Document:

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                                                                   Exhibit 10.34

                                                                  EXECUTION COPY

                                LICENSE AGREEMENT

       THIS LICENSE AGREEMENT (the "Agreement") is entered into as of May 4_,
2005 (the "Effective Date") by and between HENKAN PHARMACEUTICAL COMPANY, a
company limited by shares organized under the law of Taiwan, R.O.C., with
offices at 30th Floor, 99 Tun Hwa South Road, Section 2, Taipei, Taiwan
("HenKan") and COMBINATORX, INCORPORATED, a corporation incorporated under the
law of Delaware, with offices at 650 Albany Street, Boston, Massachusetts 02118
("CombinatoRx"). Each of HenKan and CombinatoRx may be referred to herein as a
"Party," or, collectively, as the "Parties."

                                    RECITALS

       WHEREAS, HenKan is engaged in the development and commercialization of
pharmaceutical products and is interested in developing and commercializing the
Product (as defined below);

       WHEREAS, CombinatoRx owns certain rights to the Product and is willing to
grant some of these rights to HenKan on the terms set forth herein; and

       WHEREAS, HenKan and CombinatoRx desire to collaborate on the further
preclinical and clinical development, regulatory approval, and commercialization
of the Product, with the intent that HenKan will develop and commercialize the
Product in the Field (as defined below) in the Territory (as defined below) and
under the terms of this Agreement.

       WHEREAS, CombinatoRx and HenKan further desire to coordinate and
contribute to the global development of the Product by (i) establishing HenKan
as one site of a CombinatoRx global multi-centered pivotal trial for the Product
and by (ii) HenKan contributing, with its own resources, to demonstrating the
clinical utility of and seeking regulatory approval for the product in an
oncology indication that is different from the indications being pursued by
CombinatoRx, where such indication is scientifically reasonable based upon the
preclinical data.

       NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the Parties agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

As used throughout this Agreement, the following capitalized terms shall have
the meanings ascribed to them below:

       1.1.   "ADVERSE EXPERIENCES" means (i) information on any serious
unexpected adverse event related to or potentially related to the Product if the
relationship of the serious adverse event to the Product is unknown, for any
indication, (ii) any complaint related to the Product if the relationship of the
complaint to the Product is unknown, for any indication, (iii) any information,
regardless of source, sufficient to warrant the consideration of Product

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administration changes or (iv) information from in vitro or animal studies
suggesting a significant hazard to humans. The phrase "Adverse Experiences"
includes without limitation information relating to any experience or event that
(a) suggests a significant hazard, contraindication, side effect or precaution,
(b) is fatal or life threatening, (c) is permanently disabling, (d) requires or
prolongs hospitalization, (e) involves a congenital anomaly, cancer or overdose,
(f) is one not identified in nature, specificity, severity or frequency in the
current investigator brochure or the approved product labeling for such product,
(g) includes findings from tests in laboratory animals that suggest a
significant safety risk to humans, including without limitation reports of
mutagenicity, teratogenicity or carcinogenicity, or (f) is otherwise implicated
or described by any applicable United States regulations (21 CFR 312, 314, 600)
and/or any foreign equivalent regulatory authority regulations.

       1.2.   "AFFILIATE" shall mean any company or entity controlled by,
controlling or under common control with a Party hereto, whereby the term
"control" shall include without limitation the ownership of fifty percent (50%)
or more of any entity's voting stock or participating profit interest or having
the power to directly or indirectly direct the management or determine the
policies of an entity.

       1.3.   "BUY BACK OPTION" shall have the meaning set forth in Section 2.2.

       1.4.   "CLAIM" shall mean any and all liabilities, damages, losses,
settlements, claims, actions, suits, penalties, fines, costs or expenses
(including, without limitation, reasonable attorneys' fees).

       1.5.   "COMBINATORX PRODUCT KNOW-HOW" shall mean all inventions,
concepts, discoveries, processes, Information, data, biological materials,
methods, formulations, formulae, know-how and the like that may be related to
any patent application or patent included in the CombinatoRx Product Patents and
that

              (a)    have been discovered, invented or developed by or on behalf
of CombinatoRx prior to or after the Effective Date; and

              (b)    are necessary or useful in connection with the development,
manufacture, use or sale of the Product in the Field in the Territory.

       1.6.   "COMBINATORX PRODUCT PATENTS" shall mean and collectively includes
the patent applications and patents set forth in Exhibit A attached hereto,
which shall be updated to reflect additional patents issued and patent
applications filed during the term of this Agreement, and all reissues,
extensions, renewals, substitutions, supplementary protection certificates,
additions, continuations, divisions and continuations-in-part thereof, but, in
the case of all of the foregoing, only to the extent that the foregoing cover
essentially the same subject matter as claimed in the patent applications and
patents included in Exhibit A on the Effective Date.

       1.7.   "COMBINATORX PRODUCT TECHNOLOGY" shall mean the CombinatoRx
Product Patents and the CombinatoRx Product Know-How.

       1.8.   "COMMERCIALLY REASONABLE EFFORTS" shall mean efforts and resources
commensurate with the efforts and resources in research and development used by
a reasonable

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party, possessing resources similar to the resources possessed by
the party to which this definition is applied, for projects of commensurate
economic value in consideration of the continuing progress and state of
scientific knowledge and in consideration of reasonably available resources, at
the time.

       1.9.   "CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Section 9.1 hereof.

       1.10.  "DOLLAR" AND "$" shall mean United States dollars.

       1.11.  "FDA" shall mean the United States Food and Drug Administration
and any successor thereto.

       1.12.  "FIELD" shall mean all therapeutic and diagnostic applications in
oncology.

       1.13.  "FIRST COMMERCIAL SALE" shall mean the first sale or other
disposition for value of the Product, in a final dosage form packaged for the
ultimate consumer, to an independent Third Party following Regulatory Approval,
by HenKan, its Affiliates or a sublicensee of HenKan.

       1.14.  "FORCE MAJEURE" shall mean any act of God, any accident,
explosion, fire, storm, earthquake, flood, drought, peril of the sea, riot,
embargo, war or foreign, federal, state or municipal order of general
application, seizure, requisition or allocation, any failure or delay of
transportation, shortage of or inability to obtain supplies, equipment, fuel or
labor or any other circumstances or event beyond the reasonable control of the
Party relying upon such circumstance or event to excuse its non-performance.

       1.15.  "GROSS SALES" means the gross amount invoiced on sales to
independent Third Parties of the Product by either Party, as applicable, or any
of such Party's Affiliates and/or sublicensees.

       1.16.  "HCC" means Hepatocellular Carcinoma.

       1.17.  "HENKAN DEVELOPMENT COSTS" shall mean, as of a Buy Back Option
exercise date, the out-of-pocket and fully burdened internal costs incurred by
HenKan in the development of the Product attributable to the countries in the
Territory subject to the Buy Back Option, including any payment HenKan has
already made under Sections 5.1.1 and Sections 5.1.2. Any development costs
attributable to more than one country in the Territory shall be allocated
equally among all countries in the Territory, PROVIDED, HOWEVER, that such
allocation may be adjusted by mutual agreement of the Parties on the basis of
such countries expected market share within the Territory as of the Buy Back
Option exercise date.

       1.18.  "HENKAN INVENTION" shall mean any invention, development,
discovery, method, process, Information or other know-how that is conceived of
or discovered by HenKan's employees, consultants, agents or sublicensees through
the exercise of the rights to the Product granted pursuant to this Agreement,
except to the extent that any of the foregoing directly relates to the
manufacturing, formulation, dosing, use, or sale of the Product.

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       1.19.  "HENKAN PATENT" shall mean any patent application or patent
covering a HenKan Invention.

       1.20.  "HENKAN PRODUCT INVENTION" shall mean any invention, development,
discovery, method, process, Information or other know-how that is conceived of
or discovered by HenKan's employees, consultants, agents or sublicensees through
the exercise of the rights to the Product by HenKan or its employees,
consultants, agents or sublicensees pursuant to this Agreement and that directly
relates to the manufacturing, formulation, dosing, use, or sale of the Product.

       1.21.  "HENKAN PRODUCT PATENT" shall mean any patent application or
patent covering a HenKan Product Invention.

       1.22.  "INFORMATION" shall mean information and data of any type and in
any tangible or intangible form, including without limitation inventions,
practices, methods, techniques, specifications, formulations, formulae,
knowledge, know-how, skill, experience, test data including pharmacological,
biological, chemical, biochemical, toxicological and clinical test data,
analytical and quality control data, stability data, results of studies and
patent and other legal information or descriptions.

       1.23.  "IND" shall mean the foreign equivalent in any country in the
Territory of an Investigational New Drug filing made with the FDA.

       1.24.  "JOINT STEERING COMMITTEE" shall mean a committee comprised of
equal numbers of representatives of CombinatoRx and HenKan having the
responsibilities described in Article 4 hereof.

       1.25.  "NDA" shall mean the foreign equivalent in any country in the
Territory of a New Drug Application, or other application for the approval to
market the Product, which is submitted to the FDA.

       1.26.  "NET SALES" shall mean Gross Sales less the sum of (i) trade,
quantity and cash discounts actually allowed or paid; (ii) refunds, rebates,
chargebacks, retroactive price adjustments (including Medicaid, managed care and
similar types of rebates), and service allowances actually allowed or paid;
(iii) credits or allowances given or made for rejections or returns of previous
sales of the Product or for wastage replacement actually taken or allowed; (iv)
taxes, duties or other governmental charges levied on the sale, transportation
or delivery of the Product and paid by the selling party; and (v) charges for
shipping, freight and insurance directly related to the distribution of the
Product (excluding amounts reimbursed by third party customers).

       No deductions shall be made for commissions paid to individuals whether
they are with independent sales agencies or regularly employed by such seller
and on its payroll, or for the cost of collections.

       Transfers between a Party and any of its Affiliates for resale shall not
be considered a sale, and in such cases, Net Sales shall be based on the Net
Sales for the Products received by the Affiliate who sells to a Third Party.

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       1.27.  "PATENT ROYALTY TERM" shall mean the period beginning on the First
Commercial Sale of a Product in the Territory and ending, on a country by
country basis, upon the later of (i) fifteen (15) years following the Effective
Date or (ii) the latest date on which such a Product is covered by a Valid Claim
in each country in the Territory.

       1.28.  "PHASE II" shall mean a clinical trial which is defined as "Phase
II" in FDA regulations as amended from time to time, or any foreign equivalent
thereof.

       1.29.  "PHASE III" shall mean a clinical trial which is defined as "Phase
III" in FDA regulations as amended from time to time, or any foreign equivalent
thereof.

       1.30.  "PRODUCT" shall mean CombinatoRx's product under development known
as CRx-026, including a combination of chlorpromazine and pentamidine, and all
formulations of CRx-026.

       1.31.  "REGULATORY APPROVAL" shall mean, with respect to a country, all
approvals (including price and reimbursement approvals), licenses, registrations
or authorizations based on determinations of quality, safety and efficacy of any
federal, state or local regulatory agency, department, bureau or other
government entity, necessary for the use, storage, import, transport and sale of
the Product in such country.

       1.32.  "TERRITORY" shall mean Taiwan, R.O.C., People's Republic of China
and South Korea.

       1.33.  "THIRD PARTY" shall mean any individual or entity other than
HenKan or CombinatoRx or their Affiliates or any sublicensees.

       1.34.  "TRADEMARKS" shall mean all trademarks developed, owned or
controlled by CombinatoRx for commercialization of the Product (in countries
either within or outside of the Territory) for use in connection with the
commercialization of the Product in the Territory.

       1.35.  "VALID CLAIM" shall mean (i) any claim of an issued and unexpired
patent included under the CombinatoRx Product Patents that has not been revoked
or held unenforceable or invalid by a decision of a court or other governmental
authority of competent jurisdiction or unappealed within the time allowable for
appeal, and that has not been explicitly disclaimed, or admitted by CombinatoRx
to be invalid or unenforceable or of a scope not covering the Product through
reissue, disclaimer or otherwise, and (ii) any claim of a pending application
included under the CombinatoRx Product Patents being prosecuted in good faith
that has not been abandoned or finally rejected and that has been pending for
not more than six (6) years after the filing date from which such claim takes
priority. For clarity, any claim of a patent or patent application included
under the CombinatoRx Product Patents that ceases to be a Valid Claim as a
result of pending too long or otherwise, but subsequently issues and is
otherwise described by clause (i) of the foregoing sentence shall be a Valid
Claim for purposes of this definition.

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                                    ARTICLE 2
                                 LICENSE GRANTS

       2.1.   LICENSES TO HENKAN.

              2.1.1.  EXCLUSIVE LICENSE IN THE FIELD IN THE TERRITORY. Subject
to the terms and conditions of this Agreement, CombinatoRx hereby grants to
HenKan an exclusive, perpetual, irrevocable, royalty-bearing license, with the
right to sublicense, under CombinatoRx's rights in the CombinatoRx Product
Technology to develop, use, make, have made, sell, offer for sale and import and
export the Product in the Field in the Territory. HenKan shall not have any
rights to sell the Product outside of the Territory and shall use Commercially
Reasonable Efforts to ensure that no distributor, reseller or other agent of
HenKan shall sell or distribute the Product outside of the Territory.

       In addition, subject to the terms and conditions of this Agreement,
CombinatoRx hereby grants to HenKan an exclusive license in the Territory to all
Trademarks. HenKan shall use the Trademarks in connection with the
commercialization of the Product and shall, to the extent permitted by law,
include CombinatoRx's name on all Product labels. HenKan acknowledges and agrees
that CombinatoRx is the sole and exclusive owner of the Trademarks. All goodwill
associated with the Trademarks arising from any and all use of the Trademarks
shall inure to the sole benefit of CombinatoRx which shall have sole and
exclusive right to file and prosecute registrations for such Trademarks
throughout the Territory. HenKan shall take no action to contradict, deny,
dilute, or erode HenKan's or CombinatoRx's respective rights, title, and
interests in and to any Trademarks. Without limitation, HenKan shall not use or
adopt, or purport to grant to any other party any right to use or adopt, any
mark that is confusingly similar to any Trademark. Further, HenKan shall not
file, initiate or assert any litigation, action, opposition, cancellation or
other proceeding or claim directed at or resulting in HenKan's or CombinatoRx's
loss of any right, title or interest in or to any Trademarks.

       In connection with the development, manufacture, use or sale of the
Product in the Field in the Territory by HenKan, CombinatoRx shall, upon the
Effective Date, deliver to HenKan a copy of all of the then existing CombinatoRx
Product Know-How in tangible form to the extent it can practically be reduced to
tangible form, and shall promptly deliver to HenKan a copy of any additional
CombinatoRx Product Know-How in tangible form, to the extent it can practically
be reduced to tangible form, that is discovered, invented or developed after the
Effective Date.

              2.1.2.  PARTICIPATION IN COMBINATORX CLINICAL TRIALS. CombinatoRx
shall use Commercially Reasonable efforts to provide HenKan the opportunity to
manage, at its own expense under CombinatoRx's supervision and direction (to the
extent CombinatoRx supervises and directs other trial sites) and in accordance
with CombinatoRx's protocol, a local site in the Territory as part of the
CombinatoRx multi-site Phase II and Phase III pivotal studies for the Product.
In such event, the provisions of Article 4 shall apply.

              2.1.3.  RIGHT OF FIRST NEGOTIATION TO ADDITIONAL COMBINATORX
PRODUCTS. CombinatoRx hereby grants HenKan a right of first negotiation,
exercisable for 30 days

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following CombinatoRx's notice to HenKan (the "Negotiation Notice") that it has
designated a program as a candidate for out-licensing in the Territory and after
the availability of data from the initial Phase II trials of such programs, for
development and commercialization rights to any such designated program in the
Territory. To facilitate the negotiation process and/or the exercise of the
right of first refusal, CombinatoRx shall include in the Negotiation Notice
reasonably detailed information which pertains to such candidate program,
including without limitation the contemplated principal terms and conditions of
such out-licensing, and which CombinatoRx would distribute to the participating
parties as if there were an open bid or auction. The rights granted pursuant to
this Section 2.1.3 shall apply to the following list of CombinatoRx programs
after the delivery of the Negotiation Notice by CombinatoRx: CRx-139, CRx-119,
CRx-102, CRx-170, CRx-150 and CRx-140.

       If HenKan exercises such right of first negotiation with respect to any
of the programs designated by CombinatoRx, the Parties shall negotiate in good
faith for a period of not less than 90 days (which may be extended by mutual
agreement of the Parties) the terms of an agreement regarding the development
and commercialization of such designated program in the Territory. If, despite
good faith efforts, the Parties are unable to reach agreement on the terms of
such development and commercialization agreement, CombinatoRx shall be free to
license such designated program to any other Third Party for rights in the
Territory.

              2.1.4.  HENKAN SUBLICENSE LIMITATIONS. HenKan shall be permitted
to grant a sublicense to the rights granted to it hereunder only with the prior
consent of CombinatoRx, such consent not to be unreasonably withheld. Any
sublicense by HenKan of the rights granted to HenKan hereunder shall be
consistent with the terms of this Agreement and shall include an obligation for
the sublicensee to comply with the applicable obligations of this Agreement
including, without limitation, Section 2.3 pertaining the grant of rights to
CombinatoRx, Article 5 pertaining to payments, Article 7 pertaining to records
and audits and Article 9 pertaining to confidentiality.

       2.2.   BUY BACK OPTION.

              2.2.1.  During the term of this Agreement, in the event that
CombinatoRx has a corporate opportunity including without limitation a merger,
acquisition, reorganization, business combination, sale of all or substantially
all of its assets, or the like (the "CombinatoRx Opportunity"), and that the
CombinatoRx Opportunity is conditioned upon CombinatoRx's consolidating its
global licensing activities or programs with respect to the Products, then
CombinatoRx shall have the option to buy back the rights granted to HenKan under
Section 2.1.1 (a "Buy Back Option") by paying the Purchase Price set forth in
Section 2.2.2 below. A Buy Back Option may be exercised on a country-by-country
basis and shall expire with respect to each country in the Territory upon the
First Commercial Sale in such country.

              2.2.2.  To exercise the Buy Back Option with respect to a country
in the Territory, CombinatoRx shall notify HenKan in writing (the "Buy Back
Notice") of its desire to exercise the Buy Back Option with respect to such
country prior to the expiration of the Buy Back Option in such country. The
purchase price for the exercise of the Buy Back Option (the "Purchase Price")
shall be equal to the HenKan Development Cost plus the applicable Premium listed
below, plus an obligation of CombinatoRx (or its successors or assigns, as the
case may

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be) to pay to HenKan a royalty on Net Sales in the Territory, for the Patent
Royalty Term (as set forth in Section 1.27), at the rates set forth below.
HenKan shall, within 30 days of receipt of the Buy Back Notice, provide
CombinatoRx with a detailed accounting of the HenKan Development Costs for such
country as of the date of HenKan's receipt of the Buy Back Notice. If
CombinatoRx disputes HenKan's accounting of the HenKan Development Costs,
CombinatoRx may retain an independent certified public accountant or auditor
reasonably acceptable to HenKan to inspect HenKan's books and records for the
purpose of verifying HenKan's accounting of the HenKan Development Costs. In the
event that any such audit discloses any deviation from the HenKan Development
Costs reported by HenKan, the Purchase Price shall be based on the determination
of the audit. Further, if such audit discloses that the HenKan Development Costs
are less than the amount of the HenKan Development Costs reported by HenKan by a
difference of greater than five percent (5%), then HenKan shall promptly pay the
reasonable costs of such audit after receipt of CombinatoRx's bill/invoice for
such audit. The results of such audit, and any and all information or data in
any form disclosed pursuant hereto, shall be deemed Confidential Information of
HenKan, and the provisions of Article 9 shall apply thereto.

<Table>
<Caption>
TIME OF EXERCISE OF THE BUY BACK OPTION                             PREMIUM  ROYALTY RATE(1)
---------------------------------------                             -------  ---------------
<S>                                                                     <C>             <C>
From Effective Date through the end of a Phase II Trial                 100%             1.5%
From the end of the Phase II through the end of the Phase III           200%            1.75%
After the end of the Phase III Trial                                    300%             2.5%
</Table>

       As used in the above table, the "end" of a Trial shall mean the
       completion of the final study report for such Trial.
       (1) Except as noted above, the terms regarding the payment of royalties
       from CombinatoRx (or its successors or assigns, as appropriate) to HenKan
       shall be identical (to the maximum extent possible) to those set forth in
       this Agreement for royalty payments from HenKan to CombinatoRx.

              2.2.3.  CombinatoRx may, within twenty (20) days of the later of
(i) its receipt of the HenKan's accounting of the HenKan Development Costs
described in Section 2.2.2 or (ii) the final determination of the audit of the
HenKan Development Costs pursuant to Section 2.2.2, revoke its exercise of the
Buy Back Option in such country (without prejudice to its right to exercise the
Buy Back Option with respect to such country at a later date). If CombinatoRx
does not revoke its exercise of the Buy Back Option within such 20-day period,
then CombinatoRx (or its successors or assigns, as the case may be) shall pay to
HenKan, within 30 days of the expiration of such 20-day period, 25% of the
Purchase Price, and either (a) the remainder of the Purchase price upon or
promptly after the closing of the transactions contemplated by the Corporate
Opportunity or (b) additional 25% of the Purchase Price on or before each of the
90th, 180th and 270th day following the date of the first payment (each such
payment, a "Purchase Price Installment"), whichever pays the Purchase Price
sooner. Each payment, including each Purchase Price Installment, shall be paid
in United States dollars, except that, if, at the time a particular payment is
due, CombinatoRx's common stock is registered under the Securities Exchange Act
of 1934, as amended, such payment may, subject to HenKan's consent not to be
unreasonably withheld, be paid either in cash or shares of CombinatoRx common
stock, which, for such purposes, shall be valued at the average of the closing
price of such common stock on

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the principal market on which such common stock is traded for the 10 consecutive
trading days ending on the third trading day prior to the relevant payment date.

              2.2.4.  Upon exercise of the Buy Back Option, all licenses to
HenKan hereunder shall terminate with respect to the country for which the Buy
Back Option has been exercised, and the provisions of Sections 14.4 and 14.5
shall apply with respect to such country.

       2.3    LICENSES TO COMBINATORX.

              2.3.1   LICENSE TO HENKAN PRODUCT INVENTIONS. HenKan hereby grants
to CombinatoRx an exclusive, perpetual, irrevocable, royalty-free license, with
the right to sublicense, under HenKan's rights in the HenKan Product Inventions
to develop, use, make, have made, sell, offer for sale and import and export
products and services outside of the Field in the Territory and in and outside
of the Field outside of the Territory; provided that, in the event that this
Agreement is terminated for any reason other than by HenKan pursuant to Section
14.2.1, the license grant under this Section shall become an exclusive license
in and outside of the Field throughout the world.

              2.3.2   LICENSE TO HENKAN INVENTIONS. Subject to an agreement
between the Parties in connection with the subject matter of this Section 2.3.2,
HenKan will grant to CombinatoRx a nonexclusive, nontransferable, perpetual,
irrevocable, royalty-bearing license, with the right to sublicense as set forth
in Section 2.3.3, under HenKan's rights in the HenKan Inventions to develop,
use, make, have made, sell, offer for sale and import and export products
outside of the Territory. The Parties will negotiate in good faith the terms of
such agreement including reasonable license fee and/or royalties provisions.

              2.3.3   COMBINATORX SUBLICENSE LIMITATIONS. CombinatoRx shall be
permitted to grant a sublicense to the rights granted to it under Sections 2.3.2
only with the prior consent of HenKan, such consent not to be unreasonably
withheld. Any sublicense by CombinatoRx of the rights granted to CombinatoRx
under Sections 2.3.2 shall be consistent with the terms of the agreement
described in Sections 2.3.2 and shall include an obligation for the sublicensee
to comply with the applicable obligations of such agreement.

                                    ARTICLE 3
                                    DILIGENCE

       3.1.   DILIGENCE.

              3.1.1.  PRODUCT DEVELOPMENT AND SUPPLY. HenKan shall use
Commercially Reasonable Efforts to develop the Product in each country in the
Territory as soon as practicable. Without limiting the foregoing, HenKan shall
conduct development with respect to the Product in accordance with the following
timeline: (i) initiation of first clinical trial of the Product for HCC or such
other indication mutually agreed to by the Parties (the "Initial Indication")
within a reasonable timeframe after CombinatoRx makes available its own
formulation of the Product; and (ii) initiation of preclinical studies in
support of the Initial Indication for the Product no later than June 1, 2005 and
the joint publication with CombinatoRx of such data at the appropriate
scientific conferences in 2005 and 2006. If the data from the clinical trials do
not support continued development of the Product for the Initial Indication,
then another indication (the

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"Substitute Indication") will be selected that (i) is scientifically supported
by the preclinical data for the Product and (ii) is mutually agreed to by the
Parties, and the diligence obligations of this Article 3 shall apply with
respect to such Substitute Indication.

       CombinatoRx will be HenKan's exclusive supplier of the Product for
preclinical studies and for clinical trials in the Territory at CombinatoRx's
out-of-pocket and fully burdened internal costs without additional mark-up.
HenKan shall provide CombinatoRx with reasonable forecasts and such prior
notices of its requirements of the Product as CombinatoRx may reasonably
require. If HenKan intends such forecasts or prior notices to be firm offers, it
shall accompany such firm orders with payment in full for the amount due for
such order of Product sufficiently in advance of the delivery date for such firm
order as CombinatoRx may reasonably request.

              3.1.2.  PRODUCT COMMERCIALIZATION. HenKan agrees to use
Commercially Reasonable Efforts to obtain Regulatory Approval for the Initial
Indication or the Substitute Indication for and to launch and continue
commercialization of the Product in each country in the Territory as soon as
reasonably possible after obtaining the first Regulatory Approval for such
Product.

              HenKan will be permitted to contract directly with CombinatoRx's
supplier to obtain finished Product by itself or through a Third Party
manufacturer according to local specifications.

       3.2.   EFFECT OF FAILURE TO SATISFY DILIGENCE OBLIGATIONS. If all of
HenKan and/or its sublicensees fail to comply with the development and
commercialization obligations described in Section 3.1 with respect to the
Product and fails to remedy such failure within sixty (60) days after written
notice of such failure by CombinatoRx, CombinatoRx shall have the right to
terminate this Agreement pursuant to Section 14.2.3 hereof.

