Document:

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                                                                   Exhibit 10.48

                            CAMBRIDGE SCIENCE CENTER
                                       AND
                                245 FIRST STREET
                                245 FIRST STREET
                            CAMBRIDGE, MASSACHUSETTS

                      OFFICE AND LABORATORY LEASE AGREEMENT

                                     BETWEEN

   MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
                                  ("LANDLORD")

                                       AND

                COMBINATORX, INCORPORATED, A DELAWARE CORPORATION
                                   ("TENANT")

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                      OFFICE AND LABORATORY LEASE AGREEMENT

          THIS OFFICE AND LABORATORY LEASE AGREEMENT (the "LEASE") is made and
entered into as of October 18, 2005, by and between MA-RIVERVIEW/245 FIRST
STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY ("LANDLORD") and
COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT"). The following
exhibits and attachments are incorporated into and made a part of the Lease:
EXHIBIT A (Outline and Location of Premises), EXHIBIT A-1 (Outline and Location
of Offering Space), EXHIBIT A-2 (Outline and Location of Refusal Space), EXHIBIT
B (Expenses and Taxes), EXHIBIT C (Work Letter), EXHIBIT D (Building Rules and
Regulations), EXHIBIT E (Additional Provisions), EXHIBIT F (Notice of Lease),
EXHIBIT G (Letter of Credit Form) and EXHIBIT H (List of Environmental
Substances).

1.   BASIC LEASE INFORMATION.

     1.01      "BUILDINGS" shall mean those buildings located at 245 First
               Street, Cambridge, Massachusetts 02142 and commonly known as
               Cambridge Science Center and 245 First Street, comprised of two
               buildings, the first being the science building (the "SCIENCE
               BUILDING") and the second being the office building (the "OFFICE
               BUILDING"). "RENTABLE SQUARE FOOTAGE OF THE BUILDING" is deemed
               to be 130,512 square feet with respect to the Science Building
               and 148,552 rentable square feet with respect to the Office
               Building. "RENTABLE SQUARE FOOTAGE OF THE BUILDINGS" is deemed to
               be 279,064 square feet.

     1.02      "PREMISES" shall mean the area shown on EXHIBIT A to this Lease.
               The Premises are located on the 4th floor of the Science Building
               and known as suite number 400 (the "LAB SPACE"), and on the 16th
               floor of the Office Building and known as suite number 1600 (the
               "OFFICE SPACE"). If the Premises include one or more floors in
               their entirety, all corridors and restroom facilities located on
               such full floor(s) shall be considered part of the Premises. The
               "RENTABLE SQUARE FOOTAGE OF THE PREMISES" is deemed to be 40,130
               square feet (consisting of 22,095 rentable square feet of lab
               space on the 4th floor of the Science Building and 18,035
               rentable square feet of office space on the 16th floor of the
               Office Building). Landlord and Tenant stipulate and agree that
               the Rentable Square Footage of the Buildings and the Rentable
               Square Footage of the Premises are correct.

     1.03      "BASE RENT": Lab Base Rent (as defined below) and Office Base
               Rent (as defined below) are sometimes collectively referred to as
               "BASE RENT".

               (a)  LAB BASE RENT. The Base Rent for that portion of the
                    Premises located in the Science Building ("LAB BASE RENT")
                    shall commence on the Lab Space Commencement Date (as
                    defined below) and shall be as follows:

<Table>
<Caption>
                                            ANNUAL RATE                   MONTHLY
                       PERIOD             PER SQUARE FOOT                BASE RENT
               -------------------------------------------------------------------------
                 <S>                          <C>                      <C>
                 12/1/06 - 11/30/11           $  48.00                 $   88,380.00
                 12/1/11 - 11/30/16           $  53.00                 $   97,586.25
</Table>

               (b)  OFFICE BASE RENT. The Base Rent for that portion of the
                    Premises located in the Office Building ("OFFICE BASE RENT")
                    shall commence on the Office Space Commencement Date (as
                    defined below) and shall be as follows:

<Table>
<Caption>
                                            ANNUAL RATE                   MONTHLY
                       PERIOD             PER SQUARE FOOT                BASE RENT
               -------------------------------------------------------------------------
                 <S>                          <C>                     <C>
                 9/1/06 - 8/31/11             $  30.00                 $   45,087.50
                 9/1/11 - 11/30/16            $  35.00                 $   52,602.08
</Table>

     1.04      "TENANT'S PRO RATA SHARE FOR THE OFFICE BUILDING": 12.1405%.
               "TENANT'S PRO RATA SHARE FOR THE SCIENCE BUILDING": 16.9295%.
               "TENANT'S PRO RATA SHARE FOR THE BUILDINGS": 14.3802%.

