets the criteria in
Exhibit 1.65.

         1.66     "UNSELECTED TARGET" shall mean any Mitotic Kinesin Target that
has not been identified as a Lead Target (i) by the end of Contract Year Five or
(ii) in the event GSK extends the Research Term in accordance with Section
2.8.2, by the end of the Research Term, subject in each case to Section 2.7.3
below.

         1.67     "CLOSING" AND "CLOSING DATE" shall mean the date specified in
Section 13.1.

                                      -12-
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                   ARTICLE II - COLLABORATION RESEARCH PROGRAM

         2.1      Research Program.

                  (a)      CK and GSK agree to conduct a research program on a
collaborative basis with the principal goal of identifying, developing, and
commercializing Compounds, Development Compounds and Licensed Products within
the Field, the mechanism of action of which is to inhibit Mitotic Kinesin
Targets. The Research Program shall be conducted solely in accordance with the
Research Plan, unless otherwise agreed by the Parties in writing. Each Party
agrees to keep the other Party informed of its progress and activities within
the Research Program.

                  (b)      Each Patty shall contribute to the Research Program
the Mitotic Kinesin Targets and Compounds identified by such Party prior to the
Effective Date, as well as those Mitotic Kinesin Targets, Compounds, Development
Compounds and Licensed Products identified during the Research Term. This
Section 2.1(b) shall not be deemed to limit CK's rights with respect to CK
Compounds, CK Targets or CK Products.

         2.2      The JRC. Promptly after the Effective Date, the Parties shall
establish a Joint Research Committee ("JRC"). The JRC shall have responsibility
to (i) oversee, review and coordinate the Research Program and to expedite the
progress of work being done under the Research Plan, and (ii) to make such other
decisions as are expressly allocated to the JRC under this Agreement. The JRC
shall exist until the end of the Research Term. Each Party agrees to keep the
JRC informed of its progress and activities within the Research Program.

                  (a)      Membership. The JRC shall be comprised of an equal
number of representatives from each of GSK and CK. The exact number of such
representatives shall be three (3) for each of GSK and CK, or such other number
as the Parties may agree. The initial members of the JRC shall be [*] from GSK,
and [*] from CK. Either Party may replace its respective JRC representatives at
any time, with prior written notice to the other Party. Unless otherwise agreed,
the JRC shall at all times include the CK officer overseeing all research and
the following GSK representatives: the senior Center of Excellence for Drug
Discovery ("CEDD") representatives responsible for biology, chemistry and
clinical activities of the collaboration, any of whom may be replaced by the
head of the CEDD. From time to time, the JRC may establish subcommittees to
oversee particular projects or activities, and such subcommittees will be
constituted as the JRC approves.

                  (b)      Meetings, The JRC shall meet monthly, or as more or
less often as otherwise agreed by the Parties, at such locations as the Parties
agree. It is understood that such meetings shall be held at least quarterly in
person, otherwise by telephone.

                  (c)      Decision Making. Decisions of the JRC shall be made
by majority vote of the members present in person or by other means (e.g.,
teleconference) at any meeting; provided that, if there is not an equal number
of representatives of each Party present at such

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meeting, then only an equal number of representatives of each Party shall be
entitled to vote at such meeting. In the event that the votes required to
approve a decision cannot be reached, then either Party may, by written notice
to the other, have such issue referred to the Chief Executive Officer of CK and
the Chairman, Research and Development, Pharmaceuticals of GSK, for attempted
resolution by good faith negotiations within thirty (30) days after such notice
is received. Minutes of the JRC meetings shall be taken, and shall, at a
minimum, record all decisions made. Such minutes shall be approved by both
Parties.

                  (d)      Responsibilities. The JRC shall be responsible for
preparing the Research Plan for each Contract Year, other than the initial
Research Plan, monitoring and adapting the Research Plan based on the results
and progress of the Research Program, establishing objectives for the Research
Program and evaluating the progress of the Research Program, including without
limitation:

                           (i)      Deciding the direction and objectives of the
Research Program;

                           (ii) Approving FTE requirements (subject to Section
2.6);

                           (iii)    Recommending Mitotic Kinesin Targets to be
submitted for approval by [*] as [*] Programs;

                           (iv)     Recommending Compounds to be submitted for
[*] approval as Development Compounds in accordance with Section 2.5; and

                           (v)      Providing a forum for the exchange of
scientific information among the scientists participating in the Research
Program.

         2.3      Research Plan.

                  2.3.1    Responsibilities. The Research Program shall be
carried out in accordance with the Research Plan. Each Party will be responsible
for conducting those activities within the Research Program as are allocated to
such Party under the Research Plan. The Research Plan shall be based on
priorities with respect to Compounds and Mitotic Kinesin Targets other than CK
Targets, taking into account GSK's and CK's views as to the feasibility of the
scope and timing of research activities and objectives.

                  2.3.2    Establishment of Research Plan. The initial Research
Plan shall be established by the mutual agreement of the Parties immediately
upon the execution of this Agreement (the "Initial Research Plan") and shall
cover the period from the Effective Date through December 31, 2001 in detail and
includes general plans for the following two (2) years. By December 1 of each
year during the Research Term, the JRC shall establish and approve the detailed
Research Plan for the next succeeding year, including a general plan for the
following two (2) years or the period remaining in the Research Term, whichever
is shorter. The JRC shall review the

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Research Plan on an ongoing basis and may make changes thereto as the JRC
approves in writing or as reflected in agreed and approved minutes of JRC
meetings.

         2.4      Information and Reports. GSK and CK will use diligent efforts
to make available and disclose to each other all Collaboration Technology and
Post-Collaboration Technology pertaining to Mitotic Kinesin Targets (other than
CK Targets, which are addressed in Section 4.4 below) including all Patents and
Information within such Technology regarding compounds synthesized or
discovered, initial leads, activities of leads, derivatives, and results of in
vitro and in vivo studies, assay techniques and new assays immediately after the
Effective Date and continuing throughout the Research Term, with significant
discoveries or advances being communicated as soon as reasonably practical after
such Information is obtained or its significance is appreciated; provided,
however, that with respect to tangible research material, the Parties shall
exchange such material as determined by the JRC. The Parties will exchange,
during the Research Term, at least once quarterly, a written summary of such
research and results. Within [*] ([*]) days after the [*] anniversary of the
expiration of the Research Term, and of the end of each Extension Period, each
Party shall provide to the other such a written report directed to results
obtained, and Post-Collaboration Technology developed, during the [*] period
following the end of the Research Term. Within [*] ([*]) days after the end of
each Extension Period under Section 4.2.2, each Party will provide the other
with raw data within the Collaboration Technology and Post-Collaboration
Technology to the extent reasonably requested by the other Party. Each Party
shall use diligent efforts to inform the other Party of any of its respective
Existing Technology used or incorporated in connection with the Research Program
or any Extended Target. In addition, each Party will disclose its respective
Existing Technology to the extent reasonably necessary for the other Party to
perform activities under the Research Plan.

         2.5      Designation of Development Compounds. The Parties have
established guidelines, set forth in Exhibit 2.5, for the designation of
Compounds as Development Compounds. From time to time, either Party may suggest
that the JRC consider a particular Compound to be recommended to [*] for
consideration as a Development Compound. Based upon the guidelines and the
results of the Research Program, the JRC shall designate from time to time
Compounds for consideration by [*] as Development Compounds, and upon approval
by [*], the Compounds shall be deemed Development Compounds. [*] may approve, or
withhold its approval of, the designation of any Compound as a Development
Compound in [*], whether or not such Compound [*] the [*], and a Compound shall
not be deemed a Development Compound unless so approved by [*]. Unless the JRC
otherwise approves, however, [*] agrees not to undertake IND Enabling Studies
with respect to a particular Compound, until such Compound has been designated
as a Development Compound in accordance with this Section 2.5.

         2.6      FTE Requirements; Funding. To advance the Research Program,
GSK agrees to fund CK FTEs performing research under the Research Plan in
accordance with Section 6.2 below and this Section 2.6. In addition:

                  2.6.1    Generally. Unless otherwise agreed by the Parties or
as otherwise provided in this Section 2.6, the Research Plan shall provide for,
and GSK agrees to fund, [*] ([*]) CK

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FTEs in Contract Year One; [*] ([*]) CK FTEs in Contract Year Two; [*] ([*]) CK
FTEs in Contract Year Three; [*] ([*]) CK FTEs in Contract Year Four; and [*]
([*]) CK FTEs in Contract Year Five (the "Pre-Program FTEs"). The Pre-Program
FTEs shall be funded at the rate set forth in Section 6.2.1. The Pre-Program
FTEs shall engage in research activities supporting Mitotic Kinesin Target
efforts that have not yet reached [*] Program status, in accordance with the
Research Plan. No activities funded by GSK under Section 6.2 shall be directed
to research on CK Targets, CK Compounds or CK Products once they have been
designated as such.

                  2.6.2    [*] Program Activities.

                           (a)      From time to time, [*] may establish a
formal [*] Program to be conducted on a collaborative basis by CK and GSK to
focus resources on a particular Mitotic Kinesin Target. Should [*] establish
such a [*] Program with respect to a Mitotic Kinesin Target, it shall notify the
JRC of the establishment of the [*] Program, and shall keep the JRC fully
informed of its activities under the [*] Program. In such event, the JRC will
decide upon the division between GSK and CK of responsibilities pertaining to
such [*] Program. Upon the establishment of such a [*] Program, the Research
Plan shall be modified to reflect such division, and the additional resources to
be added, which shall include additional FTEs at CK (i.e., in addition to the
Pre-Program FTEs) (such additional FTEs being referred to as "[*] Program
FTEs"); provided that, except as provided in Section 2.6.2(b) for KSP, the
additional [*] Program FTEs for any particular [*] Program shall not exceed [*]
([*]) FTEs unless otherwise agreed by GSK and CK. The decision of whether to
establish a [*] Program with respect to a particular Mitotic Kinesin Target
shall be in the [*] of [*] (except with respect to KSP in Contract Year One, as
described in Section 2.6.2(b) below); provided, however, if at any point in time
GSK assigns medicinal chemistry personnel (other than CK FTEs) at the rate
(i.e., a running rate) of [*] ([*]) full-time equivalents, to perform activities
relating to such Target, a [*] Program shall be deemed to have been established
with respect to such Target. It is anticipated that, if the Research Program is
successful and [*] establishes multiple [*] Programs, then the number of CK FTEs
will increase above the minimum CK FTEs required under 2.6.1 above.

                           (b)      Notwithstanding the foregoing, the Parties
agree that a [*] Program has been established with respect to KSP, which shall
continue through at least the end of Contract Year One. The Research Plan for
Contract Year One shall, unless otherwise agreed, provide for [*] ([*]) CK [*]
Program FTEs dedicated to KSP (i.e., in addition to the [*] CK FTEs described
above, for a total of [*] CK FTEs in Contract Year One). Following Contract Year
One, the JRC shall determine the appropriate level of [*] Program FTEs, not to
exceed [*] FTEs, to be dedicated to KSP in subsequent periods, based on the
activities remaining and the capabilities of CK to perform those activities.

                  2.6.3    Maximum FTEs. Notwithstanding Sections 2.6.2(a) and
(b) above, in no event will GSK's aggregate funding obligations for [*] Program
FTEs and Pre-Program FTEs at CK, added together, exceed [*] ([*]) FTEs at CK in
any year of the Research Term, unless mutually agreed. Notwithstanding any of
the foregoing, unless otherwise agreed by CK and

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                                      -16-
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GSK, the Research Plan may not at any time require more than [*] ([*]) CK FTEs
performing synthetic and analytical chemistry.

                  2.6.4    [*]; [*]. During Contract Year [*], CK and GSK shall
discuss a broadening of the Research Plan to include activities specifically
directed at the discovery and development of [*] and/or [*] as inhibitors of
Mitotic Kinesin Targets. The JRC shall include the broadening of the Research
Plan as a priority for discussions at its initial meetings after the Effective
Date. The Parties shall negotiate in good faith, using commercially reasonable
efforts to reach agreement on the terms of such broadening of the Research Plan.
The agreement between the Parties to broaden the Research Plan under this
Section shall take into consideration the research funding, milestones and
royalty payments already agreed to by the Parties under this Agreement. If the
Parties mutually agree in writing on such a modification of the Research Plan
prior to the [*] of the Effective Date, then the Research Plan shall be modified
as so agreed, [*] and [*] shall remain within the Field, and the Parties shall
negotiate additional collaboration terms for such area. Agreement on such an
expanded Research Plan and collaboration may be conditioned upon a commitment by
GSK to include, throughout the Research Term, sufficient resources to diligently
pursue such discovery and development activities. If by the [*] of the Effective
Date the Parties have not agreed in writing on such a modification of the
Research Plan and Agreement, then (notwithstanding Section 1.29 above) for all
purposes of this Agreement the Field shall exclude the use of [*] and [*] for
any therapeutic purpose, and shall also exclude any [*] for use in connection
with such [*] or [*].

                           (a)      If the parties fail to reach agreement on
such broadening of the Research Plan and Agreement by the end of Contract Year
[*], CK may enter into a collaboration and license or other agreement with one
or more Third Parties for [*] and/or [*], alone or in combination, after
Contract Year [*], subject to Section 2.6.4(b) below, but GSK shall receive a
royalty under Section 4.7 based on CK's use, or that of its licensees, if any,
of [*] generated under the Research Program.

                           (b)      At least [*] ([*]) days prior to CK's first
grant to a Third Party of a right to develop, manufacture, sell and distribute
(i) both at least [*] ([*]) [*] and at least [*] ([*]) [*], or (ii) at least [*]
([*]) [*], but no [*], or (iii) at least [*] ([*]) [*], but no [*], CK will
notify GSK in writing of its intent to grant such rights and a summary of the
terms upon which it then wishes to grant such rights ("Initial Notice"). A grant
described in (i) above is referred to as a "Combination License," and a grant
referred to in either (ii) or (iii) is referred to as a "Field-Specific
License." CK shall provide one (1) Initial Notice with respect to a proposed
Combination License or one (1) Initial Notice each for each of the two
categories of Field Specific License. It is understood and agreed that CK shall
not be required to submit more than one (1) Initial Notice to GSK with respect
to [*] collectively on the one hand, or more than one (1) Initial Notice to GSK
with respect to [*] collectively on the other hand.

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                                      -17-
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                                             (A)      Upon request by GSK within
[*]([*]) days after receiving an Initial Notice, CK and GSK will, during the
[*]([*]) day period following the date of the Initial Notice (the "Negotiation
Period"), negotiate the granting of rights to GSK under the Combination License
or Field Specific License, as applicable. It is understood that any such grant
of rights to GSK is subject to agreement between the Parties on the financial
terms and other conditions of such grant. If CK provides an Initial Notice to
GSK (x) with respect to a Field Specific License, GSK shall have the right to
negotiate with CK for a Combination License or (y) with respect to one product
within [*] or [*], as applicable, GSK shall have the right to negotiate with CK
for a Field-Specific License to [*] or [*], as applicable, or to a Combination
License. In the event GSK requests to negotiate a category of License as
described in (x) or (y), then the Initial Notice shall be deemed to have been
for that category of License (i.e., Combination License, Field-Specific License
for [*] or Field-Specific License for [*], as the case may be).

                                             (B)      If for any reason the
Parties do not agree upon and enter into an agreement for the grant of rights to
GSK by the end of the Negotiation Period, CK shall have no further obligations
to GSK under this Section 2.6.4 to provide an Initial Notice (x) with respect to
any [*] or [*] in the case of an Initial Notice regarding a Combination License,
(y) with respect to any [*] in the case of a Field-Specific Licensed described
in Section 2.6.4(b)(ii) above, or (z) with respect to any [*] in the case of a
Field-Specific License described in Section 2.6.4(b)(iii) above; except in each
case for CK's royalty obligations under Section 4.7 (as they may apply to [*]
and [*] as if the resultant product were a CK Product).

                           (c)      At such time as (i) CK has delivered an
Initial Notice for either (y) one (1) Combination License or (z) one (1)
Field-Specific License for [*] and one (1) Field-Specific License for [*],
whichever occurs first, and (ii) the Negotiation Period, if any, corresponding
to each Initial Notice described above has expired (or the Parties have agreed
upon and entered into an agreement concerning the subject matter of such Initial
Notice), then all obligations of CK under this Section 2.6.4 shall terminate. It
is understood that the Parties' obligations under this Section 2.6.4 are limited
to those expressly stated herein, and neither GSK nor CK shall have any further
obligation, implied or otherwise, other than the obligations expressly stated
herein.

                           (d)      For such purposes, (i) "[*]" shall mean [*]
for the treatment or [*] of a disease [*], via [*] or [*] methods, of
compositions comprising a [*] that [*] and [*] a moiety, wherein such moiety
serves a material function in the treatment or [*] of such disease; and (ii)
"[*]" shall mean [*] for the treatment or [*] of a disease comprising [*] which
modulates [*] by [*]; in each of cases (i) and (ii) where such [*], as known by
CK at the time of the grant of rights subject to this Section 2.6.4, is to
inhibit the function of a Mitotic Kinesin Target.

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<PAGE>

         2.7      Collaboration Targets. The Parties acknowledge that CK's
technology with respect to the Mitotic Kinesin Targets and the research
conducted under the Research Program could potentially provide a large number of
Mitotic Kinesin Targets and Compounds on which to focus further research and
development activities, and that, under the collaboration, the Parties will
focus their resources on particular Mitotic Kinesin Targets to be selected by
GSK as Collaboration Targets in accordance with this Section 2.7. Those Mitotic
Kinesin Targets designated as CK Targets in accordance with this Section may be
pursued independently by CK, subject to GSK's rights under Section 4.5 below, it
being understood that GSK will perform no additional research or development on
or commit additional resources to such CK Targets (unless GSK exercises its
right with respect to a CK Product under Section 4.5 below).

                  2.7.1    Initial Selection of Collaboration Targets. Upon the
later to occur of (i) the Completion of Screening for [*] ([*]) Mitotic Kinesin
Targets or (ii) [*] days after the end of Contract Year [*] (the "Lead Target
Selection Date"), the JRC will reasonably determine the number of Mitotic
Kinesin Targets, other than [*], for which at least one Tractable Compound has
been identified (a "Lead Target"); provided, however, if [*] establishes a [*]
Program with respect to a particular Mitotic Kinesin Target, such Target shall
be deemed a Lead Target. If the number of such Lead Targets is [*] or less, then
all such Lead Targets shall be Collaboration Targets. If the number of Lead
Targets is [*] or greater, then the Parties shall make the initial selection of
Collaboration Targets and CK Targets, as set forth in Sections 2.7.1(a) and (b)
below (with all of the Lead Targets that have been identified as of the Lead
Target Selection Date identified above being referred to as the "Initial Lead
Target Pool").

                           (a)      On the Lead Target Selection Date, the
Parties shall select as Collaboration Targets and CK Targets that number of Lead
Targets corresponding to the total number of Lead Targets in the Initial Lead
Target Pool as set forth in the following table, with such selection proceeding
in the manner described in Section 2.7.1(b) and (c) below.

<TABLE>
<CAPTION>
Total Lead Targets      Collaboration Targets          CK Targets
------------------      ---------------------          ----------
<S>                     <C>                            <C>
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
       [*]                      [*]                       [*]
</TABLE>

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                           (b)      In applying the foregoing table on the Lead
Target Selection Date, [*] shall be entitled to select the first [*] ([*]) [*].
After [*] has made such selection, [*] may select [*] ([*]) Lead Target as [*].
This initial selection shall progress sequentially through the table,
Lead-Target-by-Lead-Target, until all Lead Targets in the Initial Lead Target
Pool have been selected by GSK and CK based on the number of Collaboration
Targets and CK Targets assigned to each under the table. For example, if there
are [*] ([*]) Lead Targets in the Initial Lead Target Pool, [*] shall first
select [*] ([*]) [*], [*] shall then select [*] ([*]) [*], [*] shall then select
[*] ([*]) [*] more [*], and [*] shall then select [*] ([*]) additional [*].

                           (c)      [*] shall notify [*] of its first selection
no later than [*] ([*]) [*] days after the Lead Target Selection Date, and
thereafter each Party shall make its next selections sequentially, as described
in paragraph (b) above, within [*] ([*]) [*] business days after the other Party
completes its selection. In the event that a Party (the "Selecting Party") fails
to make such selection within such [*]-day or [*]-business day period, as
applicable, and again fails to make such selection within [*] ([*]) [*] business
days of a further written request to do so, the other Party shall have the right
to make such selection on behalf of the Selecting Party by so notifying the
Selecting Party of such selection, and such selection shall be deemed the
selection of the Selecting Party for purposes of this Section 2.7.

                           (d)      Upon each selection in accordance with this
Section 2.7, the particular Lead Target shall be deemed a Collaboration Target
or a CK Target, as the case may be.

                           (e)      [*]. For purposes of clarity, it is
understood that [*] shall not be included in the total Lead Targets or the
Initial Lead Target Pool, nor shall [*] be subject to the selection mechanism of
these Sections 2.7.1 and 2.7.2. [*] shall be deemed a Collaboration Target as of
the Effective Date, except to the extent otherwise provided in this Agreement.

                           (f)      If the total number of Lead Targets in the
Initial Lead Target Pool or thereafter exceeds [*] ([*]), then for all purposes
of this Section 2.7, the table above shall be deemed to be extended in the same
pattern as such table progressed from [*] ([*]) Lead Targets to [*] ([*]) Lead
Targets. For example, if there are [*]([*]) Lead Targets, [*] would be entitled
to [*] ([*]) [*] and [*] would be entitled to [*] ([*]) [*].

                  2.7.2    Subsequent Selections.

                           (a)      After all of the Lead Targets have been
selected from the Initial Lead Target Pool, then within [*] ([*]) days after
each subsequent point in time as the JRC has identified [*] ([*]) additional
Lead Targets (i.e., other than [*] and the Lead Targets previously selected in
accordance with this Section 2.7), and in any event at the end of Contract Year
Five, the Parties shall make further selections of Collaboration Targets and CK
Targets, with [*] selecting [*] ([*]) [*], and with the [*] being designated as
[*] (subject to paragraphs (b) and (c) below). For example, if [*] ([*]) Lead
Targets were in the Initial Lead Target

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Pool, when [*]([*]) additional Lead Targets are identified, [*] shall first
select [*]([*]) Lead Target as [*], and the [*] Lead Target shall be [*].

                           (b)      Notwithstanding the foregoing, until such
time as a total of at least [*]([*]) Lead Targets have been identified, then the
selection of such Lead Targets shall proceed in accordance with Section 2.7.1
above as if such Lead Targets had been in the Initial Lead Target Pool (i.e., so
that [*] will have the right to select the first [*] Lead Targets as [*], and
[*] shall have the right to select the [*] Lead Target as [*]).

                           (c)      If there is only one (1) unselected Lead
Target at the end of Contract Year Five, then that Lead Target shall be
designated as a Collaboration Target or a [*], depending on which Party is
then due a Lead Target, based on the table above.

                  2.7.3    Reversion of Unselected Targets; Selection during
Section 2.8.2 Extension.

                           (a)      It is understood that any Unselected Target
shall be deemed a CK Target at the end of Contract Year Five, unless the
Research Term is extended with respect to Unselected Targets under Section 2.8.2
below, or, if the Unselected Target is an Extendable Unselected Target and such
Target becomes an Extended Target under Section 4.2.2 below.

                           (b)      If the Research Term is extended with
respect to Unselected Targets in accordance with Section 2.8.2 below, and a
particular Unselected Target is identified as a Lead Target during the period of
such extension, such Lead Target shall be selected as a Collaboration Target or
CK Target in accordance with the table in Section 2.7.1 above, taking into
account all of the Lead Targets previously so selected under Section 2.7.1 or
2.7.2 above, or under this Section 2.7.3. Such selections shall be made in a
sequential fashion, progressing through the table Lead Target-by-Lead Target, as
each such Lead Target is identified (i.e., such selection shall not progress on
the basis of each [*] Lead Targets in the manner described in Section 2.7.2
above). Any Unselected Target that has not been identified as a Lead Target by
the end of the extended Research Term under Section 2.8.2 shall be deemed a CK
Target, unless such Unselected Target becomes an Extended Target under Section
4.2.2 below.

                           (c)      If an Extendable Unselected Target becomes
an Extended Target under Section 4.2.2 below, and such Extended Target is
identified as a Lead Target during the Extension Period for such Target, the
same shall automatically be deemed a Collaboration Target. Otherwise, such
Unselected Target shall become a CK Target as of the end of the last Extension
Period for such Target.