                                    ARTICLE 4
                       COORDINATION OF GLOBAL DEVELOPMENT

       4.1.   INTEGRATION WITH GLOBAL DEVELOPMENT ACTIVITIES OF THE PRODUCT.
Except as set forth below in this Section 4.1, preclinical and clinical studies
of the Product by HenKan, and the publication of data from these studies, will
be conducted in a manner consistent with CombinatoRx's global development
activities of the Product, as monitored through the Joint Steering Committee.
Notwithstanding the foregoing:

              4.1.1.  All of HenKan's preclinical and clinical plans, protocols,
investigators and regulatory submissions related to the Product shall each be
subject to prior approval by CombinatoRx, such approval not to be unreasonably
withheld.

              4.1.2.  All preclinical and clinical data, including case reports
and data tables generated by or on behalf of HenKan will be shared with
CombinatoRx in a form consistent with FDA reporting requirements.

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              4.1.3.  Adverse Experiences shall be promptly communicated by each
Party to the other, along with all supporting documentation in a manner
consistent with applicable regulatory authority reporting requirements.

              4.1.4.  CombinatoRx shall have the option to file data provided by
HenKan as part of an amendment to CombinatoRx's IND and as part of CombinatoRx's
NDA. HenKan shall provide to CombinatoRx or file with any regulatory authority
requested by CombinatoRx any necessary documentation to permit CombinatoRx to
include such data in its regulatory filings. CombinatoRx will use Commercially
Reasonable efforts to amend its IND regarding the Product to include protocols
of HenKan that have been approved by CombinatoRx.

              4.1.5.  CombinatoRx shall provide HenKan with a right of reference
to the data included in its regulatory submissions regarding the Product outside
of the Territory, and shall file with any regulatory authority requested by
CombinatoRx any necessary documentation to permit HenKan to include such data in
its regulatory filings.

       4.2.   JOINT STEERING COMMITTEE:

              4.2.1.  Creation and Overview: within thirty (30) days following
the Effective Date, each Party shall nominate 3 members of a Joint Steering
Committee. The Parties may agree to change the total number of representatives
on the Joint Steering Committee, provided that the Parties always have an equal
number of representatives. The Chairperson of the Joint Steering Committee shall
be either a representative of CombinatoRx or a representative of HenKan, on an
alternate basis annually. Each Party may replace any of its Joint Steering
Committee representatives at any time upon written notice to the other Party.
The Joint Steering Committee may invite non-members to participate in the
discussions and meetings of the Joint Steering Committee, provided that such
participants shall have no vote and shall follow the order of the meeting. Each
Party shall be responsible for all travel and related costs for such Party's
representatives to attend meetings of, and otherwise participate on, the Joint
Steering Committee. Subject to Section 4.1.1, the purpose of the Joint Steering
Committee shall be (i) to coordinate and oversee the activities of the Parties
with respect development of the Products and (ii) coordinate the matters
described in Section 4.1.

              4.2.2.  JOINT STEERING COMMITTEE MEETINGS. The Joint Steering
Committee shall meet at such times and places as shall be mutually agreed by the
Parties. Meetings will be in-person or by video or teleconference, as the
Parties may agree. In the event that a Joint Steering Committee member of a
Party cannot attend a meeting, such Party shall have the right to nominate
another representative of that Party to attend the meeting, provided that such
representative is reasonably experienced in the areas for which such Joint
Steering Committee member is responsible. In-person meetings shall be held at
such location as mutually agreed upon by the Parties. The Chairperson shall
prepare and distribute to the Joint Steering Committee members an agenda for
each Joint Steering Committee meeting at least ten (10) Business Days before the
meeting. A Joint Steering Committee representative of the Party hosting the
meeting shall serve as Secretary of that meeting. The Secretary of the meeting
shall prepare and distribute to all members of the Joint Steering Committee
draft minutes of the meeting within five (5) Business Days after of the meeting
for review and comment by the other Joint Steering Committee members. Such
minutes shall provide a description in reasonable

                                       11
<Page>

detail of the discussions at the meeting and a list of any actions, decisions or
determinations approved by the Joint Steering Committee. After receipt of
comments from other Joint Steering Committee members and incorporation of such
comments as appropriate in the draft minutes, the Secretary shall provide the
Chairperson with the final draft minutes. The Chairperson shall distribute the
final minutes of each meeting to the members of the Joint Steering Committee for
final review and approval no later than twenty (20) Business Days after a
meeting. Minutes will be approved no later than the next meeting of the Joint
Steering Committee.

              4.2.3.  JOINT STEERING COMMITTEE DECISION MAKING. At least
four (4) members of the Joint Steering Committee shall constitute a quorum for
any meeting of the Joint Steering Committee, provided that at least two (2)
members from each Party are present. All decisions of the Joint Steering
Committee shall be made on a unanimous basis of all Joint Steering Committee
members participating in the meeting where a quorum is present. If the Joint
Steering Committee cannot reach agreement with respect to a particular issue
before it within thirty (30) days, then the Chairperson and a Joint Steering
Team member selected by the Party not designating the then current Chairperson
shall meet again (via phone or videoconference) within two (2) working days
after the date of the Joint Steering Committee vote on such matter or the
expiration of such thirty (30) day period, whichever is earlier, and will
negotiate in good faith to reach consensus. If the Chairperson and such other
member are unable to reach agreement after fourteen (14) days, the matter shall
be resolved in accordance with the dispute resolution mechanism described in
Article 15.

                                    ARTICLE 5
                                    PAYMENTS

       5.1.   PAYMENTS TO COMBINATORX.

              5.1.1.  UPFRONT PAYMENT. HenKan shall pay CombinatoRx an upfront
payment (the "Upfront Payment") of Five Hundred Thousand Dollars ($500,000),
payable on the Effective Date. The Upfront Payment may be credited to the
upfront payments associated with the licensing of other CombinatoRx products in
the event that, at the time the Parties enter into such additional license or
licenses, this Agreement has been terminated or is expected to be terminated due
to the fact that, after completion of both the ongoing clinical trials by
CombinatoRx and the first clinical trial by HenKan for HCC or such other
indication mutually agreed by the Parties, as described in Section 3.1.1, the
development of the Product has not advanced to such stage that warrants the
further development of the Product.

              5.1.2.  CLINICAL DEVELOPMENT MILESTONES. HenKan shall make the
payments set forth below for the Product on reaching the milestone events
described below, either by itself or through any sublicensee, ("Milestone
Events") in accordance with this Section. Payments for Clinical Development
Milestones shall be payable upon the occurrence of a Milestone Event for each
formulation of a Product that requires a separate IND or a separate regulatory
approval, except that additional payments of Clinical Development Milestones are
not required for an IND or a regulatory approval for a different dose of an
already approved formulation of a Product for which such milestones have been
previously paid, so that, for example, if the milestones below have been paid
with respect to a Product as an intravenous formulation for a particular cancer
indication, no such additional milestones shall be due for a different dosage of
the same product

                                       12
<Page>

for the same indication. HenKan shall promptly notify CombinatoRx of the
occurrence of any such Milestone Event.

<Table>
<Caption>
       MILESTONE EVENT                                                               PAYMENT
       ---------------                                                             -----------
       <S>                                                                         <C>
       Earlier of (i) dosing by HenKan of first patient in the Phase III of the    $   750,000
       Product or (ii) submission by HenKan of first application for Regulatory
       Approval in the event that Phase II data is sufficient for submission for
       regulatory approval

       Submission by HenKan of first application for Regulatory Approval           $   750,000

       Receipt by HenKan of first Regulatory Approval                              $   750,000
</Table>

       All payments to be made to CombinatoRx by HenKan pursuant to this Section
5.1.2 shall be made within thirty (30) days of the achievement of each
applicable milestone. For purposes of clarity, each Milestone Event triggers the
payment set forth in this Section regardless of whether such Milestone Event
occurs prior to, after or simultaneously with any other Milestone Event, so, for
example, if HenKan seeks Regulatory Approval based on Phase II data and,
following receipt of such approval, conducts a Phase III trial, HenKan shall pay
to CombinatoRx the first two milestones shown above upon the submission of the
first application for Regulatory Approval.

       5.2.   COMMERCIALIZATION MILESTONES. HenKan shall make the payments set
forth below upon the first attainment of Net Sales in the amounts listed below
during any calendar year:

<Table>
<Caption>
              ANNUAL NET SALES              PAYMENT
              ----------------            -----------
              <S>                         <C>
              $16 million                 $   480,000
              $25 million                 $   750,000
              $50 million                 $ 1,500,000
              $100 million                $ 3,000,000
              $200 million                $ 6,000,000
              $300 million                $ 9,000,000
</Table>

       For clarification, if in any calendar year, Net Sales exceeds one of the
thresholds above, HenKan shall pay to CombinatoRx the amount associated with
such threshold PLUS the amount associated with all lesser thresholds for which
HenKan has not previously made a payment to CombinatoRx. All payments to be made
to CombinatoRx by HenKan pursuant to this Section 5.2 shall be made within
thirty (30) days of the achievement of the applicable threshold of Annual Net
Sales.

       5.3.   ROYALTIES. Until the expiration of the Patent Royalty Term, HenKan
shall pay to CombinatoRx royalties at the following marginal rates on annual Net
Sales of the Product in all countries in the Territory in which the Patent
Royalty Term has not expired:

                                       13
<Page>

<Table>
<Caption>
ANNUAL NET SALES                                                   ROYALTY RATE
----------------                                                   ------------
<S>                                                                <C>
$1 million to $25 million                                          Six percent (6%)
Greater than $25 million but less than or equal to $50 million     Eight percent (8%)
Greater than $50 million but less than or equal to $75 million     Ten percent (10%)
Greater than $75 million                                           Twelve percent (12%)
</Table>

Royalties shall be paid at the applicable marginal rate set forth above with
respect to Net Sales in a particular year. Therefore, for example, if annual Net
Sales of the Product were $50 million in each of Taiwan, the People's Republic
of China and South Korea and the Patent Royalty Term had not expired in Taiwan
and the People's Republic of China but had expired in South Korea, then HenKan
would pay to CombinatoRx royalties for that year as follows:

       For Net Sales in Taiwan and the People's Republic of China ($100 million
cumulatively), royalties would be based on the rates set forth in the table
above and would be equal to 6% of Net Sales up to $25 million ($1,500,000), 8%
of Net Sales above $25 million up to $50 million ($2,000,000), 10% of Net Sales
above $50 million up to $75 million ($2,500,000)., and 12% of Net Sales above
$75 million ($3,000,000), resulting in total royalties due in that year for such
countries of $9,000,000.

                                    ARTICLE 6
                 GENERAL PAYMENT PROVISIONS AND ROYALTY REPORTS

       6.1.   CURRENCY. All monies due to CombinatoRx hereunder are payable in
United States dollars. When Products are sold for monies other than United
States dollars, the earned royalties will first be determined in the foreign
currency of the country in which such Products were sold and then converted into
equivalent United States funds. The exchange rate will be the average rate
between the buying and selling rate as quoted in THE WALL STREET JOURNAL for the
last twenty (20) days of the reporting period for which such rate is reported.

       6.2.   FOREIGN LEGAL RESTRICTIONS ON PAYMENT. If at any time legal
restrictions prevent the prompt remittance of part or all payments by HenKan
with respect to any country where the Product is sold, unless prohibited from
lawfully doing so, HenKan must convert the amount owed into United States funds
and must pay CombinatoRx directly from its U.S. source of funds, if such source
is available, for the amount impounded. HenKan will use Commercially Reasonable
Efforts to pay all future royalties due to CombinatoRx from its U.S. source of
funds, if such source is available, so long as the legal restrictions described
in this section still apply. For clarity, nothing in this Section shall relieve
HenKan from its obligation to make payments when due hereunder.

       6.3.   FIRST COMMERCIAL SALE. HenKan also agrees to report to CombinatoRx
in its immediately subsequent progress and royalty report the date of First
Commercial Sale of the Product in each country.

       6.4.   QUARTERLY PAYMENT REPORTS AND PAYMENTS. After the First Commercial
Sale of the Product anywhere in the Territory, HenKan shall make quarterly
payment reports ("Quarterly

                                       14
<Page>

Payment Reports") to CombinatoRx on or before the thirtieth (30th) day following
the end of the preceding calendar quarter. Each Quarterly Payment Report shall
cover the most recently completed calendar quarter and shall show (a) the Gross
Sales and Net Sales of the Product sold during the most recently completed
calendar quarter; (b) the royalties, in U.S. dollars, payable with respect to
Net Sales; (c) the method used to calculate the payments owed to CombinatoRx;
and (d) the exchange rates used and shall be accompanied by the payment shown as
due on such Quarterly Report. If, after the First Commercial Sale of the
Product, no sales of Products are made during any reporting period, a statement
to this effect is required.

       6.5.   INTEREST ON LATE PAYMENTS. For purposes of this Section 6.5 only,
HenKan will be in default with respect to payment, without receipt of a reminder
from CombinatoRx, for all payments not paid timely. In case of default with
respect to payment, any amount not paid timely shall bear interest from its due
date through the date of effective receipt of payment at the rate equal to the
lesser of the maximum rate allowable under applicable law or [four percent (4%)]
over the prime rate published in the eastern edition of THE WALL STREET JOURNAL
on the date such payment was due or a comparable newspaper if THE WALL STREET
JOURNAL shall cease publishing the prime rate.

       6.6.   TAXES. The Parties shall share equally in the payment of all Taxes
(as defined in this Section) levied on payments made pursuant to Sections 5.2
and 5.3 through a reduction by HenKan of any payments pursuant to such Sections
of fifty percent (50%) of Taxes actually paid by HenKan in respect of any such
payments. To the extent any payments made by HenKan pursuant to Sections 5.2 and
5.3 are reduced in accordance with the preceding sentence, HenKan shall provide
to CombinatoRx, at the time such payments are made to CombinatoRx, documentation
showing the payment of any such Taxes by HenKan. All other payments and prices
under this Agreement are net prices, and all such other payments under this
Agreement shall be made plus value added tax, if value added tax is levied under
applicable law, and shall be grossed up for any withholding tax that may be
required under applicable law, and fees of any nature levied or incurred on
account of any such other payments from HenKan to CombinatoRx accruing under
this Agreement, by national, state or local governments, will be assumed and
paid by HenKan. As used in this Section, "Taxes" shall mean the total of all
value added taxes levied under applicable law and all fees of any nature levied
or incurred on account of any particular payment by national, state or local
governments.

                                    ARTICLE 7
                                BOOKS AND RECORDS

       7.1.   ACCOUNTING AND INTERNAL CONTROLS. HenKan shall maintain accounts
in accordance with good business practices and, specifically, shall (a) maintain
full and accurate books, records and accounts which shall, in reasonable detail,
accurately and fairly reflect all transactions related to this Agreement as far
as reasonably necessary in order to determine HenKan's claims hereunder (the
"Transactions"); such books and records shall include reasonable supporting
documentation that may be necessary in particular for purposes of evidencing the
Net Sales with respect to Product for which a royalty is due; and (b) devise and
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that (i) Transactions are executed in accordance with
HenKan' s internal requirements for general or specific authorizations, and (ii)
Transactions are recorded as necessary to permit preparation of

                                       15
<Page>

financial statements in conformity with generally accepted accounting principles
and as otherwise required to comply with all tax statutes and to maintain
accountability for assets.

       7.2.   RECORDS AND AUDITS. HenKan's books of account and reasonable
supporting documentation shall be kept at it's principal place of business and
shall be open, upon reasonable advance written notice and during normal business
hours, for a minimum of five (5) years following the end of the calendar year to
which they pertain, to the inspection, to the extent reasonably required for
verifying CombinatoRx's claims against HenKan hereunder, by an independent
certified public accountant or auditor retained by the CombinatoRx and
acceptable to HenKan for the purpose of verifying HenKan's statements with
respect to, e.g., Net Sales of Products for which a royalty is due, or the other
Party's compliance in other material respects with this Agreement; PROVIDED,
HOWEVER, that such an audit shall be conducted with reasonable advance notice
and during normal business hours, and shall not be conducted more frequently
than once during a calendar year. In the event that any such audit discloses any
deviation, the related balance shall promptly be settled. Further, if any such
audit discloses deviations exceeding five percent (5%) or more for any calendar
year, then HenKan shall promptly pay the reasonable costs of such audit after
receipt of CombinatoRx's bill/invoice for such audit. The results of such
audits, and any and all information or data in any form related thereto, shall
be deemed Confidential Information of HenKan and the provisions of Article 9
shall apply thereto.

                                    ARTICLE 8
                         REPRESENTATIONS AND WARRANTIES

       8.1.   REPRESENTATIONS, WARRANTS AND COVENANTS OF COMBINATORX.
CombinatoRx represents, warrants and covenants to HenKan as follows:

              (a)     CombinatoRx is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware with
corporate powers adequate for executing and delivering, and performing its
obligations under, this Agreement;

              (b)     The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
CombinatoRx;

              (c)     This Agreement has been duly executed and delivered by
CombinatoRx and is a legal, valid and binding obligation of CombinatoRx,
enforceable against CombinatoRx in accordance with its terms;

              (d)     CombinatoRx is not aware of any issued patents or
published patent applications in the Territory that would be infringed by the
manufacture, use or sale of the Products as it is currently being developed, and
CombinatoRx has not received any notice of such an infringement.

              (e)     CombinatoRx is the legal and beneficial owner of the
CombinatoRx Product Technology and has the right to grant to HenKan the licenses
and other rights granted herein, and Exhibit A contains a complete and correct
list as of the Effective Date of all the patent and patent applications owned or
controlled by CombinatoRx relating to the development, use, making, having made,
sale, offer for sale and import and export of the Product in the Field in the
Territory.

                                       16
<Page>

              (f)     The execution, delivery and performance of this Agreement,
including without limitation the grant of licenses and sublicenses by
CombinatoRx hereunder, do not and will not conflict with or contravene any
provision of the charter documents or by-laws of CombinatoRx or any agreement,
documents, instrument, indenture or other obligation of CombinatoRx and, to the
best knowledge of CombinatoRx, do not conflict with any rights of Third Parties;
and

              (g)     CombinatoRx has not entered into, and shall not enter
into, any agreement, make any commitment, take any action or fail to take any
action that would contravene any provision of, or derogate or restrict any of
the rights and licenses granted to, HenKan under this Agreement.

       8.2.   REPRESENTATIONS, WARRANTIES AND COVENANTS OF HENKAN. HenKan
represents, warrants and covenants to CombinatoRx as follows:

              (a)     HenKan is a company limited by shares duly organized,
validly existing and in good standing under the laws of Taiwan, R.O.C., with
corporate powers adequate for executing and delivering, and performing its
obligations under, this Agreement;

              (b)     The execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
HenKan;

              (c)     This Agreement has been duly executed and delivered by
HenKan and is a legal, valid and binding obligation of HenKan, enforceable
against HenKan in accordance with its terms;

              (d)     The execution, delivery and performance of this Agreement,
including without limitation the grant of licenses by HenKan hereunder, do not
and will not conflict or contravene any provision of the operating agreement or
certificate of formation of HenKan or any agreement, document, instrument,
indenture or other obligation of HenKan; and

              (e)     HenKan has not entered into, and shall not enter into, any
agreement, make any commitment, take any action or fail to take any action that
would contravene any provision of this Agreement.

                                    ARTICLE 9
                    CONFIDENTIAL INFORMATION AND PUBLICATIONS

       9.1.   NON-DISCLOSURE OBLIGATIONS. Except as otherwise provided in this
Article 9, during the term of this Agreement and for a period of ten (10) years
thereafter, both Parties shall maintain in confidence and use only for purposes
specifically authorized under this Agreement Information and data received from
the other Party or created, discovered or conceived by the other Party in
connection with the Product ("Confidential Information").

       To the extent it is reasonably necessary or appropriate to fulfill its
obligations or exercise its rights under this Agreement and with the prior
written consent of the disclosing Party, the receiving Party may disclose
Confidential Information of the disclosing Party that it is otherwise obligated
under this Section not to disclose to its Affiliates, licensees, sublicensees,
consultants,

                                       17
<Page>

outside contractors and clinical investigators, on a need-to-know basis on
condition that such entities or persons agree in writing to keep such
Confidential Information confidential under appropriate confidentiality
agreements. Prior to disclosing Confidential Information in accordance with this
Section 9.1, the receiving Party shall inform the Affiliate, licensee,
sublicensee, consultant, outside contractor or clinical investigator (i) that
the information constitutes Confidential Information, (ii) that the Confidential
Information is being provided in accordance with the terms and conditions of
this Agreement, and (iii) that such other party is, by accepting the
Confidential Information bound by and subject to the terms and conditions of
this Section 9.1.

       Each Party understands and agrees that it will not, for itself or in
conjunction with others, directly or indirectly, test, modify, manipulate,
research, create a derivative including, but not limited to performing
activities to understand structural activity relationships, mechanism activity
relationships or mechanism of action of particular compounds, reverse engineer,
replicate the Confidential Information, or otherwise work with or manipulate the
Confidential Information in an effort to understand the other Party's
proprietary technology or learn information not explicitly stated in the
Confidential Information unless such testing, manipulation, replication, work,
reverse engineering or other research is otherwise contemplated under this
Agreement.

       The term Confidential Information shall not include any information that
(i) is or becomes published or otherwise part of the public domain other than by
acts of the Party obligated not to disclose such information or its licensees or
sublicensees in contravention of this Agreement; (ii) is disclosed to the
receiving Party or its licensees or sublicensees by a Third Party; PROVIDED,
HOWEVER, that such information was not obtained by such Third Party directly or
indirectly from the disclosing Party; (iii) prior to disclosure under this
Agreement, was already in the possession of the receiving Party or its licensees
or sublicensees, provided that such information was not obtained directly or
indirectly from the disclosing Party; or (iv) can be shown by written documents
to have been independently developed by the receiving Party or its licensees or
sublicensees without breach of any of the provisions of this Agreement.

       Notwithstanding the foregoing, any combination of features or disclosures
shall not be deemed to fall within the foregoing exclusions merely because
individual features are published or available to the general public or in the
rightful possession of the receiving Party unless the combination itself and
principle of operation are published or available to the general public or are
in the rightful possession of the receiving Party.

       In the event the Confidential Information of the disclosing Party is
required to be disclosed by the recipient pursuant to a legal, judicial, or
administrative procedure, as required by law, the recipient may make the
disclosure provided that the Party being required to disclose such Confidential
Information gives the Party owning the Confidential Information notice of the
proposed disclosure as soon as reasonably practicable after it comes aware of it
and that such disclosure, if made, is made so as to minimize the disclosure at
such time and to maximize the protection of the information from further
disclosure.

       Each Party agrees to notify the other Party immediately upon discovery of
any unauthorized use or disclosure of Confidential Information and will
cooperate with the other

                                       18
<Page>

Party in every reasonable way to help the other Party regain possession of the
Confidential Information and prevent its further unauthorized use or disclosure.

       CombinatoRx and HenKan agree to take such steps to protect and maintain
the security and confidentiality of the Confidential Information as CombinatoRx
and HenKan would take in the case of its own confidential business information.

       9.2.   TERMS OF THIS AGREEMENT/USE OF NAME. Except as required by
applicable law or regulation, neither Party shall use the name of the other
Party in any publicity or advertising without the prior written approval of the
other Party, except that the Parties may disclose the existence of this
Agreement. HenKan agrees that CombinatoRx may disclose under a corresponding
confidentiality obligation of such Third Party, a copy of this Agreement to any
Third Party from whom CombinatoRx has licensed technology that CombinatoRx is
sublicensing to HenKan under this Agreement if necessary and only to the extent
to fulfill CombinatoRx's obligations under CombinatoRx's agreement with such
Third Party. HenKan agrees not to disclose any terms or conditions of this
Agreement to any Third Party without the prior written consent of CombinatoRx,
except as required by applicable law. The Parties shall, as soon as practical
following the execution of this Agreement, agree on the text of a joint press
release announcing this Agreement, and either Party may make disclosure of such
press release and any additional disclosure that contains substantially the same
information as such press release without the prior consent of the other Party.

       9.3.   PUBLICATIONS. Subject to Section 9.1, CombinatoRx and HenKan each
acknowledge the interest of the Parties in publishing certain of the results of
the Product to obtain recognition within the scientific community and to advance
the state of scientific knowledge. Notwithstanding anything contained herein to
the contrary, each of CombinatoRx and HenKan may, subject to Section 9.1, use
and disclose any data and results obtained its development or commercialization
of the Product for corporate presentations and in any other disclosure or
publication. HenKan shall not publish data or results obtained from the
development or commercialization of the Product without the consent of
CombinatoRx and, if desired by CombinatoRx, without jointly publishing such data
or results with CombinatoRx.

       Notwithstanding the foregoing, this Section 9.3 will not apply to
publications or disclosures by CombinatoRx or its employees that have been
approved for publication or disclosure by CombinatoRx prior to the Effective
Date.

       9.4.   LIABILITY. Each Party shall be liable for any and all direct and
indirect damages, costs and expenses resulting from any violation of this
Article 9 including, without limitation, reasonable attorneys' fees and
disbursements, consequential damages and lost profits. The Parties further agree
that money damages will not be a sufficient remedy for any breach of this
Article 9, and CombinatoRx or HenKan, as the case may be, shall be entitled, in
addition to money damages, to specific performance and injunctive relief and any
other appropriate equitable remedies for any such breach. Such remedies shall
not be deemed to be the exclusive remedies for a breach of this Article 9 but
shall be in addition to all other remedies available at law or in equity.

                                       19
<Page>

                                   ARTICLE 10
             OWNERSHIP OF INTELLECTUAL PROPERTY; PATENT PROSECUTION

       10.1.  OWNERSHIP. The ownership of all intellectual property rights
developed by or on behalf of a Party, or the Parties, hereunder shall be as set
forth in this Section 10.1.

              10.1.1. HENKAN INTELLECTUAL PROPERTY RIGHTS. Subject to the other
terms and conditions of this Agreement, all rights, title and interests in, to
and under HenKan Inventions, HenKan Patents, HenKan Product Inventions and
HenKan Product Patents shall be owned by, and remain with, HenKan.

              10.1.2. COMBINATORX PRODUCT TECHNOLOGY. Subject to the other terms
and conditions of this Agreement, all rights, title and interests in, to and
under the CombinatoRx Product Technology shall be owned by, and remain with,
CombinatoRx.

              10.1.3. OTHER INTELLECTUAL PROPERTY. Subject to Sections 10.1.1
and 10.1.2, all intellectual property conceived by employees of a Party or
agents acting on behalf of such party shall be owned by such Party and all
intellectual property conceived jointly by employees of both Parties and/or
agents acting on behalf of both Parties shall be jointly owned by the Parties.
Inventorship shall be determined in accordance with United States patent law.
The Parties shall jointly determine the filing, prosecution, maintenance and
defense of jointly owned intellectual property.