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     1.05      "BASE YEAR" for Office Taxes (defined in EXHIBIT B): Fiscal Year
               (defined below) 2007 (e.g., July 1, 2006 to June 30, 2007).

               "BASE YEAR" for Office Expenses (defined in EXHIBIT B): calendar
               year 2006.

               For purposes hereof, "FISCAL YEAR" shall mean the Base Year for
               Office Taxes and each period of July 1 to June 30 thereafter.

     1.06      "TERM": A period of 10 years from the Lab Space Commencement Date
               (as defined below). With respect to the Office Space, the Term
               shall commence on September 1, 2006 (the "OFFICE SPACE
               COMMENCEMENT DATE") and with respect to the Lab Space, the Term
               shall commence on December 1, 2006 (the "LAB SPACE COMMENCEMENT
               DATE") and, unless terminated early in accordance with this
               Lease, end with respect to the entire Premises on November 30,
               2016 (the "TERMINATION DATE"). In addition, if Tenant is entitled
               to register or record a notice or memorandum of this Lease
               pursuant to the terms of Section 1.18, Landlord and Tenant shall
               also execute and Tenant may register or record, as appropriate,
               at Tenant's cost and expense, a Notice of Lease in the form
               attached as EXHIBIT F.

     1.07      Tenant allowance for the Lab Space: an amount not to exceed
               $3,203,775.00, as further described in the attached EXHIBIT C.

               Tenant allowance for the Office Space: an amount not to exceed
               $811,575.00, as further described in the attached EXHIBIT C.

     1.08      "SECURITY DEPOSIT": $0.00.

     1.09      "GUARANTOR(S)": As of the date of this Lease, there are no
               Guarantors.

     1.10      "BROKER(S)": Richards Barry Joyce & Partners.

     1.11      "PERMITTED USE": With respect to the Office Space, general office
               use, and, with respect to the Lab Space, technical office for
               research and development, laboratory and research facility.

     1.12      "NOTICE ADDRESS(ES)":

<Table>
               <S>                                      <C>
               Landlord:                                Tenant:

               MA-Riverview/245 First Street, L.L.C.    Prior to the Office Space Commencement Date:
               c/o Equity Office
               100 Summer Street                        CombinatoRx, Incorporated
               Boston, Massachusetts 02110              650 Albany Street
               Attention: Property Manager              Boston, Massachusetts 02118
                                                        Attn: Pres/CEO/VP and Treasurer

                                                        From and after the Office Space
                                                        Commencement Date:

                                                        At the Office Space
</Table>

               A copy of any notices to Landlord shall be sent to Equity Office,
               Two North Riverside Plaza, Suite 2100, Chicago, IL 60606, Attn:
               Managing Counsel - Boston Region. A copy of any notices whereby
               Landlord is notifying Tenant of a Tenant Default under the Lease
               shall be sent to:

               Peter B. Finn, Esq. and Managing Partner
               Rubin and Rudman LLC
               50 Rowes Wharf
               Boston, MA 02110

               If any additional person listed above fails to receive the copy
               of the notice of Tenant default, the validity of the notice
               served on Tenant shall not be affected thereby.

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     1.13      "BUSINESS DAY(S)" are Monday through Friday of each week,
               exclusive of New Year's Day, Presidents Day, Memorial Day,
               Independence Day, Labor Day, Thanksgiving Day and Christmas Day
               ("HOLIDAYS"). Landlord may designate additional Holidays that are
               commonly recognized by other office buildings in the area where
               the Buildings are located. "BUILDINGS SERVICE HOURS" are 8:00
               A.M. to 6:00 P.M. on Business Days and 8:00 A.M. to 1:00 P.M. on
               Saturdays.

     1.14      "LANDLORD WORK": Intentionally Omitted.

     1.15      "PROPERTY" means the Buildings and the parcel(s) of land on which
               they are located and, at Landlord's discretion, any parking
               facilities and other improvements, if any, serving the Building
               or Buildings and the parcel(s) of land on which they are located.

     1.16      Notwithstanding anything to the contrary contained in Section 12
               of the Lease, Landlord shall have the right to require Tenant to
               post a performance or payment bond in connection with any work or
               service done or purportedly done by or for the benefit of Tenant.
               Tenant acknowledges and agrees that all such work or service is
               being performed for the sole benefit of Tenant and not for the
               benefit of Landlord.

     1.17      The following shall be the last sentence of Section 20 of the
               Lease: "WITHOUT LIMITING THE FOREGOING, IN NO EVENT SHALL
               LANDLORD OR ANY MORTGAGEES OR LANDLORD RELATED PARTIES EVER BE
               LIABLE FOR ANY CONSEQUENTIAL OR INCIDENTAL DAMAGES OR ANY LOST
               PROFITS OF TENANT."