                  2.7.4    Completion of Screening. Promptly following the
Effective Date, CK shall disclose to GSK the number of screens against
particular Mitotic Kinesin Targets that it has conducted as of the Effective
Date, including those chemical entities so screened by CK prior to the Effective
Date. It is anticipated that, by the end of Contract Year [*], CK will generate
up to [*] Data Points with respect to each of [*]([*]) Mitotic Kinesin Targets,
unless the JRC determines and agrees that such Data Points are better allocated
otherwise. The JRC shall specify

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the number of chemical entities to be screened with respect to specific Mitotic
Kinesin Targets, on a Target-by-Target basis. GSK shall supply to CK such number
of chemical entities and in such quantities as required by the Initial Research
Plan (as defined in Section 2.3.2) in time for the scheduled screening against a
particular Mitotic Kinesin Target prior to the end of Contract Year [*]. CK
shall give priority to screening chemical entities provided by GSK rather than
to chemical entities provided by CK. The screening requirements outlined in the
Initial Research Plan shall be sufficient to satisfy the Completion of Screening
requirement under this Section 2.7 and screening of such Targets shall be deemed
complete for purposes of clause (i) of Section 2.7.1 above when CK has generated
that number of Data Points specified by the Initial Research Plan for Contract
Years [*] through [*], including those Data Points generated by CK prior to
the Effective Date, or such lesser number as the JRC may agree. It is understood
that the JRC may provide for further screening beyond that level of screening
required for Completion of Screening under this Section 2.7.4, but completion of
such further screening shall not be required to satisfy the requirements of
Section 2.7.1(i) above. For purposes of this Section 2.7.4, a "Data Point" shall
be deemed generated when CK has screened a single, unique chemical entity
against a single Mitotic Kinesin Target (it being understood that such chemical
entity may be used to generate a Data Point for each Mitotic Kinesin Target).

         2.8      Extension of Research Term.

                  2.8.1    Collaboration Targets. GSK shall have the right to
extend the Research Term on an annual basis for up to [*]([*]) additional [*]
periods beyond Contract Year Five. To exercise such option, GSK shall so notify
CK in writing at least [*]([*]) months prior to the expiration of the Research
Term (including any extensions thereof in accordance with this Section 2.8.1).
During any extension of the Research Term under this Section 2.8.1, the Research
Plan shall provide for [*]([*]) CK FTEs, or a higher number if mutually agreed,
performing activities with respect to Collaboration Targets under the Research
Program, funded by GSK at the FTE rate established under Section 6.2.1 below. It
is understood that, during any extension under this Section 2.8, the Research
Program shall be limited to research and development activities directed to
Collaboration Targets, except as provided under Section 2.8.2 below. In the
event that the Research Term ends at any point in time, then from and after such
time GSK shall have no further right to extend the Research Term under this
Section 2.8.1.

                  2.8.2    Unselected Targets.

                           (a)      Except as provided in this Section 2.8.2, or
as provided in Section 4.2.2 below, all Mitotic Kinesin Targets that have not
been designated Collaboration Targets by the end of Contract Year Five shall at
that time become CK Targets.

                           (b)      Notwithstanding (a) above, if GSK has
extended the Research Term for a particular Contract Year in accordance with
Section 2.8.1 above, GSK may also extend the Research Term with respect to all
Unselected Targets for such Contract Year, to the extent provided in this
Section 2.8.2. GSK shall have the right to extend the Research Term under this
Section 2.8.2 for up to [*]([*]) additional [*] periods beyond Contract Year
Five, provided GSK has

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extended the Research Term under Section 2.8.1. To exercise such option, GSK
shall so notify CK in writing at least [*]([*]) months prior to the expiration
of the Research Term (including any extensions thereof in accordance with this
Section 2.8.2(b)). During any extension of the Research Term under this Section
2.8.2, the Research Plan shall provide for [*]([*]) CK FTEs, or a higher number
if mutually agreed, performing activities with respect to Unselected Targets
under the Research Program, funded by GSK at the FTE rate established under
Section 6.2.1 below (i.e., [*] additional FTEs beyond those required by Section
2.8.1 above, for a combined total of at least [*] CK FTEs being funded by GSK
under both Sections 2.8.1 and 2.8.2). In the event that GSK does not extend the
Research Term for any Contract Year with respect to all Unselected Targets in
accordance with this Section 2.8.2, then from and after such time GSK shall have
no further right to extend the Research Term under this Section 2.8.2.

                           (c)      In the event GSK extends the Research Term
in accordance with this Section 2.8.2, then any Unselected Targets that have not
been designated Collaboration Targets prior to the end of the last extension of
the Research Term under this Section 2.8.2 shall at that time become CK Targets,
unless GSK selects such Unselected Target as an Extended Target in accordance
with Section 4.2.2 below.

                           (d)      Once an Unselected Target is selected as
either a Collaboration Target or a CK Target, the same shall cease to be an
Unselected Target.

                        ARTICLE III - PRODUCT DEVELOPMENT

         3.1 GSK's Right to Pursue Development.

                           (a)      Following the selection of a Development
Compound in accordance with Section 2.5 above, GSK shall be responsible for
undertaking a development program to obtain Marketing Approval for one or more
Licensed Products incorporating such Development Compound. The development
program undertaken by GSK shall include all preclinical, clinical, manufacturing
and other activities, beyond those to be undertaken pursuant to the Research
Program, as are [*] or [*] in [*] and [*] to bring such Licensed Products to
market. Except as provided in Section 3.1(b), and subject to any other
provisions of this Agreement (including without limitation Sections 3.2, 3.3,
4.2.1, 7.3 and 11.3.3), GSK shall have the right to make all decisions relating
to the development, marketing and commercialization activities with respect to
any particular Development Compound or Licensed Product, including whether to
continue with the development program with respect to any Development Compound
or Licensed Product or to seek Marketing Approval of a Licensed Product in a
particular country in the Territory.

                           (b)      Upon CK's exercise of its Co-Funding Option
or GSK's exercise of the CK Product Option, the JDC shall have the right to make
all decisions relating to the development, marketing and commercialization
activities with respect to any particular Development Compound or Licensed
Product as to which CK has exercised its Co-Funding Option, including whether to
continue with the development program with respect to the Development Compound
or Licensed

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Product or to seek Marketing Approval of the Licensed Product in a particular
country in the Territory. The JDC shall make decisions in accordance with the
Co-Development Plan and Budget (as described in Section 3.4.2), as such may be
modified by the JDC and all development of Co-Funded Products shall be performed
in accordance with such Co-Development Plan and Budget. All MAAs and Marketing
Approvals for the Licensed Products (other than those for which GSK acquires
rights under Section 4.5 below) [*], unless otherwise agreed or provided herein.

                  3.1.1    Review of [*] as Potential Development Compound. The
Parties acknowledge that CK has identified and developed certain Compounds, and
that the Compound referred to by CK as [*] may potentially meet the Development
Compound Criteria guidelines set forth in Exhibit 2.5. In addition, the Parties
acknowledge that CK has commenced and is continuing product development
activities with respect to [*], and the Parties have discussed CK's continuing
development program, including the costs thereof, for such Compound. Promptly
after the Effective Date, the JRC shall determine whether and when to recommend
[*] as a Development Compound, and, if the JRC so recommends, [*] shall
determine whether or not to approve [*] as a Development Compound in accordance
with Section 2.5 above, and will notify [*] of its decision, including the
reasons for such decision, it being understood that [*] retains the absolute
right to approve or not approve [*] as a Development Compound.

                  3.1.2    Cost of [*] Preclinical Development Prior to
Decision. It is understood that, prior to the Effective Date, CK has been
proceeding with development activities with respect to [*], including activities
directed to compiling data necessary for [*] to consider [*] as a potential
Development Compound. GSK shall have no obligation to reimburse CK for any costs
incurred by CK prior to the Effective Date relating to [*] or other research and
development activities of CK. Notwithstanding the foregoing, GSK agrees to
reimburse CK for the following costs related to [*]: (a) costs associated with
[*] incurred after the Effective Date as set forth in the Research Plan; (b)
costs incurred by CK in accordance with the termination of activities ongoing as
of the Effective Date with those Third Party vendors identified with an asterisk
in the Initial Research Plan, [*]; and (c) if [*] is not approved by [*] as a
Development Compound, [*] percent ([*]%) of costs incurred by CK in accordance
with the termination of activities with those Third Party vendors identified
with an asterisk in the Initial Research Plan. GSK shall have no obligation to
reimburse CK for costs associated with [*]or other research costs other than as
set forth above or as otherwise agreed by the JRC. In establishing the
objectives and activities in the Research Plan with respect to [*], the JRC
shall determine which Third Party agreements relating to [*] to continue or to
terminate. In the event that [*] approves [*] as a Development Compound, the
Parties shall cooperate to ensure a seamless and rapid transition of further
development of [*] in accordance with the general timelines set forth in the
Initial Research Plan.

         3.2      Project Team. Promptly after approval of each Development
Compound, GSK shall form a project team comprised of GSK personnel that will
manage the conduct and progress of the further development and regulatory
affairs with respect to that Development Compound (each a

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"Project Team"). Such Project Team shall meet at least monthly. CK shall be
notified at least two weeks in advance of the date of each Project Team meeting
and shall have the opportunity to send, at CK's cost, [*] to such meeting, who
shall be designated as [*] of the Project Team. GSK shall provide such [*] with
schedules for all Project Team meetings and all other information distributed to
GSK members of the Project Team. The Project Team shall have the responsibility
for establishing the plan for the development of the subject Development
Compound (each, a "Development Plan"), and in so doing shall consider all
reasonable suggestions and comments of CK in formulating such Development Plan.
Such Development Plan shall be comprehensive and shall fully describe at least
the proposed activities related to ongoing preclinical studies, formulation,
process development, clinical studies and regulatory plans, and other activities
and timelines directed to obtaining Marketing Approval in each applicable
country. In any event, GSK agrees to keep CK fully informed as to the material
progress and activities relating to the further development and regulatory
matters pertaining to each Development Compound and Licensed Product. In
addition, GSK shall provide CK with such material information as CK may
reasonably request from time to time. It is understood that such information
will include, without limitation, copies of all proposed trial protocols and
material correspondence with regulatory authorities with respect to each
Licensed Product.

         3.3      Manufacturing. Except as provided in Section 3.1.2, GSK shall
have the right and responsibility to arrange for manufacturing of the Licensed
Products, including both clinical materials and commercial product, consistent
with GSK's reasonable internal practices and industry standards. GSK shall make
reasonable commercial efforts to ensure adequate manufacturing capacity to meet
forecast demand for Licensed Products, including, if deemed necessary by GSK,
the establishment of an alternative supply source. GSK shall also make
reasonable commercial efforts to ensure an adequate clinical and commercial
supply of such Licensed Products. GSK will keep the Project Team, the JDC and
the JCC, as applicable, advised of its manufacturing plans and activities.

         3.4      Co-Development Option. CK shall have the right, on a Licensed
Product-by- Licensed Product basis, to elect to fund a portion of the Later
Stage Development Costs of such Licensed Product, all in accordance with this
Section 3.4 (the "Co-Funding Option").

         3.4.1    Election. GSK shall notify CK at least [*]([*]) months, but
not more than [*]([*]) months, prior to initiation of the first [*] for each
Licensed Product (each, a "[*]"). Such [*] shall include the date by which such
[*] will start (the "Projected Start Date"), and shall include a description in
detail of the indication for which such [*] will be directed, together with a
comprehensive, detailed plan and budget, prepared and provided in good faith,
for the conduct of the Later Stage Development of such Licensed Product, to the
extent such information is not included in or is at variance with the
Development Plan or otherwise has not been communicated previously to CK. At
least [*]([*]) days prior to the Projected Start Date, CK may elect, by so
notifying GSK in writing, to participate in the further development of such
Licensed Product, to the extent described in this Section 3.4 below (such
notice, the "Election Notice"). Following the [*], GSK shall cooperate

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fully with CK, and shall promptly provide CK with such material information
(including without limitation underlying clinical data), to the extent such
information is not included in the Development Plan or otherwise has not been
communicated previously to CK, as CK may reasonably request to enable CK to make
an informed decision whether to exercise its Co-Funding Option under this
Section 3.4 with respect to such Licensed Product. In the event CK exercises its
Co-Funding Option with respect to a particular Licensed Product (such Licensed
Product, a "Co-Funded Product"), the provisions of Sections 3.4.2 through 3.4.4
below shall apply with respect to such Co-Funded Product.

                  3.4.2    Co-Funding Obligation. In the event CK exercises its
Co-Funding Option with respect to a Licensed Product, CK shall specify in the
Election Notice whether CK elects to fund either [*] ([*]) or [*] ([*]) of the
Later Stage Development Costs for such Licensed Product. The percentage so
specified by CK is referred to as the "CK Percentage" for such Licensed Product.
Following such election, CK shall be obligated to reimburse GSK for the CK
Percentage of such Later Stage Development Costs for such Licensed Product,
subject to the provisions of this Section 3.4.

                           (a)      The comprehensive development plan and
budget provided with the [*], as modified in accordance with this Section
3.4.2(a), is referred to as the "Co-Development Plan and Budget." By October 1
of each year during the Later Stage Development for a particular Co-Funded
Product or such other date as is mutually agreed by the Parties (which will be
established under Section 3.5 below), the JDC shall update and amend the
Co-Development Plan and Budget for such Co-Funded Product for the next
succeeding year. Unless otherwise specified in the Co-Development Plan and
Budget, any amounts projected for a full year shall be considered budgeted in
four equal quarterly amounts.

                           (b)      Within sixty (60) days after CK exercises
its Co-Funding Option with respect to a Licensed Product, but in any event prior
to the initiation of the first [*] for such Licensed Product, CK and GSK shall
establish specific reasonable Later Stage Development Costs invoicing and
payment procedures. Such procedures shall include the form of invoice, overall
documentation requirements and accounting methodologies for Later Stage
Development Costs, and specific documentation of costs required with each
invoice. Within sixty (60) days after the end of each calendar [*], GSK shall
provide to CK a statement reflecting the total Later Stage Development Costs
incurred by GSK during such calendar [*] with respect to the particular
Co-Funded Product. Within sixty (60) days after CK's receipt of such statement,
CK shall reimburse GSK for the CK Percentage of Later Stage Development Costs
incurred by GSK during such [*] period in accordance with the Co-Development
Plan and Budget for such Co-Funded Product. CK may elect to defer payment, in
whole or in part, of any amount due under this Section 3.4.2(b) for up to an
additional [*] ([*]) months after such payment would otherwise have been due, by
providing notice to GSK of the amount for which payment is to be deferred and
the period of the deferment. Any payment amount so deferred shall bear interest
at a rate of [*] percent ([*]%) per annum, calculated on the number of days from
the end of the [*] day period after the calendar [*] in which such Later Stage
Development Costs were incurred, until

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the date paid by CK. GSK agrees to keep CK informed on an ongoing basis as to
the actual Later Stage Development Costs incurred to date as compared to the
Later Stage Development Costs reflected in the Co-Development Plan and Budget.

                           (c)      Notwithstanding the foregoing, CK shall not
be obligated to reimburse GSK for amounts [*] percent ([*]%) in excess of the
Later Stage Development Costs provided in (i) the then-current Co-Development
Plan and Budget, or (ii) the Development Plan and Budget provided with the [*],
whichever is lower (the CK Percentage of such excess amounts being referred to
as the "Deferred Excess Amount") in accordance with the time periods and
schedule set forth in Section 3.4.2(b). In the event that CK elects not to
reimburse such Deferred Excess Amount in accordance with the time periods and
schedule set forth in Section 3.4.2(b), then, at GSK's option either (i) CK
shall repay such Deferred Excess Amount on the [*] anniversary of the date such
Deferred Excess Amount would otherwise have been payable under paragraph (b)
above, together with interest thereon at the rate of [*] percent ([*]%) per
annum, calculated from the date such Deferred Excess Amount would have been so
due under paragraph (b); or (ii) GSK shall be entitled to credit such excess
costs, plus interest at a rate of [*] percent ([*]%) per annum, calculated from
the date such costs would have otherwise been due, against royalties payable
under Section 6.6.2 with respect to such Co-Funded Product. GSK shall make such
election with respect to all Deferred Excess Amounts for a particular Co-Funded
Product by so notifying CK within sixty (60) days after the date CK first elects
to defer a Deferred Excess Amount under this Section 3.4.2(c) for such Co-Funded
Product. In the event of (i), CK may repay such Deferred Excess Amount earlier
than the date it would be payable under (i) above, without penalty, and with
interest only accruing until the date so paid by CK.

                           (d)      In the event CK assigns this Agreement to
[*] US Dollars ($[*]), or in the event that CK merges or consolidates or
concludes a similar transaction with such a pharmaceutical or biotechnology
entity, in which such entity becomes an Affiliate of CK, CK's ability to defer
any payments due under Section 3.4.2(b) or (c) shall terminate, and CK shall
reimburse GSK for all past payments due, including applicable interest thereon,
within ninety (90) days after the closing of such acquisition, merger or
consolidation.

                           (e)      Upon [*]([*]) months written notice to GSK,
CK may terminate its Co-Funding Option for a particular Co-Funded Product. In
such event, CK's funding obligation under Section 3.4.2(b) above shall apply
only with respect to Later Stage Development Costs of activities conducted with
respect to such Co-Funded Product prior to the date of such termination. Should
CK terminate its Co-Funding Option under this Section, any royalties payable to
CK on the Licensed Product shall be paid in accordance with Section 6.6.2(c). If
CK terminates its Co-Funding Option under this Section, it shall relinquish any
right to its Co-Promotion Option under Section 7.4 with respect to such
Co-Funded Product.

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                  3.4.3    Certain Terms. As used in this Section 3.4, the
following terms shall have the meaning set forth below:

                           (a)      "Later Stage Development" shall mean [*] and
[*] and other development activities described below, specifically directed to
the development of a Co-Funded Product, which are directed specifically towards
achieving [*] or maintaining [*] of a Co-Funded Product or achieving an [*] or
[*] for a Co-Funded Product, whether such studies are conducted by [*] or by an
[*]; provided, however, that [*] focusing on [*] not included in the [*] for the
Co-Funded Product and not used for submission of an [*] or [*] for the Co-Funded
Product shall also be included in Later Stage Development if the results of such
study are published in a peer-reviewed journal. Later Stage Development shall
also include (i) the [*] of [*] and [*] for such [*] and [*]; provided, however,
that if the amounts of [*] for [*] are used for [*] of the [*], [*] shall be [*]
for the cost of any amounts [*]; (ii) [*] and [*] development activities
commenced after the initiation of the [*] for the [*] specifically directed to
the Co-Funded Product, including [*] or clinical [*] or [*] studies, [*] and
other clinical testing, for such purpose; provided, however, that the costs of
activities described in this item (ii) to be included within Later Stage
Development Costs (other than [*] tests required to [*] a [*] clinical trial),
shall be limited to [*]% of the total Later Stage Development Costs for such
Co-Funded Product in a given [*] period; and (iii) that portion of [*]
development directed specifically towards achieving [*] of a Co-Funded Product
or achieving an [*] or [*] for a Co-Funded Product; and (iv) the preparation and
filing of [*] and all associated [*] activities to achieve [*], maintain [*] or
achieve an [*] or [*] for a Co-Funded Product, including the [*]. "Later Stage
Development" shall exclude (i) [*] development not included in (iii) above; and
(ii) any activities of the [*] and [*] of GSK and associated [*]. As used
herein, "[*]" shall mean the [*]- approved [*] required to [*] the Licensed
Product that contains [*].

                           (b)      "[*]" clinical trials shall mean any [*]
clinical trials of a Co-Funded Product conducted after [*] of such Co-Funded
Product, by GSK or a Third Party, to the extent GSK collects or receives the
data generated in such trials, performs statistical analysis with respect to
such data, with the intention of using the data to determine [*] or [*] for the
Co-Funded Product or supporting the [*] and [*] of such Co-Funded Product. [*]
clinical trials shall specifically exclude [*] programs sponsored by GSK, [*]
programs and grants (other than those grants extended by GSK to investigators to
support [*] clinical trials).

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                           (c)      "Later Stage Development Costs" with respect
to a particular Co-Funded Product shall mean, to the extent incurred in
accordance with the Co-Development Plan and Budget then in effect and to the
extent not reimbursed by a Third Party: (i) amounts paid to Third Parties for
their performance of Later Stage Development of the particular Co-Funded
Product; [*] (ii) [*] conducting such Later Stage Development, plus [*] for such
[*], [*] directly attributable to such Later Stage Development; and (iii) [*] to
the conduct of Later Stage Development, including [*] of [*] for [*] in Later
Stage Development; plus in each of cases (i), (ii) and (iii), a reasonable
allocation of [*] costs attributable to the particular Co-Funded Product
(subject to paragraph (d) below). [*] costs attributable to a Co-Funded Product
may include a reasonable allocation of [*] labor, a reasonable allocation of [*]
costs, and a reasonable allocation of [*] cost including [*] cost, [*], and [*]
over the [*] of [*] and [*], and such allocations shall be in accordance with
reasonable cost accounting methods, consistently applied by GSK for its own
internal accounting. [*] shall not include corporate [*] or [*] costs not
otherwise allocable to the [*] of the Co-Funded Product or costs associated with
[*] not incorporated into [*] costs, and [*] costs shall exclude costs
associated with [*] and [*]. It is understood that Later Stage Development Costs
shall not include any cost of activities undertaken prior to CK's exercise of
its Co-Funding Option, and shall not include any costs incurred with respect to
activities directed to [*] of a Co-Funded Product, or to [*], or to activities
not specifically directed to achieving [*], maintaining [*] or achieving an [*]
or [*] for a Co-Funded Product in an attempt to enhance Net Sales of the
Co-Funded Product and the resulting royalties to CK.

                           (d)      In no event, however, shall the total [*]
included within Later Stage Development Costs exceed [*] percent ([*]%) of the
costs described in (i), (ii) and (iii) of Section 3.4.3(c) above.

                           (e)      For purposes of this Section 3.4, a
particular "Co-Funded Product" shall include all dosages of any formulation of
the same active ingredient for all indications within the Field. Licensed
Products having a different or additional active ingredient shall be deemed a
separate Licensed Product (or a separate Co-Funded Product, as the case may be).

                  3.4.4    Certain Disputes. The Parties shall attempt to timely
resolve any dispute with respect to whether a cost or expense should be included
within Later Stage Development Costs for a particular Co-Funded Product or is
otherwise obligated to be reimbursed under this Section 3.4. If the Parties are
unable to resolve such dispute, the matter shall be referred to the Chairman,
GSK R&D, and President, CK, for resolution. If such individuals are unable to
resolve such dispute within thirty (30) days after the matter is referred to
them, the matter shall be subject to arbitration under Section 12.3.1 below.
Failure by CK to pay any disputed amount under this Section 3.4 shall not be
deemed a breach of this Agreement unless and until it has been determined in an
arbitration

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proceeding under Section 12.3.1 below that CK is obligated to pay such disputed
amount, provided that (i) CK makes such payment within thirty (30) days after
such determination or (ii) within such thirty (30) day period CK elects to
terminate its Co-Funding Option for the particular Co-Funded Product in
accordance with Section 3.4.2(e) above, in which case (notwithstanding Section
3.4.2(e)), CK shall have no obligation to reimburse any Later Stage Development
Costs not previously paid by CK.

         3.5      Joint Development Committee. Promptly following CK's exercise
of its Co-Funding Option for a Co-Funded Product, or an exercise by GSK of the
CK Product Option with respect to a CK Product under Section 4.5 below, the
Parties shall establish a Joint Development Committee ("JDC") with respect to
such Licensed Product. It is understood that the Project Team for such Licensed
Product shall continue after establishment of a JDC and shall report thereto.
The JDC shall have responsibility to oversee the Later Stage Development of the
Co-Funded Product, and all further development of the Licensed Product for which
GSK exercises its CK Product Option under Section 4.5, and to make such
decisions as are expressly provided in this Article III. The JDC shall be
comprised of an equal number of representatives from each of GSK and CK; and
unless otherwise agreed, the JDC shall at all times include CK's head of
development and GSK's head of clinical operations for the CEDD or Therapeutic
Area Strategic Team ("TAST"), as appropriate, and GSK's CEDD head of biology,
unless otherwise agreed, and shall have at least one representative from each
Party at the level of Vice President or above. Either Party may replace its
respective JDC representatives at any time, with prior written notice to the
other Party. From time to time, the JDC may establish subcommittees to oversee
particular projects or activities, and such subcommittees will be constituted as
the JDC approves. The JDC shall meet at least quarterly according to an agreed
schedule, and the Parties shall keep the JDC fully informed as to all aspects of
the Later Stage Development and other ongoing activities pertaining to the
Co-Funded Product and all further development of the Licensed Product for which
GSK exercises its CK Product Option under Section 4.5. Decisions of the JDC
shall be by majority vote; provided that if there is not an equal number of
representatives of each Party present at such meeting, then only an equal number
of representatives of each Party shall be entitled to vote. In the event the
required vote to approve a particular action cannot be obtained, then either
Party may request that the issue be referred for resolution through good faith
negotiations between the Chief Executive Officer of CK and the Chairman,
Research and Development for GSK, who shall promptly meet to resolve the issue.
In the event they are unable to reach agreement on the matter, the [*] shall
have the right to [*] on the matter, which [*] shall become the decision of the
JDC. Notwithstanding the foregoing, [*] shall not have the right to [*] with
respect to matters relating to Licensed Products for which [*].