       10.2.  DISCLOSURE OF INTELLECTUAL PROPERTY; FURTHER ASSURANCES. Each of
CombinatoRx and HenKan shall keep the other Party reasonably informed of
CombinatoRx Product Technolology, in the case of CombinatoRx, and HenKan
Inventions and HenKan Product Inventions, in the case of HenKan, and all
intellectual property that may reasonably be considered as jointly owned that is
discovered or conceived after the Effective Date. Each Party shall execute
irrevocable assignments of such right, title and interest in and to any
discoveries or inventions to the other Party pursuant to the allocations as set
forth in this Section 10.1 as reasonably necessary to vest in the other Party
all right, title and interest in such discoveries or inventions as set forth in
this Section 10.1 and shall take all other actions as may reasonably be
requested by the other Party to effect such assignments. Each Party shall
reimburse the other Party for any reasonable out-of-pocket expenses in
connection with any execution of assignment or any other actions reasonably
requested by such Party.

       10.3.  COMBINATORX PRODUCT PATENTS. CombinatoRx shall have the right but
not the obligation to prepare, file, prosecute and maintain the CombinatoRx
Product Patents in the Territory, and unless it has abandoned prosecution and
maintenance of such patent applications and patents, shall use its best efforts
to advance such prosecution and maintenance. CombinatoRx will provide copies of
all patent filings in the Territory to HenKan as far in advance of such filings
as reasonable practicable and shall give due consideration to HenKan's comments
on such filings.

       Documents received from any patent office in the Territory shall be
provided to HenKan promptly after receipt by CombinatoRx. If CombinatoRx elects,
in its sole discretion, not to file, prosecute or maintain any patent or patent
application in the Territory, it shall promptly notify

                                       20
<Page>

HenKan of its intention. HenKan shall have the right to file, prosecute or
maintain any such patent or patent application in CombinatoRx's name and on
CombinatoRx's behalf at HenKan's sole expense. CombinatoRx shall provide to
HenKan on an annual basis a report setting forth the status of the CombinatoRx
Product Patents in the Territory in reasonable detail.

       As of the Effective Date, HenKan will reimburse CombinatoRx for all costs
and expenses incurred by CombinatoRx pertaining to the prosecution and
maintenance of patent applications and patents covering the Product in the
Territory. CombinatoRx will take all necessary actions to accelerate the
prosecution of the patent applications in the Territory. The Parties hereby
acknowledge that associated costs and expenses to be reimbursed by HenKan for
such activities may be accelerated upon the execution of this Agreement.

       10.4.  HENKAN INTELLECTUAL PROPERTY. HenKan shall have the right but not
the obligation to prepare, file, prosecute and maintain patent applications and
patents, continuations, continuations-in-part, divisions, reissues, additions,
renewals, or extension thereof included in the HenKan Inventions, HenKan
Patents, HenKan Product Inventions and HenKan Product Patents in countries of
its choice throughout the world, for which it shall bear all costs. Documents
received from any patent office shall be provided to CombinatoRx promptly after
receipt by HenKan. If and to the extent HenKan elects not to file, maintain or
prosecute, or abandon any patent or patent application included in the HenKan
Inventions and HenKan Product Inventions, it shall promptly notify CombinatoRx
in writing of its intention. CombinatoRx shall have the right to file, prosecute
or maintain any such patent or patent application in HenKan's name and on
HenKan's behalf at CombinatoRx's sole expense; PROVIDED, HOWEVER, that no right
or license to any HenKan Patent or HenKan Product Patent or to practice any
HenKan Invention or HenKan Product Invention is granted under this Section 10.4.

                                   ARTICLE 11
                               PATENT INFRINGEMENT

       11.1.  INFRINGEMENT BY THIRD PARTIES OF COMBINATORX PRODUCT PATENTS.

              11.1.1. If either HenKan or CombinatoRx becomes aware of an
infringement of any CombinatoRx Product Patents within the Territory, it shall
give prompt notice thereof to the other Party. CombinatoRx shall have the right,
but not the obligation, to obtain a discontinuance of such infringement or bring
suit against the Third Party infringer. If CombinatoRx fails to take
commercially appropriate actions to interfere any infringement of any
CombinatoRx Product Patents in the Territory, HenKan may, but shall not be
obligated to take such necessary actions to stop such infringements (a "HenKan
Action"). Each Party will cooperate with the Party initiating an action, join in
any suits as may be brought by or as may be brought against the other Party and
be available at the other Party's reasonable request to be an expert witness or
otherwise to assist in such proceedings, all at the expense of the Party
initiating the action. With respect to any HenKan Action, no settlement, consent
judgment or other voluntary final disposition of the suit or action may be
entered into without the consent of CombinatoRx, which consent shall not be
unreasonably withheld or delayed.

              11.1.2. CombinatoRx shall bear the expenses of any suit or other
legal action brought by it. HenKan shall bear the expenses of any HenKan Action.
Any recovery or

                                       21
<Page>

damages derived from a suit or action shall be used first to reimburse each
Party's documented out-of-pocket legal expenses, PROVIDED THAT, in the event
that HenKan initiates a HenKan Action and prevails in such action, HenKan shall
be reimbursed by CombinatoRx, either, at CombinatoRx's election, through direct
payments or by HenKan's deduction of royalty dues, of 50% of all expenses of
such action that exceed the awards of that lawsuit, up to two hundred fifty
thousand dollars ($250,000). Any remainder of a recovery or damages derived from
a suit or action shall be shared equally between the Parties, except that any
recovery or damages derived from a suit or action brought by CombinatoRx in
which HenKan was not joined shall be retained by CombinatoRx, and any recovery
or damages derived from a HenKan Action shall be retained by HenKan.

       11.2.  INFRINGEMENT BY THIRD PARTIES OF HENKAN PRODUCT PATENT.

              11.2.1. If either CombinatoRx or HenKan becomes aware of an
infringement of any HenKan Product Patent or HenKan Patent (to the extent that
CombinatoRx is a licensee of such HenKan Product Patent or HenKan Patent
hereunder), it shall give prompt notice thereof t o the other Party. HenKan
shall have the right, but not the obligation, to obtain a discontinuance of such
infringement or bring suit against the Third Party infringer. If HenKan fails to
take commercially appropriate actions to interfere any infringement of any
HenKan Product Patent or HenKan Patent that may likely have a material adverse
effect on the sale of the Product in the Territory, CombinatoRx may, but shall
not be obligated to take such necessary actions to stop such infringements (a
"CombinatoRx Action"). Each Party will cooperate with the Party initiating an
action, join in any suits as may be brought by or as may be brought against the
other Party and be available at the other Party's reasonable request to be an
expert witness or otherwise to assist in such proceedings, all at the expense of
the Party initiating the action. With respect to any CombinatoRx Action, no
settlement, consent judgment or other voluntary final disposition of the suit or
action may be entered into without the consent of HenKan, which consent shall
not be unreasonably withheld or delayed.

              11.2.2. HenKan shall bear the expenses of any suit or other legal
action brought by it. CombinatoRx shall bear the expenses of any CombinatoRx
Action. Any recovery or damages derived from a suit or action shall be used
first to reimburse each Party's documented out-of-pocket legal expenses, and any
remainder of a recovery or damages derived from a suit or action shall be shared
equally between the Parties, except that any recovery or damages derived from a
suit or action brought by HenKan in which CombinatoRx was not joined shall be
retained by HenKan, and any recovery or damages derived from a CombinatoRx
Action shall be retained by CombinatoRx.

       11.3.  INFRINGEMENT ACTIONS AGAINST HENKAN. In the event that any action,
suit or proceeding is brought against, or written notice or threat thereof is
provided to, HenKan alleging infringement of any patent or unauthorized use or
misappropriation of technology arising out of or in connection with HenKan's
practice of CombinatoRx Product Patents (to the extent such action, suit or
proceeding specifically relates to claims included in such CombinatoRx Product
Patents, an "Infringement Suit") or the CombinatoRx Product Technology, HenKan
shall have the right to defend at its own expense such action; provided,
however, that HenKan shall not settle any suit in a manner that would adversely
affect CombinatoRx's rights to its intellectual property or require the payment
in settlement of any loss, claim, damage, liability or action

                                       22
<Page>

without the prior written consent of CombinatoRx, which consent shall not be
unreasonably withheld. CombinatoRx agrees to cooperate with HenKan, at HenKan's
expense, in connection with an Infringement Suit.

                                   ARTICLE 12
                 DISCLAIMER OF WARRANTIES; CONSEQUENTIAL DAMAGES

       12.1.  Except as expressly set forth in Section 8.1, nothing in this
Agreement shall be construed as a representation made or warranty by CombinatoRx
that any patents will issue based on pending applications licensed hereunder, or
that any such CombinatoRx Product Patents which do issue will be valid, or that
the practice by HenKan of any license or sublicense granted hereunder, or that
the use of any technology licensed or sublicensed hereunder, will not infringe
the patent or proprietary rights of any other person. In addition, except as
expressly set forth in Section 8.1, HenKan acknowledges that ALL TECHNOLOGY
LICENSED OR SUBLICENSED HEREUNDER IS LICENSED OR SUBLICENSED AS IS, AND
COMBINATORX EXPRESSLY DISCLAIMS, AND HENKAN HEREBY WAIVES, RELEASES AND
RENOUNCES, ANY WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO SUCH TECHNOLOGY,
INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE

       12.2.  Nothing in this Agreement shall be construed as a representation
made or warranty by HenKan that any patents will be filed or issued based on the
HenKan Product Inventions, or that any HenKan patents which do issue will be
valid. In addition, CombinatoRx acknowledges that ALL TECHNOLOGY LICENSED
HEREUNDER IS LICENSED AS IS, AND HENKAN EXPRESSLY DISCLAIMS, AND COMBINATORX
HEREBY WAIVES, RELEASES AND RENOUNCES, ANY WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO SUCH TECHNOLOGY, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

       12.3.  EXCEPT PURSUANT TO ARTICLE 13, NEITHER PARTY SHALL BE ENTITLED TO
RECOVER FROM THE OTHER ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES.

                                   ARTICLE 13
                                 INDEMNIFICATION

       13.1.  BY HENKAN. HenKan shall indemnify, hold harmless and defend
CombinatoRx, its successors and assigns, and the directors, officers, employees
and agents thereof (the "CombinatoRx Indemnitees") from and against any and all
Claims asserted against any such CombinatoRx Indemnitee by a Third Party arising
out of the development, manufacture, use or commercialization of the Product in
the Territory, except Claims arising out of the gross negligence or willful
misconduct of CombinatoRx.

Further, HenKan shall indemnify, hold harmless and defend the CombinatoRx
Indemnitees from and against any and all Claims asserted against any such
CombinatoRx Indemnitee by a Third Party arising out of the breach of any
representation, warranty or covenant of HenKan hereunder

                                       23
<Page>

or out of any action or omission of HenKan's directors, officers, employees
and/or agents relating to HenKan's obligations under this Agreement.

       13.2.  BY COMBINATORX. CombinatoRx shall indemnify, hold harmless and
defend HenKan, its successors and assigns, and the directors, officers,
employees and agents thereof (the "HenKan Indemnitees") from and against any and
all Claims asserted against any such HenKan Indemnitee by a Third Party arising
out of the practice of any HenKan Invention or HenKan Product Invention by
CombinatoRx, its Affiliates, licensees and/or sublicensees, except Claims
arising out of the gross negligence or willful misconduct of HenKan.

Further, CombinatoRx shall indemnify, hold harmless and defend the HenKan
Indemnitees from and against any and all Claims asserted against any such HenKan
Indemnitee by a Third Party arising out of the breach of any representation,
warranty or covenant of CombinatoRx hereunder or out of any action or omission
of CombinatoRx's directors, officers, employees and/or agents relating to
CombinatoRx's obligations under this Agreement.

       13.3.  CONDITIONS TO INDEMNIFICATION. The indemnified Party shall
promptly notify the indemnifying Party of any Claim with respect to which
indemnification is sought, upon becoming aware thereof. The indemnifying Party
shall have the right to defend against such Claim, with counsel chosen by it and
reasonably acceptable to the indemnitee(s) of the other Party. No indemnified
Party or indemnitee thereof shall enter into, or permit, any settlement of any
such Claim without the express written consent of the indemnifying Party, which
consent shall not be unreasonably withheld or delayed. An indemnitee may, at its
option and expense, have its own counsel participate in any proceeding and will
cooperate with the indemnifying Party or its insurer in the disposition of any
such matter.

                                   ARTICLE 14
                              TERM AND TERMINATION

       14.1.  TERM AND EXPIRATION. The term of this Agreement shall commence
upon the Effective Date and continue until terminated in accordance with the
terms hereof.

       14.2.  TERMINATION. This Agreement may be terminated, in whole or on an
indication-by-indication or country-by-country basis, under the following
circumstances:

              14.2.1. MATERIAL BREACH. By either Party upon written notice by
reason of a material breach by the other Party, other than for failure to pay as
set forth in Section 14.2.2 below or as described in Section 14.2.3, that the
breaching Party fails to remedy within sixty (60) days after written notice
thereof by the non-breaching Party.

              14.2.2. FAILURE TO PAY. By CombinatoRx, if HenKan fails to make
any payment to CombinatoRx hereunder within thirty (30) days after such payment
becomes due, and, in any case, such failure is not remedied within thirty (30)
days after notice thereof from CombinatoRx.

              14.2.3. FOR CAUSE. By CombinatoRx upon written notice to HenKan
and HenKan fails to remedy or take reasonable action to initiate a remedy within
sixty (60) days after

                                       24
<Page>

the date of notice thereof by CombinatoRx, if HenKan fails to use Commercially
Reasonable Efforts to develop and commercialize the Product in accordance with
Section 3.1 above.

              14.2.4. FORCE MAJEURE. By CombinatoRx, with respect to a
particular country or countries in the Territory, if HenKan (or its Affiliate or
sublicensee) becomes incapable in such countr(y/ies) for a period of thirty (30)
days, of performing any of its material obligations under this Agreement with
respect to such countr(y/ies) due to circumstances described in Section 16.3.

              14.2.5. HENKAN TERMINATION. By HenKan, at any time, upon 120 days
prior notice to provide CombinatoRx an opportunity to find a substitute partner
for the Product in the Territory.

              14.2.6. BANKRUPTCY. By either Party, in addition to any other
remedies available to it by law or in equity, by written notice to the other
Party on or after the occurrence of any of the following events: (i) the
appointment of a trustee, receiver or custodian for all or substantially all of
the property of the other Party, or for any lesser portion of such property, if
the result materially and adversely affects the ability of the other Party to
fulfill its obligations hereunder, which appointment is not dismissed within
ninety (90) days, (ii) the determination by a court or tribunal of competent
jurisdiction that the other Party is insolvent such that a Party's liabilities
exceed the fair market value of its assets, (iii) the filing of a petition for
relief in bankruptcy by the other Party on its own behalf, or the filing of any
such petition against the other Party if the proceeding is not dismissed or
withdrawn within ninety (90) days thereafter, (iv) an assignment by the other
Party for the benefit of creditors, or (v) the dissolution or liquidation of the
other Party.

              14.2.7. CHANGE OF CONTROL. In the event of a Change of Control of
HenKan, CombinatoRx shall have the right to terminate this Agreement in its
entirety upon sixty (60) days written notice. For purposes of this Section
14.2.7, "Change of Control" shall mean (i) a merger of HenKan with another
entity in which less than a majority of the outstanding shares of the surviving
entity immediately following such merger are owned by the holders of the
outstanding shares of HenKan immediately prior to such merger, or (ii) the
acquisition of more than 50% of the voting securities of HenKan or substantially
all of the assets of HenKan relating to this Agreement.

              14.2.8. NO WAIVER. The right of a Party to terminate this
Agreement, as herein above provided, shall not be affected in any way by its
waiver or failure to take action with respect to any prior default or breach.

       14.3.  EFFECT OF COMBINATORX BREACH. In the event of a material breach by
CombinatoRx, HenKan may elect to either: (i) continue to perform under this
Agreement and offset the amount of damages awarded by an arbitrator pursuant to
the Rules of Conciliation and Arbitration of the International Chamber of
Commerce then in effect against any amounts otherwise due to CombinatoRx under
Article 5 of this Agreement; or (ii) terminate this agreement in accordance with
Section 14.2.1.

       14.4.  EFFECT OF TERMINATION. In the event of a termination of this
Agreement by either Party, the provisions of this Section 14.4 shall apply,
provided however that (i) if such

                                       25
<Page>

termination is by HenKan for material breach by CombinatoRx in accordance with
Section 14.2.1, then the assignments, licenses, and other transfers from HenKan
to CombinatoRx under this Section 14.4 will be on financial terms to be agreed
by the Parties in good faith; and (ii) if the termination is by CombinatoRx for
breach or force majeure under Sections 14.2.1, 14.2.2, 14.2.3, 14.2.4, 14.2.6 or
14.2.7, or if the termination is by HenKan pursuant to Section 14.2.5, then the
assignments, licenses, and other transfers from HenKan to CombinatoRx under this
Section 14.4 will be fully paid and royalty free. On termination:

              14.4.1. all rights and licenses of, and grants to, HenKan under
this Agreement shall terminate (except to the extent required by HenKan to
fulfill its transition obligations under Section 14.5 below);

              14.4.2. all materials, including, without limitation, Information,
regulatory filings, Regulatory Approvals, INDs, NDAs, data and intellectual
property rights owned or Controlled by HenKan and useful or necessary to
develop, file for regulatory approval, make, have made, use, have used, sell,
have sold, and offer for sale of the Product in the Territory shall be
transferred to CombinatoRx (by assignment, to the extent possible, and otherwise
by exclusive license or other transfer acceptable to CombinatoRx), and HenKan
shall promptly execute such documents and take any such action requested by
CombinatoRx to effect such transfer;

              14.4.3. HenKan shall use Commercially Reasonable Efforts to assign
to CombinatoRx any applicable sublicenses to the extent related to the Product
and/or subcontracts relating to significant services to be performed by Third
Parties to the extent related to manufacture, development or commercialization
of the Product, as reasonably requested by CombinatoRx;

              14.4.4. except to the extent required by HenKan to fulfill
HenKan's transition obligations set forth in Section 14.5 below, HenKan shall
promptly collect and return, and cause its Affiliates and sublicensees to
collect and return, to CombinatoRx or, at CombinatoRx's request, destroy (i) all
amounts of finished or unfinished Product, any remaining inventory of
promotional materials, and product samples; and (ii) all documents containing
Information directly relating to the Product. Except to the extent required by
HenKan to fulfill HenKan's transition obligations, HenKan shall immediately
cease, and cause its Affiliates and sublicensees to cease, all further use of
any Information with respect to the Product. Notwithstanding the foregoing,
HenKan may retain copies of any Information to the extent required by law, as
well as retain one (1) copy of such information solely for legal archive
purposes. CombinatoRx shall be entitled to use and disclose any such Information
(including any Confidential Information) in connection with the manufacture,
development or commercialization of the Product;

              14.4.5. to the extent HenKan or its Affiliate is manufacturing (in
whole or in part) the Product, HenKan (or its Affiliate) will perform such
manufacturing responsibilities and supply CombinatoRx with the Product on such
terms and conditions as the Parties shall negotiate in good faith, through the
second anniversary of the effective date of termination of this Agreement or
such shorter period if CombinatoRx notifies HenKan that it is able to
manufacture or have manufactured the Product on comparable financial terms. To
the extent the Product is manufactured in whole or in part by a Third Party as
of the date notice of termination is given, then, upon CombinatoRx's request,
HenKan shall use Commercially Reasonable Efforts to assist

                                       26
<Page>

CombinatoRx in entering into an agreement with such Third Party or in obtaining
an assignment of such Third Party agreement to CombinatoRx with respect to the
Product; and

              14.4.6. the Parties shall use Commercially Reasonable Efforts to
complete the transition of the development, manufacture and commercialization of
the Product in the Field in the Territory hereunder to CombinatoRx (or its
sublicensee or Third Party designee) as soon as is reasonably possible pursuant
to the Transition Arrangements set forth in Section 14.5 below;

       14.5.  TRANSITION ARRANGEMENTS. If this Agreement is terminated by
CombinatoRx for breach or force majeure under Sections 14.2.1, 14.2.2, 14.2.3,
14.2.4, 14.2.6 or 14.2.7 or if the termination is by HenKan pursuant to Section
14.2.5 or if CombinatoRx exercises a Buy Back Option under Section 2.2, then:

              14.5.1. the Parties shall agree in good faith to a reasonable
transition period, not to exceed ninety (90) days (the "Transition Period")
during which time the Parties shall continue to develop, manufacture and/or
commercialize the Product in accordance with this Agreement;

              14.5.2. during the Transition Period, to the extent set forth or
requested in one or more written notices from CombinatoRx to HenKan hereunder,
HenKan will promptly take the actions required by this Section 14.5. CombinatoRx
will reasonably cooperate with HenKan (for avoidance of doubt, such cooperation
shall not require CombinatoRx to pay any amounts or incur any liabilities or
obligations not otherwise required hereunder to be paid or incurred by
CombinatoRx) to facilitate CombinatoRx's (or its nominee's) expeditious
assumption, with as little disruption as reasonably possible, of the continued
development, manufacture, and/or commercialization of the Product;

              14.5.3. upon expiration of the Transition Period, or earlier to
the extent provided in this Section 14.5, all licenses and rights granted to
HenKan hereunder shall automatically terminate (except to the extent required by
HenKan to fulfill its transition obligation, and upon the earlier of such
fulfillment or written notice from CombinatoRx that it will not require such
fulfillment, such licenses and rights, to the extent not previously terminated,
shall automatically terminate); and

              14.5.4. HenKan shall use Commercially Reasonable Efforts to
provide all cooperation and assistance reasonably requested by CombinatoRx to
enable CombinatoRx (or its nominee) to assume with as little disruption as
reasonably possible, the continued development and/or commercialization of the
Product in the Field in the Territory. Such cooperation and assistance shall be
provided in a prompt and timely manner (having regard to the nature of the
cooperation or assistance requested).

       14.6.  DISPOSITION OF INVENTORY THE PRODUCT. Upon termination of this
Agreement in its entirety, or with respect to a particular indication or
country, HenKan shall be entitled to dispose of all previously made or partially
made Product, but no more, within a period of one hundred and twenty (120) days,
provided, however, that any sale of the Product is subject to the terms of this
Agreement including, but not limited to, paying royalties at the rate and the
time provided and delivery of royalty and progress reports.

       14.7.  ACCRUED RIGHTS; SURVIVING OBLIGATIONS.

                                       27
<Page>

              14.7.1. Termination, relinquishment or expiration of this
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of a Party prior to such termination, or expiration.
Such termination, relinquishment or expiration shall not relieve a Party from
obligations that are expressly indicated to survive termination or expiration of
this Agreement.

              14.7.2. Without limiting the foregoing, Articles 1, 5, 6, 7, 9,
10, 12, 13, 14, 15 and 16 of this Agreement shall survive the expiration or
termination of this Agreement for any reason.

       14.8.  RIGHTS IN BANKRUPTCY. All licenses granted under this Agreement by
CombinatoRx or HenKan and all rights to data, regulatory filings and
Information, are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of rights to "intellectual
property" as defined under Section 101 of the U.S. Bankruptcy Code. The Parties
agree that the Parties, as licensees of such rights under this Agreement, shall
retain and may fully exercise all of their rights and elections under the U.S.
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against either Party under the
U.S. Bankruptcy Code, the Party hereto which is not a party to such proceeding
shall be entitled to a complete duplicate of (or complete access to, as
appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in their possession, shall be
promptly delivered to them (i) upon any such commencement of a bankruptcy
proceeding upon their written request therefore, unless the Party subject to
such proceeding elects to continue to perform all of its obligations under this
Agreement, or (ii) if not delivered under (i) above, following the rejection of
this Agreement by or on behalf of the Party subject to such proceeding upon
written request therefore by the non-subject Party.

                                   ARTICLE 15
                               DISPUTE RESOLUTION

       15.1.  DISPUTE RESOLUTION. Any disputes arising between the Parties
relating to, arising out of or in any way connected with this Agreement or any
term or condition hereof, or the performance by either Party of its obligations
hereunder, whether before or after termination of this Agreement, shall be
resolved as follows:

              15.1.1. CHIEF EXECUTIVE OFFICERS. The dispute shall be promptly
referred to the Chief Executive Officers or similar senior executive officers of
CombinatoRx and HenKan, who shall meet at a mutually acceptable time and
location within thirty (30) days of such notice and attempt to negotiate a
settlement.

       15.2.  ARBITRATION. If the matter remains unresolved within sixty (60)
days after the date of initiating the negotiation by the Chief Executive
Officers or similar senior executive officers, or if the Chief Executive
Officers or similar senior executive officers fail to meet within thirty (30)
days pursuant to Section 15.1.1, then the matter shall be settled by arbitration
in accordance with the Rules of Conciliation and Arbitration of the
International Chamber of Commerce then in effect; PROVIDED, HOWEVER, that
notwithstanding the foregoing, any dispute regarding the infringement or
validity of any patent shall be resolved in the courts of the

                                       28
<Page>

jurisdiction in which such patent issued. The court of arbitration shall consist
of three (3) arbitrators. Each Party shall nominate one (1) member and the two
nominated members shall select a third arbitrator within ten (10) days of their
appointment. The arbitration shall be held in San Francisco, California, in the
English language. The decision of the court of arbitration shall be final and
the prevailing Party may enter the arbitral award in any court having
jurisdiction.

       15.3.  EQUITABLE RELIEF. Notwithstanding the foregoing, each of the
Parties shall have the right to seek a preliminary or permanent injunction or
other equitable relief.

                                   ARTICLE 16
                                  MISCELLANEOUS

       16.1.  COMBINATORX ACCOUNT FOR PAYMENTS. CombinatoRx's US Dollar Bank
Account for payments to be made by HenKan under Articles 5 and 6:

              ABA #:            011-500-010
              Bank Name:        Bank of America
              Bank Address:     100 Federal St., Boston, MA 02110
              Account Number:   9429399019
              Account Name:     Disbursement

       16.2.  NO IMPLIED WAIVERS; RIGHTS CUMULATIVE. No failure on the part of
CombinatoRx or HenKan to exercise and no delay in exercising any right, power,
remedy or privilege under this Agreement, or provided by statute or at law or in
equity or otherwise, including, without limitation, the right or power to
terminate this Agreement, shall impair, prejudice or constitute a waiver of any
such right, power, remedy or privilege or be construed as a waiver of any breach
of this Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege.