     1.18      Tenant shall not record this Lease or any memorandum or notice
               without Landlord's prior written consent; provided, however,
               Landlord agrees to consent to the recordation or registration of
               a memorandum or notice of this Lease, at Tenant's cost and
               expense (and in a form reasonably satisfactory to Landlord), if
               the initial term of this Lease or the initial term plus renewal
               terms granted exceed, in the aggregate, 7 years. If this Lease is
               terminated before the Term expires, upon Landlord's request the
               parties shall execute, deliver and record an instrument
               acknowledging the above and the date of the termination of this
               Lease, and Tenant appoints Landlord its attorney-in-fact in its
               name and behalf to execute the instrument if Tenant shall fail to
               execute and deliver the instrument after Landlord's request
               therefor within 10 days.

     1.19      "LETTER OF CREDIT": $2,500,000.00, as described in Section 1 of
               EXHIBIT E attached hereto.

2.   LEASE GRANT.

     The Premises are hereby leased to Tenant from Landlord, together with the
right to use any portions of the Property that are designated by Landlord for
the common use of tenants and others (the "COMMON AREAS").

3.   INITIAL ALTERATIONS/POSSESSION.

     3.01   Tenant shall complete the Initial Office Alterations and the Initial
Lab Alterations (as such terms are defined in the Work Letter attached hereto as
EXHIBIT C) in accordance with the terms and provisions of the Work Letter.
Landlord shall pay the Office Allowance for the Initial Office Alterations and
the Lab Allowance for the Initial Lab Alterations in accordance with the Work
Letter.

     3.02   Subject to Landlord's obligations under Section 9.02 herein, the
Premises are accepted by Tenant in "as is" condition and configuration without
any representations or warranties by Landlord. By taking possession of the
Premises, Tenant agrees that the Premises are in good order and satisfactory
condition. If Tenant occupies the Office Space for the conduct of its business
therein before the Office Space Commencement Date (the "OFFICE SPACE
OCCUPANCY"), during the period commencing on the first day of the Office Space
Occupancy and ending on the day preceding the Office Space Commencement Date
(the "OFFICE SPACE OCCUPANCY PERIOD"), Tenant shall not be required to pay Rent
(as hereinafter defined) with respect to the Office Space, provided however,
during the Office Space Occupancy Period, Tenant shall be subject to the terms
and conditions of this Lease and Tenant shall pay the actual costs of
electricity used by Tenant in the Office Space and the

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actual costs Landlord incurs for the janitorial service provided by Landlord in
accordance with Section 7 herein for cleaning the Office Space (collectively,
the "OFFICE SPACE OCCUPANCY COSTS") together with the costs of any special
services requested by Tenant (e.g. freight elevator usage). Except for the cost
of special services requested by Tenant with respect to the Office Space, Tenant
shall not be required to pay Rent or Office Space Occupancy Costs for any days
of possession before the Office Space Occupancy Period during which Tenant, with
the approval of Landlord, is in possession of the Office Space for the sole
purpose of performing improvements or installing furniture, equipment or other
personal property. If Tenant occupies the Lab Space for the conduct of its
business therein before the Lab Space Commencement Date (the "LAB SPACE
OCCUPANCY"), during the period commencing on the first day of the Lab Space
Occupancy and ending on the day preceding the Lab Space Commencement Date (the
"LAB SPACE OCCUPANCY PERIOD"), Tenant shall not be required to pay Rent (as
hereinafter defined) with respect to the Lab Space, provided however, during the
Lab Space Occupancy Period, Tenant shall be subject to the terms and conditions
of this Lease and Tenant shall pay the actual costs of the Science Building
Services (as defined in Section 7 herein) set forth in Section 7 herein
(collectively, the "LAB SPACE OCCUPANCY COSTS") together with the cost of any
special services requested by Tenant (e.g. freight elevator usage). Except for
the cost of services requested by Tenant with respect to the Lab Space, Tenant
shall not be required to pay Rent or Lab Space Occupancy Costs for any days of
possession before the Lab Space Occupancy Period during which Tenant, with the
approval of Landlord, is in possession of the Lab Space for the sole purpose of
performing improvements or installing furniture, equipment or other personal
property.