         3.6      Regulatory Matters. Subject to Section 4.4.2, [*] shall file
and be the owner for all regulatory filings for Compounds and/or Licensed
Products developed pursuant to this Agreement, including all MAAs and Marketing
Approvals. Notwithstanding the foregoing, the parties shall agree on which Party
shall file and own regulatory filings for Licensed Products for which [*].

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                            ARTICLE IV - EXCLUSIVITY

         4.1      Exclusivity of Efforts.

                  4.1.1    Compounds. Except as set forth herein or Exhibit
10.1, during the Exclusivity Period, neither Party shall conduct, participate
in, or fund, directly or indirectly, alone or with a Third Party, research or
development with respect to, or commercialize a product comprising, a
Development Compound, Compound or Licensed Product within the Field, except
pursuant to this Agreement. In addition, neither Party shall, during the
Exclusivity Period, without the consent of the JRC or the other Party, hold any
discussion with any Third Party relating to any of the foregoing activities,
regardless of whether such activities would take place during or after the
Exclusivity Period, except as permitted under this Agreement.

                  4.1.2    Activities Directed to Mitotic Kinesin Targets.
Except as set forth herein or Exhibit 10.1, during the Exclusivity Period,
neither Party shall conduct, participate in, or fund, directly or indirectly,
either alone or with a Third Party, any research, development, or
commercialization activities in the Field with respect to the Mitotic Kinesin
Targets, including Collaboration Targets, except pursuant to the Agreement. In
addition, during the Exclusivity Period, neither Party shall disclose to a Third
Party any CK Existing Technology, GSK Existing Technology, Collaboration
Technology or Post-Collaboration Technology relating to Mitotic Kinesin Targets
to the extent prohibited under Section 9.5. Subject to the foregoing and the
confidentiality obligations set forth in Article IX, (i) CK shall have the right
to use Mitotic Kinesin Targets, and information relating thereto other than
Compounds, for general technology development purposes, including but not
limited to the development of assay, informatics, and expression technologies,
and (ii) either Party shall have the right to use Mitotic Kinesin Targets,
including CK Targets and Collaboration Targets, and information relating
thereto, for the generation of negative control information outside the Research
Program.

                  4.1.3    Retention of Rights.

                           (a)      For avoidance of doubt, it is understood
that this Section 4.1 shall not limit CK's activities relating to CK Targets, CK
Compounds, and CK Products.

                           (b)      Notwithstanding Section 4.1.1, each Party
retains the right to conduct, participate in, or fund, directly or indirectly,
alone or with a Third Party, research or development with respect to, or to
commercialize a product comprising (i) with respect to GSK, a GSK Library
Compound, and (ii) with respect to CK, a CK Library Compound, in each case where
the primary mode of pharmacological action of such compound is not through
inhibition of one or more Mitotic Kinesin Targets, and without use of Licensed
Technology owned (or Controlled) solely by the other Party; provided, however,
that (1) if CK has progressed a GSK Library Compound to the equivalent stage to
a Development Compound hereunder prior to GSK progressing such GSK Library
Compound to a Development Compound-equivalent stage under this Section 4.1.3(b),
the retained right of GSK under this Section 4.1.3 with respect to such GSK
Library Compound will no longer apply; and (2) if GSK has progressed a CK
Library Compound to the equivalent stage to a

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Development Compound prior to CK progressing such CK Library Compound to a
Development Compound-equivalent stage under this Section 4.1.3(b), the retained
right of CK under this Section 4.1.3 with respect to such CK Library Compound
will no longer apply. Each Party shall notify the other of their efforts with
respect to a GSK Library Compound or CK Library Compound upon the designation of
the compound as a Compound or as a Development Compound equivalent as described
in (i) and (ii) above. This Section 4.1.3 shall not be deemed to limit in any
way any license expressly granted under this Agreement.

                           (c)      GSK acknowledges that CK has ongoing
research programs related to non-human mitotic kinesins and the development of
pharmaceutical products for the treatment of human diseases, the mechanism of
action of which is to modulate such non-human proteins. GSK further acknowledges
that such ongoing research programs as well as similar future CK research
programs related to non-human mitotic kinesins are outside the scope of this
Agreement and such activities of CK are not prohibited by this Article IV.
Notwithstanding the foregoing, except for the licenses granted under Section
5.4.2, nothing in this Agreement shall be construed as a grant to CK of any
licenses from GSK under Licensed Technology for research, development or
commercialization of any products directed to non-human mitotic kinesins; and
provided further, that nothing in this Section shall be construed as a
limitation on CK's confidentiality obligations pursuant to Article IX of this
Agreement.

         4.2      Exclusivity Extension.

                  4.2.1    [*] Programs. Subject to the provisions of this
Section 4.2, for those Collaboration Targets for which a [*] Program has been
designated during the Exclusivity Period or if such Collaboration Target was an
Extended Target (as defined in 4.2.2(a) below), prior to the end of the
Extension Period for such Target, CK's obligations under Section 4.2.3 below
with respect to each such Collaboration Target shall automatically extend with
respect to such Collaboration Target for so long as GSK is diligently pursuing
such [*] Program, Development Compound or Licensed Product directed to such
Collaboration Target; provided, however, if after the Exclusivity Period or any
Extension Period, as applicable (i) GSK ceases at any time diligent research,
development or marketing of all Compounds and Licensed Products for such
Collaboration Target, or (ii) GSK fails to identify a Compound meeting the
guidelines set forth in Exhibit 2.5 and designate such Compound as a Development
Compound for such Collaboration Target before the [*] anniversary of the
expiration of the Exclusivity Period, or in the case of a Collaboration Target
that was an Extended Target, before the [*] anniversary of the end of the
Extension Period for such Target, then CK's obligations under Section 4.2.3
shall terminate with respect to such Target. GSK shall keep CK informed of its
progress and activities pertaining to all Collaboration Targets, Extended
Targets and Extendable Unselected Targets, and any Compounds, Development
Compounds or Licensed Products directed thereto.

                  4.2.2    Option to Extend Exclusivity; Exercise.

                           (a)      Subject to paragraph (d) below, GSK has the
option to extend CK's obligations under Section 4.2.3 below with respect to a
particular Collaboration Target or


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Extendable Unselected Target (as described in paragraph (e) below), on a
Target-by-Target basis for up to an additional [*] ([*]) years, all to the
extent set forth in Section 4.2.3 below. The option fee shall be [*] U.S.
Dollars (U.S. $[*]) per annum per Collaboration Target or Extendable Unselected
Target, as applicable. To exercise such right:

                                    (i)      with respect to a Collaboration
Target that was selected as a Collaboration Target prior to the end of the
initial five-year Research Term or any extension thereto under Section 2.8.1,
GSK shall so notify CK in writing at least ninety (90) days prior to the end of
the Exclusivity Period; and

                                    (ii)     with respect to an Extendable
Unselected Target, GSK shall so notify CK in writing at least ninety (90) days
prior to the end of the initial five-year Research Term or any extension thereto
under Section 2.8.2. In the event that an Extendable Unselected Target becomes a
Collaboration Target during an Extension Period for such Target, it is
understood that clause (i) above shall not apply (i.e., because such Extendable
Unselected Target was not a Collaboration Target at the end of the Research
Term).

                                    (iii)    Each such notice shall specify the
Collaboration Target(s) or Extendable Unselected Target(s) for which GSK elects
to exercise its right under this Section 4.2.2, and include payment in the
amount of [*] U.S. Dollars (U.S. $[*] ) for each Collaboration Target(s) or
Extendable Unselected Target(s) for which GSK exercises its rights under this
Section 4.2. Upon such exercise, such Collaboration Target(s) or Extendable
Unselected Target(s) shall be deemed an "Extended Target" for a period of [*]
from such anniversary date.

                           (b)      After the first [*] -year extension for a
particular Extended Target under (a) above, subject to paragraph (d) below, GSK
may maintain such Extended Target as an Extended Target for one additional [*]
([*]) year period beginning at the end of the first Extension Period, by so
notifying CK in writing, and paying to CK the amount of [*] U.S. Dollars (U.S.
$[*] ) for each Extended Target for which GSK seeks such a continued extension,
at least ninety (90) days prior to the end of the first Extension Period.

                           (c)      In the event that the Extension Period
lapses at any time with respect to a particular Collaboration Target or
Extendable Unselected Target, then GSK shall have no further rights, and CK
shall have no further obligations, under this Section 4.2 with respect to such
Collaboration Target or Extendable Unselected Target, and such Collaboration
Target or Unselected Target shall not be deemed an Extended Target for any
period thereafter and shall be deemed a CK Target. If GSK establishes, prior to
the end of the Extension Period for an Extended Target, a [*] Program, then
Section 4.2.1 shall apply; provided that, in the case of an Extended Target that
is an Extendable Unselected Target, such Extended Target has first been
designated as a Collaboration Target in accordance with Section 2.7.3 above.

                           (d)      Notwithstanding the foregoing provisions of
this Section 4.2.2, if GSK extends the Research Term for [*] ([*]) years under
Section 2.8.1 above, GSK may only extend its rights under Section 4.2.3 below
with respect to Collaboration Targets and Extendable Unselected


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Targets for a single [*] Extension Period under this Section 4.2.2 (i.e., so
that in such event GSK shall not have the right to an additional extension under
paragraph (b) above); and if GSK extends the Research Term for [*] ([*]) years
under Section 2.8.1 above, GSK shall not have any right to extend its rights
with respect to any Collaboration Target or Extendable Unselected Target.

                           (e)      The Unselected Targets for which GSK may
extend its rights under Section 4.2.3 below ("Extendable Unselected Targets"),
in accordance with this Section 4.2.2 shall be determined as follows: Prior to
the time specified in paragraph (a)(ii) above for GSK to so extend such rights,
GSK and CK shall allocate the Unselected Targets then remaining (the "Unselected
Target Pool") into Extendable Unselected Targets and CK Targets, in the same
manner as the Parties selected Collaboration Targets and CK Targets from Lead
Targets under Section 2.7.3 above, progressing sequentially through the table in
Section 2.7.1, as if such Extendable Unselected Targets were Collaboration
Targets and as if such Unselected Targets were Lead Targets. It is understood
that such selection shall begin at the point in the table where the last
selection of a Collaboration Target or CK Target, as the case may be, was made
under Section 2.7. For example, if there had been [*] ([*]) Lead Targets during
the Research Term (including any extension thereto), and there remain [*] ([*])
Unselected Targets in the Unselected Target Pool, then [*] shall have the right
to make the first selection of [*] from such Unselected Target Pool, then [*]
would have the right to select [*]([*])[*] as a [*] , [*] would then have the
right to select [*]([*]) additional [*] from the Unselected Target Pool, and [*]
would have the right to select the [*] and [*] Unselected Target as [*] . Upon
such selection by GSK the Unselected Target so selected by GSK shall become an
"Extendable Unselected Target," and upon such selection by CK the Unselected
Target shall become a CK Target.

                           (f)      GSK shall not be required to continue, but
upon mutual agreement of the Parties may elect, to [*] during the
Extension Period.

                  4.2.3    CK Obligations for Extended Targets. For so long as
GSK's exclusivity with respect to a particular Collaboration Target or Extended
Target is extended under Section 4.2.1 or Section 4.2.2 above, CK shall not
conduct, participate in, or fund, directly or indirectly, alone or with a Third
Party, any research, development, or commercialization activities in the Field
with respect to such Collaboration Target or Extended Target, as applicable.

         4.3      Certain Other Matters Pertaining to Exclusivity.

                  4.3.1    Target Reversion. After the end of the Exclusivity
Period or Extension Period, as applicable, any Collaboration Target or Extended
Target with respect to which CK's activities are no longer restricted under
Section 4.2.3 shall cease to be a Collaboration Target, and shall cease to be an
Extended Target, for all purposes of this Agreement, and any such Target shall
be deemed a CK Target at the conclusion of such Period or such later time as
specified in Section 4.2.1, as applicable, except pursuant to the Agreement.


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                  4.3.2    GSK Activities. Subject to Section 4.4.2 below, after
a Mitotic Kinesin Target becomes a CK Target, GSK shall not conduct, participate
in, or fund, directly or indirectly, alone or with a Third Party, any research,
development, or commercialization activities in the Field with respect to such
CK Target.

         4.4      Commercialization of CK Targets and Compounds.

                  4.4.1    Generally. It is understood that, as provided in this
Agreement, [*] will have control over the selection, development and
commercialization of Development Compounds and Licensed Products. Accordingly,
GSK and CK have agreed that CK has the right to continue, on its own (outside
the Research Program) research, development and other activities relating to CK
Targets, including the identification of CK Compounds and development of CK
Products for commercialization, in accordance with a workplan established by CK.
During the Research Term, CK shall provide quarterly updates to the JRC of the
progress of its activities on CK Targets. Notwithstanding the foregoing, for so
long as GSK's CK Product Option under Section 4.5 below remains in effect with
respect to a CK Compound or CK Product, CK shall retain exclusive rights to such
CK Compound or CK Product sufficient to grant to GSK the rights that GSK is
entitled to receive under Section 4.5 upon GSK's exercise of such CK Product
Option with respect to such CK Compound or CK Product.

                  4.4.2    Transition.

                           (a)      At such time as a Mitotic Kinesin Target
becomes a CK Target, a compound becomes a CK Compound or a Licensed Product
becomes a CK Product, then from and after such time, GSK shall cooperate fully
with CK to provide CK with all Licensed Technology and Information to which CK
has a right or license under this Agreement and which is necessary or useful for
CK to further research, develop, produce or otherwise exploit such CK Target, CK
Compound or CK Product. Such cooperation shall include (i) the [*] disclosure of
all such Information, to the extent such information is not within the
possession or control of CK (including, without limitation: [*] with respect to
the CK Compound or CK Product and [*] with respect to CK Products, CK Compounds
or CK Targets, and (ii) [*] and [*] or [*] in connection with the CK Product, CK
Compound or CK Target, transfer of [*] all to the extent that such material is
not in the possession of CK, and such other [*] as are reasonably necessary or
useful for CK to exercise its full rights with respect to such CK Target, CK
Compound, or CK Product granted to CK under this Agreement. From and after such
time, all such Information specifically pertaining to the CK


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Compounds, CK Products and CK Targets shall be deemed Confidential Information
of CK for purposes (i.e., to the same extent as such information had been first
disclosed to GSK by CK under this Agreement), subject to the exceptions
described in Section 9.1(ii), (iii) or (iv) (but not subject to the exception in
Section 9.1(i)) below. Notwithstanding the foregoing, GSK shall not be
considered to be in breach of this Section 4.4.2 for failure to disclose
information, if, despite [*] efforts, the identification of such
information is impractical or such information is not material. Without limiting
the foregoing, GSK shall use [*] efforts with respect to those activities
for which it is responsible to ensure orderly transition and uninterrupted
research and development of CK Targets, CK Compounds or CK Products. CK shall
promptly reimburse [*] with respect to activities and
[*] under this Section 4.4.2.

                           (b)      In addition, GSK shall cooperate fully to
transition to CK upon CK's request any arrangement with any [*] from which GSK
had arranged to [*] of Compounds, Development Compounds or Licensed Products
that became a CK Compound or CK Product hereunder. In the event that such [*] ,
and the CK Compound has reached a stage equivalent to Development Compound at
the time of its transition, then GSK shall continue to provide CK [*] until the
conclusion of any [*] , and shall also [*] a final, reasonable [*] as ordered by
CK within [*] ([*]) days after the date of transition. GSK shall be obligated to
[*] ordered by CK, but only to the extent that GSK, prior to the date of
transition, was [*] at a [*] which would permit [*] run, consistent with GSK's
past practices with respect to such Compound, Development Compound or Licensed
Product that became a CK Compound or CK Product hereunder.

                           (c)      In the event that a Mitotic Kinesin Target
later becomes a CK Target, a Compound later becomes a CK Compound, or a
Development Compound or a Licensed Product later becomes a CK Product, for
clarity it is understood that:

                                    (i)      Any subject matter that would have
been within the GSK Existing Technology, Collaboration Technology or
Post-Collaboration Technology at the time the Mitotic Kinesin Target becomes a
CK Target, the Compound becomes a CK Compound, or the Development Compound or a
Licensed Product becomes a CK Product, but for such event, shall nonetheless
continue to be within the Collaboration Technology, Post-Collaboration
Technology or GSK Existing Technology, respectively, for all purposes of this
Agreement. For example, if GSK makes an invention with respect to a
Collaboration Target after the Exclusivity Period, and then such Collaboration
Target becomes a CK Target, such invention shall continue to be within the
Post-Collaboration Technology, with respect to such CK Target, and with respect
to CK Compounds and CK Products directed to such CK Targets. It is understood
that this Section 4.4.2(c)(i) shall be subject in all respects to paragraph (b)
of Section 1.32 above.

                                    (ii)     The licenses to GSK under Section
5.2 below shall terminate (A) with respect to any Compound, Development Compound
or Licensed Product that became a CK


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Compound or CK Product, and (B) with respect to any Collaboration Target that
became a CK Target.

         4.5      GSK Option. For the period commencing on the Effective Date
and ending on the [*] anniversary thereof, for those CK Targets selected
by CK under Section 2.7.1 or 2.7.2, and for those CK Targets that become CK
Targets as a result of GSK's failure to designate a Development Compound for
such Targets within the time period specified in clause (ii) of Section 4.2.1,
GSK shall have an option to acquire a worldwide license to CK Compounds and CK
Products, all as described in this Section 4.5 below (the "CK Product Option").
Such Option shall be exercisable on a CK Product-by-CK Product basis as follows.

                  4.5.1    Exercise. At such time as CK has completed [*] ([*])
clinical trials of a particular CK Product, CK shall notify GSK of such event
(the "CK [*] Notice"), and shall provide to GSK a complete copy of the IND filed
with the FDA for such CK Product, the completed clinical trial report in the
form and including the information requested on Exhibit 4.5.1 hereto for the
clinical trials of such CK Product as of the date of the CK [*] Notice, and a
statement in detail of the research and development costs subject to
reimbursement under Section 4.5.2 below of the date of such [*] Notice. Within
[*] ([*]) days after receipt of the CK [*] Notice, GSK shall have the right to
exercise the CK Product Option with respect to such CK Product, by so notifying
CK in writing. For purposes of this Section 4.5.1, "completion" of a [*] trial
shall be deemed to have occurred upon the later to occur of (i) thirty (30) days
after the last patient to be treated in such trial has been dosed, and (ii)
receipt by CK of the completed clinical trial report for such clinical trial in
the form and including the information requested on Exhibit 4.5.1 hereto.
Following delivery of the CK [*] Notice to GSK, CK shall cooperate fully with
GSK, and shall promptly provide GSK with such material information (including
without limitation underlying clinical data), to the extent such information has
not been communicated previously to GSK, as GSK may reasonably request to enable
GSK to make an informed decision whether to exercise its CK Product Option under
this Section 4.5. In any case, such cooperation shall include providing to GSK
within [*] ([*]) days after the CK [*] Notice, a comprehensive, detailed plan
and budget for development activities to be undertaken by CK with respect to
such CK Product during the one (1) year period following the date of the [*]
Notice, together with such formal plans as CK then has produced, if any, for the
conduct of [*] trials of such CK Product. Within [*] ([*]) days after GSK
exercises its CK Product Option with respect to a CK Product, CK shall provide
GSK with a statement of the Early Stage R&D Costs that would be required to be
reimbursed by GSK under Section 4.5.2(a) below. In the event GSK exercises its
CK Product Option with respect to a particular CK Product, the provisions of
Sections 4.5.2 through 4.7 below shall apply with respect to such CK Product.

                  4.5.2    Terms of License Upon Exercise of CK Product Option.
In the event that GSK so exercises the CK Product Option with respect to a
particular CK Product, such CK Product shall, upon such exercise, cease to be a
CK Product and shall thereafter be deemed a Licensed Product. In such event:


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                           (a)      Within [*] ([*]) days after GSK's exercise
of the CK Product Option, GSK shall pay to CK an amount equal to [*] percent (
[*] %) of the research and development costs incurred by CK with respect to such
CK Product outside of the Research Program up to the date of GSK's exercise of
the CK Product Option, as defined in Section 4.5.2(a)(i) and (ii) below (such
activities, the "Early Stage R&D" and such costs, the "Early Stage R&D Costs").

                                    (i)      The Early Stage R&D Costs incurred
by CK for which CK shall receive reimbursement from GSK under this Section
4.5.2(a) shall only include those specifically directed to research and
development of the CK Product, to the extent not reimbursed by a Third Party,
including the following costs: (1) costs for the conduct of activities related
to [*] of the CK Product or the CK Compound incorporated in the CK Product; (2)
cost for the conduct of [*] and other [*] for a CK Product; (3) costs
specifically related to those activities intended to [*] and/or [*] or [*] or a
CK Compound incorporated in the CK Product, or to [*] ; (4) studies related to
[*], and other [*] of, or [*] or [*] of, a CK Product; (5) amounts paid to Third
Parties for their performance of Early Stage R&D of the particular CK Product;
(6) [*] conducting such Early Stage R&D (to the extent [*] under this
Agreement), plus [*] for such [*], [*] directly attributable to such Early Stage
R&D; and (7) [*] that are attributable to the conduct of Early Stage R&D,
including [*] specifically related to the CK Product; plus (subject to paragraph
(ii) below), for such items other than those in (5) above, a reasonable
allocation of [*] costs attributable to the particular CK Product. [*] costs
attributable to a CK Product may include a reasonable allocation of [*] labor, a
reasonable allocation of [*] costs, and a reasonable allocation of [*] costs
including [*] cost, [*] , and [*] over the [*] of [*] and [*] , and such
allocations shall be in accordance with reasonable cost accounting methods,
consistently applied by CK for its own internal accounting. [*] shall not
include: (a) corporate [*] or [*] costs not otherwise allocable to the [*] of
the CK Product; or (b) costs associated with [*] not attributable to the Early
Stage R&D. The Parties shall attempt to timely resolve any dispute with respect
to whether an item of cost or expense should be included within Early Stage R&D
Costs for a particular CK Product under this Section 4.5. If the Parties are
unable to resolve such dispute, the matter shall be referred to the [*] , and
[*] , for resolution. If such individuals are unable to resolve such dispute
within thirty (30) days after the matter is referred to them, the matter shall
be subject to arbitration under Section 12.3.1 below. In such event, GSK may
withhold [*] percent ( [*] %) of the disputed amount (i.e., [*] % times [*] % of
the disputed Early Stage R&D Costs), and failure by GSK to pay such portion of
the disputed amount under this Section 4.5 shall not be deemed a breach of this
Agreement unless and until it has been determined in an arbitration proceeding
under Section 12.3.1 below that GSK is obligated to pay such disputed amount,
and GSK fails to make such payment within thirty (30) days after such
determination.


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                                    (ii)     In no event, however, shall the
total [*] costs included within Early Stage R&D Costs exceed (a) [*] percent (
[*] %) with respect to research and preclinical development costs, or (b) [*]
percent ( [*] %) with respect to clinical development costs, in each case that
are described in (1) through (7) of Section 4.5.2 (a)(i) above.

                                    (iii)    Notwithstanding the foregoing,
Early Stage R&D Costs shall not include costs for which GSK previously has
reimbursed CK under Section 6.2 or pursuant to this Section 4.5.2(a) (i.e., to
the extent such costs were included within the Early Stage R&D Costs for a
Licensed Product for which GSK previously exercised the CK Product Option).

                           (b)      The base royalties payable to CK with
respect to such Licensed Product shall equal [*] percent ( [*] %) of the royalty
rates specified in Section 6.6.2(a)(i) below (subject to paragraph (d) below).
It is understood, however, that for purposes of determining the applicable
royalty rate, the total annual Net Sales ranges shall be exactly the same as
specified in Section 6.6.2(a)(i) below; so that for example, if the Net Sales of
the Licensed Product for the particular calendar year equal $ [*], then
the royalty payable for such Licensed Product shall equal [*] percent ( [*] %).