       16.3.  FORCE MAJEURE. CombinatoRx and HenKan shall each be excused for
any failure or delay in performing any of its respective obligations under this
Agreement if such failure or delay is caused by Force Majeure. If either Party
is prevented or delayed in the performance of any of its obligations under this
Agreement by Force Majeure, that Party shall forthwith serve notice in writing
on the other Party specifying the nature and extent of the circumstances giving
rise to the Force Majeure.

       16.4.  NOTICES. Any notice or payment required to be given to either
Party will be deemed to have been properly given and to be effective upon
receipt if (a) delivered in person, by telefax, or overnight courier, or (b)
mailed by first-class certified mail, postage paid, to the respective addresses
given below, or to another address as it shall designate by written notice given
to the other Party. The failure to provide a copy of any notice to CombinatoRx
to its counsel as described below shall not affect the validity of such notice
hereunder.

In the case of HenKan: HenKan Pharmaceutical Company
                       30th Floor

                                       29
<Page>

                       99 Tun Hwa South Road, Section 2
                       Taipei, Taiwan

With a copy to:             Lucas S. Chang
                            Wilson Sonsini Goodrich & Rosati
                            650 Page Mill Road
                            Palo Alto, CA 94304-1050

In the case of CombinatoRx: CombinatoRx, Incorporated
                            650 Albany Street
                            Boston, MA 02118
                            USA
                            Attn: CFO
                            Fax: (617) 425-7010

With a copy to:             Ropes & Gray LLP
                            One International Place
                            Boston, Massachusetts 02110
                            Attn: Marc Rubenstein
                            Fax: (617) 951-7050

       16.5.  ASSIGNABILITY. The terms and provisions of this Agreement shall
inure to the benefit of, and be binding upon, CombinatoRx, HenKan, and their
respective successors and permitted assigns; PROVIDED, HOWEVER, that neither
Party may assign or otherwise transfer any of its rights, nor delegate any of
its respective obligations hereunder, without the written consent of the other
Party such consent not to be unreasonably withheld or delayed; PROVIDED,
HOWEVER, that CombinatoRx may assign this Agreement without consent in
connection with any merger, reorganization, or sale of all or substantially all
of its assets to which this Agreement relates; and provided further, that HenKan
may assign this Agreement without consent: (a) in connection with any merger,
reorganization or sale of all or substantially all of its assets to which this
Agreement relates, provided that (i) HenKan reasonably demonstrates to
CombinatoRx that the assignee, transferee or surviving entity of such
transaction has sufficient intent, skills and resources in the development of
pharmaceutical products to perform its obligations hereunder or (b) to an
Affiliate of HenKan provided that such Affiliate of HenKan shall reassign any
such assignment to HenKan, on ceasing to be an Affiliate of HenKan. Assignment
by operation of law shall be deemed an assignment for purposes of this Section
16.5. Any assignment in violation of this Section shall be void.

       16.6.  AMENDMENTS. No amendment, modification, waiver, termination or
discharge of any provision of this Agreement, nor consent to any departure by
CombinatoRx or HenKan

                                       30
<Page>

therefrom, shall in any event be effective unless the same shall be in writing
signed by the Party against whom enforcement is sought.

       16.7.  GOVERNING LAW; CONSENT TO JURISDICTION.

              16.7.1. GOVERNING LAW. This Agreement, and all claims arising
under or in connection therewith, shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to any
choice or conflict of law provision or rule that would cause the application of
the laws of any other jurisdiction.

              16.7.2. CONSENT TO JURISDICTION. Subject to Section 15.2, each
party to this Agreement, by its execution hereof, (i) hereby irrevocably submits
to the exclusive jurisdiction of the courts of the State of New York for the
purpose of any action arising in whole or in part under or in connection with
this Agreement, (ii) hereby waives to the extent not prohibited by applicable
law, and agrees not to assert, by way of motion, as a defense or otherwise, in
any such action, any claim that it is not subject personally to the jurisdiction
of the above named courts, that its property is exempt or immune from attachment
or execution, that any such action brought in one of the above named courts
should be dismissed on grounds of FORUM NON CONVENIENS, should be transferred to
any court other than one of the above named courts, or should be stayed by
reason of the pendency of some other proceeding in any other court other than
one of the above named courts, or that this Agreement or the subject matter
hereof may not be enforced in or by such court, and (iii) hereby agrees not to
commence any action arising out of or based upon this Agreement or relating to
the subject matter hereof other than before one of the above named courts nor to
make any motion or take any other action seeking or intending to cause the
transfer or removal of any such action to any court other than one of the above
named courts whether on the grounds of inconvenient forum or other wise. Each
party hereby (x) consents to service of process in any such action in any manner
permitted by New York law; (y) agrees that service of process made in accordance
with clause (x) or made by registered or certified mail, return receipt
requested, at its address specified pursuant to Section 16.5, shall constitute
good and valid service of process in any such action; and (z) waives and agrees
not to assert (by way of motion, as a defense, or otherwise) in any such action
any claim that service of process made in accordance with clause (x) or (y) does
not constitute good and valid service of process.

       16.8.  SEVERABILITY. All terms contained in this Agreement shall be so
construed as not to infringe the provisions of any applicable law, but, if any
such term does infringe any such provision, such term shall be deemed to be void
and severable. The Parties undertake to replace invalid terms or fill any gap
with valid terms which most closely approximate the intent and economic effect
of the invalid terms or, in case of a gap, the Parties' presumable intentions.
In the event that the terms and conditions of this Agreement are materially
altered as a result of the preceding sentence, the Parties will renegotiate the
terms and conditions of this Agreement in order to resolve any inequities.

       16.9.  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.

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       16.10. EXECUTION IN COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, and all of which counterparts,
taken together, shall constitute one and the same instrument.

       16.11. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of CombinatoRx and HenKan with respect to the subject matter hereof, and all
prior or contemporaneous understandings or agreements, whether written or oral,
between CombinatoRx and HenKan with respect to such subject matter are hereby
superseded in their entirety.

       16.12. NO AGENCY, PARTNERSHIP OR JOINT VENTURE. Nothing herein shall
create, evidence or imply any agency, partnership or joint venture between the
Parties and neither Party shall act or describe itself as the agent of the other
Party nor shall either Party represent that is has any authority to make
commitments on behalf of the other Party.

       IN WITNESS WHEREOF, the Parties hereby have been caused this Agreement to
be duly executed as of the date first above written.

COMBINATORX, INCORPORATED

By: /s/ Alexis Borisy
   -------------------------------
Name: Alexis Borisy
Title: President and CEO

Date: May 4th, 2005
     -----------------------------

HENKAN PHARMACEUTICAL COMPANY

By: /s/ Marty May
   -------------------------------
Name: Marty May
Title: President

Date: May 9, 2005
     -----------------------------

                                       32
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                                    EXHIBIT A

                           COMBINATORX PRODUCT PATENTS

<Table>
<Caption>
                                                  TAIWAN          CHINA        S. KOREA
          PATENT               US PATENT        APPLICATION    APPLICATION    APPLICATION
-------------------------  ------------------  -------------  -------------  -------------
<S>                          <C>               <C>            <C>            <C>
Chlorpromazine and              6569853           90127505       1821723     2003-7006212
Pentamidine for the
Treatment of Neoplastic      US Divisional         Filed          Filed         Filed
Disorders                       6846816           10/31/01      10/31/01       10/31/01

                                 Filed
                                11/6/00
                                1/21/03
                                 Issued
                                5/27/03
                                1/25/05

Kinesin and Phosphotase        10/885130          93133826         N/A           N/A
Inhibitors Composition of
Matter and Method of Use     Filed 5/27/04     Filed 11/9/04  Filed 11/9/04  Filed 11/9/04

Compositions for the         Filed 4/19/05
Treatment of Neoplasms
                                Attorney
                              Docket No.:
                              50164/100001
</Table><Page>

                                                                   Exhibit 10.35

                                                                  EXECUTION COPY

                               RESEARCH AGREEMENT

     RESEARCH AGREEMENT (this "AGREEMENT"), dated as of August 9, 2005 (the
"EFFECTIVE DATE"), by and between CombinatoRx, Incorporated, a Delaware
corporation (the "COMPANY"), and CHDI, Inc., a New Jersey corporation (the
"FOUNDATION"). The Company and the Foundation shall hereinafter be referred to
individually as a "PARTY" and collectively as the "PARTIES".

     The Foundation supports basic, applied and clinical research aimed at
finding diagnoses, treatments, cures and preventions of Huntington's disease.

     The Company is a biopharmaceutical company focused on developing new
medicines built from synergistic combinations of approved drugs.

     The Foundation has chosen the Company as a strategic partner to collaborate
with the Foundation on a program to find and develop drugs for Huntington's
disease.

     To further the Foundation's objective, the Foundation desires to engage the
Company to conduct certain research and the Company is prepared to conduct that
research.

     The Parties have entered into this Agreement for the purpose of, among
other things, ensuring that the results of that collaboration are made readily
available in a timely fashion to accelerate scientific discovery and facilitate
the development of products that diagnose, treat, cure and prevent Huntington's
disease.

     In consideration of the mutual representations, warranties and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

                                RESEARCH PROJECT

1.   RESEARCH PROJECT. The "RESEARCH PROJECT" means the program of scientific
     research described in APPENDIX A. The expected time frame for completing
     each Phase (as defined in APPENDIX A) of the Research Project together with
     the corresponding budget of the number and cost of the full-time employees
     of the Company ("FTES") required to complete each such Phase in such time
     frame is set forth in APPENDIX B.

2.   CONDUCT OF THE RESEARCH PROJECT; CONTINUATION OF THE RESEARCH PROJECT.

     (a)  CONDUCT OF THE RESEARCH PROJECT. The Company hereby agrees to devote
          such resources as set forth in APPENDIX B and effort as is necessary
          to (i) conduct the Research Project in accordance with APPENDIX A and
          APPENDIX B and (ii) to complete each Phase of the Research Project
          within the time frames set forth in APPENDIX B. If at any time the
          Company makes a good faith determination that (A) the Research Project
          cannot be

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          conducted substantially in accordance with APPENDIX A or APPENDIX B,
          (B) any Phase of the Research cannot be substantially completed within
          the time frame set forth in APPENDIX B for such Phase or (C) the
          continued conduct of the Research Project in accordance with APPENDIX
          A is unlikely to yield scientifically valid or useful results, the
          Company shall promptly give notice (a "CHANGE OF CIRCUMSTANCES
          NOTICE") to the Foundation.

     (b)  CONDITIONS TO THE CONTINUATION OF THE RESEARCH PROJECT. Unless
          otherwise agreed to by the Foundation pursuant to a notice delivered
          to the Company in accordance with this Agreement, the Company hereby
          agrees that the Company shall not proceed to conduct or perform any
          Phase of the Research Project if the Company does not first satisfy or
          achieve each of the conditions (the "SCIENTIFIC MILESTONES") set forth
          in APPENDIX C at the time specified in respect of (i) such Phase or
          (ii) any prior Phase of the Research Project which is required or
          otherwise necessary to be satisfied or achieved prior to beginning the
          conduct or performance of any subsequent Phase of the Research
          Project. The determination of whether a Scientific Milestone has been
          satisfied or achieved shall be determined by the Research Committee
          (as defined below).

     (c)  ESTABLISHMENT OF A JOINT RESEARCH COMMITTEE; RESPONSIBILITIES OF THE
          RESEARCH COMMITTEE.

          (i)    ESTABLISHMENT OF A JOINT RESEARCH COMMITTEE. The Parties hereby
                 agree to establish within a reasonable period of time following
                 the date hereof a Joint Research Committee (the "RESEARCH
                 COMMITTEE") which shall comprise four members two of which
                 representatives shall be designated by each Party. The Research
                 Committee shall establish its own internal operating procedures
                 and meeting schedule; provided, however, the Research Committee
                 shall meet at least once every three months during the conduct
                 and performance of the Research Project.

          (ii)   RESPONSIBILITIES OF THE RESEARCH COMMITTEE. The Research
                 Committee shall, among other things, (A) oversee the
                 implementation and conduct of the Research Project, (B)
                 determine if changes are needed to the Research Project or the
                 time frames and budgeted FTE numbers and cost set forth in
                 APPENDIX B, (C) approve and implement any changes to the
                 Research Project or the time frames and budgeted FTE numbers
                 and cost set forth in APPENDIX B and (D) facilitate on-going
                 communications between the Parties. Any matter which requires a
                 decision by, or the approval of, the Research Committee under
                 this Agreement (including any matter described in APPENDIX A)
                 shall require the affirmative consent of each representative of
                 the Research Committee. At each meeting of the Research
                 Committee, one

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                 representative shall be appointed to record and distribute the
                 minutes of such meeting.

                                    PAYMENTS

3.   OBLIGATION TO MAKE PAYMENTS AND PAYMENT SCHEDULE; QUARTERLY FTE NOTICES;
     QUARTERLY PAYMENT ADJUSTMENT.

     (a)  OBLIGATION TO MAKE PAYMENTS AND PAYMENT SCHEDULE.

          (i)    OBLIGATION TO MAKE PAYMENTS. The Foundation shall make payments
                 to the Company for the Research Project as provided in, and
                 subject to the terms and conditions of, this Agreement. The
                 Company acknowledges and agrees that the Foundation shall not
                 be required to make any payment to the Company in respect of
                 any Phase of the Research Project for which each of the
                 Scientific Milestones has not been satisfied or achieved.

          (ii)   PAYMENT SCHEDULE. The amount of each quarterly payment (the
                 "QUARTERLY PAYMENTS") and milestone payment (the "MILESTONE
                 PAYMENTS" and, together with the Quarterly Payments, the
                 "PAYMENTS") are set forth on the payment schedule (the "PAYMENT
                 SCHEDULE") attached hereto as Appendix D.

     (b)  QUARTERLY FTE NOTICES.

          (i)    DELIVERY OF THE QUARTERLY FTE NOTICES. The Company shall
                 deliver a written notice (each, a "QUARTERLY FTE NOTICE") to
                 the Foundation promptly following the end of each 90-day period
                 (each, a "QUARTERLY FTE NOTICE PERIOD") during the period
                 beginning on the Effective Date and continuing through the
                 Quarterly FTE Notice Period following the last scheduled
                 Quarterly Payment made by the Foundation under the terms of
                 this Agreement.

          (ii)   REQUIRED INFORMATION IN EACH QUARTERLY FTE NOTICES. Each
                 Quarterly FTE Notice shall be given in respect of the most
                 recently ended Quarterly FTE Notice Period and shall:

                 (A)  set forth the Quarterly Payment number and the year and
                      quarter of the Research Project (in each case, as set
                      forth in APPENDIX D) covered by such Quarterly FTE Notice
                      Period;

                 (B)  identify each Phase of the Research Project (each, an
                      "APPROVED ACTIVE PHASE") for which (1) each of the
                      Scientific Milestones required to proceed to conduct or
                      perform such Phase of the Research Project has been

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                      satisfied or achieved and (2) activities were conducted by
                      the Company during such Quarterly FTE Notice Period;

                 (C)  set forth the date during such Quarterly FTE Notice Period
                      that activities actually commenced on each Approved Active
                      Phase;

                 (D)  set forth the number of FTEs budgeted to devote time to
                      each Approved Active Phase as set forth in APPENDIX B (the
                      "BUDGETED FTES") during such Quarterly FTE Notice Period;

                 (E)  set forth (1) the number of FTEs that actually devoted
                      time to each Approved Active Phase (the "ACTUAL FTES")
                      during such Quarterly FTE Notice Period up to an amount
                      not to exceed the number of Budgeted FTEs and (2) the name
                      and title of each such Actual FTE;

                 (F)  identify each Approved Active Phase that each Actual FTE
                      actually devoted time to during such Quarterly FTE Notice
                      Period and set forth the number of days (or prorate
                      portion thereof) such Actual FTE actually devoted
                      one-hundred percent of his or her effort to such Approved
                      Active Phase during such Quarterly FTE Notice Period up to
                      an amount not to exceed the difference between (1) the
                      number of days budgeted for such Approved Active Phase as
                      set forth in Appendix B MINUS (2) the aggregate number of
                      days an Actual FTE actually devoted one-hundred percent of
                      his or her effort to such Approved Active Phase as set
                      forth by the Company in all prior Quarterly FTE Notices;
                      and

                 (G)  include a certification by the Company that all of the
                      information provided in such Quarterly FTE Notice is true,
                      complete and correct.

     (c)  QUARTERLY PAYMENT ADJUSTMENT.

          (i)    REVIEW OF QUARTERLY FTE NOTICE. Beginning on the date of the
                 receipt of a Quarterly FTE Notice, the Foundation shall have a
                 period (the "QUARTERLY PAYMENT ADJUSTMENT REVIEW PERIOD") of 20
                 days to request such additional information from the Company as
                 may be reasonably required by the Foundation to verify the
                 information set forth in such Quarterly FTE Notice and review
                 such Quarterly FTE Notice.

          (ii)   CALCULATION OF QUARTERLY PAYMENT ADJUSTMENT. Within 10 days of
                 the expiration of the Quarterly Payment Adjustment Review
                 Period, the Foundation shall calculate the aggregate cost (the

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                 "ACTUAL QUARTERLY FTE COST") of the Actual FTEs that actually
                 devoted time to the Approved Active Phases during the Quarterly
                 FTE Notice Period covered by such Quarterly FTE Notice which
                 aggregate cost shall include the budgeted management FTE set
                 forth in APPENDIX B. If the Quarterly Payment made by the
                 Foundation in respect of such Quarterly FTE Notice Period is
                 greater than the Actual Quarterly FTE Cost in respect of such
                 Quarterly FTE Notice Period, (A) the Foundation shall have the
                 right to credit the amount of such overage against any future
                 payments required to be made by the Foundation to the Company
                 under this Agreement or (B) upon the written request of the
                 Foundation, the Company shall pay the amount of such overage to
                 the Foundation within 30 days of the receipt of any such
                 request. For purposes of this Agreement, all calculations shall
                 be made using a FTE rate of $250,000 per year other than FTEs
                 allocated to Phase 2 for which a FTE rate of $275,000 shall be
                 used.

4.   CONDITIONS TO THE FOUNDATION'S PAYMENTS.

     (a)  SPECIFIC CONDITIONS TO PAYMENTS BY THE FOUNDATION. The Foundation may,
          but shall not be obligated to, make any specific payment to the
          Company for the Research Project required by this Agreement if the
          Company does not first satisfy or achieve each of the conditions set
          forth in this Agreement (including any attachment to this Agreement)
          at the time specified in this Agreement (including any attachment to
          this Agreement) relating to the specific payment to be made by the
          Foundation to the Company which is required to be satisfied or
          achieved prior to the making of such payment by the Foundation.

     (b)  GENERAL CONDITIONS TO PAYMENTS BY THE FOUNDATION. The Foundation may,
          but shall not be obligated to, make any payments to the Company for
          the Research Project required by this Agreement upon the occurrence
          and continuation of any of the following events:

          (i)    CHANGE IN RESEARCH PROJECT. The Company gives a Change of
                 Circumstances Notice to the Foundation;

          (ii)   BREACH OF THIS AGREEMENT. There is a material breach of any
                 representation, warranty or covenant of this Agreement by the
                 Company; or

          (iii)  BANKRUPTCY EVENT. There is a Bankruptcy Event involving the
                 Company (as defined in SECTION 20 of this Agreement).

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               RESULTS; HIGH Q RESEARCH GROUP AND RESULTS SHARING

5.   DEFINITIONS. For the purposes of this Agreement, the following terms have
     the meanings set forth below:

     (a)  "HIGH Q RESEARCH GROUP" means a community of investigators and
          organizations funded by the Foundation and its affiliates whose
          objective is to find diagnoses, treatments, cures and preventions of
          Huntington's disease.

     (b)  "RESULTS" means any scientifically valid methods, data, outcomes or
          other results made in the course of the conduct, or resulting from the
          performance, of the Research Project and includes any reagents, cell
          lines, compounds, animal models or other materials produced in the
          course of the conduct, or resulting from the performance, of the
          Research Project. For the avoidance of doubt, Results shall not
          include any Company Background Intellectual Property (as defined in
          SECTION 7).

     (c)  "THIRD PARTY RESULTS" means any scientifically valid methods, data,
          outcomes or other results (i) made in the course of the conduct, or
          resulting from the performance, of research conducted by members of
          the High Q Research Group (as defined in SECTION 6(a) of this
          Agreement) (other than the Company) and (ii) funded by the Foundation
          or one of its affiliates.

6.   HIGH Q RESEARCH GROUP; SHARING OF RESULTS WITH OTHERS.

     (a)  PARTICIPATION IN THE HIGH Q RESEARCH GROUP. Subject to the terms of
          this Agreement, the Company hereby acknowledges and agrees that it is
          participating in the High Q Research Group.

     (b)  DELIVERY OF RESULTS TO THE FOUNDATION; WITHDRAWAL OF RESULTS; RESULTS
          DEEMED CONFIDENTIAL INFORMATION; EXCLUSION OF COMPANY BACKGROUND
          INTELLECTUAL PROPERTY.

          (i)    DELIVERY OF RESULTS TO THE FOUNDATION; WITHDRAWAL OF RESULTS.
                 The Company shall inform the Foundation of all Results produced
                 or discovered within a reasonable period of time following the
                 production or discovery of each such Result (and, in the case
                 of any reagents, cell lines, compounds, animal models or other
                 materials constituting Results, upon the request of the
                 Foundation, deliver such materials as directed by the
                 Foundation). If at any time after informing the Foundation of
                 Results pursuant to this SECTION 6(b), the Company determines
                 that there is a reasonable scientific basis to conclude that
                 such Results are not scientifically valid, the Company shall
                 promptly so notify the Foundation.

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          (ii)   RESULTS DEEMED CONFIDENTIAL INFORMATION. The Parties hereby
                 agree that all Results shall be deemed Confidential Information
                 (as defined in SECTION 14 of this Agreement) and treated as
                 Confidential Information by each of the Parties in accordance
                 with the terms of SECTION 14 and SECTION 15 of this Agreement
                 until, the earlier to occur of (A) the Publication (as defined
                 in SECTION 16 of this Agreement) of such Results by the Company
                 and (B) the disclosure of such Results by the Foundation
                 pursuant to SECTION 6(f) of this Agreement.

          (iii)  EXCLUSION OF COMPANY BACKGROUND INTELLECTUAL PROPERTY. For the
                 avoidance of doubt, the Foundation hereby agrees that the
                 Company shall not be required to share or otherwise disclose or
                 distribute any Company Background Intellectual Property (as
                 defined in SECTION 7).

     (c)  DISCLOSURE OF RESULTS WITHIN THE HIGH Q RESEARCH GROUP; REIMBURSEMENT
          OF EXPENSES.

          (i)    DISCLOSURE OF RESULTS WITHIN THE HIGH Q RESEARCH GROUP. At any
                 time following the 60-day period beginning on the date that the
                 Company discloses Results to the Foundation, the Foundation may
                 disclose such Results to any member of the High Q Research
                 Group who has agreed to each of the covenants set forth in
                 SECTION 6(d) of this Agreement with respect to any Results
                 disclosed to such member. For the avoidance of doubt, such
                 member shall be bound and obligated to treat any Results
                 disclosed to such member in the same manner and extent as the
                 Company is bound and obligated to treat any Third Party Results
                 disclosed to the Company under SECTION 6(d).

          (ii)   REIMBURSEMENT OF EXPENSES. The Foundation hereby agrees to
                 reimburse the Company for all reasonable direct costs and
                 expenses incurred by the Company in complying with any request
                 by the Foundation to provide Results to any member of the High
                 Q Research Group pursuant to this SECTION 6. The Company shall
                 submit invoices (including all relevant receipts, if any) to
                 the Foundation for all such costs and expenses incurred by the
                 Company on a monthly basis. Each invoice shall be paid by the
                 Foundation within 30 days of the receipt of such invoice from
                 the Company for such costs and expenses.

     (d)  DISCLOSURE OF THIRD PARTY RESULTS TO THE COMPANY. With respect to any
          Third Party Results disclosed to the Company, the Company hereby
          agrees:

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          (i)    to hold all Third Party Results in confidence until such Third
                 Party Results are Published or otherwise made publicly
                 available (except by breach of this Agreement) so that the
                 disclosure of the Third Party Results among members of the High
                 Q Research Group does not constitute a public disclosure and so
                 that the ability to patent the Third Party Results is
                 preserved; provided, however, the Company shall not be required
                 to hold any Third Party Results in confidence if such Third
                 Party Results (A) were previously known by the Company other
                 than by reason of disclosure by the Foundation; (B) were
                 publicly disclosed except by breach of this Agreement either
                 prior to or subsequent to the receipt of such Third Party
                 Results by the Company; (C) are rightfully received by the
                 Company from a third party without an express obligation of
                 confidence to the Foundation or the member of the High Q
                 Research Group who discovered such Third Party Results; (D) are
                 independently developed by the Company without use or reliance
                 upon Third Party Results provided by the Foundation; (E) are
                 disclosed pursuant to any applicable federal, state, local or
                 international law, or any judicial or government request,
                 requirement or order, provided that the Company takes
                 reasonable steps to provide the Foundation with sufficient
                 prior notice in order to allow the Foundation to contest such
                 request, requirement or order;

          (ii)   to discuss the Third Party Results only with those employees of
                 the Company that are advised (A) of the confidential nature of
                 the Third Party Results and (B) that the Third Party Results
                 must not be shared with anyone outside of the Company until the
                 Third Party Results are made publicly available;

          (iii)  until the Third Party Results are made publicly available, to
                 not Publish or otherwise publicly disclose methods, data or
                 other results which are derived using the Third Party Results
                 without appropriate written permission; and

          (iv)   to acknowledge other researchers appropriately if the Third
                 Party Results have contributed to a Publication or presentation
                 of Results.

     (e)  DISCLOSURE NOT TO CONSTITUTE PUBLICATION. The Parties acknowledge that
          it is the intention of the Foundation, the Company and the other
          members of the High Q Research Group that the sharing of Results and
          Third Party Results among members of the High Q Research Group is to
          be conducted in a manner so that such sharing shall not constitute
          "disclosure" for patent purposes.