4.   RENT.

     4.01   Commencing on the Office Space Commencement Date with respect to the
Office Space and the Lab Space Commencement Date with respect to the Lab Space,
Tenant shall pay Landlord, without any setoff or deduction, unless expressly set
forth in this Lease, all Office Base Rent and Additional Rent due with respect
to the Office Space and all Lab Base Rent and Additional Rent due with respect
to the Lab Space for the Term (collectively referred to as "RENT"). "ADDITIONAL
RENT" means all sums (exclusive of Base Rent) that Tenant is required to pay
Landlord under this Lease. Tenant shall pay and be liable for all rental, sales
and use taxes (but excluding income taxes), if any, imposed upon or measured by
Rent. Base Rent and recurring monthly charges of Additional Rent shall be due
and payable in advance on the first day of each calendar month without notice or
demand, provided that (i) the installment of Office Base Rent for the first full
calendar month of the Term with respect to the Office Space (i.e., September,
2006) and the first monthly installment of Additional Rent for Office Expenses
and Office Taxes with respect to the Office Space shall be payable on or before
the Office Space Commencement Date, and (ii) the installment of Lab Base Rent
for the first full calendar month of the Term with respect to the Lab Space
(i.e., December, 2006) and the first monthly installment of Additional Rent for
Lab Expenses (as defined in EXHIBIT B) and Lab Taxes (as defined in EXHIBIT B)
with respect to the Lab Space shall be payable on or before the Lab Space
Commencement Date. All other items of Rent shall be due and payable by Tenant on
or before 30 days after billing by Landlord. Rent shall be made payable to the
entity, and sent to the address, Landlord designates and shall be made by good
and sufficient check or by other means acceptable to Landlord. Tenant shall pay
Landlord an administration fee equal to 5% of all past due Rent, provided that
Tenant shall be entitled to a grace period of 5 Business Days for the first 2
late payments of Rent in a calendar year. In addition, past due Rent shall
accrue interest at 12% per annum. Landlord's acceptance of less than the correct
amount of Rent shall be considered a payment on account of the earliest Rent
due. Rent for any partial month during the Term shall be prorated. No
endorsement or statement on a check or letter accompanying payment shall be
considered an accord and satisfaction. Tenant's covenant to pay Rent is
independent of every other covenant in this Lease.

     4.02   Tenant shall pay Tenant's Pro Rata Share of Office Taxes and Office
Expenses with respect to the Office Space and Tenant's Pro Rata Share of Lab
Taxes and Lab Expenses with respect to the Lab Space in accordance with EXHIBIT
B of this Lease.

5.   COMPLIANCE WITH LAWS; USE.

     The Premises shall be used for the Permitted Use and for no other use
whatsoever. Tenant shall comply with all statutes, codes, ordinances, orders,
rules and regulations of any municipal or governmental entity whether in effect
now or later, including the Americans with Disabilities Act ("LAW(S)"),
regarding the operation of Tenant's business and the use, condition,
configuration and occupancy of the Premises. In addition, Tenant shall, at its
sole cost and expense, promptly comply with any Laws that relate to the "Base
Building" (defined below), but only to the extent such obligations are triggered
by Tenant's use of the Premises, other than for

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general office use (or, with respect to the Lab Space, any other Permitted Use),
or Alterations or improvements in the Premises performed or requested by Tenant.
"BASE BUILDING" shall include the structural portions of the Buildings, the
public restrooms and the Buildings mechanical, electrical and plumbing systems
and equipment located in the internal core of the Buildings on the floor or
floors on which the Premises are located. Except to the extent properly included
in Expenses, Landlord shall be responsible for the cost of correcting any
violations of Title III of the Americans with Disabilities Act (ADA) with
respect to the Common Areas of the Buildings. Landlord shall comply with all
other Laws relating to the Common Areas of the Buildings, provided that
compliance with such Laws is not the responsibility of Tenant under this Lease,
and provided further that Landlord's failure to comply therewith would prohibit
Tenant from obtaining or maintaining a certificate of occupancy, or its
equivalent, for the Premises, or would unreasonably and materially affect the
safety of Tenant's employees or create a significant health hazard for Tenant's
employees. Notwithstanding the foregoing, Landlord shall have the right to
contest any alleged violation in good faith, including, without limitation, the
right to apply for and obtain a waiver or deferment of compliance, the right to
assert any and all defenses allowed by Law and the right to appeal any
decisions, judgments or rulings to the fullest extent permitted by Law.
Landlord, after the exhaustion of any and all rights to appeal or contest, will
make all repairs, additions, alterations or improvements necessary to comply
with the terms of any final order or judgment. Tenant shall promptly provide
Landlord with copies of any notices it receives regarding an alleged violation
of Law. Tenant shall reimburse and compensate Landlord for all expenditures made
by, or damages or fines sustained by, Landlord due to any violations of Laws by
Tenant or any Tenant Related Parties with respect to the Premises. Tenant shall
comply with the rules and regulations of the Buildings attached as EXHIBIT D and
such other reasonable rules and regulations adopted by Landlord from time to
time, including rules and regulations for the performance of Alterations
(defined in Section 9). Tenant shall obtain and pay for all permits and shall
promptly take all actions necessary to comply with all Laws, including, without
limitation, the Occupational Safety and Health Act, regulating Tenant's specific
use of the Premises or the Property. Tenant shall maintain in full force and
effect all certifications or permissions to provide its services required by any
authority having jurisdiction to authorize, franchise or regulate such services.
Tenant shall be solely responsible for procuring and complying at all times with
any and all necessary permits directly relating or incident to: the conduct of
its specific activities on the Premises; its scientific experimentation,
transportation, storage, handling, use and disposal of any chemical or
radioactive or bacteriological substances or organisms or other hazardous wastes
or environmentally dangerous substances or materials or medical waste, including
without limitation the obtaining of an industrial discharge permit from the
Massachusetts Water Resources Authority; its conduct of animal research
activities; and its storage of fuel, chemicals, or other regulated materials
permitted hereunder. Within 10 Business Days of a request by Landlord, Tenant
shall furnish Landlord with copies of all such permits, together with a
certificate certifying that such permits are all of the permits which Tenant is
required to maintain with respect to the Premises.