                           (c)      For purposes of determining the milestone
payments under Section 6.4 below, such Licensed Product shall be deemed a
Licensed Product [*] for [*] (i.e., so that the milestone payments will equal
the amounts specified in Section 6.4.1). The milestone payments due with respect
to such Licensed Products under such Section 6.3.1 for Milestone 5 ( [*] ) and
Section 6.4.1 for Milestone 1 and Milestone 2 ( [*] , respectively) shall be due
within forty-five (45) days after GSK exercises the CK Product Option with
respect to such Licensed Product; provided, however, that a payment for a
particular Milestone shall not be so due if GSK has previously made a payment
under Section 6.3.1 below for such Milestone with respect to a Development
Compound directed to the same Mitotic Kinesin Target or under Section 6.4.1 for
such Milestone with respect to the same Licensed Product (i.e., before such
Mitotic Kinesin Target or Licensed Product became a CK Target or CK Product,
respectively); and provided, further, that for purposes of this Section
4.5.2(c), the amount due with respect to Milestone 5 under Section 6.3.1 shall
be [*] US Dollars ($ [*] ) rather than [*] US Dollars ($ [*] ). Notwithstanding
the foregoing, GSK shall have no obligation to make either such milestone
payment to CK if GSK previously made a milestone payment to CK with respect to
such Product for such milestone under Section 6.3 or 6.4 below before the
Licensed Product became a CK Product.

                           (d)      CK's Co-Funding Option under Section 3.4
above shall apply to such Licensed Product and CK shall exercise it, and the
royalties payable with respect to such Licensed Product shall equal the
royalties described in Section 4.5.2(b) above, plus X percentage points, where
"X" equals the difference in [*] between the [*] and the [*] , [*] , or [*] , as
the case maybe, in each case if such royalties had not been adjusted under
Section 4.5.2(b) above.


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                           (e)      From and after the time that GSK exercises
the CK Product Option with respect to a CK Product (which will then become a
Licensed Product), CK and GSK shall cooperate with respect to the further
development activities of such Licensed Product, pursuant to a Development Plan
approved by the JDC. Immediately following GSK's exercise of the CK Product
Option, CK shall exercise the Co-Funding Option with respect to the Licensed
Product, and within [*] ([*]) days shall notify GSK of the CK Percentage, as set
forth in Section 3.4. Promptly following GSK's exercise of the CK Product Option
and CK's notification of the CK Percentage, the JDC shall establish such a
Development Plan for the Licensed Product. The Development Plan for the Licensed
Product shall reflect CK's exercise of its Co-Funding Option. In reviewing and
approving the Development Plan, the JDC shall take into consideration which
Party is more appropriate to conduct activities reflected in the Development
Plan, taking into consideration, among other factors, the scope and scale to
which CK had been conducting certain activities prior to GSK's exercise of the
CK Product Option. GSK and CK shall each assume those development activities
agreed by the JDC.

                           (f)      CK shall continue performing further
activities related to the development of such Licensed Product in accordance
with CK's own development plans for a period of one (1) year after GSK's
exercise of the CK Product Option, or until such earlier time as the JDC
establishes such a Development Plan, and thereafter the further development of
the Licensed Product shall be conducted in accordance with such Development
Plan, as modified by the JDC from time to time; provided, that during such
interim period CK shall not initiate a [*] trial, or make any major commitments
with respect to a [*] trial of such Licensed Product, including [*] , except as
approved by the JDC. Any activities that are to be transferred by CK to GSK
under the Development Plan shall be transferred as quickly as possible, and CK
shall take [*] to ensure such speedy transfer. All costs incurred by CK in
performing such activities (i.e., those after GSK's exercise of the CK Product
Option but prior to the JDC's establishment of a Development Plan), and those
conducted pursuant to the Development Plan so established, shall be reimbursed
by GSK to the extent they exceed the CK Percentage elected by CK under the
Co-Funding Option with respect to the Licensed Product. All such reimbursements
shall be made in the same manner as is provided in Section 6.2 below for funding
under the Research Plan (including the provisions for interim periods, as
contemplated in Section 6.2.4). CK and GSK shall establish specific reasonable
invoicing and payment procedures for reimbursements under this Section 4.5.2(f),
including the form of invoice, overall documentation requirements and accounting
methodologies.

                           (g)      Transition. Subject to paragraph (e) above,
and incident to the extent reasonably necessary for GSK to perform activities
assigned to it under the Development Plan approved by the JDC:

                                    (i)      From and after the time that GSK
exercises the CK Product Option with respect to a CK Product (which will then
become a Licensed Product), CK shall cooperate fully with GSK to provide GSK
with all Licensed Technology and Information to which


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GSK has a right or license under this Agreement and which is necessary or
useful for GSK to perform such activities. Such cooperation shall include the
[*] disclosure of all Information, to the extent such information is not within
the possession or control of GSK, (including, without limitation, [*] , all to
the extent that such material is not in the possession of GSK, and such other
[*] and [*] as are reasonably necessary or useful for GSK to exercise its full
rights and perform such activities with respect to such CK Product.
Notwithstanding the foregoing, CK shall not be considered to be in breach of
this Section 4.5.2(g) for failure to disclose information, if, despite [*]
efforts, the identification of such information is impractical or such
information is not material. Without limiting the foregoing, CK shall use [*]
efforts to ensure orderly transition and uninterrupted research and development
of CK Products under this Section. GSK shall promptly reimburse CK's [*] costs
with respect to activities and materials provided by CK under this Section
4.5.2(g).

                                    (ii)     In addition, the JDC shall meet and
discuss how best to proceed with the [*] of such CK Product in the best interest
of such CK Product and its commercial profile, taking into consideration the
relative capabilities of each Party, including CK's [*] or arrangements prior to
GSK's exercise of its CK Product Option. In the event that the JDC determines
that [*] such CK Product, CK shall cooperate fully to [*] related to the CK
Product as reflected in the Development Plan approved by the IDC.

                           (h)      For purposes of this Section 4.5.2, all
dosage forms, and all formulations, of the same active ingredient shall be
deemed a single Licensed Product. Licensed Products having a different or
additional active ingredient shall be deemed a separate Licensed Product if such
different or additional active ingredient is a different or additional CK
Compound or CK Product or another active ingredient in which CK has proprietary
rights (other than a Licensed Product otherwise licensed to GSK hereunder).

                  4.5.3    Termination. In the event that GSK does not elect to
exercise its CK Product Option on a CK Product, in accordance with Section 4.5.1
above, then the CK Product Option, and all of CK's obligations under this
Section 4.5 with respect to such CK Product, as well as with respect to all CK
Compounds and CK Products for the same CK Target shall terminate. CK shall
thereafter be free to develop such CK Products, CK Compounds and CK Targets,
alone or in connection with Third Parties.

                  4.5.4    [*] Products. It is understood that this Section 4.5
and the rights and obligations of GSK and CK under this Section 4.5 shall not
apply to any [*] Products. For such purposes, " [*] Products" shall mean those
CK Compounds and CK Products that are directed to Mitotic Kinesin Targets
designated as CK Targets under any Section of this Agreement


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other than (i) [*] or (ii) by reason of [*] failure to [*] a Development
Compound for such Target within the time period specified in [*] above.

                  4.5.5    No Implied Obligations. The only obligations of GSK
and CK under this Section 4.5 are as expressly stated herein, and there are no
further implied obligations relating to the matters contemplated therein.
Without limiting the foregoing, it is further understood and agreed that the
subject CK Product(s) may or may not be discovered or reduced to practice at
all, or that further modification and/or variations of a product may be
developed after the date CK provides notice under Section 4.5.1 above. It is
understood that modifications and/or variations of a Licensed Product as
described in Section 4.5.2(h) that are developed after the date CK provides
notice under Section 4.5.1 above shall be included within the Licensed Product
for which GSK exercised its CK Product Option.

         4.6      CK Efforts. For as long as GSK retains an option on CK
Products as set forth in Section 4.5 above, CK shall use [*] efforts to
develop at least one CK Compound or CK Product, consistent with the practice of
CK in pursuing the development of pharmaceutical products of its own development
and of similar commercial potential value within the relevant product line.

         4.7      Royalties to GSK.

                  4.7.1    Royalty Obligation. In the event that CK
commercializes a CK Product independently of GSK (i.e., in the case where GSK
does not exercise the CK Product Option), then in such case CK shall pay to GSK
a royalty on sales of such CK Product by CK, its Affiliates and Sublicensees, in
an amount to be reasonably established by the Parties, based on the extent to
which GSK has [*] under this Agreement, and/or has provided [*] to [*], that [*]
the research, development or commercialization of such CK Product. In the event
the Parties are not able to agree upon such royalty, then upon request by either
Party, such amount shall be determined in accordance with Section 12.3.1 below.
It is understood that, in connection with establishing the applicable royalty,
the ancillary terms of such royalty, such as the term for which such royalties
are due, the definition of CK's net sales, royalty reporting, audit rights, [*]
(such as those in Section [*] below) and the like will also be established,
which terms will be no less favorable to CK than the corresponding terms of this
Agreement. Notwithstanding the foregoing, in no event shall the royalty to be
paid to GSK exceed the following amounts, based on the stage of the CK Product
at the time the relevant Mitotic Kinesin Target became a CK Target (the
"Reversion Stage"), as reflected in the table below:

<TABLE>
<CAPTION>
REVERSION STAGE                        [*] ROYALTY
------------------------------------------------------
<S>                                    <C>
 [*]                                     [*]%
------------------------------------------------------
 [*]                                     [*]%
------------------------------------------------------
 [*]                                     [*]%
------------------------------------------------------
 [*]                                     [*]%
------------------------------------------------------
 [*]                                     [*]%
------------------------------------------------------
</TABLE>


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                  4.7.2    [*]; [*]. For purposes of the foregoing table, the
Reversion Stage for all [*] and [*] shall be deemed the [*] stage.

                  4.7.3    Other Considerations. It is understood that the
royalty rates specified in 4.7.1 above are [*] . The actual royalty rate to be
applied in any given situation shall be [*] and [*] under the circumstances and
shall take into account [*] to Mitotic Kinesin Targets prior to or outside of
this Agreement, the actual contribution of [*] to the effort in terms of [*] ,
the possible need for [*] (and in such case the possibility that [*] ), and
other similar factors.

         4.8      Other Formulations; Dosage Forms. For purposes of this Article
4, all dosage forms, and all formulations, of the same active ingredient shall
be deemed a single CK Product. CK Products having a different active ingredient
shall be deemed a separate CK Product.

                           ARTICLE V - LICENSE GRANTS

         5.1      Research Licenses to CK and GSK. GSK hereby grants CK a
non-exclusive, worldwide license to make and use subject matter within the GSK
Existing Technology and Collaboration Technology, to conduct activities assigned
to CK under the Research Plan, during the Research Term. CK hereby grants GSK a
non-exclusive, worldwide license to make and use subject matter within the CK
Existing Technology and Collaboration Technology, to conduct activities assigned
to GSK under the Research Plan, during the Exclusivity Period and Extension
Period, if any. The licenses granted under this Section 5.1 shall not include
the right to grant or authorize sublicenses; provided, however, that the use by
GSK or CK of subcontractors approved by the JRC shall not be construed as a
sublicense.

         5.2      Commercial Licenses to GSK.

                  5.2.1    Compounds. Development Compounds and Licensed
Products. Subject to the terms and conditions of this Agreement, CK hereby
grants GSK an exclusive license, under CK Existing Technology and CK's interest
in Collaboration Technology and Post-Collaboration Technology, (a) to make, have
made, use, sell, offer for sale and import Compounds, Development Compounds and
Licensed Products for use in the Field and in the Territory and (b) to make and
use Collaboration Targets, and any subject matter within the Collaboration
Technology or Post-Collaboration Technology, for the purpose of discovering and
commercializing Compounds, Development Compounds and Licensed Products for use
within the Field.

                  5.2.2    CK Library Compounds.

                           (a)      Notwithstanding Sections 1.4, 1.7, 1.13,
1.16 and 1.53, a CK Library Compound shall not be deemed within CK Existing
Technology, unless and until such time as such CK Library Compound has become
both a Compound and a Development Compound hereunder.

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However, GSK is hereby granted a non-exclusive license to make and use CK
Library Compounds and CK Existing Technology to pursue discovery (including
optimization) and initial development of such CK Library Compounds and
derivatives thereof, for the purpose of identifying and conducting initial
development of Development Compounds for Collaboration Targets and, during the
Research Term and applicable extensions, for Mitotic Kinesin Targets (other than
CK Targets). The CK Library Compounds that GSK is licensed to make and use under
this Section 5.2.2 shall be limited to those (i) that were identified as
Compounds against a Mitotic Kinesin Target in activities under the Research
Plan; and (ii) that are derived from (i.e., tracing its chemical lineage to a CK
Library Compound or resulting from the direct progression through a continuing
medicinal chemistry program from a CK Library Compound, in each case as
evidenced by contemporaneous written laboratory records) the CK Library
Compounds described in the preceding clause (i). GSK shall have no research
license under this Section 5.2.2 with respect to CK Library Compounds that are
not described in (i) or (ii) above.

                           (b)      Notwithstanding Section 5.2.2(a) above, if
CK has progressed a CK Library Compound licensed to GSK under this Section 5.2.2
to a stage equivalent to a Development Compound, where the primary mode of
pharmacological action of such CK Library Compound is not through inhibition of
one or more Mitotic Kinesin Targets, prior to GSK progressing such CK Library
Compound to be a Development Compound, GSK's licenses to such CK Library
Compound shall terminate. A compound shall be deemed to have reached a "stage
equivalent to a Development Compound" if such compound would meet criteria
comparable those specified in Exhibit 2.5, or IND Enabling Studies have been
conducted for such compound. Upon request, CK shall use good faith efforts to
advise GSK whether it is actively pursuing such CK Library Compound, and CK
shall notify GSK at such time as such CK Library Compound has progressed to a
stage equivalent to a Development Compound as described in this Section
5.2.2(b).

                           (c)      Notwithstanding Section 5.2.2(a) above, GSK
agrees not to engage in optimization activities to discover Compounds that are
derived from a CK Library Compound in a manner that intentionally optimizes such
Compounds specifically to exploit the activity of such Compound against any
target, other than a Mitotic Kinesin Target that is not a CK Target.

                  5.2.3    Sublicenses. GSK may sublicense the right to [*]
and/or [*] a particular Development Compound or Licensed Product [*] or [*] .
GSK shall inform CK of its intention to sublicense its rights at least sixty
(60) days prior to the date GSK intends to execute such sublicense and shall
provide CK with the opportunity to provide comments to GSK with respect to such
sublicense. GSK shall consider CK's reasonable comments in its decision whether
to grant such sublicense. Notwithstanding the foregoing, (i) GSK shall have the
right to sublicense the right to [*] and/or [*] a Licensed Product [*] or [*] ,
provided that GSK is actively [*] and [*] such Licensed Product itself [*] , and
(ii) GSK shall have the right to have Licensed Products [*] for GSK by a Third
Party [*] and [*] . Subject to the foregoing, GSK shall have the sole right to
decide whether and how to grant any sublicenses under this Section 5.2.3. Any
sublicensee of GSK must have


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<PAGE>
reasonable capabilities to support the [*] of the Development Compound and/or
Licensed Product. Any such sublicense (and any right to obtain such a
sublicense) shall be granted no earlier than the date the Compound incorporated
therein has been designated as a Development Compound in accordance with Section
2.5 above.

                  5.2.4    [*] . At least [*] ([*]) months prior to GSK [*], GSK
will notify CK in writing of its intent to [*] ("Initial Notice"). Upon request
by CK, GSK and CK will, during such [*] ([*]) month period, negotiate in good
faith the [*] to CK, provided that [*] by GSK for the Compound, Development
Compound or Licensed Product and the objective requirements set forth therein.
It is understood that any such [*] would be subject to agreement between the
Parties on the financial terms and other conditions of such [*] .
Notwithstanding the foregoing, this Section 5.2.4 shall not apply with respect
to [*] the Development Compound or Licensed Product.

                  5.2.5    No Other Active Ingredients. For clarity, it is
understood that, notwithstanding Section 1.44 above, the licenses to GSK under
this Section 5.2 shall not extend to any active ingredient included within a
Licensed Product other than a Compound, a Development Compound, or in the case
of a Licensed Product for which GSK exercised its CK Product Option pursuant to
Section 4.5 above, the active ingredients incorporated by CK into the CK Product
that became such Licensed Product.

         5.3      Commercialization License to CK.

                  5.3.1    CK Compounds and CK Products. Subject to GSK's Option
for a license under Section 4.5 above, GSK hereby grants CK an exclusive
license, with the right to grant and authorize sublicenses, under GSK Existing
Technology (subject to Section 5.3.2 below), and GSK's interest in Collaboration
Technology and Post-Collaboration Technology, (a) to make, have made, use, sell,
offer for sale and import CK Compounds and CK Products in the Field in the
Territory and (b) to make and use CK Targets, and any subject matter within the
Collaboration Technology or Post-Collaboration Technology, solely for the
purpose of discovering, developing and commercializing CK Compounds and CK
Products.

                  5.3.2    GSK Library Compounds; Additional Research License.

                           (a)      Notwithstanding Sections 1.13, 1.16, 1.34
and 1.53, a GSK Library Compound shall not be deemed within the GSK Existing
Technology, unless and until such time as IND Enabling Studies are commenced by
or under authority of CK with respect to such GSK

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Library Compound. However, CK is hereby granted a non-exclusive license to make
and use GSK Library Compounds and GSK Existing Technology to pursue discovery
(including optimization) and initial development of such GSK Library Compounds
and derivatives thereof, for the purpose of identifying and conducting initial
development of CK Compounds that meet criteria similar to that of Development
Compounds; provided that the GSK Library Compounds that CK is so licensed to
make and use under this Section 5.3.2 shall be limited to those (i) that were
identified as Compounds against such Mitotic Kinesin Target before such Mitotic
Kinesin Target was designated as a CK Target, or (ii) that are derived from
(i.e., tracing its chemical lineage to a GSK Library Compound or resulting from
the direct progression through a continuing medicinal chemistry program from a
GSK Library Compound, in each case as evidenced by contemporaneous written
laboratory records) the GSK Library Compounds described in the preceding clause
(i). CK shall have no research license under this Section 5.3.2 with respect to
GSK Library Compounds that are not described in (i) or (ii) above.

                           (b)      Notwithstanding (a) above, if GSK has
progressed a GSK Library Compound licensed to CK under this Section 5.3.2. to a
stage equivalent to a Development Compound, where the primary mode of
pharmacological action of such GSK Library Compound is not through inhibition of
one or more Mitotic Kinesin Targets, prior to CK progressing such GSK Library
Compound to a stage equivalent to a Development Compound, CK's licenses to such
GSK Library Compound shall terminate. A compound shall be deemed to have reached
a "stage equivalent to a Development Compound" if such compound would meet
criteria comparable those specified in Exhibit 2.5, or IND Enabling Studies have
been conducted for such compound. Upon request, GSK shall use good faith efforts
to advise CK whether it is actively pursuing such GSK Library Compound and GSK
shall notify CK at such time as a GSK Library Compound has progressed to a stage
equivalent to a Development Compound as described in this Section 5.3.2(b).

                           (c)      Notwithstanding Section 5.3.2(a) above, CK
agrees not to engage in optimization activities to discover CK Compounds that
are derived from a GSK Library Compound in a manner that intentionally optimizes
such CK Compounds specifically to exploit the activity of such CK Compound
against any target, other than a CK Target.

                  5.3.3    No Other Active Ingredients. For clarity, it is
understood that, notwithstanding Section 1.9 above, the licenses to CK under
this Section 5.3 shall not extend to any active ingredient included within a CK
Product other than a CK Compound.

         5.4      Additional Licenses for Unpatented Collaboration
and Post-Collaboration Technology.

                  5.4.1    License to GSK. CK hereby grants to GSK a
non-exclusive license, including the right to grant and authorize sublicenses,
under CK's interest in any Collaboration Technology and Post-Collaboration
Technology, other than CK Patents, to use and otherwise exploit the same for any
purpose, subject to Sections 4.1-4.3, and Section 5.3, above.

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<PAGE>
                  5.4.2    License to CK. GSK hereby grants to CK a
non-exclusive license, including the right to grant and authorize sublicenses,
under GSK's interest in any Collaboration Technology and Post-Collaboration
Technology, other than GSK Patents, to use and otherwise exploit the same for
any purpose, subject to Sections 4.1-4.3, and Section 5.2, above.

         5.5      Cytometrix(TM)Technology. It is understood that CK has
developed certain Cytometrix(TM) Technology, which may be useful in the
discovery of Compounds, and that CK will apply such Cytometrix(TM) Technology to
the Research Program, as described more fully in the Research Plan.
Notwithstanding any other provision of this Agreement, however, the Parties
agree that CK's Cytometrix(TM) Technology is [*] or [*], and CK is [*] to [*]
GSK with such Cytometrix(TM) Technology; provided, however, that (i) [*], as
applicable, and (ii) [*] within the Cytometrix(TM) Technology would [*] be [*]
by the [*] or [*] of a Compound, Development Compound, or Licensed Product, such
[*] shall be [*], [*] for such purposes. [*] (i) [*]; (ii) [*] and (iii) [*].

         5.6      [*]. If a chemical entity that would otherwise be a Compound
or CK Compound hereunder, meets the Compound Criteria for both a [*] and a [*],
then such chemical entity shall be considered a "[*]" if the difference in [*]
activity ([*]) is less than [*] between the [*] and the [*]. Furthermore, such a
chemical entity shall be deemed a Compound, and not a CK Compound, if its [*]
activity ([*]) is [*] greater against the [*] than against the [*]. Such a
chemical entity shall be deemed a CK Compound, and not a Compound, if its [*]
activity ([*]) is [*] greater against a [*] than against

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the [*]. With respect to [*], either Party shall have the right to pursue
research and optimization of such [*] for the purpose of identifying Compounds
or CK Compounds that meet the criteria for Development Compounds (or, in the
case of CK Compounds, criteria similar thereto); provided, however, that neither
Party shall commence clinical development or commercialize a [*] as a Compound,
Development Compound, Licensed Product, CK Compound or CK Product without the
prior written approval of the other Party. Notwithstanding the foregoing, GSK
shall not engage in optimization activities to discover Compounds in a manner
that intentionally optimizes such Compounds specifically to exploit the activity
of such Compound against a [*]; and, CK shall not engage in optimization
activities to discover CK Compounds in a manner that intentionally optimizes
such CK Compounds specifically to exploit the activity of such CK Compound
against a [*]. As used herein, [*] activity ([*]) shall mean the first criterion
set forth in Exhibit 1.17.

         5.7      No Implied Licenses. Each Party acknowledges that the licenses
granted under this Article V are limited to the scope expressly granted, and all
other rights to Licensed Technology are expressly reserved to the Party owning
such Licensed Technology. Without limiting the foregoing, it is understood that
where an exclusive license under Licensed Technology is granted to a Party under
this Article V for a particular purpose, the Party granting such license retains
all of its rights to such Licensed Technology for all purposes not expressly
licensed. Accordingly, for example, the license granted under Section 5.2.1(b)
above shall not preclude CK from making or using a Collaboration Target for
purposes outside the Field.

         5.8      Nothing in this Article V shall be construed as limiting or
changing the rights and obligations of the Parties under Sections 4.1.1 and
4.1.2, except to the extent provided in Section 5.5 above.

                              ARTICLE VI - PAYMENTS

         6.1      Initial Payments.

                           (a)      Technology Access Fee. In consideration of
CK's development efforts prior to the Effective Date and the performance of its
obligations during the Research Program, on the Closing Date, GSK shall pay to
CK an initial fee of Fourteen Million U.S. Dollars (U.S. $14,000,000), which
amount shall be non-refundable and non-creditable against any other amounts due
CK under this Agreement.

                           (b)      Equity Investment. It is understood that GSK
has also agreed to make an equity investment in CK, on the Closing Date, in the
amount of Fourteen Million U.S. Dollars (U.S. $14,000,000) pursuant to the terms
and conditions of a Stock Purchase Agreement of even date referencing this
Agreement.