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     (f)  DISCLOSURE OF RESULTS OUTSIDE THE HIGH Q RESEARCH GROUP. With respect
          to each Result disclosed by the Company to the Foundation, on and
          after the later to occur of (i) the fifth anniversary of the date
          hereof and (ii) three years after the date of the disclosure of such
          Result (such later date hereinafter referred to as the "DISCLOSURE
          DATE"), the Foundation shall have the right to disclose (other than
          through Publication) such Result to any individual or organization
          without any restrictions unless prior to the Disclosure Date the
          Company notifies the Foundation that there exists good reasons for
          such disclosure to be withheld for an additional six-month period, in
          which case the Disclosure Date will be extended for an additional six
          months and the provisions of this SECTION 6(f) shall apply to such new
          Disclosure Date.

                              INTELLECTUAL PROPERTY

7.   DEFINITIONS. For the purposes of this Agreement, the following terms have
     the meanings set forth below:

     (a)  "COMPANY BACKGROUND INTELLECTUAL PROPERTY" means Intellectual Property
          owned or licensed by the Company prior to the date hereof that is
          applied to the Research Project at any time together with any
          modifications or enhancements to such Intellectual Property Made in
          the course of the conduct, or resulting from the performance, of the
          Research Project or the term of this Agreement, whichever is longer.

     (b)  "HD FIELD OF USE" means any activity useful for creating, researching,
          developing, manufacturing, distributing or selling a product, process
          or service for diagnosing, treating, curing or preventing Huntington's
          disease.

     (c)  "HD INTELLECTUAL PROPERTY" means any Intellectual Property (other than
          Company Background Intellectual Property) Made in the course of the
          conduct, or resulting from the performance of, the Research Project
          that (i) relates to Huntington's disease or (ii) is useful for the
          creation, development, manufacture or distribution of a product or
          service for the diagnosis, treatment, cure or prevention of
          Huntington's disease". For the avoidance of doubt, HD Intellectual
          Property shall not include any Company Background Intellectual
          Property.

     (d)  "HD INTELLECTUAL PROPERTY DIAGNOSTIC OR TOOL" means any HD
          Intellectual Property which may be used for diagnostic applications or
          as a tool for drug discovery in connection with any disease other than
          Huntington's disease.

     (e)  "HD RESEARCH AND DEVELOPMENT" means any activity useful for the
          creation, development, manufacture or distribution of a product or
          service for the diagnosis, treatment, cure or prevention of
          Huntington's disease other than the sale of such product or service.
          For the avoidance of doubt, HD Research and Development shall not
          include any right to sell a

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          product or service (including any transfer of services or products
          made using intellectual property rights, whether or not for
          consideration, other than a transfer of services or products solely
          for research and development purposes without fee or profit).

     (f)  "INTELLECTUAL PROPERTY" means any discovery, invention, formulation,
          know-how, method, technological development, enhancement,
          modification, improvement, work of authorship, computer software
          (including, but not limited to, source code and executable code) and
          documentation thereof, data or collection of data, whether patentable
          or not, or susceptible to copyright or any other form of legal
          protection.

     (g)  "MADE" when used in relation to any Intellectual Property means the
          conception, discovery, invention or first actual reduction to practice
          of such Intellectual Property, as the case may be.

     (h)  "NON-HD INTELLECTUAL PROPERTY" means any Intellectual Property Made in
          the course of the conduct, or resulting from the performance of, the
          Research Project that is not HD Intellectual Property ". For the
          avoidance of doubt, Non-HD Intellectual Property shall not include any
          Company Background Intellectual Property.

     (i)  "NON-PATENTABLE HD INTELLECTUAL PROPERTY" means any HD Intellectual
          Property that is not Patentable HD Intellectual Property.

     (j)  "PATENTABLE INTELLECTUAL PROPERTY" means all Patentable HD
          Intellectual Property and Patentable Non-HD Intellectual Property.

     (k)  "PATENTABLE HD INTELLECTUAL PROPERTY" means any HD Intellectual
          Property which (i) is or may be patentable or otherwise protectable
          under Title 35 U.S.C. and corresponding legislation in other
          jurisdictions and (ii) is the subject of a patent or pending patent
          application, including any continuation, continuation-in-part,
          division, extension, substitute, re-examination, reissue and any other
          derivative application or patent.

     (l)  "PATENTABLE NON-HD INTELLECTUAL PROPERTY" means any Non-HD
          Intellectual Property which (i) is or may be patentable or otherwise
          protectable under Title 35 U.S.C. and corresponding legislation in
          other jurisdictions and (ii) is the subject of a patent or pending
          patent application, including any continuation, continuation-in-part,
          division, extension, substitute, re-examination, reissue and any other
          derivative application or patent.

     (m)  "RESEARCH AND DEVELOPMENT" means any activity useful for the creation,
          development, manufacture or distribution of a product or service other
          than the sale of such product or service. For the avoidance of doubt,
          Research and Development shall not include any right to sell a product
          or service (including any transfer of services or products made using

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          intellectual property rights, whether or not for consideration, other
          than a transfer of services or products solely for research and
          development purposes without fee or profit).

8.   OWNERSHIP OF INTELLECTUAL PROPERTY.

     (a)  OWNERSHIP OF HD INTELLECTUAL PROPERTY. The Foundation and the Company
          shall jointly own in equal shares all HD Intellectual Property. Each
          of the Parties hereby agrees that it will not sell or otherwise
          transfer its title to any HD Intellectual Property to any third party
          other than an affiliate provided that such affiliate takes title to
          such HD Intellectual Property (i) subject to the rights of the
          non-transferring Party in such HD Intellectual Property under this
          Agreement and (ii) assumes the obligations of the transferring Party
          with respect to such HD Intellectual Property under this Agreement.

     (b)  OWNERSHIP RIGHTS OF NON-HD INTELLECTUAL PROPERTY. The Company shall
          own all Company Background Intellectual Property and all Non-HD
          Intellectual Property. Except as expressly set forth in this
          Agreement, the Foundation shall have no interest in any Non-HD
          Intellectual Property resulting from, or conceived during, the
          Research Project.

9.   INTELLECTUAL PROPERTY; PATENTABLE HD INTELLECTUAL PROPERTY.

     (a)  NOTICE OF INTELLECTUAL PROPERTY. If either Party believes that any
          Intellectual Property has been Made in the course of the conduct, or
          resulting from the performance of, the Research Project, such Party
          will, within a reasonable period of time thereafter, give notice (an
          "INVENTION NOTICE") of such Intellectual Property to the other Party.
          Such Intellectual Property Notice shall describe in reasonable detail
          the Intellectual Property that such Party believes has been Made and
          state whether such Party believes that such Intellectual Property is
          Patentable Intellectual Property.

     (b)  PROSECUTION OF PATENTABLE HD INTELLECTUAL PROPERTY; INVENTORSHIP.

          (i)    RESPONSIBILITY FOR PROSECUTION OF PATENTABLE HD INTELLECTUAL
                 PROPERTY. The Company shall prepare, file, prosecute and
                 maintain the appropriate filings in respect of any Patentable
                 HD Intellectual Property including filing (A) a provisional
                 patent application or (B) a patent application (including a
                 patent application corresponding to a previously filed
                 provisional patent application) claiming any such Patentable HD
                 Intellectual Property in the United States and in such other
                 jurisdictions as the Company determines, acting reasonably,
                 that are necessary in order to protect the Company's and the
                 Foundation's rights in such Patentable HD Intellectual
                 Property. The Company shall ensure that all filings are

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                 filed in the name of the Company and the Foundation as
                 co-owners.

          (ii)   FOUNDATION ELECTION TO HAVE PROSECUTION OF PATENTABLE HD
                 INTELLECTUAL PROPERTY INITIATED. At any time and from time to
                 time, the Foundation shall have the right to elect to cause the
                 Company to prepare, file, prosecute and maintain the
                 appropriate filings in respect of any Patentable HD
                 Intellectual Property which is the subject of an Invention
                 Notice by providing notice (a "FOUNDATION PATENT FILING
                 NOTICE") of such election to the Company including filing (A) a
                 provisional patent application or (B) a patent application
                 (including a patent application corresponding to a previously
                 filed provisional patent application) claiming any such
                 Patentable HD Intellectual Property in the United States and in
                 such other jurisdictions as the Company determines, acting
                 reasonably, that are necessary in order to protect the
                 Company's and the Foundation's rights in such Patentable HD
                 Intellectual Property. The Company shall ensure that all
                 filings are filed in the name of the Company and the Foundation
                 as co-owners.

          (iii)  INVENTORSHIP. The Parties hereby agree that the identity of the
                 inventor of all Patentable HD Intellectual Property shall be
                 determined in accordance with United States Patent law (or, if
                 the jurisdiction in which patent or other protection is being
                 sought does not permit the application of United States Patent
                 law to identify the inventor, then in accordance with the
                 applicable law in that jurisdiction).

     (c)  COVENANTS OF THE COMPANY. With respect to the prosecution and
          maintenance by the Company of any Patentable HD Intellectual Property
          pursuant to SECTION 9(b) of this Agreement, the Company hereby agrees
          to promptly (i) give all notices required by, and comply with all
          other requirements of, applicable law to preserve the Parties' rights
          in such Patentable HD Intellectual Property as appropriate; (ii)
          prepare, file, prosecute and maintain, as applicable, the appropriate
          filings to protect the Parties' rights in such Patentable HD
          Intellectual Property; (iii) provide the Foundation with a copy of any
          provisional patent application or patent application filed claiming
          such Patentable HD Intellectual Property; (iv) provide the Foundation
          with copies of all correspondence and other documents relating to the
          prosecution and maintenance of such Patentable HD Intellectual
          Property that come into the possession or control of the Company; and
          (v) such other documents and information related to such Patentable HD
          Intellectual Property as the Foundation may reasonably request and the
          Company can provide without incurring unreasonable cost and expense.

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     (d)  PATENT EXPENSES. The Parties hereby agree that all out-of-pocket costs
          and expenses (including attorneys' fees and government filing fees)
          incurred by the Company to prepare, file, prosecute and maintain the
          appropriate filings to protect the Parties' rights in any Patentable
          HD Intellectual Property ("PATENT EXPENSES") will be shared equally by
          the Parties. The Company shall submit invoices (including all relevant
          receipts) for all such Patent Expenses to the Foundation on a monthly
          basis or as invoices in respect of Patent Expenses are received from
          third parties. Each invoice shall be paid by the Foundation within 30
          days of the receipt of such invoice from the Company for such Patent
          Expenses.

     (e)  DISCLAIMER OF INTEREST IN PATENTABLE HD INTELLECTUAL PROPERTY.

          (i)    DISCLAIMER NOTICE. With respect to any Patentable HD
                 Intellectual Property, either Party may, at any time, disclaim
                 its interest in such Patentable HD Intellectual Property and
                 elect to cease to bear its share of the Patent Expenses in
                 respect of such Patentable HD Intellectual Property by
                 providing notice of such election ("PATENTABLE HD INTELLECTUAL
                 PROPERTY DISCLAIMER NOTICE") to the other Party; provided,
                 however, the disclaiming Party shall remain liable for is share
                 of all Patent Expenses incurred or committed to through the
                 date the non-disclaiming party receives the Patentable HD
                 Intellectual Property Disclaimer Notice. The Company shall be
                 deemed to have disclaimed its interest in any Patentable HD
                 Intellectual Property that is the subject of a Foundation
                 Patent Filing Notice if the Company fails to comply with the
                 obligations set forth in SECTION 9(c) of this Agreement with
                 respect to such Patentable HD Intellectual Property.

          (ii)   EFFECT OF DISCLAIMER NOTICE. In the event that a Patentable HD
                 Intellectual Property Disclaimer Notice is delivered by either
                 Party in respect of Patentable HD Intellectual Property: (A)
                 the disclaiming Party shall promptly assign its ownership
                 interest in such Patentable HD Intellectual Property to the
                 non-disclaiming Party without consideration; (B) except as set
                 forth in SECTION 9(e)(i) above, as of the date of the receipt
                 of such Patentable HD Intellectual Property Disclaimer Notice
                 by the non-disclaiming Party, the disclaiming Party shall no
                 longer be responsible for its share of the Patent Expenses in
                 respect of such Patentable HD Intellectual Property; (C) except
                 as set forth in SECTION 9(e)(i) above, as of the date of the
                 receipt of such Patentable HD Intellectual Property Disclaimer
                 Notice by the non-disclaiming Party, the non-disclaiming Party
                 shall be solely responsible for all Patent Expenses in respect
                 of such Patentable HD Intellectual Property; (D) except as
                 expressly set forth in SECTION 10(e) of this Agreement, the
                 disclaiming Party shall have no further rights to such
                 Patentable HD Intellectual Property; and (E) the disclaiming

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                 Party hereby agrees at any time during and after the term of
                 this Agreement to cooperate with the non-disclaiming Party
                 without consideration but at the expense of the non-disclaiming
                 Party in preparing, filing, prosecuting and maintaining, as
                 applicable, the appropriate filings to protect the
                 non-disclaiming Party's rights in such Patentable HD
                 Intellectual Property, including obtaining execution by its
                 employees of any documents necessary in connection with such
                 activities. Each of the Parties hereby agrees to use reasonable
                 efforts to keep the other Party advised of its deliberations
                 regarding its determinations as to electing to disclaim its
                 interest in any Patentable HD Intellectual Property.

     (f)  INFRINGEMENT OR MISAPPROPRIATION OF HD INTELLECTUAL PROPERTY.

          (i)    INFRINGEMENT OR MISAPPROPRIATION OF HD INTELLECTUAL PROPERTY BY
                 THIRD PARTIES. Each Party hereby agrees to promptly notify the
                 other Party in writing of any alleged or threatened
                 infringement or misappropriation of any HD Intellectual
                 Property by a third party of which it becomes aware. In
                 connection with any such alleged or threatened infringement or
                 misappropriation, the Parties hereby agree to confer and take
                 such action and allocate expenses and recoveries in such manner
                 as they may mutually agree. Neither Party shall settle a claim
                 brought against a third party in respect of such infringement
                 or misappropriation without the consent of the other Party.

          (ii)   INFRINGEMENT OR MISAPPROPRIATION CLAIMS BY THIRD PARTIES
                 RELATED TO HD INTELLECTUAL PROPERTY. Each Party hereby agrees
                 to notify the other party in writing if any third party alleges
                 that any HD Intellectual Property infringes or misappropriate
                 such third party's Intellectual Property rights. In connection
                 with any such alleged infringement or misappropriation, the
                 Parties hereby agree to confer and take such action and
                 allocate expenses in such manner as they may mutually agree.
                 Neither Party shall settle a claim brought by a third party in
                 respect of such infringement or misappropriation without the
                 consent of the other Party.

10.  LICENSES.

     (a)  COMMERCIALIZATION OF HD INTELLECTUAL PROPERTY; RESERVATION OF RIGHTS
          REGARDING HD INTELLECTUAL PROPERTY.

          (i)    COMMERCIALIZATION OF HD INTELLECTUAL PROPERTY. The Parties
                 hereby agree that neither Party shall (A) except as expressly
                 permitted by SECTION 10(a)(ii)(A), SECTION 10(a)(ii)(C) or
                 SECTION 10(a)(ii)(D) of this Agreement, use or otherwise
                 exploit any HD Intellectual Property for any use or purpose or
                 (B) except as expressly

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                 permitted by SECTION 10(a)(ii)(B), SECTION 10(a)(ii)(C) or
                 SECTION 10(a)(ii)(E) of this Agreement, grant any license of
                 any HD Intellectual Property for any use or purpose. The
                 Parties hereby further agree that, except as expressly
                 permitted by SECTION 10(a)(ii) of this Agreement, the use or
                 other exploitation of any HD Intellectual Property (other than
                 any HD Intellectual Property Diagnostic or Tool outside the HD
                 Field of Use) by either of the Parties or a third party for
                 uses other than Research and Development shall only be done
                 pursuant the grant of a commercial license (any such license
                 shall hereinafter be referred to as a "COMMERCIAL LICENSE")
                 pursuant to a license agreement executed by each of the
                 Parties.

          (ii)   RESERVATION OF RIGHTS BY THE PARTIES TO GRANT CERTAIN LICENSES.

                 (A)  COMPANY'S RIGHT TO USE HD INTELLECTUAL PROPERTY. The
                      Company hereby reserves the right to use any HD
                      Intellectual Property for all uses and purposes relating
                      to Research and Development.

                 (B)  COMPANY'S RIGHT TO GRANT RESEARCH AND DEVELOPMENT
                      LICENSES. The Company hereby reserves the right to grant
                      non-exclusive licenses throughout the world in respect of
                      any HD Intellectual Property for all uses and purposes
                      relating to Research and Development.

                 (C)  COMPANY'S RIGHT TO USE AND GRANT COMMERCIAL LICENSES IN
                      RESPECT OF HD INTELLECTUAL PROPERTY DIAGNOSTICS OR TOOLS.
                      The Company hereby reserves the right to (1) use any HD
                      Intellectual Property Diagnostic or Tool for all uses and
                      purposes outside the HD Field of Use and (2) grant
                      commercial licenses throughout the world in respect of any
                      HD Intellectual Property Diagnostic or Tool for all uses
                      and purposes outside of the HD Field of Use.

                 (D)  FOUNDATION'S RIGHT TO USE HD INTELLECTUAL PROPERTY. The
                      Foundation hereby reserves the right to use any HD
                      Intellectual Property for all uses and purposes relating
                      to HD Research and Development.

                 (E)  FOUNDATION'S RIGHT TO GRANT HD RESEARCH AND DEVELOPMENT
                      LICENSES. The Foundation hereby reserves the right to
                      grant non-exclusive licenses throughout the world in
                      respect of any HD Intellectual Property for all uses and
                      purposes relating to HD Research and Development.

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     (b)  CONSULTATIONS BETWEEN THE COMPANY AND THE FOUNDATION REGARDING
          COMMERCIAL LICENSES; EXCLUSIVE RIGHT TO NEGOTIATE; THIRD PARTY
          PROPOSALS.

          (i)    GOOD FAITH CONSULTATIONS. The Parties hereby agree to consult,
                 and work in partnership, with each other in accordance with the
                 provisions of this SECTION 10 concerning the grant of any
                 Commercial License. With respect to any decision regarding the
                 granting of any Commercial License, the Parties hereby further
                 agree to (A) act in good faith and on a responsive basis and
                 (B) make such decision on a reasonable basis using the
                 principles and guidelines set forth in SECTION 10(c) of this
                 Agreement.

          (ii)   EXCLUSIVE RIGHT TO NEGOTIATE A COMMERCIAL LICENSE. The Parties
                 hereby agree that the Company shall have an exclusive first
                 right to negotiate with the Foundation to obtain for itself
                 each Commercial License. Such exclusive right to negotiate
                 shall extend for a period of 90 days beginning on the date
                 either Party notifies the other Party in writing of its desire
                 to initiate the process for the granting of a Commercial
                 License; provided, however, no such notice may be given in
                 respect of such Commercial License prior to the earlier to
                 occur of (A) the mutual agreement of the Parties, (B) with
                 respect to any compound combination, the date on which all data
                 reasonably necessary to permit the filing of investigational
                 new drug application ("IND") with the United States Food and
                 Drug Administration (the "FDA") is available and (C) the fourth
                 anniversary of the Effective Date. During such 90-day period,
                 the Parties hereby agree to negotiate with each other under the
                 principles and guidelines set forth in SECTION 10(b) and
                 SECTION 10(c). If, upon the expiration of such 90-day period,
                 the Parties have not reached an agreement to grant such
                 Commercial License to the Company, the Parties may submit
                 alternative proposals for such Commercial License for
                 consideration in accordance with this SECTION 10.

          (iii)  RIGHT TO MAKE PROPOSAL REGARDING THE GRANTING OF A COMMERCIAL
                 LICENSE.

                 (A)  Subject to SECTION 10(b)(ii), the Parties hereby agree (1)
                      that either Party may submit to the Parties for their
                      consideration under this SECTION 10 a proposal for the
                      granting of a Commercial License and (2) to consult and
                      make a determination regarding the granting of a
                      Commercial License in respect of such proposal in
                      accordance with the provisions of this SECTION 10.

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                 (B)  if (1) the Parties are evaluating multiple proposals
                      (including one submitted by the Company pursuant to which
                      the Company would be granted a Commercial License (the
                      "COMPANY PROPOSAL")) to determine whether or not the
                      principles and guidelines set forth in this SECTION 10 for
                      the granting of a Commercial License have been satisfied
                      and (2) more than one of such proposals (including the
                      Company Proposal) satisfies the principles and guidelines
                      set forth in this SECTION 10 on an equivalent basis, the
                      Foundation hereby agrees to accept the Company Proposal
                      and agrees to grant a Commercial License to the Company in
                      accordance with this SECTION 10.

     (c)  PRINCIPLES AND GUIDELINES FOR GRANTING COMMERCIAL LICENSES.

          (i)    FUNDAMENTAL PRINCIPLES AND GUIDELINES. The Parties hereby agree
                 that a Commercial License shall be granted if and only if the
                 Parties mutually agree that the granting of such Commercial
                 License is reasonably likely to:

                 (A)  maximize the impact on the health and well-being of
                      Huntington's disease patients;

                 (B)  maximize the availability of diagnostic or therapeutic
                      products to Huntington's disease patients; and

                 (C)  maximize the speed of which diagnostic or therapeutic
                      products are available to Huntington's disease patients.

          (ii)   AVAILABILITY OF PRODUCTS AS PRIMARY FACTOR FOR GRANTING
                 COMMERCIAL LICENSES. Subject to SECTION 10(c)(iii), if (A) the
                 Parties are evaluating multiple proposals (including a Company
                 Proposal) for the granting of a Commercial License, (B) more
                 than one of the proposals satisfies the principles and
                 guidelines set forth in this SECTION 10 (other than (1) the
                 proposed economic terms and (2) the proposed time frame for
                 making the diagnostic or therapeutic product which is to be the
                 subject of such Commercial License available to Huntington's
                 disease patients) on an equivalent basis; and (C) one of the
                 proposals sets forth a time frame for making the diagnostic or
                 therapeutic product which is to be the subject of such
                 Commercial License available to Huntington's disease patients
                 that is substantially shorter than those set forth in the other
                 proposals being considered by the Parties, the Parties hereby
                 agree that the proposal setting forth such substantially
                 shorter time frame shall be accepted by the Parties and a
                 Commercial License granted to the entity making such proposal
                 even if the economic terms of such proposal are

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                 substantially less than those set forth in the other proposals
                 being considered by the Parties.

          (iii)  COMMERCIAL LICENSE AGREEMENT TERMS AND CONDITIONS. In addition
                 to the principles and guidelines set forth in SECTION 10(c)(i)
                 and SECTION 10(c)(ii) of this Agreement, the Parties hereby
                 further agree that a Commercial License shall be granted if and
                 only if the Parties mutually agree that the terms and
                 conditions of the license agreement in respect of such
                 Commercial License incorporates the following terms, principles
                 and guidelines:

                 (A)  reasonable performance milestones and a demonstrated
                      capacity of the licensee to be able to meet those
                      milestones; and

                 (B)  reasonable business and other terms and conditions that
                      are in keeping with the then existing market standards for
                      agreements of such type and nature in respect of similar
                      technology and in similar disease indications.

     (d)  RESOLUTION OF DISPUTES REGARDING THE GRANTING OF COMMERCIAL LICENSES.
          If the Parties do not reach a mutual agreement regarding the granting
          of a Commercial License in respect of a proposal for the granting of a
          Commercial License submitted by either of the Parties for their
          consideration in accordance with the provisions of this SECTION 10,
          the Parties hereby agree that the resolution of such disagreement
          shall be determined in accordance with the dispute resolution
          procedures set forth in SECTION 26 of this Agreement.

     (e)  RESERVATION OF NON-EXCLUSIVE LICENSES OF DISCLAIMED PATENTABLE HD
          INTELLECTUAL PROPERTY.

          (i)    RESERVATION OF NON-EXCLUSIVE LICENSE BY THE FOUNDATION. With
                 respect to each patent (including (A) any patent application,
                 divisional, continuation, continuation-in-part, substitute,
                 renewal, reexamination, extension or reissue in respect of such
                 patent or (B) any intellectual property rights claimed in
                 respect of such patent) claiming Patentable HD Intellectual
                 Property which the Foundation has disclaimed its interest
                 pursuant to SECTION 9(e) of this Agreement, the Foundation
                 hereby reserves a non-exclusive, paid-up, irrevocable,
                 perpetual license throughout the world for all purposes
                 relating to HD Research and Development including a license to
                 (1) make, have made, use and have used products or processes
                 resulting from such Patentable HD Intellectual Property, (2)
                 practice and have practiced such Patentable HD Intellectual
                 Property and (3) use and have used the Confidential Information
                 relating to such Patentable HD Intellectual Property. The
                 foregoing

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                 license (a) shall be for all purposes and activities relating
                 to HD Research and Development only, (b) shall not include any
                 right to sell (including any transfer of services or products
                 made using intellectual property rights, whether or not for
                 consideration, other than a transfer of services or products
                 solely for research and development purposes without fee or
                 profit), (c) shall not be subject to royalties or other fees
                 and (d) shall include the right to grant sublicenses on the
                 same terms; provided, that, such sublicense (i) is granted
                 without payment of royalties, other fees or profit and (ii)
                 prohibits the sublicensee from granting sublicenses.

          (ii)   RESERVATION OF NON-EXCLUSIVE LICENSE BY THE COMPANY. With
                 respect to each patent (including (A) any patent application,
                 divisional, continuation, continuation-in-part, substitute,
                 renewal, reexamination, extension or reissue in respect of such
                 patent or (B) any intellectual property rights claimed in
                 respect of such patent) claiming Patentable HD Intellectual
                 Property which the Company has disclaimed its interest pursuant
                 to SECTION 9(e) of this Agreement, the Company hereby reserves
                 a non-exclusive, paid-up, irrevocable, perpetual license
                 throughout the world for all purposes relating to Research and
                 Development including a license to (1) make, have made, use and
                 have used products or processes resulting from such Patentable
                 HD Intellectual Property, (2) practice and have practiced such
                 Patentable HD Intellectual Property and (3) use and have used
                 the Confidential Information relating to such Patentable HD
                 Intellectual Property. The foregoing license (a) shall be for
                 all purposes and activities relating to Research and
                 Development only, (b) shall not include any right to sell
                 (including any transfer of services or products made using
                 intellectual property rights, whether or not for consideration,
                 other than a transfer of services or products solely for
                 research and development purposes without fee or profit), (c)
                 shall not be subject to royalties or other fees and (d) shall
                 include the right to grant sublicenses on the same terms;
                 provided, that, such sublicense (i) is granted without payment
                 of royalties, other fees or profit and (ii) prohibits the
                 sublicensee from granting sublicenses.