6.   SECURITY DEPOSIT.

     The Security Deposit, if any, shall be delivered to Landlord upon the
execution of this Lease by Tenant and held by Landlord without liability for
interest (unless required by Law) as security for the performance of Tenant's
obligations. The Security Deposit is not an advance payment of Rent or a measure
of damages. Landlord may use all or a portion of the Security Deposit to satisfy
past due Rent or to cure any Default (defined in Section 18) by Tenant, or to
satisfy any other loss or damage resulting from Tenant's Default as provided in
Section 19. If Landlord uses any portion of the Security Deposit, Tenant shall,
within 5 days after demand, restore the Security Deposit to its original amount.
Landlord shall return any unapplied portion of the Security Deposit to Tenant
within 45 days after the later to occur of: (a) determination of the final Rent
due from Tenant; or (b) the later to occur of the Termination Date or the date
Tenant surrenders the Premises to Landlord in compliance with Section 25.
Landlord may assign the Security Deposit to a successor or transferee and,
following the assignment, Landlord shall have no further liability for the
return of the Security Deposit. Landlord shall not be required to keep the
Security Deposit separate from its other accounts.

7.   BUILDING SERVICES.

     7.01   OFFICE BUILDING.

     (a)  Landlord shall furnish Tenant with the following services in the
Office Building: (a) water for use in the Base Building lavatories; (b)
customary heat and air conditioning in season during Buildings Service Hours,
although Tenant shall have the right to receive HVAC service during hours other
than Buildings Service Hours by paying Landlord's then standard charge for

                                        5
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additional HVAC service and providing such prior notice as is reasonably
specified by Landlord; (c) standard janitorial service on Business Days; (d)
elevator service; (e) electricity in accordance with the terms and conditions in
Section 7.01(b); (f) access to the Office Building for Tenant and its employees
24 hours per day/7 days per week, subject to the terms of this Lease and such
protective services or monitoring systems, if any, as Landlord may reasonably
impose, including, without limitation, sign-in procedures and/or presentation of
identification cards; and (g) such other services as Landlord reasonably
determines are necessary or appropriate for the Property.

     (b)  Without the consent of Landlord, Tenant's use of electrical service
shall not exceed, either in voltage, rated capacity, use beyond Buildings
Service Hours or overall load, that which Landlord reasonably deems to be
standard for the Office Building. Landlord shall have the right to measure
electrical usage by commonly accepted methods, including the installation of
measuring devices such as submeters and check meters. If it is determined that
Tenant is using excess electricity, Tenant shall pay Landlord Additional Rent
for the cost of such excess electrical usage and for the cost of purchasing and
installing the measuring device(s).

     7.02   SCIENCE BUILDING. Landlord agrees to furnish Tenant with the
following services and facilities (the "SCIENCE BUILDING SERVICES") in the
Science Building:

     HVAC System: The HVAC system shall be comprised of a central chilled water
     system, condenser water system, hot water heating system and custom
     air-handling units.

     Air Handling Units: Custom-built air handlers shall deliver approximately
     1.75 CFM per SF of 100% outdoor air to the Lab Space. Two units are located
     outdoors on the Annex roof. The remaining unit is indoors, located on level
     3B of the Annex, and serves the Annex levels 1 and 2. The units are sized
     to provide 100% outside air to the space. The units are complete with
     double wall construction, dual supply fans, variable frequency drives,
     filter section with 30% and 85% filters, chilled water coil and hot water
     coil. The supply air is distributed via medium pressure supply duct main
     through the Science Building; the medium pressure duct is stubbed out
     approximately 3' from the shaft on each floor for future tenant fit-up.
     Variable frequency drives on the supply fans are provided to vary the
     supply to the space as part of the Variable Air Volume (VAV) supply
     air/exhaust air system.

     Chilled Water: Chilled water shall be provided from a 1200-ton central
     chilled water plant located on the first floor of the Annex. The system
     shall consist of water-cooled centrifugal chillers, cooling towers mounted
     on the Annex roof, and a pumping system, piping and controls. Chilled water
     pumps shall be constant volume and shall run 24/7.