         6.2      Research Payments - Funding. Subject to the limitations set
forth below, from and after the Effective Date, GSK shall reimburse costs
incurred by CK in performing the Research Program in accordance with the
Research Plan, in the following manner:

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                  6.2.1    FTEs. An FTE rate determined in accordance with this
Section 6.2.1 shall be used for purposes of determining the costs incurred by CK
with respect to CK personnel performing work on the Research Program. The FTE
rate shall be [*] U.S. Dollars (U.S. $[*]) per FTE (as adjusted below). The FTE
rate includes all salary, employee benefits, incidental materials and other
expenses including support staff and overhead for or associated with an FTE and
travel and lodging expenses incurred by such FTEs in performance of the Research
Program. Effective beginning with the calendar year 2002, the FTE rate shall
increase no more than once annually by the percentage increase, if any, in (i)
the Radford Associates Annual Biotechnology Compensation and Benefits Survey for
the San Francisco Bay Area, or (ii) the Consumer Price Index, for All Urban
Consumers for the San Francisco Bay Area, as published by the U.S. Department of
Labor, Bureau of Labor Statistics, in each case whichever increase is higher
since the last such increase under this Section 6.2.1, (or in the case of the
first such increase, the Effective Date) (the "Cost of Labor Increase"), upon
thirty (30) days prior written notice to GSK and such increase shall be
effective for the then-current and all subsequent Research Plans hereunder until
further modified under this Section 6.2.1.

                  6.2.2    Non-FTE Costs. If the JRC specifically requests, as
confirmed by GSK in writing or in the written Research Plan approved by the JRC,
that CK conduct and fund a research activity at an external center, CK's
out-of-pocket external costs incurred by CK in following such request shall be
reimbursed at CK's cost; provided that, if CK identifies that a particular task
can be efficiently performed by a Third Party, CK may satisfy its FTE commitment
with personnel from such Third Patty if such Third Party is approved by the JRC,
and that, unless the JRC determines otherwise, such Third Party personnel will
be deemed a CK FTE for purposes of the Research Plan and this Agreement.

                  6.2.3    Payment. On or before the first day of each calendar
[*] during the Research Term, after receipt of an invoice from CK, GSK shall pay
to CK an amount equal to the costs budgeted to be incurred by CK under the
Research Plan for such [*]. Unless otherwise specified in the applicable
Research Plan, amounts budgeted for the full year will be deemed budgeted in
equal amounts for each calendar [*] during such year. Within sixty (60) days
following the end of each calendar [*] during the Research Term, CK shall
provide to GSK a summary of the costs actually incurred during each calendar [*]
in performing the Research Plan during such period, in a form mutually agreed by
the Parties. If the costs so incurred by CK in such period are less than the
amounts budgeted for CK to so incur during such period under the Research Plan,
then the difference will be carried forward and credited against the next
payment due to CK under this Section 6.2. If CK incurs in such period costs in
excess of the amounts so budgeted, the excess may be carried forward and treated
as costs incurred in a subsequent period. Notwithstanding the foregoing, for the
period from the Effective Date through September 30, 2001, GSK shall pay to CK,
within ten (10) business days after the Effective Date, an amount equal to the
costs budgeted to be incurred by CK under the Research Plan for such period;
provided, however, that if GSK or CK terminates this Agreement pursuant to
Section 11.1.1, CK shall reimburse any payments made by GSK to CK under this
Section.

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                  6.2.4    Interim Periods. In the event the JRC is unable for
any reason to establish a Research Plan for any period during the Research Term,
then in such case the [*] advance payments to CK for each [*] during any such
interim period shall equal [*] of the FTE rate multiplied by the actual number
of CK FTEs covered by the last Research Plan that was approved by the JRC, for
the last [*] covered by such approved Research Plan; provided that, if such
number exceeds the minimum number of CK FTEs required to be included in any
Research Plan for the particular Contract Year, as reflected in Section 2.6
above, then GSK may elect to [*] the number of CK FTEs for such interim period
to a number [*] specified in Section 2.6, by so notifying CK in writing. If GSK
so elects, the [*] advance payments to CK for each [*] during any such interim
period shall equal [*] of the FTE rate multiplied by the actual number of CK
FTEs listed in GSK's notice (which shall [*] number of CK's FTEs for such period
specified in Section 2.6 above). Any payments made under this Section 6.2.4
shall be non-refundable.

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         6.3      Research Milestone Payments.

                  6.3.1    Milestones. GSK shall pay to CK the following amounts
upon achievement of each occurrence of the following events (each a "Research
Performance Milestone"):

<TABLE>
<CAPTION>
                                                                                   CASH PAYMENT
                                    MILESTONE                                    (IN U.S. DOLLARS)
                                    ---------                                    -----------------
<S>                                                                              <C>
1.  [*]                                                                             $ [*]

2.  [*]                                                                             $ [*]

3.  [*]                                                                             $ [*]

4.  [*]                                                                             $ [*]

5.  [*]                                                                             $ [*]

6.  [*]                                                                             $ [*]
</TABLE>

                  6.3.2    Certain Terms and Conditions.

                           (a)      "[*]" shall have the meaning set forth in
Exhibit [*], attached hereto and incorporated herein.

                           (b)      In the event that the first Compound against
the [*] Mitotic Kinesin Target induces [*] , but [*], in its [*] discretion,
elects to approve the Compound as a [*], then Research Performance Milestone 5
shall be [*] to [*] United States dollars (U.S. $[*]). "[*] " shall have the
meaning set forth in Exhibit 6.3.2(b), attached hereto and incorporated herein.
If such [*] does not exhibit evidence of [*] in [*] (as defined in Exhibit
6.4.4), then the Development Milestone under Section 6.4 below (initiation of
[*]) for a Licensed Product incorporating such [*] shall be [*] by [*] U.S.
Dollars (U.S. $[*]).

                           (c)      It is understood that Research Performance
Milestone 5 may be satisfied by [*], if and when [*] by [*] as a [*] in
accordance with Section [*].

* 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.


                                      -51-

<PAGE>
                           (d)      Selection of [*] shall be in accordance with
Section [*]. It is understood that Research Performance Milestone [*] shall be
paid on a Target-by-Target basis, so that the selection of the first [*] for
each [*] Mitotic Kinesin Target shall trigger a separate payment of [*] U.S.
Dollars (U.S. $[*]).

         6.4      Development Milestones. Except as set forth below, GSK shall
pay to CK upon achievement of the corresponding events set forth below (each, a
"Development Milestone") for each Licensed Product, regardless of whether the
development, promotion, or marketing of such Licensed Product is discontinued at
any time after the achievement of such milestone:

                  6.4.1    [*]. For each Licensed Product that [*]:

<TABLE>
<CAPTION>
                  MILESTONE                           [*]                     [*]                [*]
                  ---------                       ------------            ------------     -----------------
<S>                                               <C>                     <C>              <C>
1. [*]                                            $[*]                        [*]          [*]

2. [*]                                            $[*]                        [*]          [*]

3. [*]                                            $[*]                        [*]          $[*]

4. [*]                                            $[*]                        [*]          $[*]

5. [*]                                            $[*]                        [*]          $[*]

6. [*]                                            $[*]                       $[*]          $[*]

7. [*]                                            $[*]                       $[*]          $[*]

</TABLE>


* 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.



                                      -52-

<PAGE>

                  6.4.2    [*] For each Licensed Product that [*], on
a Collaboration Target-by-Target basis:

<TABLE>
<CAPTION>


          MILESTONE                        [*]                   [*]                  [*]
          ---------                   ------------        -----------------     -----------------
<S>                                   <C>                 <C>                   <C>
1. [*]                                 $[*]                 [*]                    [*]

2. [*]                                 $[*]                 [*]                    [*]

3. [*]                                 $[*]                 [*]                   $[*]

4. [*]                                 $[*]                 [*]                   $[*]

5. [*]                                 $[*]                 [*]                   $[*]

6. [*]                                 $[*]                $[*]                   $[*]

7. [*]                                 $[*]                $[*]                   $[*]


</TABLE>

                  6.4.3    Certain Terms. For purposes of the Development
Milestones due under this Section 6.4:

                           (a)      In no event will multiple Development
Milestone payments be made for the same Licensed Product, except in the event
where a Licensed Product for [*] is also the [*] Licensed Product directed
against that Mitotic Kinesin Target to be [*] for a [*].

                           (b)      It is understood that the Development
Milestone payments reflected under the column "[*]" shall be payable whether or
not Development Milestones have been paid for such Licensed Product with respect
to [*]. In addition, the "[*]" need not be the same Licensed Product as the
"[*]."

                           (c)      Notwithstanding the definition of [*]
under Section [*], a clinical trial that is a [*] shall not be
deemed a [*] trial that meets such Development Milestone [*], and accordingly,
the payment corresponding to such Development Milestone [*] shall not become due
by reason of such a [*]. For purposes of this Section 6.4.3, a
"[*]" shall mean a [*], as provided in

* 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.

                                      -53-



<PAGE>
 [*], submitted for the sole purpose of conducting a [*] study or [*] study of
the [*] of no more than [*] ([*]) [*] to compare the [*] of at least [*] ([*]),
but not more than [*] ([*]), [*]. Any clinical trial that includes
activities in addition to those listed in this Section, including without
limitation [*] or any subsequent clinical trial of the particular Compound,
shall not be deemed a [*], and upon initiation of such trial, Development
Milestone [*] shall be immediately due and payable.

                           (d)      For purposes of this Section 6.4, and
Section 6.6 below, all dosage forms, and all formulations, of the same active
ingredient shall be deemed a single Licensed Product. Licensed Products having a
different or additional active ingredient shall be deemed a separate Licensed
Product; provided, however, that the different or additional active ingredient
is a different or additional Development Compound than the original Development
Compound contained in the Licensed Product.

                           (e)      The Development Milestone payments under
Section 6.4.2 shall be determined on a Mitotic Kinesin Target-by-Target basis,
meaning, for example, that the [*] that is directed to a particular Mitotic
Kinesin Target shall trigger the payments under the column "[*]" milestone, and
that the [*] for another Mitotic Kinesin Target shall also trigger those
payments.

                           (f)      "[*]" of a particular clinical trial
shall mean the date of [*] of the [*] subject in such trial.

                           (g)      If a subsequent Development Milestone is
achieved with respect to a particular Licensed Product before a prior
Development Milestone ("prior" and "subsequent" referring to a lower number in
the tables above, e.g., Development Milestone 2 being "prior" to Development
Milestone 3), then all such prior Development Milestones shall be deemed
achieved upon achievement of the subsequent Development Milestone.

                           (h)      "[*]" of an [*] shall mean the date of
receipt by GSK of written notice of [*] from the FDA (or its equivalent in a
country outside the U.S.) of an [*] for the Licensed Product for [*].

                           (i)      "[*] of an [*] by [*]" shall mean the date
that an [*] has been [*] for a Licensed Product in [*]; provided that, if such
application is [*] by the [*] ("[*]") under the [*] the Development Milestone
will be met (in full). For purposes of the foregoing, validation of an [*] by
[*] or the [*] shall be deemed "[*]" of such [*] by such [*] or [*], as
applicable, and if an [*] is submitted under the [*] and validated by the [*]
("[*]"), such [*] shall be deemed [*] by a [*]

* 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.

                                      -54-


<PAGE>
upon confirmation that the resulting [*] in the [*] will serve as the basis for
[*] in such [*].

                           (j)      "Receipt of [*] from [*]" shall mean the
[*] for the Licensed Product, in [*]; provided, however, that GSK shall pay CK
[*] ([*]) of Development Milestone [*] under Sections 6.4.1 and 6.4.2, as
applicable, upon the date that GSK receives [*] from [*]. GSK shall subsequently
pay CK an additional [*] ([*]) of Development Milestone [*] when GSK receives
[*] from each of [*].

                  6.4.4    Credits.

                           (a)      Should all development of a particular
Licensed Product for a particular Collaboration Target discontinue prior to [*]
in [*], for any reason, and be replaced by an alternative Licensed Product
against that Collaboration Target, then, for the next Licensed Product for such
Collaboration Target to achieve a milestone for which a corresponding milestone
payment was made for the discontinued Licensed Product, no payment shall be due
with respect to such alternative Licensed Product with respect to such
milestone.

                           (b)      If there is evidence of [*] in [*] for a
particular Licensed Product, but GSK, in its sole discretion, elects to continue
development of such Licensed Product, then (i) Development Milestone [*] shall
be [*] by [*] percent ([*]%), and (ii) Development Milestones [*] through [*]
shall each be [*] by [*] percent ([*]%). "[*]" shall have the meaning set forth
in Exhibit 6.4.4, attached hereto and incorporated herein. Notwithstanding the
foregoing, in the event that such Licensed Product receives [*] in the [*] or a
[*], and the [*] required [*] by such [*] does not [*], then the amount of all
such milestone [*] for such Licensed Product shall be paid to CK upon receipt of
such [*].

         6.5      Milestone Payment Timing. The payments set forth in Sections
6.3 and 6.4 hereof shall each be due and payable by GSK to CK within forty-five
(45) days of the occurrence of the milestone event set forth therein. For
milestones accomplished by CK, such payment shall be due forty-five (45) days
after receipt by GSK of an invoice from CK therefor to GSK, subject to GSK's
verification during such forty-five (45) day period that the milestone occurred.
GSK and CK agree to promptly notify the other of its achievement of any
milestone.

         6.6      Earned Royalties For Licensed Products. GSK shall pay CK a
royalty on worldwide Net Sales of Licensed Products by GSK, its Affiliates or
Sublicensees. Such royalty shall be paid based on the total annual worldwide Net
Sales for each calendar year, on a Licensed Product-by- Licensed Product basis.

* 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.

                                      -55-

<PAGE>

                  6.6.1    General. Subject to Section 6.6.2 below, the annual
royalty rate for a particular Licensed Product in a given year shall be
determined by the total worldwide annual Net Sales of such Licensed Product for
the particular calendar year, according to the following schedules.

                           (a)      For each Licensed Product that [*]:

<TABLE>
<CAPTION>
 Total Annual Net Sales                Royalty
 ----------------------                -------
<S>                                    <C>
    Less than $[*]                       [*]%
Between $[*] and $[*]                    [*]%
   Greater than $[*]                     [*]%
</TABLE>

                           (b)      For each Licensed Product that [*]:

<TABLE>
<CAPTION>
 Total Annual Net Sales                Royalty
 ----------------------                -------
<S>                                    <C>
    Less than $[*]                      [*]%
Between $[*] and $[*]                   [*]%
   Greater than $[*]                    [*]%
</TABLE>

                  6.6.2    Licensed Products Subject to Co-Funding Option. With
respect to Licensed Products for which CK has exercised its Co-Funding Option
pursuant to Section 3.4, the annual royalty rate for a particular Licensed
Product in a given calendar year shall be determined by the total annual
worldwide Net Sales of such Licensed Product in that calendar year and the
percentage of Later Stage Development Costs for such Licensed Product that CK
elected to fund, according to the following schedules.

                           (a)      If CK elected to fund the Later Stage
Development Costs  with respect to a Co-Funded Product at a CK Percentage of [*]
([*]%),

                                    (i)      For each Licensed Product [*]:

<TABLE>
<CAPTION>
 Total Annual Net Sales               Royalty
 ----------------------               -------
<S>                                   <C>
    Less than $[*]                      [*]%
Between $[*] and $[*]                   [*]%
   Greater than $[*]                    [*]%
</TABLE>

* 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.

                                      -56-

<PAGE>

                                    (ii)     For each Licensed Product that [*]:

<TABLE>
<CAPTION>
 Total Annual Net Sales                Royalty
 ----------------------                -------
<S>                                    <C>
    Less than $[*]                       [*]%
Between $[*] and $[*]                    [*]%
   Greater than $[*]                     [*]%
</TABLE>

                           (b)      If CK elected to fund the Later Stage
Development Costs with respect to a Co-Funded Product at a CK Percentage of [*]
percent ([*]%),

                                    (i)      For each Licensed Product that
                                             [*]:

<TABLE>
<CAPTION>
 Total Annual Net Sales                Royalty
 ----------------------                -------
<S>                                    <C>
    Less than $[*]                       [*]%
Between $[*] and $[*]                    [*]%
   Greater than $[*]                     [*]%
</TABLE>

                                    (ii)     For each Licensed Product that [*]:

<TABLE>
<CAPTION>
 Total Annual Net Sales                Royalty
 ----------------------                -------
<S>                                    <C>
    Less than $[*]                       [*]%
Between $[*] and $[*]                    [*]%
   Greater than $[*]                     [*]%
</TABLE>

                           (c)      For any particular Co-Funded Product for
which CK terminates its obligation to fund Later Stage Development Costs under
Section 3.4.2(e), GSK shall pay the royalty rate under this Section 6.6.2
corresponding to the CK Percentage elected by CK for such Co-Funded Product;
provided that GSK's obligation to pay the royalty rate set forth in this Section
6.6.2 for Net Sales of such Co-Funded Product shall continue only until such
time as the difference between the cumulative royalties paid under this Section
6.6.2 for such Co-Funded Product, and the cumulative royalties for Net Sales of
such Co-Funded Product that would have otherwise been payable under Section 6.6
if CK had not exercised its Co-Funding Option, equals the amount paid by CK to
GSK for Later Stage Development Costs, plus interest at a rate of [*] percent
([*]%) per annum, for such Co-Funded Product prior to the effective date of the
termination. Thereafter, GSK shall pay royalties on Net Sales of such Co-Funded
Product according to Section 6.6.1.

* 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.

                                      -57-

<PAGE>

                  6.6.3    Other.

                           (a)      For purposes of determining the royalty
rates applicable hereunder, it is understood that "total annual Net Sales" shall
be determined on a world-wide, calendar year basis, and shall be determined
separately for each separate Licensed Product.

                           (b)      Further, it is understood that if the total
annual Net Sales for a particular calendar year are within a particular Net
Sales range, as reflected in the tables in paragraphs (a) or (b) of either 6.6.1
or 6.6.2 above, then the royalty corresponding to such range shall apply to all
total Net Sales for the particular calendar year (i.e., not just to those Net
Sales within the range). For example, for a Licensed Product [*] covered by
Section 6.6.1(a) above, if the total Net Sales in a particular calendar year are
$[*], then the royalty for all Net Sales of such Licensed Product for such
calendar year shall equal [*] percent ([*]%). Eighteen (18) months after the
date of the initial commercial sale of a Licensed Product in the Territory, GSK
and CK shall agree upon a reasonable mechanism to smooth out the quarterly
payment of royalties based on the expected levels of Net Sales of Licensed
Products for the particular calendar year, and the corresponding royalty
expected to be due for such calendar year, so that the royalties paid for each
quarter shall equal as approximately as practical the actual royalty that will
be payable for the calendar year in which such quarter occurs, based on the
application of this Section 6.6.

                           (c)      GSK agrees to establish list prices and
discounts for each Licensed Product in the best interests of such Licensed
Product, taking into account the competitive environment, product profile and
commercial potential of the Licensed Product. Without limiting the foregoing,
GSK agrees that it shall establish list prices and discounts for each Licensed
Product in a manner to maximize the commercial success of the Licensed Product
in a particular country. Such pricing and discounting decisions shall take into
consideration their impact on CK.

         6.7      Term For Royalty Payment. Royalties payable under Section 6.6
shall be paid on a country-by-country basis from the date of the first
commercial sale of each Licensed Product with respect to which royalty payments
are due for a period which is the longer of:

                                    (i)      the expiration of the last to
expire Patent in such country covering the composition of matter or use of a
Compound or Licensed Product; or

                                    (ii)     [*] ([*]) years following the
date of the first commercial sale of such Licensed Product in such country.

         6.8      Payment; Foreign Exchange. All payments under this Agreement
shall be made from the United States by a United States entity or from the
United Kingdom by a U.K. entity. The remittance of royalties payable on Net
Sales will be payable in U.S. dollars to a bank and to an account designated by
CK using a rate of exchange of the currency in which the Net Sales occurred with
U.S. dollars, as published in the Wall Street Journal on the last day of the
quarter for which such payment was due.

* 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.

                                      -58-

<PAGE>

         6.9      Taxes. Subject to Section 12.5, in the event that GSK is
required to withhold and remit any tax to the revenue authorities in any country
in the Territory regarding any milestone payment or royalties payable to CK due
to the laws of such country, such amount shall be withheld by GSK, and GSK shall
notify CK and promptly furnish CK with copies of any documentation evidencing
such withholding.

         6.10     Timing of Royalty Payments and Reports. Royalty payments under
this Agreement shall be made to CK or its designee quarterly within sixty (60)
days following the end of each calendar quarter for which royalties are due.
Each royalty payment shall be accompanied by a report summarizing the Net Sales
during the relevant three (3) month period.

         6.11     Accounting. The Parties shall maintain complete and accurate
records, in accordance with generally accepted accounting practices, which are
relevant to costs, expenses and payments under this Agreement. Such records
shall be open during reasonable business hours for examination at the other
Party's expense, upon written notice to the other Party, and not more often than
once each year by a certified public accountant or other representative selected
by the Party for the sole purpose of verifying the correctness of calculations
or such costs, expenses or payments made under this Agreement. In the event that
such examination establishes a discrepancy for any period covered by such
examination in excess of [*] percent ([*]%), the Party owing any payment shall
reimburse the other Party for such unpaid amount in addition to the expense of
the examination. Any records or accounting information received from the other
Party shall be Confidential Information for purposes of Article IX.

         6.12     [*].

                  6.12.1   Right of [*]. In the event that (i) it becomes
necessary for [*] to [*] under [*] of a Third Party, where such [*] or [*] of a
Development Compound comprising a Licensed Product, or the [*] or [*] (as
defined below) of the Collaboration Target to which such Licensed Product is
directed, which Development Compound or Collaboration Target is within the CK
Existing Technology or consists of Collaboration or Post-Collaboration
Technology owned solely or jointly by CK, and such [*] would [*] or [*] of such
Licensed Product (but not, for example, by reason of its [*] or [*]), and (ii)
[*] must [*] such Third Party for such [*] on [*] such Licensed Product [*], [*]
may [*] that [*] of the [*] to such Third Party as the Parties agree under [*]
below, but in no event more than [*] percent ([*]%) of such [*], against [*] on
[*] of such Licensed Product [*], subject in each case to the [*] of [*]
specified in [*] below. [*] shall not be entitled to such [*] in [*] of the [*]
in the event the [*] of such Third Party for which such [*] have been incurred
are [*] or [*]. For purposes of this Section 6.12.1, a [*] shall "[*] of the
Collaboration Target" if such [*] a [*] or [*] by [*] of such Collaboration
Target.

* 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.

                                      -59-

<PAGE>
                  6.12.2   Consultation; Disputes. [*] shall consult with [*]
prior to entering into any [*] with a Third Party for which [*] would seek to
[*] under this Section 6.12, and shall take into account reasonable suggestions
of [*] with respect to such proposed [*]. Any dispute under this Section 6.12,
including any dispute as to whether such a [*] is necessary, shall be resolved
in accordance with Section 12.3.1 below.

                  6.12.3   [*]. In addition to the [*], it is understood that on
a case-by-case basis, GSK and CK may agree that it would be in their mutual best
interests to [*] a [*] for [*] with a Licensed Product, and in such case may
similarly agree that it would be in their mutual best interests to [*] with
respect to such [*]; provided, however, that neither Party shall be obligated to
agree to any such [*] or [*], and no such [*] shall be made unless so agreed.

                  6.13     [*] in [*] for [*]. If, during the Exclusivity Period
or Extension Period, as applicable, [*] occurs in [*] or [*] of the [*] between
a Licensed Product being marketed and sold under this Agreement by GSK, its
Affiliates or Sublicensees and any [*] (as defined below) [*] and [*] (other
than a GSK Affiliate or Sublicensee), and for so long as such [*] is [*] and [*]
in such [*] or [*] of [*], and [*] of such [*] percent ([*]%) of the total [*]
of such [*] and the Licensed Product in the [*] in such Contract Year, the [*]
in respect of such [*] or [*] shall be [*] to the extent provided in Section [*]
below. GSK shall give CK [*] of such [*] with suitable and reasonable supporting
documentation. Any [*] in the [*] as a result of such [*] shall apply from the
[*] by GSK to CK of such [*] and shall be [*] only for the period such [*],
subject in each case to Section [*] below. For the purposes of this Section
6.13, a "[*]" shall mean any [*] (other than a Licensed Product sold by or under
authority of GSK) containing the [*] as the [*] in the Licensed Product being
sold by GSK, or its Affiliate or Sublicensee in [*], and which [*] the Licensed
Product in the [*] or [*].