11.  NON-ASSERT COVENANT. So long as the Parties are in compliance with the
     terms and conditions of this Agreement, each of the Parties hereby
     undertakes not to bring any action or assist others in bringing any action,
     and undertakes to ensure, by contract or otherwise, that its licensees and
     assignees of any HD Intellectual Property or Non-HD Intellectual Property
     will not bring any action or assist others in bringing any action, against
     the Foundation, its licensees or assignees of any HD Intellectual Property
     or any other person on the ground that the practice or use, as the case may
     be, of any HD Intellectual Property for any purpose or activity relating to
     HD Research and Development infringes or misapropriates the

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     proprietary rights of such Party, its licensees or assignees in any HD
     Intellectual Property or Non-HD Intellectual Property.

12.  LICENSES TO COMPANY BACKGROUND INTELLECTUAL PROPERTY; SCOPE OF LICENSE TO
     USE COMPANY BACKGROUND INTELLECTUAL PROPERTY.

     (a)  LICENSES TO COMPANY BACKGROUND INTELLECTUAL PROPERTY. To the extent it
          has the legal right to do so, the Company hereby agrees, upon the
          request of the Foundation and subject to the provisions of this
          SECTION 12, SECTION 14 and SECTION 26, to grant to the Foundation (or
          a third party designated by the Foundation) a non-exclusive, paid-up,
          license throughout the world to use the Company Background
          Intellectual Property to the extent necessary to enable the Parties to
          commercially exploit the HD Intellectual Property in accordance with
          the terms of this Agreement. In clarification of the foregoing, the
          Foundation acknowledges and understands (i) the sensitive nature of
          the Company Background Intellectual Property and (ii) the extent to
          which the Company seeks to protect Company Background Intellectual
          Property and confidential information. Therefore, the Foundation
          hereby agrees that the Company shall not be required to grant a
          license pursuant to this SECTION 12 in connection with the commercial
          exploitation of any HD Intellectual Property if a commercially
          reasonable alternative method is available for a third party to
          commercially exploit such HD Intellectual Property.

     (b)  SCOPE OF LICENSE TO USE COMPANY BACKGROUND INTELLECTUAL PROPERTY. To
          the extent the Company is required to grant a non-exclusive license
          pursuant to this SECTION 12, the Parties hereby agree that such a
          license shall only be granted to the limited extent actually necessary
          to commercially exploit the HD Intellectual Property and for no other
          purpose, including, but not limited to, (i) discover or identify other
          drug candidates or (ii) explore other materials or compounds in an
          effort to discover a competitive therapeutic to treat Huntington's
          disease. The Parties further agree that any such license shall (A)
          contain appropriate and reasonable restrictions under the
          circumstances designed to safeguard the integrity and proprietary
          nature of the Company Background Intellectual Property and (B) be for
          a term no longer than is necessary to commercially exploit the HD
          Intellectual Property.

     (c)  RESOLUTION OF DISPUTES RELATING TO LICENSES OF COMPANY BACKGROUND
          INTELLECTUAL PROPERTY. In the event a dispute arises under this
          SECTION 12, and the matter is referred to an arbitrator pursuant to
          the terms of this Agreement, the arbitrator shall be given mutual
          instructions by the Parties that the provisions of this SECTION 12 are
          to be strictly construed and limited in order to adequately and
          appropriately protect the Company Background Intellectual Property.

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13.  REVENUE SHARING.

     (a)  AGREEMENT TO SHARE REVENUE. The Parties hereby agree that all revenue
          ("REVENUE") received by either of the Parties from the grant of any
          Commercial License of any HD Intellectual Property (other than HD
          Intellectual Property which has been disclaimed by one of the Parties
          pursuant to SECTION 9(e) of this Agreement) to a third party shall be
          distributed as follows:

          (i)    First, to the Foundation until an amount equal to the aggregate
                 amount of payments required to be made by the Foundation to the
                 Company (including any milestone payments actually paid to the
                 Company by the Foundation), under this Agreement has been
                 distributed to the Foundation;

          (ii)   Second, provided that the initial regulatory approval to sell a
                 therapeutic product which provides a benefit to Huntington's
                 disease patients has been granted by the appropriate regulatory
                 authority, to the Company until an amount equal to the amount
                 distributed to the Foundation pursuant to SECTION 13(a)(i) has
                 been distributed to the Company; and

          (iii)  Thereafter, equally to the Foundation and the Company.

     (b)  REVENUE SHARING NOT APPLICABLE TO REVENUE FROM COMMERCIAL LICENSING
          WHERE THE COMPANY IS THE LICENSEE. The Parties hereby agree that this
          SECTION 13 shall not apply to any Revenue received by either of the
          Parties in respect of a Commercial License of any HD Intellectual
          Property where the Company is the licensee of the interests of the
          Foundation in such HD Intellectual Property.

                CONFIDENTIAL INFORMATION; PUBLICITY; PUBLICATION

14.  CONFIDENTIAL INFORMATION. For the purposes of this Agreement, the term
     "CONFIDENTIAL INFORMATION" shall mean (a) this Agreement, (b) the Results
     and (c) all information provided by one Party (the "DISCLOSING PARTY") to
     another Party (the "RECEIVING PARTY") that is clearly identified as
     "Confidential" by the Disclosing Party at the time of disclosure. If such
     transmittal occurs orally, the Disclosing Party will promptly reduce such
     transmittal to writing, mark and identify it as confidential, and provide
     such record to the Receiving Party. Specifically excepted from Confidential
     Information is all information that: (i) was previously known by the
     Receiving Party other than by reason of disclosure by the Disclosing Party;
     (ii) is publicly disclosed except by breach of this Agreement either prior
     to or subsequent to the Receiving Party's receipt of such information;
     (iii) is rightfully received by the Receiving Party from a third party
     without an express obligation of confidence to the Disclosing Party; (iv)
     is independently developed by the Receiving Party without use or reliance
     upon Confidential Information provided by the Disclosing Party; (v) is
     disclosed

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     pursuant to any applicable federal, state, local, or international law, or
     any judicial or government request, requirement or order, provided that the
     Receiving Party takes reasonable steps to provide the Disclosing Party with
     sufficient prior notice in order to allow the Disclosing Party to contest
     such request, requirement or order; or (vi) was provided by the Disclosing
     Party more than five years prior to disclosure by the Receiving Party.

15.  CONFIDENTIALITY. The Receiving Party shall not disclose any Confidential
     Information without written authorization from the Disclosing Party, except
     (a) the Foundation may disclose Confidential Information to the extent
     expressly permitted by the terms and conditions of SECTION 6 of this
     Agreement; (b) the Foundation may disclose Confidential Information in
     furtherance of the any license contemplated in SECTION 10 of this
     Agreement, provided that the Foundation imposes a corresponding obligation
     of confidentiality on the third party receiving such Confidential
     Information; (c) the Company may disclose Confidential Information to the
     extent expressly permitted by the terms and conditions of SECTION 16 of
     this Agreement; and (d) either Party may disclose Confidential Information
     to the extent expressly permitted by the terms and conditions of SECTION 17
     of this Agreement.

16.  PUBLICATION.

     (a)  DEFINITIONS. For the purposes of this Agreement, the term "PUBLISH"
          means (i) to publish in a peer reviewed scientific journal of general
          circulation; (ii) present at a scientific meeting and "PUBLICATION"
          has a corresponding meaning; or (iii) to disseminate, discuss or
          otherwise make publicly available outside of the High Q Research Group
          the Results or details regarding the Research Project.

     (b)  EXCLUSIVE RIGHT TO PUBLISH. The Company shall have (i) the sole and
          exclusive right to Publish Results and (ii) the sole and final
          authority over any and all decisions related to Publication of
          Results. The Company hereby agrees to provide appropriate
          acknowledgement of the Foundation's support of, and contribution to,
          the Research Project in any Publication of the Results.

     (c)  NOTICE OF PLANNED PUBLICATION OR OTHER PUBLIC DISCLOSURE BY THE
          RESEARCHER; FOUNDATION'S RIGHT OF REVIEW PRIOR TO PUBLICATION OR OTHER
          PUBLIC DISCLOSURE BY THE COMPANY. The Company shall provide the
          Foundation with a copy of any manuscript, abstract or presentation
          containing or based upon any Results for the Foundation's review and
          comment pursuant to this SECTION 16(c) prior to the submission to a
          journal for review for Publication or other public disclosure of such
          manuscript, abstract or presentation. The Foundation shall have a
          period (the "PUBLICATION REVIEW PERIOD") of 60 days (unless a shorter
          period is required by any regulatory or governmental entity but in no
          event less than 20 days), following the receipt of a proposed
          manuscript or an abstract or

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          presentation in which to review and comment on the proposed
          manuscript, abstract or presentation, as the case may be. In the event
          the Foundation identifies in writing information in any such
          manuscript, abstract or presentation which could reasonably be
          expected to adversely affect potential intellectual property rights
          associated with the Results, the Company shall either remove such
          information from such manuscript, abstract or presentation or delay
          the Publication or other public disclosure until appropriate steps,
          reasonably satisfactory to the Foundation, have been taken by the
          Company to protect the intellectual property rights. If there are any
          changes made to any proposed manuscript, abstract or presentation that
          has previously been provided to the Foundation which could reasonably
          be expected to adversely affect potential intellectual property rights
          associated with the Results, (1) the Company shall provide the
          Foundation with a copy of such revised manuscript, abstract or
          presentation and (2) the review and comment rights provided to the
          Foundation under this SECTION 16(c) shall apply to such revised
          manuscript, abstract or presentation.

17.  PUBLICITY. No Party shall use the name, trademarks, logos, physical
     likeness or other symbol of another Party (or their employees) for any
     marketing, advertising, public relations or other purposes without the
     prior written consent of an authorized representative of the affected
     Party, except that (a) either Party may make reference to the Foundation's
     support of the Research Project, provided that, in any such reference, the
     relationship of the Parties shall be accurately and appropriately described
     and (b) either Party may disclose, without the other Party's approval, (i)
     the existence of this Agreement; (ii) a general summary of the subject
     matter of the Research Project; (iii) the aggregate dollar amount of
     financial support to be provided under this Agreement; and (iv) any
     specific terms of this Agreement that are a matter of public record except
     by breach of this Agreement. All press releases shall be jointly issued.

                                    COVENANTS

18.  COVENANTS. Each of the Company, and where expressly applicable, the
     Foundation, hereby agrees to each of the following:

     (a)  COMPLIANCE WITH LAW. The Research Project will be conducted in
          compliance with all applicable federal, state, local, international,
          health authority and institutional laws, rules, regulations, orders
          and guidelines.

     (b)  USE OF FUNDS. All funds provided to the Company by the Foundation
          under this Agreement shall be used for the Research Project in
          accordance with this Agreement and for no other purposes.

     (c)  REPORTS; DISCLOSURE OF INFORMATION. The Company will provide the
          Foundation with interim written reports at least every six months and
          a final written report on the status and progress of the Research
          Project,

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          including an analysis of milestones achieved. Each such report shall
          include a copy of all Results and underlying data and each such report
          shall be treated as Confidential Information. Each Party agrees to
          provide to the other Party all information which may at any time come
          into the possession of such Party which relates to any compound
          combination evaluated in the course of the conduct or performance of
          the Research Project.

     (d)  AUDIT; ACCESS. At reasonably convenient times and dates, (i) the
          Foundation and its representatives shall have the right to audit the
          Company's compliance with this Agreement and (ii) the Company will
          provide the Foundation and its representatives with reasonable access
          to the Research Project facilities, data and personnel in order to
          assess the progress of the Research Project.

     (e)  RESEARCH TEAM. The Research Project shall only be conducted by
          individuals who have agreed to assign any rights they may acquire in
          any resulting Intellectual Property to the Company so that the Company
          may perform its obligations under this Agreement. The Company shall
          cause any such individual to assign any such Intellectual Property to
          the Company so that the Company may perform its obligations under this
          Agreement. Any person participating in the Research Project at the
          request of the Foundation shall assign any rights they may acquire in
          any resulting Intellectual Property to the Foundation.

     (f)  LICENSES AND APPROVALS. The Company has obtained all, and will obtain
          all, future, licenses, permits, consents and other approvals necessary
          for the Company to perform its obligations and convey the rights
          granted under this Agreement.

     (g)  CONFLICTING OBLIGATIONS. The Company has not granted any right or
          entered into any agreement or understanding that conflicts with the
          Company's obligations or the Foundation's rights under this Agreement.
          The Company will not grant any right and will not enter into any
          agreement or understanding that conflicts with the Company's
          obligations or the Foundation's rights under this Agreement. The
          Foundation has not granted any right or entered into any agreement or
          understanding that conflicts with the Foundation's obligations or the
          Company's rights under this Agreement. The Foundation will not grant
          any right and will not enter into any agreement or understanding that
          conflicts with the Foundation's obligations or the Company's rights
          under this Agreement.

     (h)  REQUIRED THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. The Company and the
          Foundation shall consult with each other in order to facilitate the
          licensing by the Company of any intellectual property rights of any
          third party (the "REQUIRED THIRD PARTY INTELLECTUAL PROPERTY RIGHTS")
          that must be licensed by the Company to use a reagent, cell line,
          compound or other materials

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          necessary for the Company to conduct or perform the Research Project.
          The Foundation shall reimburse the Company for the out-of-pocket costs
          of licensing any Required Third Party Intellectual Property Rights
          provided the terms and conditions upon which such Required Third Party
          Intellectual Property Rights are to be licensed are approved in
          writing by the Foundation. The Foundation hereby acknowledges and
          agrees that the Company is not obligated to conduct or perform the
          Research Project using any reagent, cell line, compound or other
          material if, in the Company's reasonable determination, the Company
          does not have a valid license or other right to use such reagent, cell
          line, compound or other material to conduct or perform the Research
          Project.

     (i)  INTELLECTUAL PROPERTY. The Company owns or has the right to use
          pursuant to a valid and enforceable, written license, sublicense,
          agreement, or other permission, all Company Background Intellectual
          Property existing as of the date hereof. Except for the Required Third
          Party Intellectual Property Rights, the Company Background
          Intellectual Property existing as of the date hereof constitutes all
          Intellectual Property necessary or useful to conduct and perform the
          Research Project and the other obligations of the Company under this
          Agreement. The Company will not interfere with, infringe upon,
          violate, misappropriate or otherwise come into conflict with any
          Intellectual Property rights of any third party in the conduct and
          performance of the Research Project.

     (j)  FURTHER ASSURANCES. Each Party shall execute such further documents,
          instruments, licenses and assurances and take such further actions as
          the other Party may reasonably request from time to time to better
          enable the other Party to exercise its rights under this Agreement
          and/or to confirm the terms and conditions of this Agreement.

                                    PAYMENTS

19.  PAYMENTS. Subject to the terms and conditions of this Agreement, payments
     will be remitted to the Company at the address set forth in SECTION 24 of
     this Agreement.

                    TERM; TERMINATION; EFFECT OF TERMINATION

20.  DEFINITION. For the purposes of this Agreement, the term "BANKRUPTCY EVENT"
     shall mean the (a) making of a general assignment for the benefit of
     creditors by the an entity; (b) filing of any petition by an entity or the
     commencement of any proceeding voluntarily by an entity for any relief
     under any bankruptcy or insolvency laws or any law relating to the relief
     of debtors; (c) consent by an entity to the entry of an order in an
     involuntary bankruptcy or insolvency case; (d) entry of an order or decree
     for relief against an entity by a court of competent jurisdiction in an
     involuntary case under any bankruptcy or insolvency laws or any law
     relating to the relief of debtors, which order or decree is unstayed and in
     effect for a period of sixty (60) consecutive days; (e) appointment, with
     or without

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     the consent of an entity, of any receiver, liquidator, custodian, assignee,
     trustee, sequestrator or other similar official of an entity or any
     substantial part of its property; or (f) admission by an entity in writing
     of its inability to pay its debts generally as they become due.

21.  TERM; TERMINATION OF CERTAIN PROVISIONS; EFFECT OF TERMINATION OF CERTAIN
     PROVISIONS.

     (a)  TERM. The term of this Agreement shall commence on the date hereof and
          shall continue in effect until terminated (in whole or in part) in
          accordance with the terms hereof or by the mutual written agreement of
          the Parties.

     (b)  TERMINATION OF CERTAIN PROVISIONS BY THE FOUNDATION. The Foundation
          may, by giving notice to the Company, elect to terminate each of the
          provisions specified in SECTION 21(e)(i) of this Agreement and
          discontinue the Research Project upon the occurrence and continuation
          of any of the following events:

          (i)    CHANGE IN RESEARCH PROJECT. The Company gives a Change of
                 Circumstances Notice to the Foundation.

          (ii)   INTERRUPTION. The Research Project is interrupted for more than
                 90 consecutive days at any time or for more than 120 days in
                 any 12 month period.

          (iii)  SATISFACTION OR ACHIEVEMENT OF SCIENTIFIC MILESTONES. If (A)
                 the Company does not satisfy or achieve each of the Scientific
                 Milestones on or before the date such Scientific Milestone was
                 to be satisfied or achieved or (B) the Company does not
                 complete the screening required by Phase 2B of the Research
                 Project within 39 months of the Effective Date; provided,
                 however, the date of termination in respect of the termination
                 of this Agreement by the Foundation due to the occurrence of
                 the circumstances described in this SECTION 21(b)(iii) shall be
                 30 days following the receipt by the Company of a notice of
                 termination from the Foundation delivered in accordance with
                 this Agreement.

          (iv)   BREACH OF THIS AGREEMENT. If the Company (A) materially
                 breaches any representation or warranty given by it under this
                 Agreement or (B) defaults in the performance of any of its
                 obligations under this Agreement and such breach or default is
                 not remedied within 45 days of the receipt by the Company of
                 notice of such breach or default from the Foundation.

          (v)    BANKRUPTCY EVENT. The Company becomes subject to a Bankruptcy
                 Event.

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     (c)  TERMINATION OF CERTAIN PROVISIONS BY THE COMPANY. The Company may, by
          giving notice to the Foundation, elect to terminate each of the
          provisions specified in SECTION 21(e)(i) of this Agreement and
          discontinue the Research Project upon the occurrence and continuation
          of any of the following events:

          (i)    BREACH OF THIS AGREEMENT. If the Foundation (A) materially
                 breaches any representation or warranty given by it under this
                 Agreement or (B) defaults in the performance of any of its
                 obligations under this Agreement and such breach or default is
                 not remedied within 45 days of the receipt by the Foundation of
                 notice of such breach or default from the Company.

          (ii)   BANKRUPTCY EVENT. The Foundation becomes subject to a
                 Bankruptcy Event.

     (d)  FACILITATION OF CONTINUED RESEARCH. Upon any termination of this
          Agreement, if requested by the Foundation, the Company will use its
          commercially reasonable efforts to facilitate the continuance of the
          Research Project elsewhere. For clarification purposes, for purposes
          of this SECTION 21(d), "commercially reasonable efforts" shall mean
          that the Company will (i) take the actions necessary to transfer the
          research information and data, inventory, copies of notebooks,
          compound libraries and the like to the Foundation (or such third party
          as directed by the Foundation) and (ii) participate in telephone and
          in-person discussions at mutually convenient and agreed upon times and
          places.

     (e)  EFFECT OF TERMINATION OF CERTAIN PROVISIONS.

          (i)    TERMINATION OF SPECIFIED PROVISIONS; SURVIVAL OF REMAINING
                 PROVISIONS. Immediately upon an election by the Foundation
                 pursuant to SECTION 21(b) of this Agreement or by the Company
                 pursuant to SECTION 21(c) of this Agreement, each of any
                 termination of this Agreement, SECTION 2, SECTION 3(a), SECTION
                 4 and SECTION 19 shall immediately terminate and have no
                 further force or effect. The Parties hereby acknowledge and
                 agree that in the event of the termination of the provisions
                 specified in this SECTION 21(e)(i), all other sections and
                 provisions of this Agreement shall survive indefinitely and
                 remain in full force and effect.

          (ii)   EFFECT OF TERMINATION. The Parties hereby acknowledge and agree
                 that in the event of the termination of the provisions
                 specified in this SECTION 21(e)(i) of this Agreement shall not
                 (A) relieve any Party then in breach of this Agreement for any
                 liabilities to the other Party in respect of such breach or (B)
                 relieve either Party from any of the obligations such Party may
                 have under any of the

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                 sections or provisions of this Agreement that expressly survive
                 any termination of this Agreement.

                                  MISCELLANEOUS

22.  INDEPENDENT CONTRACTOR. The Company is acting as an independent contractor
     and not an agent, joint venturer or partner of the Foundation.

23.  INDEPENDENT RESEARCH. Nothing in this Agreement shall be construed to limit
     the freedom of the Company to engage in similar inquiries made
     independently under other contracts or agreements with parties other than
     the Foundation.

24.  NOTICES. Any notice required or permitted to be given by this Agreement
     shall be in writing and shall be delivered by personal delivery, facsimile
     (provided the sender has evidence of successful transmission) or next day
     courier service. Any notice so delivered shall be deemed to be given,
     delivered and received, if delivered by personal delivery, on the day of
     delivery and if delivered by facsimile or courier service, on the day
     following dispatch. All such notices are to be given or made to the Parties
     at the following addresses (or to such other address as any Party may
     designate by a notice given in accordance with the provisions of this
     section):

     If to the Foundation to:

     CHDI, Inc.
     c/o MRSSI, Inc.
     350 Seventh Avenue, Suite 601
     New York, NY 10001
     Attention: Ruth Basu
     Telephone: 212-239-9300 x202
     Fax: 212-239-2101

     If to Company to:

     CombinatoRx, Incorporated
     650 Albany Street
     Boston, MA 02118
     Attention: Daniel Grau, Vice-President
     Telephone: 617-425-7022
     Fax: 617-425-7010

25.  INDEMNITY.

     (a)  The Foundation shall indemnify the Company, including, as applicable,
          its directors, officers, employees and agents, against any and all
          losses, costs and damages (including reasonable legal fees) suffered
          by the Company (and/or such other related persons) as a result of the
          Foundation's negligence, willful misconduct or breach of this
          Agreement.

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     (b)  The Company shall indemnify the Foundation, including, as applicable,
          its members, directors, officers, employees and agents, against any
          and all losses, costs and damages (including reasonable legal fees)
          suffered by the Foundation (and/or such other related persons) as a
          result of the Company's negligence, willful misconduct or breach of
          this Agreement.

26.  ALTERNATIVE DISPUTE RESOLUTION. If a dispute arises out of or relates to
     this Agreement (including any notice delivered in accordance with this
     Agreement), or breach thereof, the Parties agree first to try in good faith
     to settle such dispute, failing which such dispute shall be settled by a
     single arbitrator in an arbitration in New York, NY administered by JAMS
     under its Comprehensive Arbitration Rules and Procedures. The Parties
     hereby agree that the arbitrator shall be instructed by each of the Parties
     that (a) that this Agreement is to be narrowly construed and interpreted
     and (b) the arbitrator shall not be entitled to award speculative or
     consequential damage or lost profits. The arbitrator's fees and expenses
     shall be shared equally by the Parties. Each Party shall be responsible for
     its own costs and expenses, including fees of witnesses, consultants,
     travel and attorneys' fees and disbursements. The award rendered by the
     arbitrator shall be final and binding on the Parties, and judgment on the
     award may be entered in any court having jurisdiction thereof if reasonably
     necessary for enforcement. The Parties agree that, notwithstanding anything
     to the contrary in such rules, any and all such proceedings shall be
     confidential. During the pendency of any arbitration proceeding hereunder,
     the Parties further agree that this Agreement shall remain in full force
     and effect and the Parties shall continue to fulfill and satisfy their
     respective obligations hereunder other than to the extent such obligation
     is the subject of such arbitration proceeding.

27.  ASSIGNMENT. The Company may not assign this Agreement without the written
     consent of the Foundation, except to an entity (a) that acquires all or
     substantially all of the business of the Company (whether by sale of assets
     or stock or by merger) and (b) who agrees, in writing, to assume Company's
     obligations under this Agreement. The Company hereby agrees that any entity
     that acquires all or substantially all of the business of the Company
     (whether by sale of assets or stock or by merger) shall (i) acquire the
     Company's interest in the HD Intellectual Property and (ii) agree, in
     writing, to assume Company's obligations under this Agreement. The
     Foundation may assign this Agreement so long as the assignee expressly
     assumes in writing the Foundation's obligations in this Agreement.

28.  INCORPORATION OF APPENDICES AND EXHIBITS; ENTIRE AGREEMENT; AMENDMENT. The
     appendices and exhibits identified in this Agreement are incorporated
     herein by reference and made a part hereof. If anything in any appendix or
     exhibit attached to this Agreement conflicts with any terms or conditions
     set forth in the body of this Agreement, the terms and conditions set forth
     in the body of this Agreement shall control. This Agreement constitutes the
     entire agreement among the Parties relating to the Research Project and all
     prior understandings and agreements relating to the Research Project are
     superseded hereby. This Agreement may not be amended except by a document
     signed by the Company and the Foundation.

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29.  NO WAIVER. Any failure of a Party to enforce any provision of this
     Agreement shall not be deemed a waiver of its right to enforce such
     provision on any subsequent occasion. No waiver of any provision of this
     Agreement shall be valid unless it is in writing and is executed by the
     Party against whom such waiver is sought to be enforced. A waiver by any of
     the Parties of any provision of this Agreement will not be construed to be
     a waiver of any succeeding breach thereof or of any other provision of this
     Agreement.

30.  SEVERABILITY. Whenever possible, each provision of this Agreement shall be
     interpreted in such manner as to be effective and valid under applicable
     law. In the event a court of competent jurisdiction holds any provision of
     this Agreement to be invalid, such holding shall have no effect on the
     remaining provisions of this Agreement, and they shall continue in full
     force and effect.

31.  INTERPRETATION; HEADINGS. The word "including" shall mean "including
     without limitation". All pronouns and any variations thereof refer to the
     masculine, feminine or neuter, singular or plural, as the context may
     require. All terms defined in this Agreement in their singular or plural
     forms have correlative meanings when used herein in their plural or
     singular forms, respectively. Headings used in this Agreement are for
     convenience of reference only and are not intended to influence the
     interpretation hereof.