     Cooling Tower: The cooling tower/condenser water system shall consist of
     cooling towers, pumps, piping and controls. The cooling tower/condenser
     water system is sized for an additional 25% capacity for tenant
     supplemental cooling. The piping distribution shall include vertical
     risers, capped and valved on each floor, for tenant usage. Condenser water
     pumps shall be constant volume and shall run 24/7. Condenser water fans
     shall be equipped with VFD's. Tenant's condenser water system shall be
     isolated from the primary condenser water loop and the secondary pumping
     system shall have VFD's provided with the pumps.

     Heating: Hot water shall be provided by gas-fired boilers. The system is
     complete with primary/secondary pumping, piping and controls. Piping shall
     include piping to the rooftop units as well as vertical risers in the
     Science Building, capped and valved on each floor for future tenant fit-up.
     Differential bypass shall be provided with constant volume secondary pumps.
     All future tenant reheat and hot water coils will be two-way control.
     Heating only is provided in areas reserved for Tenant's equipment and
     storage. Any cross ventilation and/or cooling required in these areas shall
     be provided by Tenant, based on equipment installed by Tenant.

     Plumbing System: The plumbing system shall consist of water service and gas
     service into the Science Building, storm drainage system, toilet cores and
     janitor's closets, as well as locations for tenant PH neutralization
     systems on the first floor. Showers shall be provided at the first floor
     bathroom for tenant fitness use.

     Domestic Water: Domestic water shall be distributed to toilet cores and
     mechanical penthouse as required. Centralized risers shall also be provided
     for use as part of tenant fit up. Domestic water is complete with booster
     pump to provide sufficient water pressure at all floors.

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     Gas: The gas service into the Science Building shall be sized to meet the
     base building requirements and future tenant loads. Tenant is responsible
     for its own gas metering.

     Electrical System: Electric service to the Science Building shall be via an
     exterior Nstar substation (primary switchgear and pad-mounted transformer)
     located behind a secure screened wall area. The substation is provided with
     a dual feed primary electric service (normal and standby) with automatic
     transfer. The Science Building electric service provided is 480/277 volt,
     3-phase, 4-wire at 4000 ampere. The overall electric service size for the
     Science Building is approximately 27 watts per square foot. Without the
     consent of Landlord, Tenant's use of electrical service shall not exceed,
     either in voltage, rated capacity, use beyond Buildings Service Hours or
     overall load, that which Landlord reasonably deems to be standard for the
     Science Building.

     Distribution: Within the Science Building core, a bus duct riser for
     Tenant's use shall provide approximately 15 watts per SF
     (lighting/receptacles/lab equipment) for lab space. Tenant shall be
     responsible for its own electric metering and distribution from each
     floor's respective un-metered bus duct to Tenant's space.

     Generator: The Science Building shall be provided with a 300Kw diesel fired
     life safety generator. The generator shall serve the fire pump, smoke
     control system, fire alarm, system, elevator, emergency egress and exit
     lighting.

     Tel/Data: Telephone service to the Science Building shall be established
     with a main distribution feed on the first floor and distributed to stacked
     tel/data rooms located on each floor. High-speed fiber data service shall
     also be provided to the first floor communications closet. Tenant shall be
     responsible for installing high-speed fiber data service from the first
     floor communications closet to its Premises.

     Fire Protection: Fire protection system consists of service into the
     Science Building, fire department connection, and distribution throughout
     the Science Building. Sprinkler distribution shall be provided in finished
     common areas and provided as required by code in vacant Tenant spaces.
     Modification to sprinkler piping and distribution shall be performed by
     Tenant to suit its layout and hazard index.

     Fire Alarm: The fire alarm system shall be an expandable addressable
     high-rise system. Common areas are complete with detection and notification
     and annunciation devices as required.

     Cleaning: Tenant shall provide its own cleaning services to the Lab Space
     according to cleaning standards generally prevailing in comparable research
     and development buildings in the City of Cambridge and according to any
     cleaning specifications adopted by Landlord from time to time during the
     Term of this Lease.

     Access System: The Science Building shall have a card access system for
     access to the Science Building.

     7.03   Tenant shall pay directly to the proper authorities charged with the
collection thereof all charges for separately metered electricity (Office
Building and Science Building), separately check metered gas (Office Building
and Science Building), separately check metered water and sewer charges (Science
Building), telephone (Office Building and Science Building) and other separately
metered or check metered utilities or services used or consumed on the Premises
whether called charge, tax, assessment, fee or otherwise including, without
limitation, all such charges to be paid as the service from time to time becomes
due. In addition, Tenant shall pay to Landlord when billed the cost of metered
gas and electrical service for the base building air, chilled water, and heated
water provided to the Lab Space. As part of Tenant's Initial Lab Alterations to
the Lab Space, Tenant shall install in accordance with specifications provided
by Landlord, at Tenant's sole cost and expense, separate meters and wiring to
measure and bill Tenant for the utilities used in each space. The meters and
checkmeters in the Lab Space shall include, without limitation, airflow sensors
in the main duct and BTU meters in the hot water and condenser water lines
entering the Lab Space, as well as checkmeters for water and sewer and gas
service. As part of Tenant's Initial Office Alterations to the Office Space,
Tenant shall install in accordance with specifications provided by Landlord, at
Tenant's sole cost and expense, separate meters and wiring to measure and bill
Tenant for the electricity used in the Office Space.