         6.14     Conditions to [*]; Amount of [*].

                  6.14.1   Conditions to [*]. It is understood that, if [*] of a
Licensed Product [*] are [*] by the [*] or by [*], [*] will be [*] by [*] due to
[*]. Consequently, the Parties acknowledge that Sections 6.12 and 6.13 are
intended only to avoid a [*] on [*] in the event described herein. Accordingly,
notwithstanding Section 6.12 or 6.13 above, the [*] with respect to [*] of a
Licensed Product [*] shall only be [*] if [*] and [*] of such Licensed Product
in [*] have been [*] by reason of either [*] or [*], and the [*] would create
[*] between GSK and CK with respect to the [*]

* 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.

                                      -60-

<PAGE>
of such Licensed Product in [*] without a [*] under Section 6.12 or 6.13,
as applicable. In addition, (i) before any [*] under Section 6.12 or 6.13 shall
take effect, GSK shall consult with CK as to measures that can reasonably be
taken to [*] of such [*] or [*], and (ii) [*] under Section 6.12 or 6.13 shall
continue only if GSK reasonably initiates and continues to progress such [*];
and (iii) any [*] under Section 6.12 or 6.13 shall continue only if GSK
continues to pursue all reasonably available legal measures that could [*] or
[*] for [*] or [*] or [*], as applicable, including the [*] of any [*] that
could [*] or [*] of a [*], directly or indirectly, and the [*] of any applicable
[*] or [*] that could affect the [*].

                  6.14.2   Amount of [*]. The amount of the [*] under Sections
6.12 and 6.13 shall be reasonably agreed by GSK and CK, taking into account the
factors described in this Section 6.14 above, provided that the [*] otherwise
[*] on such [*] shall not be so [*], after [*] or [*] under this Agreement, if
any, to [*] specified in the tables below:

                  (a)      For Licensed Products [*]:

<TABLE>
<CAPTION>
                          NO CO-FUNDING    [*]% CO-FUNDING    [*]% CO-FUNDING
                          -------------    ---------------    ---------------
<S>                       <C>              <C>                <C>
TOTAL ANNUAL NET SALES

< $[*]                        [*]%              [*]%               [*]%

$[*] - $[*]                   [*]%              [*]%               [*]%

> $[*]                        [*]%              [*]%               [*]%
</TABLE>

                  (b)      For Licensed Products that [*]:

<TABLE>
<CAPTION>
                          NO CO-FUNDING    [*]% CO-FUNDING    [*]% CO-FUNDING
                          -------------    ---------------    ---------------
<S>                       <C>              <C>               <C>
TOTAL ANNUAL NET SALES

< $[*]                        [*]%              [*]%               [*]%

$[*] - $[*]                   [*]%              [*]%               [*]%

> $[*]                        [*]%              [*]%               [*]%
</TABLE>

* 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.

                                      -61-

<PAGE>
         Accordingly, under the foregoing table, (i) if Net Sales of a
particular Licensed Product are less than [*] U.S. Dollars (U.S. $ [*]), the
royalty payable shall be [*] percent ([*]%); (ii) if Net Sales of a particular
Licensed Product are between than [*] U.S. Dollars (U.S. $ [*]) and [*] U.S.
Dollars (U.S. $[*]), the royalty payable shall be [*] percent ([*]%); and (iii)
if Net Sales of a particular Licensed Product exceed [*] U.S. Dollars (U.S.
$[*]), the royalty payable shall be [*] percent ([*]%). For example, if GSK is
entitled under Section 6.12 above to [*]on [*] of a Licensed Product [*] that is
co-funded by CK at the [*] percent ([*]%) level, and GSK's total annual Net
Sales for such Licensed Product is [*] U.S. Dollars (U.S. $[*]), then the
royalties due CK shall [*] percent ([*]%).

         6.14.3   In the event the Parties are unable to agree on such [*], the
amount of the [*] shall be established in accordance with Section 12.3.1 below.
In any event, however, the [*] shall only apply for so long as the circumstances
and conditions described in Sections 6.12 and 6.13 above continue to exist, and
shall only apply to [*] on [*] of the particular Licensed Product [*].

         6.15     [*]. In the event that a [*] in [*] or [*], other than a GSK
Affiliate or Sublicensee, for the Licensed Product, and as a result, the
conditions of Section 6.13 apply, then it is understood that [*] may be entitled
to a [*] in accordance with Section 6.14 above, as a result of such [*].

                         ARTICLE VII - COMMERCIALIZATION

         7.1      Commercialization Rights. Subject to the provisions of Section
7.4 below, GSK shall be responsible for the establishment, control and
implementation of the strategy, plans and budgets for marketing and promotion of
the Licensed Products.

         7.2      Commercialization Committee.

                  7.2.1    Establishment. No later than at the initiation of the
first Phase III clinical study for a Licensed Product, the Parties shall
establish a Joint Commercialization Committee ("JCC"). The JCC shall have
responsibility to monitor the conduct and progress of the commercialization
strategy, plans, and budgets, including establishment of a plan and budget for
the marketing, promotion, sale and distribution of such Licensed Product (each a
"Sales and Marketing Plan"). The JCC shall update the Sales and Marketing Plan
periodically, and no less often than annually, and shall include therein
detailed plans and budgets for the marketing, promotion, sale and distribution
of each Licensed Product.

                  7.2.2    Meetings; Information. The JCC shall meet at least
monthly. GSK shall notify CK at least two weeks in advance of the date of each
JCC meeting, and CK shall have the

* Certain information on this page has been omitted and filed separately with
  the Commission. Confidential treatment has been requested with respect to the
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                                      -62-

<PAGE>
opportunity to send [*] to each such meeting, who shall be designated as [*] of
the JCC. Either Party may replace its respective JCC representative(s) at any
time with prior written notice to the other Party. GSK shall provide such [*]
with schedules of all such meetings, as well as any other information
distributed to GSK members of the JCC. GSK agrees to keep CK informed regarding
the Sales and Marketing Plan (including by providing CK at least quarterly such
reports regarding shipments and sales of Licensed Products), and the activities
being undertaken with respect to the commercialization of the Licensed Product,
and shall consider all reasonable suggestions of CK in formulating and
implementing the Sales and Marketing Plan. GSK shall have right of final
decision regarding all matters under the jurisdiction of the JCC, subject to
Section 7.2.3 below.

                  7.2.3    Section 4.5 Products. With respect to any Licensed
Product for which GSK exercised the CK Product Option under Section 4.5 above,
then for all matters pertaining to such Licensed Product: (i) the JCC shall be
comprised of an equal number of representatives of each of GSK and CK, (ii)
decisions of the JCC shall be by majority vote, provided that if there is not an
equal number of representatives of each Party voting, then only an equal number
of representatives of each Party shall be entitled to vote on the matter, and
(iii) notwithstanding Section 7.2.2 above, GSK shall not have the right of final
decision with respect to such matters.

         7.3      Commercialization Efforts.

                  7.3.1    Generally. GSK shall use diligent efforts to
discover, research, develop and commercialize Licensed Products, and to perform
its obligations under Sections 2.1, 3.1-3.3 and 7.1 of this Agreement, and to
obtain the optimum commercial return for each Licensed Product in all major
markets throughout the world, consistent with high professional standards for
the research, development, commercialization, and marketing of pharmaceutical
products of similar commercial value potential. GSK shall develop and
commercialize Licensed Products in the best interests of maximizing the success
of such Licensed Product.

                  7.3.2    Reversion to CK. If after the second anniversary of
the Exclusivity Period, or with respect to a particular Collaboration Target
that was an Extended Target, the second anniversary of the end of the Extension
Period under Section 4.2 with respect to such Collaboration Target, (i) GSK is
not actively and diligently performing IND Enabling Studies, or human clinical
trials or pursuing Marketing Approval with respect to a Development Compound or
Licensed Product directed to a Collaboration Target, and (ii) is not then
actively marketing a Licensed Product directed to such Collaboration Target,
then such Target shall cease to be a Collaboration Target for all purposes of
this Agreement and shall thereafter be deemed a CK Target. Notwithstanding the
foregoing, if prior to or during the period described in this Section 7.3.2, GSK
has conducted IND Enabling Studies or clinical trials of a Development Compound
or Licensed Product directed to a particular Collaboration Target, but later
ceased such Studies or trials, then such Target shall not so cease to be a
Collaboration Target by reason of this Section 7.3.2 if GSK has then ongoing and
is actively conducting a [*] Program with respect to such Collaboration
Target, and satisfies the conditions of (i) above within thirty-six (36) months
after the prior IND Enabling

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Studies and clinical trials ceased, whichever is later. It is understood that
this Section 7.3.2 shall not be deemed to limit Sections 4.2.1 or 7.3.1 above.

                  7.3.3    After the Exclusivity Period, if GSK acquires a
product that is directed to a Mitotic Kinesin Target, GSK shall continue to
commit resources to the discovery, development and commercialization of
Compounds, Development Compounds and Licensed Products hereunder for their
maximal commercial success and in a manner that will not disadvantage the
Licensed Product to the benefit of the newly acquired product. In addition, in
the event GSK is required by a regulatory agency to divest a Licensed Product in
North America or a Major European Country, CK shall have the first right to
negotiate with GSK to acquire full rights to such Licensed Product on
commercially reasonable terms. GSK shall provide written notice to CK of its
intent to divest the Licensed Product prior to entering into any agreement with
a Third Party, shall use commercially reasonable efforts to reach such an
agreement with CK, and shall provide reasonable assistance to CK with respect to
its discussions with the relevant governmental authority(ies) overseeing the
divestiture of such Licensed Product, including encouraging the relevant
governmental authority(ies) to select CK as the acquirer of the Licensed
Product. It is understood that any agreement for CK's acquisition of the
Licensed Product would be subject to agreement between the Parties on the
financial terms and other conditions of CK's acquisition of the Licensed
Product.

         7.4      Co-Promotion Option of CK, Provided that CK has exercised its
Co-Funding Option under Section 3.4 or 4.5.2(d) with respect to a Licensed
Product, at any time prior to the MAA submission for a Licensed Product in the
United States and Canada (respectively), CK will have an option (the
"Co-Promotion Option") to co-promote such Licensed Product in the United States
and/or Canada (respectively) according to the terms and conditions set forth in
this Section 7.4. This Co-Promotion Option may be exercised, at CK's discretion,
on a product-by-product basis, for each Licensed Product with respect to which
CK has exercised its Co-Funding Option and has participated in funding [*] for
such Licensed Product under Section 3.4 or for which GSK exercised the CK
Product Option under Section 4.5 above. CK shall notify GSK of its intent to
exercise its Co-Promotion Option with respect to a particular Licensed Product
at any time prior to submission of an MAA for such Licensed Product (each such
Licensed Product for which CK exercises the Co-Promotion Option being referred
as a "Co-Promoted Product"). As used in this Section 7.4, "co-promote" shall
mean to promote jointly a Licensed Product through GSK and CK's respective sales
forces under a single trademark in a given country; "details" shall mean
face-to-face sales presentations made to physicians, nurses, pharmacists and
other individuals who provide health care services to patients, in their
capacity as such.

                  7.4.1    Scope of Co-Promotion. At such time as CK exercises
its Co-Promotion Option with respect to a Co-Promoted Product, it shall notify
GSK of the [*] that CK intends to perform annually for such Co-Promoted Product
(such total being referred to as the "Co-Promotion Percentage" for such
Co-Promoted Product) in each of the United States and Canada. This Co-Promotion
Percentage shall not be greater than [*] percent ([*]%), nor less than [*]
percent ([*]%), of the [*], in each of the United States and Canada, [*] to be
conducted for such Co-

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Promoted Product in any calendar year, unless otherwise agreed by the Joint
Commercialization Committee. CK shall have the right to [*] over the initial [*]
([*]) years of co-promoting a Co-Promoted Product; provided that CK must commit
to [*] at least [*] percent ([*]%) of its [*] in the [*], and [*] percent
([*]%) of such commitment in the [*], calendar year of such Co-Promoted
Products.

                  7.4.2    [*]. The Parties recognize that CK, under its
Co-Promotion Option, may receive orders from Third Parties for the Co-Promoted
Product. CK shall transmit such orders to GSK and [*].

                  7.4.3    Co-Promotion Coordination. The JCC shall be
responsible for coordinating the co-promotion activities under this Section 7.4,
and shall develop the strategies and programs to optimally carry-out details,
including but not limited to, the assignment of details in accordance with the
Sales and Marketing Plan. In the event CK exercises its Co-Promotion Option, the
Sales and Marketing Plan shall include detailed plans and budgets for the [*],
and shall at all times provide for CK sales representatives to conduct the [*]
to be conducted in the particular country (subject to CK's right to [*] CK's
[*], as described in Section 7.4.1 above); provided that such [*] be [*], and
that [*] will include at least a [*] in the particular therapeutic areas.

                  7.4.4    Co-Promotion Obligations. CK shall employ a
professional and trained sales force to co-promote the Co-Promoted Product in
the country(s) in which it has elected to co-promote, and such sales force shall
meet standards of competence and professionalism as is common in the
pharmaceutical industry. With the prior written consent of GSK (which shall not
be withheld or delayed unreasonably), CK may sub-contract its Co-Promotion
obligations to a Third Party, provided that CK has the right to approve the
hiring of sales personnel performing details for a Licensed Product hereunder
and to cause the removal from such detailing activities of such sales personnel.
In all events, CK's Co-Promotion and detailing shall be conducted in accordance
with the then current Sales and Marketing Plan and in accordance with all
applicable laws. [*] (including samples) as are reasonably necessary to
effectively promote the particular Co-Promoted Product consistent with the Sales
and Marketing Plan.

                  7.4.5    Reimbursement. GSK shall reimburse CK for the costs
incurred by CK in [*] in accordance with this Section 7.4, [*]. Promptly
following CK's exercise of the Co-Promotion Option for a particular Co-Promoted
Product, the Parties shall reasonably agree [*] to be paid to CK for [*]
performed by CK in accordance with the Sales and Marketing Plan then in effect
(the "[*]"). Such [*] shall equal CK's [*] cost of performing [*] over the
particular period, on a fully allocated basis, provided that the [*] shall not
exceed [*] for the Co-Promoted Product ([*]) for the [*] period. The [*] shall
be paid to CK quarterly in advance, based on the [*] budgeted to be conducted by
CK during such

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quarter under the Sales and Marketing Plan. Promptly following the end of each
calendar quarter, CK shall provide to GSK a report, in a form reasonably agreed
by the Parties, summarizing the [*] actually [*] during such quarter. In the
event the actual [*] was less than the [*] for which CK received advance
payment, then GSK shall be entitled to a credit for the [*] associated with such
shortfall against the next payment due to CK under this Section 7.4.5.

                  7.4.6    CK and GSK Right to Terminate. CK shall have the
right to terminate its Co-Promotion of any Co-Promoted Product, and its
obligations under this Article VII with respect to such Product, on a
product-by-product, country-by-country basis, upon [*] ([*]) days prior notice
to GSK. Upon such termination by CK, CK shall have no further right to [*] under
Section 7.4.5, other than for services provided prior to the date of
termination. GSK shall have the right to terminate CK's Co-Promotion of any
Co-Promoted Product, on a product-by-product, country-by-country basis, upon [*]
([*]) days prior notice to CK, in the event that employees or consultants
promoting the Co-Promoted Product, do not perform in accordance with GSK's Sales
and Marketing Plan for the Co-Promoted Product, and CK fails to correct such
non-performance during such [*]-day period. Upon such termination by GSK, CK
shall have no further right to [*] under Section 7.4.5, other than for services
provided prior to the date of termination.

         7.5      CK Logo. The name and logo of CK shall appear, with reasonable
size and prominence, on all packaging, package inserts, labeling, marketing and
sales materials and advertisements for Licensed Products for which CK exercised
the Co-Funding Option under Section 3.4 above. In the case of such Co-Funded
Products that became Licensed Products pursuant to Section 4.5 above, the name
and logos of CK and GSK shall be of equal size and prominence.

       ARTICLE VIII - OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS

         8.1      Ownership.

                  8.1.1    Generally. Each Party shall retain all of its rights,
title and interest in and to its Existing Technology, including the right to
transfer or license such intellectual property to others for any purpose,
subject only to its obligations under this Agreement, including but not limited
to the exclusivity obligations below. All right, title and interest in and to
all inventions made solely by personnel of a Party shall be owned by such Party.
All right, title and interest in and to all other inventions made jointly by
personnel of GSK and CK shall be jointly owned by GSK and CK in equal and
undivided shares. Except as expressly provided in this Agreement, neither Party
shall have any obligation to account to the other for profits, or to obtain any
consent of the other Party to license or exploit patented jointly-owned subject
matter, by reason of joint ownership thereof, and each Party hereby waives any
right it may have under the laws of any jurisdiction to require any such consent
or accounting.

                  8.1.2    CK Targets. Notwithstanding the foregoing, all
inventions and Information (including all Patents and intellectual property
rights in such inventions and Information) made by

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CK personnel in connection with activities specifically pertaining to CK
Targets, CK Compounds or CK Products shall be owned by CK. All inventions and
Information (including all Patents and intellectual property rights in such
inventions and Information) made by GSK personnel in connection with activities
specifically pertaining to CK Targets, CK Compounds or CK Products shall be
owned by GSK, and GSK hereby grants to CK an exclusive, worldwide license, with
the right to grant and authorize sublicenses, to make, have made, use, sell,
offer for sale, import and otherwise exploit subject matter within such
inventions, Information or intellectual property. It is understood that the
inventions and Information licensed to CK under this Section shall be limited to
inventions and Information that pertain to CK Targets, CK Compounds or CK
Products prior to their designation as such (e.g., with respect to CK Targets
prior to the time that the particular Mitotic Kinesin Target had been designated
as a CK Target).

         8.2      Patent Filings. The Party responsible for Prosecution and
Maintenance (as defined below) of patents covering inventions within the
Collaboration Technology or Post-Collaboration Technology shall use [*] to
obtain a reasonable scope of protection of Compounds and CK Compounds, and will
consider in good faith reasonable comments provided by the other Party.

                  8.2.1    Joint Patents. The Prosecution and Maintenance of
jointly owned Patents shall be only as mutually agreed by GSK and CK. In such
connection, the Parties agree to cooperate in good faith to obtain appropriate
patent protection for Compounds, Licensed Products, CK Compounds, and CK
Products. Accordingly, the Parties agree to cooperate and to prepare and
prosecute patent applications for Patents within the Licensed Technology
directed to such claims in a manner that ensures reasonable scope of protection
for such subject matter. Subject always to the foregoing, [*] will be
responsible at the expense of [*] for drafting, filing, prosecuting and
maintaining any jointly owned Patent directed primarily to Compounds, including
but not limited to processes for making Compounds, methods of use of Compounds
or intermediates of such.

                  8.2.2    Solely Owned Patents. GSK or CK, as the case may be,
shall control the Prosecution and Maintenance of Patents within the
Collaboration Technology and Post-Collaboration Technology that are owned by
such Party, in each case [*] and using counsel of its choice and in such
countries as such Party determines is appropriate.

                  8.2.3    Other Matters Pertaining to Prosecution of Patents.

                           (a)      Disclosure. Prior to the filing of any
patent claiming Collaboration Technology, the JRC shall establish a subcommittee
to coordinate Prosecution and Maintenance of patents covering inventions within
the Collaboration Technology and Post-Collaboration Technology (the "Patent
Subcommittee"). After the end of the Research Term, the Patent Subcommittee
shall report to the JSC. Prior to filing any patent application claiming
Collaboration Technology or Post-Collaboration Technology, each Party shall
submit to the Patent Subcommittee an invention disclosure containing such
information and in a form to be mutually agreed by the Parties. Each Party shall
keep the Patent Subcommittee informed as to material developments with respect
to the Prosecution and Maintenance of Patents claiming Collaboration Technology
or Post-Collaboration Technology, including without limitation, by providing
upon request copies of any

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substantive documents that such Party receives from any patent office, including
notice of all interferences, reissues, re-examinations, oppositions or requests
for patent term extensions, and by providing the other Party the opportunity to
have reasonable input into the strategic aspects of such Prosecution and
Maintenance. Without limiting the foregoing, neither Party shall file an
application for such a Patent unless it has first disclosed the same to the
Patent Subcommittee.

                           (b)      If, during the term of this Agreement, the
Party responsible for prosecuting a Patent within the Collaboration Technology
or Post-Collaboration Technology, as specified in this Section 8.2, (the
"Prosecuting Party") intends to allow such Patent to lapse or become abandoned
without having first filed a substitute, the Prosecuting Party shall, whenever
practicable, notify the other Party of such intention at least sixty (60) days
prior to the date upon which such Patent shall lapse or become abandoned, and
such other Party shall thereupon have the right, but not the obligation, to
assume responsibility for the Prosecution and Maintenance and defense thereof at
its own expense with counsel of its own choice.

                           (c)      "Prosecution and Maintenance" or "Prosecute
and Maintain" with regard to a Patent shall mean the preparing, filing,
prosecuting and maintenance of such Patent, as well as re-examinations,
reissues, requests for patent term extensions and the like with respect to such
Patent, together with the conduct of interferences, the defense of oppositions
and other similar proceedings with respect to the particular Patent.

         8.3      Patent Costs.

                  8.3.1    Collaboration and Post-Collaboration Technology. [*].
CK and GSK shall share the Patent Costs associated with the Prosecution and
Maintenance of jointly owned Patents, as the Parties agree.

                  8.3.2    CK and GSK Existing Technology. CK shall be
responsible for [*] percent ([*]%) of the Patent Costs incurred by CK prior to
and after the Effective Date in all countries in the Territory with respect to
CK Existing Technology. GSK shall be responsible for [*] percent ([*]%) of the
[*] incurred by GSK prior to and after the Effective Date in all countries in
the Territory with respect to GSK Existing Technology. If a Party chooses not to
Prosecute and Maintain a Patent within its Existing Technology that it solely
owns in a country or countries of the Territory, it shall use [*] efforts to
promptly notify the other Party of its decision, and, if such patent pertains to
a Collaboration Target, Compound, Development Compound, Licensed Product, CK
Compound or CK Product licensed to the other Party hereunder, the other Party
shall have the right to Prosecute and Maintain such Patent and at its own
expense with counsel of its own choice.

                  8.3.3    Definition of Patent Costs. "Patent Costs" shall mean
the reasonable fees and expenses paid to outside legal counsel, and filing,
maintenance and other out-of-pocket expenses paid to Third Parties, incurred in
connection with the Prosecution and Maintenance of Patents.

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         8.4      Third Party Technologies.

                  8.4.1    Existing Third Party Technology. It is understood
that certain Patents within the CK Existing Technology have been in-licensed
pursuant to that certain Exclusive License Agreement dated April 21, 1998, as
modified, among CK, the Regents of the University of California and the Board of
Trustees of the Leland Stanford Junior University (the "University License"),
and that CK shall be responsible for payment of all partnership and other fees
required pursuant to Section 5.2 thereof. As required for the furtherance of the
objectives of this Agreement, CK shall use [*] to maintain the University
License and to timely pay all fees due under the University License. Should CK
be unable to make any payment required under the University License, it shall
notify GSK, and GSK shall thereupon have the option to make such payment on
behalf of CK and to seek reimbursement from CK for such payment.

                  8.4.2    Acquired After Effective Date. In addition, if after
the Effective Date, CK or GSK (the "Sublicensing Party") acquire from a Third
Party subject matter within the Licensed Technology ("Third Party Technology"),
but that is subject to royalty or other payment obligations to the Third Party,
then the following shall apply: The licenses granted to the other Party (the
"Commercializing Party") under Section 5.2 and 5.3 above with respect to such
Third Party Technology shall be subject to the Commercializing Party's promptly
reimbursing the Sublicensing Party for any milestones, royalties or other
amounts that become owing to such Third Party by reason of the Commercializing
Party's exercise of such license or sublicense to the Third Party Technology.
Upon request by the Commercializing Party, the Sublicensing Party shall disclose
to the Commercializing Party a true, complete and correct written description of
such payment obligations, and the Commercializing Party's obligation to
reimburse such amounts following such request shall be limited to those payment
obligations as so disclosed by the Commercializing Party, with any such payments
made [*] under [*] (to the extent [*] applies). In the event that the
Commercializing Party does not promptly reimburse the Sublicensing Party for
such amounts upon request, then such Third Party Technology shall thereafter be
deemed excluded from the Licensed Technology. Notwithstanding the foregoing,
neither Party shall utilize in performing the Research Program any Third Party
Technology that would impose a royalty or other payment obligation to a Third
Party for which the other Party would become responsible under this Section
8.4.2 with respect to a Licensed Product or CK Product, unless the JRC has
approved such utilization.