32.  GOVERNING LAW. This Agreement shall be governed by and construed in
     accordance with the domestic laws of the State of Delaware without giving
     effect to any choice or conflict of law provision or rule (whether of the
     State of Delaware or any other jurisdiction) that would cause the
     application of the laws of any jurisdiction other than the State of
     Delaware.

33.  NO STRICT CONSTRUCTION. The Parties have participated jointly in the
     negotiation and drafting of this Agreement. In the event of an ambiguity or
     question of intent or interpretation arises, this Agreement shall be
     construed as if drafted jointly by the Parties, and no presumption or
     burden of proof shall arise favoring or disfavoring any of the Parties by
     virtue of the authorship of any of the provisions of this Agreement,
     however, the Agreement is to be strictly and narrowly construed.

34.  COUNTERPARTS. This Agreement may be signed, including by facsimile
     signature, in two or more counterparts and each such counterpart will
     constitute an original document and such counterparts, taken together, will
     constitute the same instrument.

                                    * * * * *

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     In witness to the foregoing, the Parties have executed this Research
Agreement as of the date first written above.

FOUNDATION:

CHDI, Inc.

By:       /s/ Kenneth J. Slutsky
     -----------------------------------
     Name:    Kenneth J. Slutsky
     Title:   President
              Hereunto Duly Authorized

COMPANY:

CombinatoRx, Incorporated

By:       /s/ Alexis Borisy
     -----------------------------------
     Name:    Alexis Borisy
     Title:   President and Chief Executive Officer
              Hereunto Duly Authorized

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                        APPENDIX A TO RESEARCH AGREEMENT

                        (DESCRIPTION OF RESEARCH PROJECT)

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INTRODUCTION

GENERAL.

The goal of the Research Project is to rapidly discover novel combinations of
therapeutics that will enter clinical trials for the prevention or slowing of
the progression of Huntington disease. This Research Project description sets
forth two different mechanistic approaches towards this goal: (a) the prevention
of cytotoxicity in a cell-based model system and (b) the regulation of expanded
huntingtin (htt) protein levels in cells from Huntington disease patients.

The Research Project shall be conducted in five distinct phases (each, a
"PHASE") each of which shall be conducted over the specified period of time
beginning once all Scientific Milestones have been satisfied and all Required
Third Party Intellectual Property Rights necessary to conduct each such Phase
have been acquired by, or on behalf of, the Company. The Phases of the Research
Project are:

     -  Phase 1 - Assay Development and Optimization

           -   Phase 1A - Optimization of Assay 1

           -   Phase 1B - Development and Optimization of Assay 2

           -   Phase 1C - Development and Optimization of Assay 3

     -  Phase 2 - Primary Screening

           -   Phase 2A - Determination of Single Agent Activities of Selected
               Compounds

           -   Phase 2B - Combination Screening and Nomination of Compound
               Combinations for Secondary Screening

     -  Phase 3 - Secondary Screening

     -  Phase 4 - Pharmacokinetic, Pharmacodynamic and Toxicological Evaluation

     -  Phase 5 - Demonstration of Efficacy of Active Combinations in an
        Huntington disease mouse model

Each Phase of the Research Project shall be conducted in accordance with the
estimated time frames set forth in APPENDIX B. A detailed description of the
specific research activities to be conducted during each Phase is set forth
below.

The Company's Huntington disease Therapeutic Area Team comprising PhD and
BS-level scientists will be responsible for assay development and optimization
during Phase 1 of the Research Project and then interface with the screening and
technology groups during Phases 2, 3 and 4 of the Research Project. The Research
Project will be managed by a PhD level scientist and assisted by the Company's
project management group. The broader Research Project team will include members
of the Company's computational biology, informatics and new products groups, and
later stages of the Research Project will involve the Company's IN VIVO
pharmacology, bioanalytical and clinical development groups. The Research
Project and the activities of the Research Project team shall be managed by the
Research Committee.

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The Foundation will provide funding to the Company to support the Research
Project team consisting of the number of FTE's set forth in APPENDIX B
representing all functions and expertise required to complete the Research
Project (except IN VIVO efficacy studies which will be performed at
Psychogenics, Inc. ("PSYCHOGENICS") or such other entity selected by the
Foundation). During the Phase 1 of the Research Project, the Company will staff
the research team with (a) at least one PhD scientist FTE, (b) at least one
associate scientist FTE per mechanistic approach or assay type (1. cytotoxicity
and 2. htt protein levels) and (c) one-half senior scientific management FTE.
The transition to Phase 2 of the Research Project will require the addition of
at least one screening technician FTE as well as one FTE from the screening
core.

DEFINITIONS.

For the purposes of this Agreement, the following terms have the meanings set
forth below:

     -  "HIT" shall mean an entity that (a) displays a concentration-response
        relationship in the primary screen but not the counter assay, (b) has a
        purity of greater than 90% by LC/Mass Spec and (c) is a suitable
        candidate for further analysis.

     -  "LEAD" shall mean a Hit that (a) displays a concentration-response
        relationship in selected secondary assays, (b) is blood brain barrier
        penetrable and (c) is deemed of high enough quality to be tractable for
        IN VIVO testing in animal models of Huntington disease.

     -  "CANDIDATE" shall mean a Lead that (a) exhibits sufficient efficacy in
        predictive animal models of Huntington disease and (b) is suitable for
        first-in-man studies.

PHASE 1 - ASSAY DEVELOPMENT AND OPTIMIZATION

GENERAL.

Two expanded huntingtin-induced cell toxicity assays will be developed and
optimized using different cell lines. The first cell toxicity assay ("ASSAY 1")
will be optimized for high-throughput screening on the Company's platform
("HTS") using a cell line that is readily available. The second cell toxicity
assay ("ASSAY 2") will be developed and optimized using a cell line which must
be engineered and validated. A third assay ("ASSAY 3" and, together with Assay 1
and Assay 2, the "ASSAYS") will be developed and optimized using a high-content
imaging system to measure htt protein levels.

The optimization of Assay 1 shall begin on the date upon which an immediately
available cell line approved by the Research Committee is acquired by, or on
behalf of, the Company. Subject to the successful optimization of Assay 1 by the
Company and the approval of Assay 1 by the Research Committee, the Company will
begin Phase 2 of the Research Project using Assay 1 while additional assays are
being developed and optimized. pilot experiments in respect of Assay 2 shall
begin on the date upon which cell lines and cDNA constructs approved by the
Research Committee are acquired by, or on behalf of, the Company. The
development and optimization of Assay 2 shall begin on the date human neuronal
cell lines (E.G., TRex Flp-In neuroblastomas) approved by the Research Committee
are acquired by, or on behalf of, the Company in order to create an inducible
expression system with constructs for wild-type and expanded htt protein

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with variable glutamine repeat lengths. Assay 3, a high contect imaging assay to
monitor expanded htt protein levels and/or the presence of htt-aggregates in
Huntington disease patient derived cell lines, shall be developed and optimized
in parallel to Assay 1 and 2 and shall begin on the date cell lines and htt
specific antibodies approved by the Research Committee are acquired by, or on
behalf of, the Company.

PHASE 1A - OPTIMIZATION OF ASSAY 1

GENERAL.

Assay 1 will be optimized using a readily available htt or expanded htt
expressing cell line. Several htt and expanded htt expressing cell lines are
available from the Huntington disease research community. These include full
length wild type and expanded htt, and exon 1 wild type and expanded htt
expressing cell lines, each with variable glutamine (Q) repeat lengths. These
cell lines have existing protocols for htt-induced cytotoxicity. Examples of
possible cell lines and protocols include:

     -  Humanized N-terminal Exon 1, Q111, full length htt striatal cell lines
        derived from knock-in mice, chemical induced susceptibility assay
        (protocol: Macdonald, Harvard/MGH).

     -  Tebufenozide-induced HttN90-Q103-GFP (exon1) in PC12 cells, viability
        measured by release of lactate dehydrogenase (protocol: Erik Schweitzer,
        UCLA)

     -  Tebufenozide-induced HttN90-Q103-GFP (exon1) in PC12 cells, rescue from
        reduction of cell viability is measured with a cell viability dye,
        Alamar Blue (protocol: Brent Stockwell, Columbia Univ).

     -  ST14A cells (rat embryonic striatal precursor made by Elena Cattaneo)
        induced to differentiate into striatal-like neurons with 39C and serum
        W/D and express HttN548-Q120 (HEAT domain 1 plus 157 AAs), rescue from
        reduction in cell viability is measured with a cell viability dye,
        calcein AM (protocol: Brent Stockwell, Columbia Univ).

     -  HEK293 tet-induced HttN90-Q51 (exon1), rescue from cell toxicity
        measured by quantifying protein content of lysates (protocol: Erich
        Wanker, Max Delbruck Inst).

     -  Muristerine A-induced expression of Htt-Q103-EGFP in PC12 cells, GFP
        cell count for fraction of cells with aggregates (protocol: Alex
        Kazantsev, Harvard/MGH).

     -  HeLa cell with htt Q79, measurement of ATP depletion (protocol: Sanchez,
        Boston Univ).

     -  Among others with varying Q lengths and host cell backgrounds.

The Research Committee shall evaluate various cell lines and select up to four
cell lines for preliminary evaluation by the Company for use in Phase 1A of the
Research Project. The cell lines selected by the Research Committee shall be
acquired by, or on behalf of, the Company and conduct a preliminary evaluation
of each such cell line for its viability for optimization into Assay 1. Based
upon this preliminary evaluation by the Company, the Research Committee shall

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select one cell line to be used for optimization into Assay 1. Using the
approved cell line, the Company shall optimize such cell line into Assay 1 in
accordance with the development/optimization and validation procedures described
below. Furthermore, Assay 1 shall (a) be amenable to HTS and (b) consider each
of the following parameters as approved by the Research Committee:

     -  Uses a cell line that displays inducible cell death or cytotoxic
        measurments dependent on the induction of expanded htt and that is
        specific for the expanded form of htt and not wild type htt (I.E., the
        response to expanded htt GREATER THAN wildtype htt).

     -  Uses a viability readout that tracks inducible cell death with an
        acceptable signal to noise ratio (~3:1) and a Z' value acceptable to the
        Research Committee.

     -  Uses an assay format amenable to a 384-well plate using one of several
        viability readouts.

     -  Uses an inducible cytotoxic measurement that occurs on a time course
        appropriate for HTS (LESS THAN 36 hours).

     -  Observation of dose-dependent htt induction, and parallel dose-dependent
        cytotoxicity.

     -  Identification of one or more positive controls that inhibit the
        htt-induced cytotoxicity.

     -  Is characterized by response to induction that is reversible upon wash
        out of inducer (ability to track this will depend on protein stability
        and kinetics of cell death).

     -  Is characterized by cell lines that will recapitulate disease relevant
        features, such as sensitivity to stimulation with dopamine, glutamate or
        neuronal toxin.

Upon selection of the cell line by the Research Committee, the Company will
expand and characterize the selected cell line and complete the optimization of
Assay 1 in accordance with the development/optimization and validation
procedures described below. Furthermore, Assay 1 shall (a) be amenable to HTS
and (b) meets each of the specifications set forth above.

PHASE 1B - DEVELOPMENT AND OPTIMIZATION OF ASSAY 2

GENERAL.

Assay 2 will be developed and optimized using human neuronal cell lines (E.G.,
neuroblastomas) in order to create an inducible expression system with
constructs for wild-type and expanded htt protein with variable glutamine repeat
lengths. Assay 2 will be developed and optimized by the Company using a novel
TRex Flp-In neuroblastoma cell line made by Invitrogen Corporation
("INVITROGEN"). The TRex Flp-In neuroblastoma cell line shall be transferred to
the Company for introduction by the Company of the desired htt constructs and
the creation of stably transfected human neuronal cell lines capable of inducing
htt protein expression. The Foundation shall use reasonable efforts to acquire
such TRex Flp-In neuroblastoma cell line by entering into an agreement (the
"INVITROGEN AGREEEMENT") with Invitrogen upon terms and conditions acceptable to
the Foundation in its sole discretion to develop and deliver to the Company a
TRex Flp-In neuroblastoma cell line. The Invitrogen Agreement shall require
Invitrogen to produce the TRex

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Flp-In neuroblastoma cell line substantially in accordance with the
specifications described below.

PHASE 1B - PART 1: PILOT EXPERIMENTS BY THE COMPANY.

In order to select the neuronal cell line background that will yield the desired
phenotype, a series of pilot transient transfections described below will be
performed by the Company to determine the best candidate cell lines for TRex
Flp-In stable line generation. Criteria for the selection include cell death (or
an earlier cytotoxicity measurement) after transient expression of expanded htt,
but not wild type htt, as well as attributes amenable for HTS (cell growth rate
and ease of handling).

Candidate cell lines will be transiently transfected by the Company with
wildtype and expanded htt expression constructs, both exon 1 and full length.
The expression constructs used will depend on availability in the Huntington
disease research community, but will include varying htt Q-lengths, E.G., ~20
(normal) as well as ~50 and ~100 (expanded). The cDNAs approved by the Research
Committee for use in the pilot experiments to be conducted by the Company will
be transferred from Huntington disease research community to the Company and
their sequence confirmed by the Company. Upon such confirmation, the Company
shall conduct the pilot experiments. The relative transfection efficiencies of
the wild type and expanded expression constructs will be compared to determine
which lines appear to be differentially sensitive to the expression of wild type
versus expanded htt. Cell lines for comparison include SY5Y, HCN1a, and IMR32,
among other human neuronal cell lines, as well as the rodent lines N1a. and
PC-12 (a line known to display cytotoxicity upon expanded htt expression).

The expected amount of time to conduct the pilot transient transfections
described above is three months following the date upon which cell lines and
cDNA constructs approved by the Research Committee are acquired by, or on behalf
of, the Company.

PHASE 1B - PART 2: PRODUCTION OF TREX FLP-IN NEUROBLASTOMA CELL LINE BY
INVITROGEN.

Based on the transient transfection pilot experiment results, the Research
Committee shall evaluate the cell lines and, if warranted, approve up to two
cell lines for use as the parental cell lines for the generation of TRex Flp-In
stable cell lines. Upon the production of stable TRex Flp-In cell lines by
Invitrogen, which is estimated to take between eight to 12 months, the cell
lines will be transfered to the Company. The cell lines are to be produced to
ensure that the created single integration site does not negatively affect the
cell line.

PHASE 1B - PART 3: DEVELOPMENT AND OPTIMIZATION OF ASSAY 2 FROM THE TREX FLP-IN
NEUROBLASTOMA CELL LINE.

Upon receipt of the TRex Flp-In stable cell lines from Invitrogen, the Company
shall develop and optimize such cell line into Assay 2 in accordance with the
development/optimization and validation procedures described below. Furthermore,
Assay 2 shall (a) be amenable to HTS and (b) consider each of the following
parameters as approved by the Research Committee:

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     -  Uses a cell line that displays inducible cell death or cytotoxic
        measurments dependent on the induction of expanded htt and that is
        specific for the expanded form of htt and not wild type htt (I.E., the
        response to expanded htt GREATER THAN wildtype htt).

     -  Uses a viability readout that tracks inducible cell death with an
        acceptable signal to noise ratio (~3:1) and a Z' value acceptable to the
        Research Committee.

     -  Uses an assay format amenable to a 384-well plate using one of several
        viability readouts.

     -  Uses an inducible cytotoxic measurement that occurs on a time course
        appropriate for HTS (LESS THAN 36 hours).

     -  Observation of dose-dependent htt induction, and parallel dose-dependent
        cytotoxicity.

     -  Identification of one or more positive controls that inhibit the
        htt-induced cytotoxicity.

     -  Is characterized by response to induction that is reversible upon wash
        out of inducer (ability to track this will depend on protein stability
        and kinetics of cell death).

     -  Is characterized by cell lines that will recapitulate disease relevant
        features, such as sensitivity to stimulation with dopamine, glutamate or
        neuronal toxin.

To develop and optimize Assay 2, the Company will transfect the TRex Flp-In cell
lines with (a) normal exon 1 of htt, (b) expanded exon 1 of htt, (c) normal full
length htt and (d) expanded full length htt, each in the appropriate vector and
epitope tagged in order to facilitate the detection of exogenous protein. The
transfected cells will then be selected to generate homogenous pools of
inducible cell lines for sceening. Upon selection of the transfected cells, the
Company will generate homogenous pools of inducible cell lines for sceening.
After the Company has generated these cell lines, the Company will prepare
frozen early passage aliquots of this cell line in sufficient quantity to ensure
that the Assay 2 is reproducible and that the Company does not have to culture
the line for extended periods. Additionally, primary neuronal cultures may be
used by the Company to establish possible neuronal characteristics of the
generated cell lines.

PHASE 1A AND 1B - ASSAY DEVELOPMENT, OPTIMIZATION AND VALIDATION PROCEDURES FOR
ASSAY 1 AND ASSAY 2

VIABILITY READOUTS.

In order to determine the optimal induction conditions for the use of each of
Assay 1 and Assay 2 in Phase 2 of the Research Project, the Company will
evaluate the stable lines for expanded htt-specific inducible cell death. The
Company will test multiple clones and pools for each of the construct/cell line
combinations. The Company will evaluate at least five viability readouts each of
which monitors some aspect of cell viability: (a) Alamar Blue reduction which
detects the presence of cellular reductases, (b) lactate dehydrogenase ("LDH")
release which is an enzyme released by dying cells, (c) cellular ATP levels
which can be detected by the use of luciferase, (d) calcein AM cleavage which
detect the presence of cellular esterases and (e) mitochondrial inner membrane
potential which is often disrupted in dying cells. For each of these viability
readouts, the Company shall optimize the variable parameters. Moreover, the
Company will test at least four concentrations of inducer (E.G., tetracycline)
in each of these assay conditions. Throughout this process, the Company will
note any morphological features specific to

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expression of expanded htt since such features may become useful in subsequent
assay design and optimization.

The Company will be able to interrogate this multiparameter space using 384-well
plates. For example, if the Company looks at five clones or pools per construct,
induces with five doses of inducer, and samples each viability assay at four
time points and five doses of assay substrate, this will require 30,000 data
points, or 100 plates. The Company can also interrogate the multiparameter space
at higher resolution by increasing the number of plates or by employing "Design
of Experiment" statistics (using JMP software). From these data, the Company
will select the cell line with the optimal Z' score (i.e. the best inducible
toxicity of expanded htt) in which wild-type htt does not cause toxicity.

DETERMINING THE KINETICS OF CELL DEATH.

In the optimal cell line selected for each of Assay 1 and Assay 2, the Company
will test a range of inducer concentrations versus length of induction time to
determine the kinetics of cytotoxicity and recovery. That is, the Company will
induce expanded htt expression, and then withdraw inducer after various lengths
of time (12 hours, 24 hours, 36 hours, etc.). In each case, the Company will
allow the cells to recover for a total incubation time of three days, at which
point the Company will select among the several previously described
cytotoxic/viability endpoints and look at the readout that is potentially
reversible (E.G., mitochondria membrane potential). This experiment will help
the Company assess the extent to which induction of expanded htt is reversible
upon removal of inducer. In parallel with these experiments, the Company will
measure the half-life of induced expanded and wild-type htt proteins using
35S pulse-chase labeling. The Company will select assay conditions based on
these experiments that allow the Company to identify both enhancers and
suppressors of htt toxicity (I.E., a concentration and length of inducer
treatment such that increases and decreases in toxicity are both detectable).

VALIDATION WITH POSITIVE CONTROLS.

The Company will validate each of Assay 1 and Assay 2 using all relevant
positive controls, with an attempt to control for a variety of cell death
mechanisms. The Company will solicit suggestions for positive control compounds
from the htt research community and will utilize those compounds approved by the
Research Committee. Potential positive control compounds include HDAC
inhibitors, neurotrophic factors, RNAi, and caspase inhibitors. For the latter,
two different pan-caspase inhibitors (Z-VAD-fmk and BOC-D-fmk) will be tested.
In addition, if the Company selects the mitochondrial membrane potential
readout, the Company will attempt to use cyclosporine A as a positive control.
The Company will test the dose-response curves for the compounds approved by the
Research Committee and the time-dependence of their ability to rescue death in
order to help determine whether timing of compound addition relative to htt
induction is an important variable and how this can be optimized for the conduct
of Phase 2 of the Research Project.

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PHASE 1C - DEVELOPMENT OF ASSAY 3

GENERAL.

Assay 3 shall be developed to monitor expanded htt protein levels and/or the
presence of htt-aggregates in Huntington disease patient derived cell lines
using high-content imaging assay. The Company shall develop Assay 3 as described
below, which assay shall consider each of the following parameters as approved
by the Research Committee:

     -  Use of a primary cell line that originates from Huntington disease
        patient samples.

     -  Use of a readout that tracks htt protein levels (both wild-type and/or
        expanded) relative to an internal control, such as actin.

     -  Use of a readout that is able to differentiate the Huntington disease
        patient cell line versus control lines.

     -  Use of a readout that is relevant to Huntington disease disease
        pathology (increased htt aggregation).

     -  The abnormal phenotype exhibited by the patient line will be able to be
        reversed by treatment with putative control compounds, and/or RNAi.

     -  The high content readout will allow the identification of
        intracellular/subcellular localizations, aggregates for Htt protein and
        other morphological characteristics.

     -  A significant signal to noise ratio and Z' value acceptable to the
        Research Committee.

To develop Assay 3, the Company will use a high-content screen (E.G. a Cellomics
Arrayscan automated imaging station) to capture fluorescent images of human
Huntington disease patient fibroblasts stained with Hoechst 33342 (a nuclear
dye) and antibodies available both commercially and from the Huntington disease
research community. Antibodies to expanded huntingtin, wild type huntingtin,
oligomeric expanded huntingtin and actin will be evaluated by the Company.

The Company will develop Assay 3 into a 96- or 384-well plate format compatible
for HTS, in which the Company can rapidly assess the effects of compounds on the
level of wild-type huntingtin, expanded huntingtin, and a control protein
(actin). In addition, changes in protein localization or aggregation will be
quantified.

Assay 3 will be validated using, among other controls selected by the Research
Committee, (a) HDAC inhibitors, which should up-regulate both expanded and
wild-type forms of huntingtin, (b) proteasome inhibitors, which should act
similarly to HDAC inhibitors, (c) transcription and translation inhibitors,
which should decrease the levels of both expanded and wild-type huntingtin
proteins, (d) an aldehyde-based peptidic deubiquitinating enzyme inhibitor,
which should increase the degradation of both wild-type and expanded proteins by
preventing removal of ubiquitin chains, and (e) RNAi.

EVALUATION OF CELL LINES.

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The Company will evaluate six human Huntington disease fibroblast lines and four
age/gender control fibroblasts approved by the Research Committee from the
Coriell cell repository and/or academic collaborators. Cell lines will be
evaluated for the following characteristics:

     -  Doubling time: this feature will be an important factor in deciding
        whether or not aggregates or nuclear inclusions will be a viable
        endpoint.

     -  Cellular localization of wild-type and expanded htt protein.

     -  Aggregates: determine whether aggregates are visible, and if so, the
        Company will study in real-time the kinetics of aggregate formation,
        reversibility with positive controls such as Congo Red.

     -  General morphology both at cellular level (cell membrane, cell size and
        shape) and at the subcellular level (nuclei, ER, mitochondria): this
        will allow thorough comparison between the Huntington disease patient
        lines and the control lines, to determine all possible morphological
        endpoints that can be tracked. Any such characteristic will be evaluated
        as to its possible relevance to disease pathology as well as its
        reversibility.

After obtaining the cell lines, the Company will cryopreserve aliquots of each
cell line. After the Company has identified and selected an optimal cell line,
the Company will prepare additional frozen early passage aliquots of this cell
line in order to allow the Company to thaw a fresh aliquot on a regular basis,
if necessary. This will ensure that Assay 3 will be reproducible without the
Company being required to culture this cell line for more than a week at a time.

EVALUATION OF ANTIBODIES.

In the development and optimization of Assay 3, the Company will test a panel of
antibodies to the antigens of interest (wild-type htt, expanded htt, oligomeric
htt and actin) for their ability to efficiently and specifically test its target
antigen. For collection and prioritization of antibodies, the Company will
collect input and suggestions about available antibodies from the Foundation and
from researchers in the Huntington disease research community. Antibodies will
be evaluated for their specificity to htt, using immuno-blotting and
immunocytochemistry. Cell lines that express tagged versions of htt will be
used, if possible, and siRNA experiments may also prove useful for distinction
of oligomeric versus monomeric htt. Test specificity/quality of antibodies that
distinguish the oligomeric versus monomeric Htt protein via dot
blot/ELISA/imaging analysis as described in the reference (see Kayed, et al.
2003).

ASSAY OPTIMIZATION.

The Company will test the candidate antibody/cell line combinations that meet
the above qualifications, varying primary/secondary antibody concentrations, and
the time of incubation (testing five time points) to optimize the assay staining
conditions. For instance, the Company could test 5 time points x 10
concentrations x 400 antibody/cell line combinations = 20,000 data points. Using
384-the well plates, this will require ~100 plates, which is feasible, given an
assumed plate processing capacity of 100 plates per day in high-content mode.
From these data, the Company will select the cell line with the optimal Z' score
for all signals being detected. The Company will then iterate several additional
cycles of optimizing the assay conditions (plate

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type, medium composition, secondary antibody, length of incubation, etc.) to
prepare the Assay 3 for cHTS. In the development of Assay 3, the Company will
use "Design of Experiment" statistics (using JMP software) to sample this
multiparameter space.

VALIDATION WITH CONTROLS.

The Company will seek a broad panel of potential positive controls for testing
in Assay 3 to validate the selected cell line using two different pan-caspase
inhibitors (Z-VAD-fmk and BOC-D-fmk), which may affect processing or
localization of htt. Assay 3 will also be validated using (a) HDAC inhibitors,
which should up-regulate both expanded and wild-type forms of huntingtin, (b)
proteasome inhibitors, which should act similarly to HDAC inhibitors, (c)
transcription and translation inhibitors, which should decrease the levels of
both expanded and wild-type huntingtin proteins, (d) an aldehyde-based peptidic
deubiquitinating enzyme inhibitor, which should increase the degradation of both
wild-type and expanded proteins by preventing removal of ubiquitin chains and
(e) known anti-aggregation compounds derived from the Foundation secondary
screening collection. The Company will test the dose-response curves for these
compounds and the time-dependence of their effects. This will help determine
whether length of compound treatment is an important variable and how this can
be optimized for Phase 2 of the Research Project.

PHASE 2 - PRIMARY SCREENING

GENERAL.