     7.04   Landlord's failure to furnish, or any interruption, diminishment or
termination of services due to the application of Laws, the failure of any
equipment, the performance of

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<Page>

repairs, improvements or alterations, utility interruptions or the occurrence of
an event of Force Majeure (defined in Section 26.03) (collectively a "SERVICE
FAILURE") shall not render Landlord liable to Tenant, constitute a constructive
eviction of Tenant, give rise to an abatement of Rent, nor relieve Tenant from
the obligation to fulfill any covenant or agreement. However, if the Premises,
or a material portion of the Premises, are made untenantable by reason of
Landlord's fault or neglect for a period in excess of 3 consecutive Business
Days as a result of a Service Failure that is reasonably within the control of
Landlord to correct, then Tenant, as its sole remedy, shall be entitled to
receive an abatement of Rent payable hereunder during the period beginning on
the 4th consecutive Business Day of the Service Failure and ending on the day
the service has been restored. If the entire Premises have not been rendered
untenantable by the Service Failure, the amount of abatement shall be equitably
prorated. For purposes hereof, the Office Space will be deemed to be
"untenantable" if the Office Space is not fit for occupancy for general office
use (without regard to Tenant's particular use of the Office Space), and the Lab
Space will be deemed to be "untenantable" if the Lab Space is not fit for
occupancy for use as a technical office for research and development, laboratory
and research facilities (without regard to Tenant's particular use of the Lab
Space).

8.   LEASEHOLD IMPROVEMENTS.

     All improvements in and to the Premises, including, without limitation,
standard installed lab equipment and any Alterations (defined in Section 9.03)
(collectively, "LEASEHOLD IMPROVEMENTS") shall remain upon the Premises at the
end of the Term without compensation to Tenant, provided that Tenant, at its
expense, in compliance with the National Electric Code or other applicable Law,
shall remove any Cable (defined in Section 9.01 below). In addition, Landlord,
by written notice to Tenant at least 30 days prior to the Termination Date, may
require Tenant, at its expense, to remove any Alterations that, in Landlord's
reasonable judgment, are of a nature that would require removal and repair costs
that are materially in excess of the removal and repair costs associated with
standard office or laboratory improvements (the Cable and such other items
collectively are referred to as "REQUIRED REMOVABLES"). Required Removables
shall include, without limitation, internal stairways, raised floors, personal
baths and showers, vaults, rolling file systems and structural alterations and
modifications. The Required Removables shall be removed by Tenant before the
Termination Date. Tenant shall repair damage caused by the installation or
removal of Required Removables. If Tenant fails to perform its obligations in a
timely manner, Landlord may perform such work at Tenant's expense. Tenant, at
the time it requests approval for a proposed Alteration, including any Initial
Office Alterations or Initial Lab Alterations, as such terms may be defined in
the Work Letter attached as EXHIBIT C, may request in writing that Landlord
advise Tenant whether the Alteration, including any Initial Office Alterations
or Initial Lab Alterations, or any portion thereof, is a Required Removable.
Within 10 days after receipt of Tenant's request, Landlord shall advise Tenant
in writing as to which portions of the alteration or other improvements are
Required Removables. All specialized equipment, trade fixtures and furnishings
not attached to the Premises shall remain the property of Tenant and must be
removed by Tenant upon termination or expiration of this Lease. Notwithstanding
any provision hereof to the contrary, the following shall constitute personal
property of Tenant which shall be removed by Tenant upon termination or
expiration of this Lease, absent the express agreement of Landlord and Tenant to
the contrary: all moveable personal property, and furniture, furnishings and
equipment, such as computers, servers, phone system, work stations, power poles,
desks, tables, chairs, projectors, and lab equipment such as portable freezers,
refrigerators, mixers, centrifuges, biosafety cabinets, cage washers,
autoclaves, stirrers, rotors, ovens, incubators, cell sorters, flow Cytometers,
microscopes, water baths, unaffixed lab tables, pumps, gas cylinders, and
regulators. It is expressly understood and agreed that the following shall
become the property of Landlord upon the installation thereof and shall remain
on the Premises upon termination or expiration of this Lease: generators, fume
hoods, and affixed tables, benches and cabinets (except for biosafety cabinets).