         8.5      Enforcement Rights.

                  8.5.1    Defense and Settlement of Third Party Claims. If a
Third Party asserts that a Patent or other right owned by it is infringed by the
manufacture, use, sale or importation of any Licensed Product, [*] shall have
the primary right but not the obligation to defend against any such assertions
at its cost and expense. In the event [*] elects to defend against any such
Third Party claims, [*] shall have the sole right to direct the defense of any
such Third Party claims and to elect to settle such claims. In any event, the
Parties shall assist one another and cooperate in any such litigation at the
other's request without expense to the requesting Party. Each Party may at its
own expense and with its own counsel join any defense brought by the other
Party.

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                  8.5.2    Infringement by Third Parties.

                           (a)      If any Patent within the Licensed Technology
Controlled by CK is infringed by a Third Party in any country in connection with
the manufacture, use and sale of a product substantially similar to a Licensed
Product in such country, GSK shall have the primary right, but not the
obligation to institute, prosecute, and control any action or proceeding with
respect to such infringement of such Patent, by counsel of its own choice, and
CK shall have the right, at its own expense, to be represented in that action by
counsel of its own choice. If GSK fails to bring an action or proceeding within
a period of [*] ([*]) days after a request by CK to do so, CK shall have the
right to bring and control any such action by counsel of its own choice, and GSK
shall have the right to be represented in any such action by counsel of its own
choice at its own expense.

                           (b)      If any Patent within the Licensed Technology
that is Controlled by GSK is infringed by the manufacture, sale or importation
of a product substantially similar to a CK Product, CK shall have the primary
right, but not the obligation, to institute, prosecute, and control any action
or proceeding with respect to such infringement of such Patent, by counsel of
its own choice, and GSK shall have the right, at its own expense, to be
represented in that action by counsel of its own choice. If CK fails to bring an
action or proceeding within a period of [*] ([*]) days after a request by GSK to
do so, GSK shall have the right to bring and control any such action by counsel
of its own choice, and CK shall have the right to be represented in any such
action by counsel of its own choice at its own expense.

                           (c)      If one Party brings any such action or
proceeding in accordance with this Section 8.5.2, the second Party agrees to be
joined as a party plaintiff and to give the first Party reasonable assistance
and authority to file and prosecute the suit. The costs and expenses of the
Party bringing suit under this Section shall be borne by such Party, and any
damages or other monetary awards recovered shall be shared as follows: The
amount of such recovery actually received by the Party controlling such action
shall first be applied to the out-of-pocket costs of such action, and then shall
be shared (a) in the event of an action with respect to an infringing product
substantially similar to a Licensed Product, CK shall receive a percentage of
such net recovery equal [*] that would have been payable to CK with respect to
such Licensed Product (without giving effort to Sections [*] or [*] above)
(e.g., if CK were entitled [*] for such Licensed Product, CK would be entitled
to receive [*] of the net recovery), and GSK shall be entitled to the remainder
of such net recovery; and (b) in the event of an action with respect to an
infringing product substantially similar to a CK Product, GSK shall receive a
percentage of such net recovery equal to [*] that would be payable to GSK under
this Agreement with respect to such CK Product, and CK shall be entitled to the
remainder of such net recovery. A settlement or consent judgment or other
voluntary final disposition of a suit under this Section 8.5.2(c) may be entered
into without the consent of the Party not bringing the suit; provided that such
settlement, consent judgment or other disposition does not admit the invalidity
or unenforceability of any Patent within the Licensed Technology and provided
further, that any rights

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to continue the infringing activity in such settlement, consent judgment or
other disposition shall be limited to those rights that the granting Party
otherwise has the right to grant.

                           (d)      General. Subject to Paragraphs (a), (b) and
(c) above, with respect to jointly owned Patents, each Party may proceed in such
manner as the law permits. Each Party shall bear its own expenses, and any
recovery obtained by either Party may be retained by such Party unless otherwise
agreed.

                          ARTICLE IX - CONFIDENTIALITY

         9.1      Confidentiality: Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that the receiving Party shall keep confidential and shall not publish or
otherwise disclose or use for any purpose other than as provided for in this
Agreement any Information and other confidential and proprietary information and
materials furnished to it by the other Party pursuant to this Agreement or any
Information developed during the term of this Agreement (collectively,
"Confidential Information"), except to the extent that it can be established by
the receiving Party that such Confidential Information:

                                    (i)      was in the lawful knowledge and
possession of the receiving Party prior to the time it was disclosed to, or
learned by, the receiving Party, or was otherwise developed independently by the
receiving Party, as evidenced by written records kept in the ordinary course of
business, or other documentary proof of actual use by the receiving Party;

                                    (ii)     was generally available to the
public or otherwise part of the public domain at the time of its disclosure to
the receiving Party;

                                    (iii)    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; or

                                    (iv)     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.

         9.2      Authorized Disclosure. Except as expressly provided otherwise
in this Agreement, each Party may use and disclose Confidential Information of
the other Party as follows: (i) under appropriate confidentiality provisions
substantially equivalent to those in this Agreement, in connection with the
performance of its obligations or exercise of rights granted or reserved in this
Agreement (including the rights to commercialize Licensed Products and CK
Products and to grant licenses and sublicenses hereunder), or (ii) to the extent
such disclosure is reasonably necessary in filing or prosecuting patent,
copyright and trademark applications, complying with the terms of licenses from
Third Parties with respect to a Party's Existing Technology, prosecuting or
defending litigation, complying with applicable governmental regulations,
obtaining regulatory approval, conducting preclinical or clinical trials,
marketing Licensed Products or CK Products, or otherwise

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required by law, provided, however, that if a Party is required by law or
regulation to make any such disclosure of the other Party's Confidential
Information it will, except where impracticable for necessary disclosures, for
example in the event of medical emergency, give reasonable advance notice to the
other Party of such disclosure requirement and, except to the extent
inappropriate in the case of patent applications, will use its reasonable
efforts to secure confidential treatment of such Confidential Information
required to be disclosed or (iii) in communication with investors, consultants,
advisors or others on a need to know basis, in each case under appropriate
confidentiality provisions substantially equivalent to those of this Agreement,
or (iv) to the extent mutually agreed to by the Parties.

         9.3      Termination of Prior Agreement. This Agreement supersedes the
Confidentiality Agreement between the Parties (or their predecessors) dated [*]
(including amendments) and the Materials Transfer Agreement between the Parties
dated [*], including all modifications. All information exchanged between the
Parties under that Agreement shall be deemed Confidential Information and shall
be subject to the terms of this Article IX.

         9.4      Publications. Each Party shall submit any proposed publication
containing Confidential Information to the other Party at least [*] ([*]) days
in advance to allow that Party to review such planned public disclosure. The
reviewing Party will promptly review such proposed publication and make any
objections that it may have to the publication of Confidential Information of
the reviewing Party contained therein. Should the reviewing Party make an
objection to the publication of any such Confidential Information, then the
Parties shall discuss the advantages and disadvantages of publishing such
Confidential Information. If the Parties are unable to agree on whether to
publish the same, subject to Section 12.1 below, the JRC shall attempt to
resolve the matter. If the JRC is unable to resolve the matter promptly, the
Chief Executive Officer of CK and the Chairman, Research and Development,
Pharmaceuticals of GSK shall reasonably agree on the extent to which the
publication of such Confidential Information shall be made.

         9.5      Limit on Disclosure of Information Relating to Mitotic Kinesin
Targets. Notwithstanding Section 9.2(i) above:

                           (a)      for both Parties during the Exclusivity
Period and any Extension Period, on a Target-by-Target basis with respect to any
Mitotic Kinesin Targets that have not been designated as a Collaboration Target
or a CK Target,

                           (b)      for CK, for the duration of its obligation
under Section 4.2.3 with respect to a particular Collaboration Target and with
respect to matters pertaining specifically to such Collaboration Target, and

                           (c)      for GSK, with respect to matters relating to
CK Targets, such Party in question shall not disclose to a Third Party any CK
Existing Technology, GSK Existing Technology, Collaboration Technology or
Post-Collaboration Technology specifically directed to matters within the Field
specifically pertaining to such Mitotic Kinesin Target(s), such as

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 structure/activity relationship data, target validation data and the like;
provided, however, that CK shall have the right to disclose such data in (b)
above (other than data that is directed specifically to one or more Mitotic
Kinesin Targets other than CK Targets) (i) in connection with research and
development on CK Targets, CK Compounds and CK Products, or (ii) in connection
with commercialization of CK Products (subject to GSK's CK Product Option under
Section 4.5); and provided, further, that GSK shall have the right to disclose
such data in (c) above (other than data that is directed specifically to one or
more Mitotic Kinesin Targets other than Collaboration Targets) (i) in connection
with research and development on Collaboration Targets, Compounds, Development
Compounds and Licensed Products, or (ii) in connection with commercialization of
Licensed Products. This Section 9.5 shall not be deemed to restrict CK's
disclosure of any such Licensed Technology in connection with activities
pertaining to (x) performance of its obligations under the Research Program, (y)
[*] or [*] after such [*] are excluded from the Field pursuant to Section 2.6.4,
or (z) any disclosure authorized under Section 9.2(ii), (iii) or (iv) above.

    ARTICLE X - REPRESENTATIONS AND WARRANTIES; COVENANTS AND INDEMNIFICATION

         10.1     Representations and Warranties. Each of the Parties hereby
represents and warrants and covenants as follows:

                           (a)      This Agreement is a legal and valid
obligation binding upon such Party and enforceable in accordance with its terms.
Except as otherwise noted in Exhibit 10.1 hereto, the execution, delivery and
performance of the Agreement by such Party does not conflict with any agreement,
instrument or understanding, oral or written, to which it is a party or by which
it is bound, nor violate any law or regulation of any court, governmental body
or administrative or other agency having jurisdiction over it.

                           (b)      Other than the notification requirements
under the Hart-Scott-Rodino ("HSR") Act and approval of the transaction
contemplated by this Agreement by the Federal Trade Commission ("FTC"), no
government authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, under any applicable
laws, rules or regulations currently in effect, is or will be necessary for, or
in connection with, the transaction contemplated by this Agreement or any other
agreement or instrument executed in connection herewith, or for the performance
by it of its obligations under this Agreement and such other agreements.

                           (c)      Each Party has not, and during the term of
the Agreement will not, grant any right to any Third Party relating to its
respective technology in the Field which conflicts with the rights granted to
the other Party hereunder. Each Party will not, during the Exclusivity Period or
Extension Period, as applicable, encumber its respective CK Patents or GSK
Patents within the Licensed Technology, as applicable, with liens, mortgages,
security interests or another similar interest that would give the holder the
right to convert the interest into patent ownership, unless the encumbrance is
expressly subject to the licenses herein.

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                           (d)      Each Party owns or otherwise controls all of
the rights, title and interest in and to its Patents and Know-How within the
Licensed Technology.

                           (e)      Each Party has no present knowledge from
which it concludes that the CK Patents or GSK Patents within the Licensed
Technology, as applicable, are invalid or that their exercise would infringe
patent rights of Third Parties.

                           (f)      Each Party has not omitted to furnish the
other with any information requested by the other Party, or intentionally
concealed from the other Party any information in its possession concerning the
Mitotic Kinesin Targets or the transactions contemplated by this Agreement which
would be material to the other Party's decision to enter into this Agreement and
to undertake the commitments and obligations set forth herein.

         10.2     Indemnification.

                  10.2.1   Indemnification by GSK. GSK hereby agrees to
indemnify, defend and hold CK and its agents, directors and employees harmless
from and against any and all suits, claims, actions, demands, liabilities,
expenses and/or loss, including reasonable legal expense and attorney's fees
("Losses") resulting directly from the development, manufacture, use, handling,
storage, sale or other disposition of chemical agents or Licensed Products by
GSK, its Affiliates, agents or Sublicensees.

                  10.2.2   Indemnification by CK. CK hereby agrees to indemnify,
defend and hold GSK and its agents, directors and employees harmless from and
against any and all Losses resulting directly from the development, manufacture,
use, handling, storage, sale or other disposition of chemical agents or CK
Products by CK, its Affiliates, agents or Sublicensees.

                  10.2.3   Procedure. In the event a Party is seeking
indemnification under Sections 10.2.1 or 10.2.2, it shall inform the other Party
(the "Indemnifying Party") of a claim as soon as reasonably practicable after it
receives notice of the claim, shall permit the Indemnifying Party to assume
direction and control of the defense of the claim (including the right to settle
the claim) and shall cooperate as requested (at the expense of the Indemnifying
Party) in the defense of the claim.

         10.3.    Covenants of the Parties.

                  (a)      Upon the terms and subject to the conditions hereof,
each of the Parties hereto shall use its good faith efforts, before the Closing
to (i) take, or cause to be taken, all actions necessary, proper or advisable
under applicable law or otherwise to consummate and make effective the
transactions contemplated by this Agreement, (ii) make all necessary filings,
and thereafter make any other advisable submissions, with respect to this
Agreement and the transactions contemplated by this Agreement required under the
HSR Act; provided that, with respect to this clause (a), neither GSK nor CK
shall be required to agree to any modification or amendment that, in the
reasonable opinion of the Party's legal and/or financial counsel, would be
adverse to such Party.

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The Parties hereto shall cooperate with each other in connection with the making
of all such filings. The Parties hereto shall furnish all information required
for any application or other filing to be made pursuant to the rules and
regulations of any applicable law in connection with the transactions
contemplated by this Agreement.

                           (b)      GSK and CK shall file as soon as practicable
(but not later than five (5) business days) after the Effective Date
notifications under the HSR Act and shall respond as promptly as practicable to
all inquiries or requests received from the FTC, the Antitrust Division of the
Department of Justice, for additional information or documentation and shall
respond as promptly as practicable to all inquiries and requests received from
any such authority (including any state attorney general) in connection with
antitrust matters. The Parties shall cooperate with each other in connection
with the making of all such filings or responses. GSK agrees to pay the filing
fees and all associated costs for required HSR filings related to this
Agreement.

                        ARTICLE XI - TERM AND TERMINATION

         11.1     Term. Unless earlier terminated, the Agreement and the payment
obligations under Article VI will continue in effect, on a product-by-product
and country-by-country basis until the later of (i) the expiration of the last
to expire Patent within the Licensed Technology covering such Compound or
Licensed Product in such country, or (ii) [*] ([*]) years after the date of the
first commercial sale of such Licensed Product in such country. Effective upon
the expiration (but not earlier termination) of this Agreement, CK hereby grants
to GSK a fully-paid-up, royalty-free license under CK Existing Technology and
CK's interest in Collaboration Technology and Post-Collaboration Technology to
make, have made, use and sell the Development Compounds and Licensed Products in
the Territory without further payment or consideration to CK. Effective upon the
expiration of this Agreement, GSK hereby grants to CK a fully-paid-up,
royalty-free license, under GSK Existing Technology and GSK's interest in
Collaboration Technology and Post-Collaboration Technology, to make, have made,
use and sell the CK Compounds and CK Products, in the Territory without further
payment or consideration to GSK.

                  11.1.1   Termination Prior to Closing. This Agreement may be
terminated at any time prior to the Closing:

                           (a)      by GSK or CK, if all applicable waiting
periods for the HSR filing made in connection with this Agreement have not
lapsed or been terminated early by August 1, 2001 or the FTC initiates an
investigation into the transaction contemplated by this Agreement; or

                           (b)      by GSK or CK, if the Closing has not
occurred by August 1, 2001; or

                           (c)      by the mutual written consent of GSK and CK.

         11.2     Termination For Breach. Either Party may terminate this
Agreement in the event the other Party shall have materially breached or
defaulted in the performance of any of its material obligations hereunder, and
such default shall have continued for ninety (90) days after written notice

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thereof was provided to the breaching party by the non-breaching party. Any
termination shall become effective at the end of such ninety (90) day period
unless the breaching party (or any other party on its behalf) has cured any such
breach or default prior to the expiration of the ninety (90) day period.

         11.3     Termination Upon Notice.

                  11.3.1   Termination by GSK on Notice. GSK may terminate this
Agreement upon [*] ([*]) months written notice to CK, provided that such notice
is given after the fifth anniversary of the Effective Date; and provided further
that if GSK extends the Research Term in accordance with Section 2.8 above, such
termination may not take effect prior to the end of the Research Term.

                  11.3.2   Termination by GSK on a Product-by-Product Basis. In
addition GSK may terminate this Agreement as to any particular Licensed Product
by so notifying CK, which termination shall be effective [*] ([*]) months after
the date of such notice; provided, however, if the Research Term has ended and
as a result of such termination: (i) GSK is not actively performing substantial
research and/or development activities with respect to a Collaboration Target or
any Compound, Development Compound or Licensed Product directed to the
Collaboration Target that is so terminated, and is not then actively marketing a
Licensed Product directed to such Collaboration Target, then such Target shall
cease to be a Collaboration Target for all purposes of this Agreement, and shall
thereafter be deemed a CK Target; or (ii) GSK is not then actively pursuing
substantial research and/or development activities or human clinical trials with
respect to any Collaboration Target, Compound, Development Compound or Licensed
Product directed to any Collaboration Target, and is not then actively marketing
a Licensed Product directed to any Collaboration Target, then the termination of
such Licensed Product shall be deemed a termination of this Agreement in its
entirety under Section 11.3.1 above. This Section 113.2 shall not be deemed to
limit Sections 4.2.1 or 7.3.2 above.

                  11.3.3   Termination by CK on Notice. If at any time after the
Research Term the conditions in clause (ii) of Section 11.3.2 above are met
(i.e., regardless of whether GSK has formally terminated a particular Licensed
Product under Section 11.3.2), CK shall have the right to terminate this
Agreement upon [*] ([*]) months notice to GSK.

         11.4     Termination on Bankruptcy. Either Party may terminate this
Agreement, if, at any time, the other Party shall file in any court or agency
pursuant to any statute or regulation of any state or country, a petition in
bankruptcy or insolvency or for reorganization or for an arrangement or for the
appointment of a receiver or trustee of the Party or of substantially all of its
assets, or if the other Party proposes a written agreement of composition or
extension of substantially all of its debts, or if the other Party shall be
served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within [*] ([*]) days
after the filing thereof, or if the other Party shall propose or be a party to
any dissolution or liquidation, unless in connection with such dissolution or
liquidation this Agreement is assigned under Section 12.5, or if the other Party
shall make an assignment of substantially all of its assets for the benefit of
creditors.

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         11.5     Intentionally left blank.

         11.6     Certain Payment Terms.

                  11.6.1   Milestone Payments. Notwithstanding anything herein
to the contrary, GSK shall not be obligated to pay any payment otherwise payable
under Section 6.3 as a result of occurrence of a Research Performance Milestone
or under Section 6.4 as the result of occurrence of a Development Milestone if
the Research Performance Milestone or Development Milestone occurs after (i) a
termination notice is properly given pursuant to Section 11.3 above or (ii) a
termination pursuant to Section 11.2 above by reason of a breach by CK.
Similarly, in the event that GSK terminates this Agreement with respect to a
particular Licensed Product in accordance with Section 11.3.2 above, GSK shall
not be obligated to pay any payment under Section 6.4 above as the result of
occurrence of a Development Milestone with respect to such terminated Licensed
Product if the milestone event occurs after a notice of such termination is
properly given by GSK pursuant to Section 11.3.2.

         11.7     Effect of Termination.

                  11.7.1   Termination Prior to Closing. Notwithstanding any
other provision of this Agreement, in the event that this Agreement is
terminated pursuant to Section 11.1.1, this Agreement shall be deemed terminated
ab initio, and notwithstanding Section 11.7.3 below, no provisions of this
Agreement shall survive such termination. All amounts paid prior to the date of
such termination shall be non-refundable; provided that CK shall promptly
reimburse to GSK any amounts paid to CK under Sections 3.1.2 (a), 6.2 or 6.3
above. All Confidential Information disclosed prior to such termination shall be
deemed Confidential Information pursuant to the Confidentiality Agreement (as
amended) between the Parties dated [*], which Confidentiality Agreement shall
survive.

                  11.7.2   Accrued Rights, Surviving Obligations. Termination,
relinquishment or expiration of the Agreement for any reason shall be without
prejudice to any obligations which shall have accrued prior to such termination,
relinquishment or expiration, including, without limitation, the payment
obligations under Article 6 hereof and any and all damages arising from any
breach hereunder.

                  11.7.3   Survival. Except as provided under Section 11.7.1,
Articles 1,10,11 and 12 (other than Section 12.2) and Sections 8.1, 8.3, 9.1,
and 9.2 shall survive the expiration and any termination of this Agreement; and
Article 5 shall survive the expiration but not an earlier termination (except as
provided below) of this Agreement. In addition, the following provisions shall
survive termination of this Agreement in the events set forth below:

                           (a)      Certain Terminations. In the event of a
termination of this Agreement pursuant to Section 11.3, or termination by CK
pursuant to Section 11.2: (i) Section 4.4.2 shall survive, and all Licensed
Products, Compounds and Collaboration Targets shall be deemed CK Products, CK
Compounds and CK Targets, respectively; (ii) without limiting any other
provisions of

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this Section 11.7.3, CK's rights and GSK's obligations (but not GSK's rights or
CK's obligations) under Sections 2.4, 8.2.3 and 8.4.2 and under the last two
sentences of Section 3.2 shall survive; (iii) Sections 5.3 and 5.4.2 shall
survive, and in addition, CK shall have an irrevocable, exclusive, worldwide
license, with the right to grant and authorize sublicenses, under GSK's interest
in the Collaboration Technology and Post-Collaboration Technology, and any
trademarks owned by GSK and used specifically by GSK to identify the Licensed
Products (excluding the GlaxoSmithKline trade name and trade dress) to make,
use, sell, import and otherwise exploit products directed to Mitotic Kinesin
Targets for use in the Field (without giving effect to any modification under
Section 2.6.4), including the right to practice any invention within such
Technology for the purpose of conducting research or development activities
directed to such products; and (iv) without limiting the foregoing, GSK's
obligations under Section 4.1.1, 4.1.2 and 4.3.2 above shall continue for the
Exclusivity Period as if the Agreement had not been terminated. From and after
the date of a notice of termination in the events described in this Section
11.7.3(a), CK shall have no further obligations under this Agreement beyond
those obligations that survive termination in such events as specified in this
Section 11.7.3.

                           (b)      Breach by CK. In the event of a termination
of this Agreement by GSK pursuant to Section 11.2: (i) in the event that such
termination occurs before the end of the Research Term, those Lead Targets
identified as of the termination effective date but not selected pursuant to
Section 2.7 shall become Collaboration Targets, all other Mitotic Kinesin
Targets shall revert to CK and the licenses granted to GSK under Section 5.1
shall be expanded to include conducting research independently beyond the
Research Term for the purpose of identifying Compounds directed to such
Collaboration Targets, without any further payment by GSK to CK (subject to
(b)(ii)); (ii) the provisions of Article 6 (other than 6.2) and Sections 5.2
(other than 5.2.4), 5.4, 4.1.3 and 7.3.1, and GSK's rights and CK's obligations
(but not CK's rights or GSK's obligations) under Sections 2.4, 8.2.3 and 8.4.2
shall survive and, in addition, GSK shall have an irrevocable, non-exclusive,
worldwide license, with the right to grant and authorize sublicenses, under CK's
interest in the Collaboration Technology and Post-Collaboration Technology, to
make, use, sell, import and otherwise exploit products directed to Collaboration
Targets for use in the Field (without giving effect to any modification under
Section 2.6.4), including the right to practice any invention within such
Technology for the purpose of conducting research or development activities
directed to such products; and (iii) without limiting the foregoing, CK's
obligations under Section 4.1.1 and 4.1.2 above shall continue for the
Exclusivity Period as if the Agreement had not been terminated. From and after
the date of a notice of termination in the events described in this Section
11.7.3(b), GSK shall have no further obligations under this Agreement beyond
those obligations that survive termination in such events as specified in this
Section 11.7.3.