Upon the completion of the development of each Assay by the Company, the
Research Committee shall evaluate each such Assay for use in Phase 2 of the
Research Project. Each Assay approved by the Research Committee for use in Phase
2 of the Research Project (each, an "APPROVED PRIMARY SCREENING ASSAY") shall be
utilized by the Company in Phase 2 of the Research Project.

Phase 2 of the Research Project shall be conducted in two sub-phases: Phase 2A
and Phase 2B of the Research Project. In Phase 2A of the Research Project, the
Company will screen at least ~1,600 in each Approved Primary Screening Assay to
determine the "single agent" activities of such compounds. And, in Phase 2B of
the Research Project, the Company shall use the results from Phase 2A of the
Research Project to determine a recommended combination screening strategy and,
subject to the approval of such combination screening strategy by the Research
Committee, the Company shall screen between 100,000 and 1,000,000 binary
combinations of compounds in each Approved Primary Screening Assay.

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PHASE 2A - DETERMINATION OF SINGLE AGENT ACTIVITIES OF SELECTED COMPOUNDS

GENERAL.

Utilizing each Approved Primary Screening Assay, the Company shall determine the
"single agent" activities of at least 1,300 compounds utilizing a dose-response
of concentrations. The Company will select at least 1,300 from the Company's
library of approved compounds ("COMPANY LIBRARY COMPOUNDS") with a focus on
selecting compounds with highest probability of crossing the blood-brain barrier
(the "BBB"). In addition, the Foundation shall have the right to identify and
select up to 300 compounds ("FOUNDATION SELECTED COMPOUNDS") that are of
particular interest to research currently being conducted in the broader
Huntington disease research community, including those previously identified IN
VITRO and/or studied IN VIVO. The Company shall screen all of the Company
Library Compounds and the Foundation Selected Compounds to determine the "single
agent" activity of such compounds.

COMPOUND SELECTION.

The Company will select at least 1,300 Company Library Compounds which fully
represent the mechanistic and structural diversity of approved compounds. Upon
the request of the Foundation, the Company Library Compounds can be prioritized
by their likelihood of crossing the BBB, based on the Company's internal BBB
ranking. The Company's internal analysis takes the factors into consideration:
(a) known CNS effect in humans, as demonstrated by therapeutic class or
documented side-effect in the literature, (b) the ability to cross BBB in
experimental system, as demonstrated by published experiments and (c) in silico
prediction of BBB partitioning, based on chemical structure. The up to 300
Foundation Selected Compounds to be screened will be selected from the following
categories: 50-100 compounds from the Foundation's secondary screening
consortium, 208 compounds that the Foundation has identified from the literature
as potentially being of interest for Huntington disease, and approximately 100
biological agents that have been reported to be of interest to Huntington
disease. These lists will be cross referenced with the Company collection to
identify compounds that are already available at the Company, and up to 300 of
those that are not will be acquired by the Company. The precise number of
Foundation Selected Compounds acquired will depend on their availability. The
Company will discuss the possibility of formatting the biological agents for
screening with EMD Biosciences. If the Company does not reach an acceptable
arrangement with this or another supplier, the Company will purchase these
proteins individually, then format them in 384-well plates, heeding the
manufacturers' instructions regarding storage conditions.

SCREENING.

The Company's screening method begins with a "ranking" phase where the single
agent activity of compounds in our libraries is determined. Ranking of single
agents is generally performed in a 2 x 12 format as described below, although
this may be tailored to the specific needs of a particular assay. Based on this
ranking, compounds are classified as "active," possessing activity in the
subject assay, or "inactive," possessing no activity the subject assay.
Separating the testing

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of active and inactive compounds makes an efficient and complete search of all
pair-wise combinations tractable.

2 x 12 RANKING FORMAT.

Each 384-well ranking plate contains nine different compounds, numbered 1-9,
that are plated in two adjacent columns and are diluted from top to bottom in 12
steps. Positive controls are located in columns two and 23. DMSO treated
negative controls are located in columns nine and 16.

COUNTER SCREENING.

Putative Hits from the Phase 2A screening will be tested in variants of each
Approved Screening Assay to eliminate false positive results. These counter
screens will identify compounds that (a) suppress expression of expanded htt,
(b) alter the concentration or metabolism of inducer, or (c) directly activate
the assay readout (I.E., are fluorescent or react with luciferase) by using cell
lines that express wild type htt; or by running the assay without cells or
primary antibodies. Testing in the approved counter screens is requisite for
proceeding onto Phase 2B.

PHASE 2B - COMBINATION SCREENING AND NOMINATION OF COMPOUND COMBINATIONS FOR
SECONDARY ASSAY(S)

GENERAL

The Research Committee shall use the actual throughput achieved during Phase 2A
of the Research Project, together with the compound activity results of the
single agent ranking, to determine a recommended combination screening strategy.
The determination of a recommended combination screening strategy will be
influenced by the number of actives that emerge from the single agent ranking
and the throughput of the screening using each Approved Primary Screening Assay.
The recommended combination screening strategy shall be approved by the Research
Committee prior to the initiation of Phase 2B of the Research Project. The
combination screening strategy approved by the Research Committee will be used
to survey between 100,000 and 1,000,000 pairwise combinations, as described
below.

Using the combination screening strategy approved by the Research Committee, the
Company shall screen between 100,000 and 1,000,000 binary combinations of
compounds in each Approved Primary Screening Assay. The most active combinations
will be retested at high resolution and confirmed hits will be subjected to IN
SILICO prioritization based on achievable plasma concentrations, known
toxicities, known drug-drug incompatibilities and other literature information
in the Company's chalice knowledgebase. Due to the size and diversity of
combination space, a library of 1,600 compounds contains over 1,000,000 unique
pair-wise combinations. Thus, a relatively small number of known compounds
generates a very large number of possible compound combinations. Such a large
and diverse group of potential compound combinations greatly increases the
likelihood of the identification of a novel Huntington disease therapeutic. If
any of the Approved Primary Screening Assays is a high

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throughput assay that can be processed at the Company's standard throughput, the
Company will be able to screen more than 1,000,000 binary compound combinations
in each such Approved Primary Screening Assay.

Based on information from the ranking phase, there are several types of
combination screens the Company performs:

        (a) "active + active" - all active compounds are crossed with each
            other;

        (b) "active + inactive" - all active compounds are crossed with all
            inactive compounds; and

        (c) "inactive + inactive" - all inactive compounds are crossed with each
            other.

In brief, active compounds are tested in combination against the other actives
using a dose-ratio matrix format and inactive compounds are tested using a
pooling strategy to maximize the number of combinations that can be surveyed on
a single plate.

In dose matrix screening, a focus compound is serially diluted from
top-to-bottom using a fixed dilution factor. The EC50 value determined is used
to target the appropriate concentration range. Cross compounds are serially
diluted from left-to-right on a separate plate. Aliquots from each master plate
are transferred to a third plate to create the dose matrix. Cells and other
components of the assay are then added prior to incubation to allow induction of
the combination effect. Assay plates are processed and data collected are
associated with the specific compound combination. This experimental design
allows efficient automation of the compound distribution process to generate all
possible pairwise combinations after preparation of a small set of master
plates.

The screening will be conducted using optimized plate formats to efficiently
take advantage of the single-agent activity information. Active compounds (peak
inhibition GREATER THAN 20% at 95% confidence from replicates) require complete
coverage of the transitional concentrations of the single-agent response curves
(between the EC10 and EC90 concentrations), while this range cannot be specified
in the case of inactive compounds. For example, the Company has designed
sparse-matrix plate formats which permit 54 blocks to be compressed on to a
plate, which can be reconstructed to produce sparsely sampled 6x6 dose matrix
blocks. For inactive compounds, the Company uses a single-concentration
combination format which represents 208 combinations per plate, along with the
corresponding single agent responses. For combinations involving one active and
one inactive agent, the master plates are compatible, producing combination
blocks with two six point dose-response curves, one with the inactive compound
at a single high concentration.

High-resolution "9x9" combination plates are run to confirm detection of
synergistic combinations and to allow quantitation of combination activity. A
smaller dilution factor (E.G., two) and a nine-step dilution curve are used for
each compound in the combination to provide greater precision in describing the
synergy surface. This is important because observed effects are next compared to
expected response surfaces derived from the single-agent response curves using
established reference models for compound interactions.

In addition to the above-described cHTS screen, the Company has the ability to
perform "enhancer" screens on select compounds of interest. In this screening
mode, the Company tests a specific compound of interest against each of the
compounds in our collection to identify drugs

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that enhance the potency or intrinsic activity of a compound of interest. Such
enhancer screening can be performed using compounds discovered by the Huntington
disease Research Project community and will be added at the request and approval
of the Research Committee.

If assay throughput is a limiting factor, the Company will consider alternative
combination screening strategies that will allow the Company to optimally
explore the combination space within the time allotted. At a minimal, this
screen would examine 100,000 combinations. For instance, the Company could focus
on 35 single agent actives from the primary screen and perform both a 35 x 35
screen, as the well as an enhancer screen that would pair each of the 35 actives
with each of the ~1600 compounds in the ranking library as described above.

COUNTER SCREENING.

Putative Hit combinations from the Phase 2B screening will be tested in variants
of each Approved Screening Assay to eliminate false positive results. These
counter screens will identify compound combinations that (a) suppress expression
of expanded htt, (b) alter the concentration or metabolism of inducer, or (c)
directly activate the assay readout (I.E., are fluorescent or react with
luciferase) by using cell lines that express wild type htt; or by running the
assay without cells or primary antibodies. Testing in the approved counter
screens is requisite for proceeding onto Phase 3.

PHASE 3 - SECONDARY SCREENING

GENERAL.

At any time and from time to time during the conduct of Phase 2B of the Research
Project, the Research Committee may evaluate compound combinations for which the
screening is completed for utilization in Phase 3 of the Research Project. Each
compound combination approved by the Research Committee for utilization in Phase
3 of the Research Project (each, a "PHASE 3 APPROVED COMPOUND COMBINATION")
shall be utilized by the Company in Phase 3 of the Research Project for
secondary screening.

In Phase 3 of the Research Project, Phase 3 Approved Compound Combinations will
be prioritized using a panel of secondary assays selected and approved by the
Research Committee (each, an "APPROVED SECONDARY SCREENING ASSAY") including (a)
each of the Approved Primary Screening Assays and (b) the additional assays
described below (such as those that may be available from the Huntington disease
research community) that would further characterize and validate the Phase 3
Approved Compound Combinations being developed. Phase 3 Approved Compound
Combinations will be prioritized and tested to validate the observed activities
and to determine the selectivity of the mechanism of action.

EFFECT IN ALTERNATE COMPANY DEVELOPED AND OPTIMIZED ASSAYS.

Each Approved Primary Screening Assay will serve as a secondary assay for the
other. The Company will test Hit combinations from each Approved Primary
Screening Assay in each of the other Approved Primary Screening Assays that have
been developed and optimized. This will

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serve to determine if suppressors of cytotoxicity affect disposition of expanded
or wild type htt, and if modulators of htt disposition can affect cytotoxicity
of htt.

IMMUNO-BLOT OF HTT LEVELS.

The Company will measure expanded and wild type htt levels (induced for Assay 1
and Assay 2, and endogenous for Assay 3) to determine whether compounds are
affecting the overall levels of htt. For Assay 1 and Assay 2, this will serve as
a counter screen for false positives. For Assay 3, this will serve to confirm
one type of hit class: modulators of htt levels. Also, if an ELISA is available,
the Company will also use it to conduct such testing.

ACTIVITY IN ADDITIONAL CELL LINES.

The Company will test Hit combinations in additional cell lines that were
identified in Phase 1 of the Research Project. Thus, the Company will test
suppressors of cytotoxicity in additional cell backgrounds for their ability to
suppress htt cytotoxicity and the Company will test modulators of htt
disposition for their ability to act in additional Huntington disease patient
fibroblasts. These Approved Secondary Screening Assays will ensure any compound
effects are not idiosyncratic to the one cell line used in the primary screen.

STRIATAL BRAIN SLICE ASSAY.

Subject to the approval of the Research Committee, the Company will collaborate
with Don Lo (Duke University) and colleagues to test active combinations in the
striatal brain slice assay that is currently being run in Dr. Lo's laboratory.
Other assays being developed in Dr. Lo's lab, including those with co-culture of
striatal and cortical neurons, may also prove useful as secondary assays.

TRANSFECTED PRIMARY STRIATAL NEURON ASSAY.

Subject to the approval of the Research Committee, the Company will collaborate
with Trophos S.A. (Marseille, France) to test Hit combinations in the
transiently transfected striatal neuron cytotoxicity assay.

OTHER SECONDARY ASSAYS.

The Company welcomes the input from the Foundation to facilitate the evaluation
of candidate combinations with the most disease-relevant secondary assays
available. Subject to the approval of the Research Committee, the Company will
bring such assays in-house if the identified laboratories are unable to test the
Phase 3 Approved Compound Combinations in such assays.

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PHASE 4 - PHARMACOKINETIC, PHARMACODYNAMIC AND TOXICOLOGICAL EVALUATION

GENERAL.

At any time and from time to time during the conduct of Phase 3 of the Research
Project, the Research Committee may evaluate compound combinations for which the
screening is completed for utilization in Phase 4 of the Research Project. Each
Phase 3 Approved Compound Combinations approved by the Research Committee for
utilization in Phase 4 of the Research Project (each, a "PHASE 4 APPROVED
COMPOUND COMBINATION") shall be utilized by the Company in Phase 4 of the
Research Project for evaluation in rodents to determine whether such Phase 4
Approved Compound Combination exhibits desired pharmaceutical properties
expected from the profiles of the single agents, including matched half-lives,
if necessary, BBB penetration to sufficient concentrations and minimal toxicity.

PHARMACOKINETIC / PHARMACODYNAMIC ANALYSIS OF PRE-CLINICAL CANDIDATES.

The Company will evaluate each Phase 4 Approved Compound Combination in rodents
to determine whether the each such Phase 4 Approved Compound Combination
exhibits the desired pharmaceutical properties in combination. The Research
Committee will select and approve a up to six Phase 4 Approved Compound
Combination which the Company will be assess IN VIVO, in mouse-based
pharmacokinetic, pharmacodynamic studies and blood-brain barrier penetration
studies. The Company will assess the concentration found in blood and brain for
the individual compounds in each Phase 4 Approved Compound Combination after
oral gavage, IP, IM and IV injection in adult mice. The route of administration
that provides an achievable brain concentration above the concentration required
will be explored further using a variety of doses and time points. These latter
experiments will aim to determine the half-life of each Approved Phase 4
Compound Combination and such compound combination's constituent compounds in
blood and brain after a specific method of administration. These studies will
allow the Company to select Phase 4 Compound Combinations for further study that
cross the blood-brain barrier and that have reasonable half-lives and achieve
concentrations IN VIVO such that the Company expects them to act in the central
nervous system ("CNS"). Animals will be perfused with 0.9% saline prior to
removal of brain tissue to provide a more accurate estimate of the final drug
concentration in the tissue. Phase 4 Compound Combinations selected by the
Research Committee will then be given using the selected route of administration
to adult mice for one week (or longer if recommended by the Research Committee),
and toxicity measured using body weight and behavioral monitoring. Phase 4
Approved Compound Combinations that are non-toxic at the required dose will be
further studied in newborn mice. The Company will administer these Phase 4
Approved Compound Combinations to mice using the selected route of
administration and the achievable concentration in blood and brain will be
measured. These studies will confirm that such Phase 4 Approved Compound
Combinations can be administered to newborn mice, cross the blood-brain barrier
and accumulate to a sufficient concentration in the nervous system that the
Company expects protection from expanded htt pathology to occur.

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PHASE 5 - DEMONSTRATION OF EFFICACY OF ACTIVE COMBINATIONS IN A HUNTINGTON
DISEASE MOUSE MODEL

GENERAL.

Upon the completion the pharmacokinetic, pharmacodynamic and toxicological
evaluation of each Phase 4 Approved Compound Combination in Phase 4 of the
Research Project, the Foundation may evaluate and select Phase 4 Approved
Compound Combinations for utilization in Phase 5 of the Research Project. Each
Phase 4 Approved Compound Combination selected by the Foundation for utilization
in Phase 5 of the Research Project for evaluation a mouse Huntington disease
efficacy model shall be referred to herein a "PHASE 5 APPROVED COMPOUND
COMBINATION".

MOUSE MODEL TESTING.

Each Phase 5 Approved Compound Combination will be tested using the most disease
relevant animal model that is available at the time such Phase 5 Approved
Compound Combination is available to be as determined by the Foundation. As of
the date hereof, the most relevant animal model available is the R6/2 Huntington
disease mouse model. The Foundation shall solicit input from the Company in
respect of the nature and extent of the mouse model testing program to be
utilized under Phase 5 of the Research Project. However, the specific timing,
nature and extent of all mouse model testing under the Phase 5 Approved Compound
Combinations under Phase 5 of the Research Project shall be determined by the
Foundation in its sole discretion and all such testing shall be carried out at
the sole direction of the Foundation.

All mouse model testing of the Phase 5 Approved Compound Combinations under
Phase 5 of the Research Project shall be conducted by Psychogenics or such other
entity as the Foundation shall elect in its sole discretion. The costs of any
mouse model testing of the Phase 5 Approved Compound Combinations under Phase 5
of the Research Project conducted at the direction of the Foundation shall be
paid by the Foundation.

IN VIVO pharmacological testing of Huntington disease model animals will be done
using multiple dose levels and a subset will receive single agents alone as a
control. These animal studies will include both short term (LESS THAN 2 months)
and long term (6 month survival) endpoints. Critical information regarding the
efficacy and potential safety of administering the Phase 5 Approved Compound
Combinations will also be collected.

The results of mouse model testing of the Phase 5 Approved Compound Combinations
shall be used by the Parties to determine whether any of the Phase 5 Approved
Compound Combinations constitutes a Candidate for which the Parties should seek
the filing of an IND with the FDA either by the Company or a third party. Any
such determination shall be made subject to, and in accordance with, the terms
of this Agreement (including SECTION 9, SECTION 10 and SECTION 12).

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                        APPENDIX B TO RESEARCH AGREEMENT

                  (RESEARCH PROJECT TIME FRAMES AND FTE BUDGET)

<Page>

                                                                  EXECUTION COPY

                        APPENDIX C TO RESEARCH AGREEMENT

                             (SCIENTIFIC MILESTONES)

<Table>
<Caption>
Research Project Phase                                       Condition(s) to Begin Conduct of Phase
----------------------                                       --------------------------------------
<S>                                               <C>
RESEARCH PROJECT - SCIENTIFIC MILESTONES

Phase 1 through Phase 5                           Execution of this Agreement by the Parties.

                                                  The Research Committee has made each decision and granted
                                                  each approval expressly set forth in this Agreement that is
                                                  specifically required or otherwise necessary to begin the
                                                  conduct of any specific Phase of the Research Project.

Phase 1A                                          At least four cell lines approved by the Research Committee
                                                  for Phase 1A (a) have been acquired by, or on behalf of the
                                                  Company (including any related Required Third Party
                                                  Intellectual Property Rights) and (b) the Company has taken
                                                  delivery of such cell lines within three months of the
                                                  Effective Date.

Phase 1B - Part 1                                 The cell lines and cDNA constructs approved by the Research
                                                  Committee for Phase 1B - Part 1 (a) have been acquired by, or
                                                  on behalf of the Company (including any related Required
                                                  Third Party Intellectual Property Rights) and (b) the Company
                                                  has taken delivery of such cell lines and cDNA constructs
                                                  within three months of the Effective Date.

Phase 1B - Part 2                                 The Research Committee has approved at least one cell line
                                                  for use as the parental cell line for the generation of the
                                                  TRex Flp-In neuroblastoma cell line by Invitrogen within six
                                                  months of the Effective Date.

                                                  The Foundation and Invitrogen have executed the Invitrogen
                                                  Agreement within six months of the Effective Date.

Phase 1B - Part 3                                 Invitrogen has delivered the TRex Flp-In neuroblastoma cell
                                                  line to the Company within 12 months of the execution of the
                                                  Invitrogen Agreement.

Phase 1C                                          The cell lines and htt specific antibodies approved by the
                                                  Research Committee for Phase 1C (a) have been acquired by, or
                                                  on behalf of the Company (including any related Required
                                                  Third Party Intellectual Property Rights) and (b) the Company
                                                  has taken delivery of such cell lines and cDNA constructs
                                                  within three months of the Effective Date.

Phase 2 and 3 - Use of Assay 1 for Screening      Complete optimization of Assay 1 within four months following
                                                  the date the Company has taken delivery of the cell
</Table>

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                                                                  EXECUTION COPY

<Table>
<S>                                               <C>
                                                  line approved by the Research Committee for use in the
                                                  optimization of Assay 1.

                                                  Assay 1 meets each of the specifications set forth in
                                                  APPENDIX A and is approved by the Research Committee for use
                                                  in Phase 2 and 3.

Phase 2 and 3 - Use of Assay 2 for Screening      Complete development and optimization of Assay 2 within five
                                                  months following the delivery of the TRex Flp-In
                                                  neuroblastoma cell line to the Company.

                                                  Assay 2 meets each of the specifications set forth in
                                                  APPENDIX A and is approved by the Research Committee for use
                                                  in Phase 2 and 3.

Phase 2 and 3 - Use of Assay 3 for Screening      Complete development and optimization of Assay 3 within nine
                                                  months following the date cell lines and htt specific
                                                  antibodies approved by the Research Committee for use in the
                                                  development and optimization of Assay 3 are acquired by, or
                                                  on behalf of, the Company.

                                                  Assay 3 meets each of the specifications set forth in
                                                  APPENDIX A and is approved by the Research Committee for use
                                                  in Phase 2 and 3.

Phase 2A                                          The Company has (a) selected at least 1,300 Company Library
                                                  Compounds within one month of the approval by the Research
                                                  Committee of any of the Assays for use in Phase 2 and 3 and
                                                  (b) acquired each Foundation Selected Compound within one
                                                  month of the selection of such compounds by the Foundation.

Phase 2B                                          The screening required by Phase 2A has been completed within
                                                  26 months of the Effective Date.

                                                  The combination screening strategy for Phase 2B is approved
                                                  by the Research Committee.

Phase 3                                           The Research Committee approves at least one Phase 3 Approved
                                                  Compound Combination.

Phase 4                                           The Research Committee approves at least one Phase 4 Approved
                                                  Compound Combination.

Phase 5                                           The Foundation approves at least one Phase 5 Approved
                                                  Compound Combination.
</Table>

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                        APPENDIX D TO RESEARCH AGREEMENT

                               (PAYMENT SCHEDULE)

<Table>
<Caption>
Payment Number           Payment Amount                      Date(s) and/or Condition(s) of Payment
--------------           --------------                      --------------------------------------
<S>                      <C>                      <C>
QUARTERLY PAYMENTS

Payment 1                $  343,750               Execution of this Agreement by the Parties.
Year 1 - Quarter 1

Payment 2                $  368,750               Achievement or satisfaction of each condition set forth in
Year 1 - Quarter 2                                this APPENDIX D in respect Payment 1.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 1.

Payment 3                $  425,000               Achievement or satisfaction of each condition set forth in
Year 1 - Quarter 3                                this APPENDIX D in respect Payment 1 through Payment 2.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 2.

Payment 4                $  525,000               Achievement or satisfaction of each condition set forth in
Year 1 - Quarter 4                                this APPENDIX D in respect Payment 1 through Payment 3.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 3.

Payment 5                $  471,875               Achievement or satisfaction of each condition set forth in
Year 2 - Quarter 1                                this APPENDIX D in respect Payment 1 through Payment 4.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 4.

Payment 6                $  531,250               Achievement or satisfaction of each condition set forth in
Year 2 - Quarter 2                                this APPENDIX D in respect Payment 1 through Payment 5.
</Table>

<Page>

                                                                  EXECUTION COPY

<Table>
<S>                      <C>                      <C>
                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 5.

Payment 7                $  512,500               Achievement or satisfaction of each condition set forth in
Year 2 - Quarter 3                                this APPENDIX D in respect Payment 1 through Payment 6.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 6.

Payment 8                $  540,625               Achievement or satisfaction of each condition set forth in
Year 2 - Quarter 4                                this APPENDIX D in respect Payment 1 through Payment 7.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 7.

Payment 9                $  537,500               Achievement or satisfaction of each condition set forth in
Year 3 - Quarter 1                                this APPENDIX D in respect Payment 1 through Payment 8.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 8.

Payment 10               $  400,000               Achievement or satisfaction of each condition set forth in
Year 3 - Quarter 2                                this APPENDIX D in respect Payment 1 through Payment 9.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 9.

Payment 11               $  365,625               Achievement or satisfaction of each condition set forth in
Year 3 - Quarter 3                                this APPENDIX D in respect Payment 1 through Payment 10.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 10.

Payment 12               $  365,625               Achievement or satisfaction of each condition set forth in
Year 3 - Quarter 4                                this APPENDIX D in respect Payment 1 through Payment 11.
</Table>

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                                                                  EXECUTION COPY

<Table>
<S>                      <C>                      <C>
                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 11.

Payment 13               $  331,250               Achievement or satisfaction of each condition set forth in
Year 4 - Quarter 1                                this APPENDIX D in respect Payment 1 through Payment 12.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 12.

Payment 14               $  193,750               Achievement or satisfaction of each condition set forth in
Year 4 - Quarter 2                                this APPENDIX D in respect Payment 1 through Payment 13.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 13.

Payment 15               $  100,000               Achievement or satisfaction of each condition set forth in
Year 4 - Quarter 3                                this APPENDIX D in respect Payment 1 through Payment 14.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 14.

Payment 16               $  100,000               Achievement or satisfaction of each condition set forth in
Year 4 - Quarter 4                                this APPENDIX D in respect Payment 1 through Payment 15.

                                                  The completion by the Foundation, in accordance with SECTION
                                                  3(c), of the Quarterly Payment adjustment review and
                                                  calculation procedures in respect of the Quarterly FTE
                                                  Notice delivered by the Company for the Quarterly FTE Notice
                                                  Period covered by Payment 15.

MILESTONE PAYMENTS

Payment 1                $   40,000               Phase 2B screening has been completed for all Approved
                                                  Primary Screening Assays and the results of such screening
                                                  have been delivered to the Research Committee within 39
                                                  months of the Effective Date

Payment 2                $  100,000               With respect to each Phase 5 Approved Compound Combination
                                                  licensed to an entity (other than the Company) pursuant to a
                                                  Commercial License granted in accordance with SECTION 10 of
                                                  this Agreement.
</Table>

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