                           (c)      Termination under Section 11.3.3. In the
event CK provides notice to GSK of its intent to terminate this Agreement
pursuant to Section 11.3.3, then, with respect to any CK Compound or CK Product
for which CK had begun IND Enabling Studies that would otherwise be subject to
the CK Product Option, but for which CK has not completed [*] ([*]) [*] studies,
prior to the date of such notice (each, a "Potential Option Product"), GSK may
exercise its CK Product Option pursuant to Section 4.5, as follows:

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                                    (i)      Upon request by GSK within thirty
(30) days after receiving CK's notice of termination under Section 11.3.3, GSK
may request that CK notify GSK of such Potential Option Products (the "GSK
Information Request"). Within thirty (30) days after receiving such GSK
Information Request, CK shall notify GSK of such Potential Option Products,
together with a copy of any IND that has been filed by CK with respect to such
Potential Option Product as of the date of such notice by CK (the "CK Notice").
Then, within [*] ([*]) days after GSK's receipt of the CK Notice, GSK may
exercise the CK Product Option with respect to such Potential Option Products
(i.e., as if CK had completed [*] ([*]) [*] studies for such Potential Option
Products and provided GSK a proper CK [*] Notice therefore in accordance with
Section 4.5). In such case, and solely for purposes of such case, (i) the first
three sentences of Section 4.5 shall not apply to GSK's exercise of the CK
Product Option for such Potential Option Products, (ii) notwithstanding Section
4.5.2(d) or any other provision of Section 4.5, CK shall not be obligated to
exercise the Co-Funding Option with respect to any Potential Option Product for
which GSK exercises the CK Product Option under this Section 11.7.3, and (iii)
CK's obligations under Section 4.6 shall thereafter terminate.

                                    (ii)     In the event that GSK so exercises
the CK Product Option with respect to one or more Potential Option Products,
then CK's notice of termination described above shall not be effective under
Section 11.3.3, and this Agreement shall continue in force and effect, subject
to the terms and conditions hereof. However, in such case, upon such exercise by
GSK, all Collaboration Targets and Unselected Targets shall be deemed CK Targets
(notwithstanding Sections 2.7, 2.8, 4.2 or any other provision of this
Agreement), all Compounds, Development Compounds and Licensed Products shall be
deemed CK Compounds and CK Products, and the CK Product Option shall terminate
with respect to all such CK Targets, and all CK Compounds and CK Products
directed to such CK Targets (i.e., all rights of GSK under Section 4.5 shall
terminate with respect to CK Products directed to all Mitotic Kinesin Targets
other than those that were CK Targets at the time of CK's notice of termination
under Section 11.3.3). Once GSK has exercised the CK Product Option under this
Section 11.7.3(c), GSK shall not have any further right under this Section
11.7.3(c) upon a subsequent termination by CK under Section 11.3.3.

         11.8     Termination Not Sole Remedy. Termination is not the sole
remedy under this Agreement and, whether or not termination is effected, all
other remedies will remain available except as agreed to otherwise herein.

                           ARTICLE XII - MISCELLANEOUS

         12.1     Publicity

                  12.1.1   Financial Terms. Each of the Parties hereto agrees
not to disclose to any Third Party the financial terms of this Agreement without
the prior written consent of the other Party hereto, except to advisors,
investors and others on a need-to-know basis under circumstances that reasonably
ensure the confidentiality thereof, or to the extent necessary to comply with
the terms of licenses from Third Parties with respect to a Party's Existing
Technology, or to the extent required by law. Notwithstanding the foregoing,
following the Effective Date, the Parties shall agree upon a

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press release to announce the execution of this Agreement together with a
corresponding Question & Answer outline for use in responding to inquiries about
the Agreement; thereafter, GSK and CK may each disclose to Third Parties the
information contained in such press release and Question & Answer outline
without the need for further approval by the other.

                  12.1.2   Publicity Review. The Parties acknowledge the
importance of supporting each other's efforts to publicly disclose results and
significant developments regarding Licensed Products, CK Products and other
activities in connection with this Agreement, beyond what is required by law,
and each Party may make such disclosures from time to time with the approval of
the other Party, which approval shall not be unreasonably withheld or delayed.
Such disclosures may include, without limitation, achievement of Research
Performance Milestones, Development Milestones, significant events in the
research, development and regulatory process with respect to such a Development
Compound, Licensed Product or CK Product, commercialization activities and the
like. When a Party (the "Requesting Party") elects to make any such public
disclosure under this Section 12.1.2, it will give the other Party (the
"Cooperating Party") at least five (5) business days notice to review and
comment on such statement, it being understood that if the Cooperating Party
does not notify the Requesting Party in writing within such five day period of
any reasonable objections, as contemplated in this Section 12.1.2, such
disclosure shall be deemed approved, and in any event the Cooperating Party
shall work diligently and reasonably to agree on the text of any proposed
disclosure in an expeditious manner. The principles to be observed in such
disclosures shall be accuracy, compliance with applicable law and regulatory
guidance documents, reasonable sensitivity to potential negative reactions of
the EDA (and its foreign counterparts) and the need to keep investors informed
regarding the Requesting Party's business. Accordingly, the Cooperating Party
shall not withhold its approval of a proposed disclosure that complies with such
principles.

         12.2     Overall Management of Collaboration.

                  12.2.1   Joint Steering Committee. The Parties shall establish
an overall committee ("Joint Steering Committee") to review and coordinate the
conduct of the collaboration under this Agreement. The Joint Steering Committee
shall be comprised of three (3) members each from CK and GSK, with the members
selected from senior management of each Party. Unless otherwise agreed, the
Joint Steering Committee shall at all times include [*]. The Joint Steering
Committee shall meet at least annually, or as more frequently as is requested by
either Party, to review and discuss the performance of the collaboration. All
other committees under this Agreement shall be subordinate to the Joint Steering
Committee.

                  12.2.2   Mutual Decisions. CK and GSK shall cause each of
their representatives on the JRC, JDC, or any other committee established under
this Agreement to vote, and shall otherwise perform their respective activities
under this Agreement, in the best interests of the collaboration contemplated
herein, including the timely research, development and commercialization of
Compounds, Development Compounds, Licensed Products and not in the present or
future interest

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of either Party outside the collaboration. Where this Agreement calls for
specified officers of CK and GSK to meet and resolve a particular issue, each
Party shall make its respective officer reasonably available for an in-person
meeting on at least three particular dates and times within the thirty (30) days
after the request.

         12.3     Short-Form Arbitration.

                  12.3.1   Certain Disputes.

                           (a)      If the Parties do not agree upon (i) a
matter to be decided by the IDC, or the JCC, for which [*] does not have the
right to [*] (i.e., pursuant to the last sentence of Section [*], or under
Section [*], above) or the JRC (e.g., pursuant to Sections 2.2 and 2.3.2); or
(ii) the royalty terms to be established under Section 4.7 above; (iii) whether
one or more amounts are required to be reimbursed under Section 3.4.4 or
4.5.2(a); or (iv) a dispute under Section 6.12, 6.13 or 6.14 above, then such
matters in issue shall be determined by binding arbitration conducted pursuant
to this Section 12.3.1 by one (1) arbitrator. In such arbitration, the
arbitrator shall be an independent expert (including in the area of the dispute)
in the pharmaceutical or biotechnology industry mutually acceptable to the
Parties. If the Parties are unable to agree on an arbitrator, the arbitrator
shall be an independent expert as described in the preceding sentence selected
by the chief executive of the Chicago office of the American Arbitration
Association.

                           (b)      In the event of a dispute under (a) above,
(i) each Party shall prepare a written report setting forth its position with
respect to the substance of the dispute and (ii) in the case of a dispute under
(a)(i), (a)(ii) or (a)(iv) above (but not under (a)(iii)), the arbitrator shall
select one of the Party's positions as his decision, and shall not have
authority to render any substantive decision other than to so select the
position of either GSK or CK. Except as provided in the preceding clause (ii)
such arbitration shall be conducted in all respects under the rules of the
American Arbitration Association.

                           (c)      The costs of any arbitration under this
Section 12.3.1 shall be shared equally by the Parties, and each Party shall bear
its own expenses in connection with such arbitration. The Parties shall use
diligent efforts to cause the completion of any such arbitration within ninety
(90) days following a request by any Party for such arbitration.

                  12.3.2   Disputes as to CK Products. In the event that GSK
disputes under Section 2.6.4 or 4.5 above CK's right to develop or otherwise
commercialize products under Section 2.6.4 or 4.5 above, GSK shall initiate an
arbitration proceeding under this Section 12.3.2 within [*] ([*]) days of its
receipt of notice from CK that CK intends to so develop or otherwise
commercialize such a compound, product or Mitotic Kinesin Target. If GSK does
not initiate such arbitration within such [*] ([*]) day period, it shall have
no further right to dispute CK's right to develop and commercialize such
compound(s), product(s) or Target(s). Any such dispute shall be finally settled
by binding arbitration in Chicago under the Licensing Rules of American
Arbitration Association by a single arbitrator appointed in accordance with such
rules. The arbitrator shall be a retired federal judge with experience trying
patent cases, and the Parties shall use their respective best efforts to

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obtain a final determination by the arbitrator within sixty (60) days after the
initiation of such proceeding. THE FOREGOING REMEDY SHALL BE THE PARTIES' SOLE
AND EXCLUSIVE REMEDY WITH RESPECT TO ANY DISPUTE DESCRIBED IN THIS SECTION
12.3.2.

                  12.3.3   Retention of Rights. Nothing in this Section 12.3
shall preclude GSK or CK from resorting to judicial or equitable remedies for
any disputes not within Section 12.3.1 or 12.3.2.

         12.4     Governing Law. This Agreement and any dispute arising from the
performance or breach hereof shall be governed by and construed and enforced in
accordance with the laws of the [*], U.S.A., without reference to conflicts of
laws principles.

         12.5     Assignment.

                  12.5.1   General. This Agreement shall not be assignable by
either Party to any Third Party hereto without the written consent of the other
Party hereto. Notwithstanding the foregoing, either Party may assign this
Agreement, without the written consent of the other Party, to an Affiliate or to
an entity that acquires all or substantially all of the business or assets of
such Party to which this Agreement pertains (whether by merger, reorganization,
acquisition, sale or otherwise), and agrees in writing to be bound by the terms
and conditions of this Agreement. Notwithstanding the foregoing, either Party
may assign and/or delegate any rights and/or obligations hereunder without the
consent of the other Party to an Affiliate that is at least ninety percent (90%)
owned by such Party, or, in the case of GSK, to an Affiliate that is at least
ninety percent (90%) owned, directly or indirectly, by the ultimate parent of
Glaxo Group Limited (for so long as such Party or parent maintains at least that
level of ownership); provided in each case, however, that such assignment shall
not relieve the assigning Party of any of its obligations hereunder. It is
understood that the provisions of Section 12.5.2 shall apply in the event of
assignment of this Agreement under the circumstances described therein. If any
permitted assignment would result in withholding or other similar taxes becoming
due on payments to the other Party under this Agreement, the assigning Party
shall be responsible for all such taxes and the amount of such taxes shall not
be withheld or otherwise deducted from the amounts payable to such other Party.
If, in such event, such other Party actually reduces the amount of income tax
paid by such Party as a result of using a credit for the amount of such
withholding or similar taxes paid by the assigning Party, then such other Party
shall promptly refund to the assigning Party the amount of such reduction in
income tax resulting from the use of such credit. No assignment and transfer
shall be valid and effective unless and until the assignee/transferee shall
agree in writing to be bound by the provisions of this Agreement. The terms and
conditions of this Agreement shall be binding on and inure to the benefit of the
permitted successors and assigns of the Parties.

                  12.5.2   Certain Matters Relating to Acquisitions. In the
event of an assignment of this Agreement to a Third Party, or another
transaction in which a Third Party becomes an Affiliate of CK that controls CK
(as "control" is defined in Section 1.2 above) (each such event, a "Subject
Transaction"), then the following shall apply:

* 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.

                                      -82-

<PAGE>

                           (a)      Notwithstanding the definitions of
Collaboration Technology, Post-Collaboration Technology, CK Patents and CK
Know-How, CK Existing Technology, Cytometrix Technology, Compounds, Development
Compounds, Licensed Products, CK Compounds, CK Products, CK Library Compounds,
or Mitotic Kinesin Targets (together, "Collective CK Technologies"), the
Collective CK Technologies shall not include any intellectual property or
subject matter (the "Previously Existing Subject Matter") that, prior to the
Subject Transaction, was held or Controlled by such Third Party (or an Affiliate
of such Third Party that was not an Affiliate of CK at the time of such
assignment or transaction, each such Third Party and Affiliate being referred to
as a "Subsequently Affiliated Company") and GSK shall have no right or license
under this Agreement to any such Previously Existing Subject Matter except as
may be agreed under Section 12.5.2(b)(i) or (b)(ii) below.

                           (b)      If, at the time of the Subject Transaction,
the Subsequently Affiliated Company had [*], or [*] for the [*] of [*] to [*]
which is then subject to [*] under [*] or [*], then:

                                    (i)      CK in its sole discretion, may
elect to [*], including any [*], with the [*] efforts under this Agreement, on
the same terms and conditions.

                                    (ii)     If CK does not make the election in
(i), then, on request by either Party, GSK and CK shall meet, together with
representatives of the Subsequently Affiliated Company, to discuss [*] to [*]
activities, including all relevant [*], on such terms as the parties may agree.
It is understood that any such [*] would [*] involve a [*] of the [*] granted to
CK and GSK hereunder. It is understood, however, that neither GSK nor CK shall
be obligated to enter into any agreement to so [*]. In the event the Parties do
not agree to so [*], then the provisions of subparagraphs (iii)-(vii) below
shall apply.

                                    (iii)    Following the Subject Transaction,
the [*] immediately prior to the Subject Transaction (the "[*]") shall [*] and
[*] to those that were [*] to research activities (A) in the Research Program
and (B) which generate [*] that would reasonably accrue to the Research Program
or that are reasonably necessary for CK to fulfill its obligations under the
Research Program, to the extent CK would otherwise have [*] and [*] had the
Subject Transaction not occurred. The obligations under this paragraph (b)(iii)
shall terminate on the [*] of the Effective Date of this Agreement.

                                    (iv)     [*] shall not disclose non-public
Collaboration Technology, Post-Collaboration Technology or GSK Existing
Technology to any Subsequently Affiliated Company for use in connection with the
research, development or commercialization of products within the Field, the
primary mode of pharmacological action of which is through the

* 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.

                                      -83-

<PAGE>

inhibition of one or more Mitotic Kinesin Targets, other than those CK Targets
for which the CK Product Option under Section 4.5 above does not apply at that
time (i.e., CK Products directed to such CK Targets would not be subject to the
CK Product Option) (such Mitotic Kinesin Targets, excluding such CK Targets,
being referred to as "Restricted Mitotic Kinesin Targets"), unless [*] could
have disclosed such item to a Third Party.

                                    (v)      No Subsequently Affiliated Company
shall have any license under Collaboration Technology, Post-Collaboration
Technology, GSK Existing Technology, or CK Existing Technology for any purpose
unless such license could also be granted to a Third Party herein.

                                    (vi)     The Parties shall use diligent
efforts to put procedures in place to [*] of GSK or CK Confidential Information
to a Subsequently Affiliated Company that would not [*] Third Party herein and
to prevent [*] of any [*], including requiring each Party's representatives on
the JRC, JDC, JSC and any employees performing research in connection with this
Agreement to [*] agreeing to comply with the [*] of this Agreement. Without
limiting the foregoing, any employee of [*] immediately prior to the Subject
Transaction who is transferred to a Subsequently Affiliated Company shall [*]
with respect to a Restricted Mitotic Kinesin Target at any Subsequently
Affiliated Company or in collaboration with personnel of such Subsequently
Affiliated Company, for so long as [*] activities with respect to such
Restricted Mitotic Kinesin Target are prohibited under Section 4.1.2 or 4.2.3
above.

                                    (vii)    Notwithstanding the foregoing, the
conditions of subparagraphs (iii)-(vi) above shall be deemed satisfied in all
respects, if such [*] (or its successor) is maintained and operated as an
independent company. Such entity shall be deemed to be operated as an
independent company if, after the Subject Transaction (A) [*] can remain fully
bound under all terms and conditions of this Agreement, (B) [*] has the
capability to perform as would have CK prior to the Subject Transaction for all
purposes under this Agreement and (C) [*] and the Subsequently Affiliated
Company contractually commit that there shall be no disclosures or licenses with
respect to Licensed Technology under this Agreement from [*] to the Subsequently
Affiliated Company that would not have been either (x) permitted to be disclosed
or granted to a Third Party under this Agreement or (y) permitted to be used or
disclosed by CK for its independent efforts under this Agreement.

                           (c)      Unless this Agreement is [*] under Section
12.5.2(b)(i) or (ii) above, the Collective CK Technologies shall not include any
intellectual property or subject matter created or acquired by such Subsequently
Affiliated Company following the Subject Transaction, and no activities of the
Subsequently Affiliated Company shall be deemed within the Research Program. It
is understood, however, that if Cytokinetics, Inc. (i.e., the Party to this
Agreement) is legally merged with and into another corporate entity, then the
resulting merged corporate entity shall be fully bound by all provisions of this
Agreement and shall not be a "Subsequently Affiliated Company" under this
Section 12.5.2.

* 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.

                                      -84-

<PAGE>

                           (d)      Subject to the foregoing and paragraph (b)
above, Sections 4.1.2 and 4.2.3 shall not apply with respect to activities of
the Subsequently Affiliated Company. In addition, subject to paragraph (b)
above, Section 2.6.4(b) shall not apply to a Subsequently Affiliated Company,
and no officer or representative of a Subsequently Affiliated Company shall be
required or permitted to serve on the JRC or JSC (e.g., under Section 2.2(a)
above).

                  12.5.3   Certain Additional Matters on Change of Control of
CK. Notwithstanding the provisions of Section 12.5.2, in the event CK assigns
this Agreement (i) to [*] [*] US Dollars ($[*]), or in (ii) the event that CK
merges or consolidates or enters into a similar transaction with such a
pharmaceutical or biotechnology entity in which such entity becomes an Affiliate
of CK, and, in either case, then upon request by GSK, the Parties will each use
their respective diligent efforts to put procedures into place to [*] under any
of Section 2.2, 3.2, 3.5, 7.2 and/or 7.4 above, including, without limitation,
requiring each Party's representatives on the JRC, JDC, JSC and any employees
performing research in connection with this Agreement to [*] agreeing to comply
with the [*] of this Agreement. It is understood that the provisions of Section
12.5.2 may also apply in the event of the occurrence of the events described in
this Section 12.5.3.

         12.6     Performance Warranty. Each Party hereby warrants and
guarantees the performance of any and all rights and obligations by its
Affiliate(s).

         12.7     Notices. All notices, requests and communications hereunder
shall be in writing and shall be personally delivered or sent by facsimile
transmission (confirmed by prepaid registered or certified mail, return receipt
requested or by international express delivery service) (e.g., Federal Express),
mailed by registered or certified mail (return receipt requested), postage
prepaid, or sent by international express courier service, and shall be deemed
to have been properly served to the addressee upon receipt of such written
communication, to following addresses of the Parties, or such other address as
may be specified in writing to the other Party hereto:

IF TO CK,

                  ADDRESSED TO: CYTOKINETICS, INC.
                                280 East Grand Avenue
                                South San Francisco, California 94080
                                Attention: Robert Blum,
                                            Vice President, Business Development
                                Telephone: (650) 624-3002
                                Telecopy: (650) 624-3010

* 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.

                                      -85-
<PAGE>

            WITH COPY TO: WILSON SONSINI GOODRICH & ROSATI
                          PROFESSIONAL CORPORATION
                          650 Page Mill Road
                          Palo Alto, CA 94304-1050
                          Attention: Kenneth A. Clark, Esq.
                          Telephone: (650) 493-9300
                          Telecopy: (650)493-6811

IF TO GSK,

            ADDRESSED TO: GLAXO GROUP LIMITED, DOING BUSINESS AS GLAXOSMITHKLINE
                          709 Swedeland Road
                          King of Prussia, Pennsylvania 19406
                          Attention: Vice President, Business Development
                          Telephone: (610) 270-5973
                          Telecopy: (610) 270-5962

          WITH A COPY TO: GLAXOSMITHKLINE
                          Corporate Legal Department
                          One Franklin Plaza
                          200 N. 16th Street/FP 2360
                          Philadelphia, PA 19103
                          Attention: Senior Vice President and Assistant
                                        General Counsel-R&D Legal Operations
                          Telephone: 215-751-4000
                          Telecopy: 215-751-3935

         12.8     Waiver. Neither Party may waive or release any of its rights
or interests in this Agreement except in writing. The failure of either Party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement shall not constitute a waiver of that right or excuse a
similar subsequent failure to perform any such term or condition. No waiver by
either Party of any condition or term in any one or more instances shall be
construed as a continuing waiver of such condition or term or of another
condition or term.

         12.9     Severability. If any provision hereof should be held invalid,
illegal or unenforceable in any jurisdiction, the Parties shall negotiate in
good faith a valid, legal and enforceable substitute provision that most nearly
reflects the original intent of the Parties and all other provisions hereof
shall remain in full force and effect in such jurisdiction and shall be
liberally construed in order to carry out the intentions of the Parties hereto
as nearly as may be possible. Such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of such provision in
any other jurisdiction. In the event a Party seeks to avoid a provision of this
Agreement by asserting that such provision is invalid, illegal or otherwise
unenforceable, the other Party shall have the right to terminate this Agreement
upon sixty (60) days' prior written notice to the asserting Party, unless such
assertion is eliminated and the effect of such assertion cured within such sixty
(60) day period. Any termination in accordance with the foregoing sentence shall
be deemed a termination pursuant

                                      -86-
<PAGE>

to Section 11.3.1 if the Party who made such assertion was GSK, and shall be
deemed a termination under Section 11.2 by reason of a breach by CK, if CK is
the Party who made such assertion.

         12.10    Entire Agreement. This Agreement and the accompanying Stock
Purchase Agreement set forth all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto and supersede and terminate all prior agreements and understanding
between the Parties. There are no covenants, promises, agreements, warranties,
representations, conditions or understandings, either oral or written, between
the Parties other than as set forth herein and therein. No subsequent
alteration, amendment, change 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.

         12.11    Independent Contractors. Nothing herein shall be construed to
create any relationship of employer and employee, agent and principal,
partnership or joint venture between the Parties. Each Party is an independent
contractor. Neither Party shall assume, either directly or indirectly, any
liability of or for the other Party. Neither Party shall have the authority to
bind or obligate the other Party and neither Party shall represent that it has
such authority.

         12.12    Headings. Headings used herein are for convenience only and
shall not in any way affect the construction of or be taken into consideration
in interpreting this Agreement.

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

                             ARTICLE XIII - CLOSING

         13.1     Upon the terms and subject to the conditions of this
Agreement, the closing of this Agreement and the closing of the Stock Purchase
Agreement shall take place at a closing (the "Closing") to be held at the
offices of Wilson Sonsini Goodrich & Rosati, at 10:00 A.M. Pacific Daylight Time
on such date as agreed by the Parties (the "Closing Date"), or at such other
place or at such other time contemporaneous with satisfaction of the last
closing condition as GSK and CK may mutually agree upon in writing.

                                      -87-
<PAGE>

IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their duly authorized representatives as of the date and year first
above written.

CYTOKINETICS, INC.                      GLAXO GROUP LIMITED,
                                        A GLAXOSMITHKLINE CORPORATION

By: /s/ James H. Sabry                  By: /s/ Tadataka Yamada
    ---------------------------------       -----------------------------
Name:  James H. Sabry, M. D., Ph. D.    Name:  Dr. Tadataka Yamada

Title: President and CEO                Title: Chairman, R&D

Date:  June 20, 2001                    Date:  6/20/01

                                      -1-
<PAGE>

                                  EXHIBIT 1.17

                                COMPOUND CRITERIA

[*]


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  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>

                                  EXHIBIT 1.55

                             [*] PROGRAM ACTIVITIES

[*]

* 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.
<PAGE>

                                  EXHIBIT 1.65

                           TRACTABLE COMPOUND CRITERIA

[*]


* 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.
<PAGE>

                                   EXHIBIT 2.5

                          DEVELOPMENT COMPOUND CRITERIA

[*]


* 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.

<PAGE>

                                  EXHIBIT 4.5.1

                              CLINICAL REPORT FORM

                                      [*]

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  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>

                                  EXHIBIT 6.3.2

                                FEASIBILITY STUDY

                                      [*]

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  the Commission. Confidential treatment has been requested with respect to the
  omitted portions.
<PAGE>

                                EXHIBIT 6.3.2(b)

                                      [*]

[*]

 * 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.

<PAGE>
                                  EXHIBIT 6.4.4

                                      [*]

                                      [*]


* 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.


<PAGE>

                                  EXHIBIT 10.1

                             THIRD PARTY AGREEMENTS

<TABLE>
<CAPTION>
EFFECTIVE DATE               COMPANY/CONSULTANT                              AGREEMENT WITH CYTOKINETICS
--------------               ------------------                              ---------------------------
<S>                  <C>                                                <C>
[*]                  [*]                                                [*]

[*]                  [*]                                                [*]

[*]                  [*]                                                [*]

[*]                  [*]                                                [*]

[*]                  [*]                                                [*]
</TABLE>

* 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.