9.   REPAIRS AND ALTERATIONS.

     9.01   Tenant shall periodically inspect the Premises to identify any
conditions that are dangerous or in need of maintenance or repair. Tenant shall
promptly provide Landlord with notice of any such conditions. Tenant shall, at
its sole cost and expense, perform all maintenance and repairs to the Premises
that are not Landlord's express responsibility under this Lease, and keep the
Premises in good condition and repair, reasonable wear and tear excepted.
Tenant's repair and maintenance obligations include, without limitation, repairs
to: (a) floor covering; (b) interior partitions; (c) doors; (d) the interior
side of demising walls; (e) electronic, fiber, phone and data cabling and
related equipment that is installed by or for the exclusive benefit of Tenant
(collectively, "CABLE"); (f) supplemental air conditioning units, kitchens,
including hot water heaters, plumbing, and similar facilities exclusively
serving Tenant;

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<Page>

and (g) Alterations. Subject to the terms of Section 15 below, to the extent
Landlord is not reimbursed by insurance proceeds, Tenant shall reimburse
Landlord for the cost of repairing damage to the Buildings caused by the acts of
Tenant, Tenant Related Parties and their respective contractors and vendors. If
Tenant fails to make any repairs to the Premises for more than 15 days after
notice from Landlord (although notice shall not be required in an emergency),
Landlord may make the repairs, and Tenant shall pay the reasonable cost of the
repairs, together with an administrative charge in an amount equal to 10% of the
cost of the repairs.

     9.02   Landlord shall keep and maintain in good repair and working order
and perform maintenance upon the: (a) structural elements of the Buildings; (b)
mechanical (including HVAC), electrical, plumbing and fire/life safety systems
serving the Buildings in general; (c) Common Areas; (d) roof of the Buildings;
(e) exterior windows of the Buildings; and (f) elevators serving the Buildings.
Landlord shall promptly make repairs for which Landlord is responsible.

     9.03   Tenant shall not make alterations, repairs, additions or
improvements or install any Cable (collectively referred to as "ALTERATIONS")
without first obtaining the written consent of Landlord in each instance, which
consent shall not be unreasonably withheld, conditioned or delayed. However,
Landlord's consent shall not be required for any Alteration that satisfies all
of the following criteria (a "COSMETIC ALTERATION"): (a) is of a cosmetic nature
such as painting, wallpapering, hanging pictures and installing carpeting; (b)
is not visible from the exterior of the Premises or Buildings; (c) will not
affect the Base Building; and (d) does not require work to be performed inside
the walls or above the ceiling of the Premises. Cosmetic Alterations shall be
subject to all the other provisions of this Section 9.03. Prior to starting
work, Tenant shall furnish Landlord with plans and specifications; names of
contractors reasonably acceptable to Landlord (provided that Landlord may
designate specific contractors with respect to Base Building); required permits
and approvals; evidence of contractor's and subcontractor's insurance in amounts
reasonably required by Landlord and naming Landlord as an additional insured;
and any security for performance in amounts reasonably required by Landlord.
Changes to the plans and specifications must also be submitted to Landlord for
its approval. Alterations shall be constructed in a good and workmanlike manner
using materials of a quality reasonably approved by Landlord. Tenant shall
reimburse Landlord for any sums paid by Landlord for third party examination of
Tenant's plans for non-Cosmetic Alterations. In addition, if the proposed
Alteration(s) involve the Base Building or require work to be performed inside
the walls or above the ceiling of the Premises, then Tenant shall pay Landlord a
fee for Landlord's oversight and coordination of any such non-Cosmetic
Alterations equal to 10% of the cost of the non-Cosmetic Alterations. Upon
completion, Tenant shall furnish "as-built" plans for non-Cosmetic Alterations,
completion affidavits and full and final waivers of lien. Landlord's approval of
an Alteration shall not be deemed a representation by Landlord that the
Alteration complies with Law.

     Subject to the Landlord's prior review and approval, and further subject to
the terms and provisions of this Lease, Landlord shall permit Tenant to install,
at Tenant's sole cost and expense, conduit between the Lab Space and the Office
Space at such locations as Landlord may reasonably determine. Tenant shall have
the exclusive right and obligation to install, maintain, use and remove such
conduit and the corresponding Cable installed and utilized in connection
therewith. The conduit and Cable between the Lab Space and the Office Space must
be tagged in the telecom closet on each floor with a label showing Tenant's
name, phone number and suite number. The precise specifications and a general
description of the conduit and Cable along with all documents Landlord
reasonably requires to review the installation of the conduit and Cable shall be
submitted to Landlord for Landlord's written approval no later than 20 days
before Tenant commences to install the conduit and/or the Cable. If Landlord
determines that the conduit and/or the Cable does not comply with the Landlord
approved plans and specifications, that the Building has been damaged during
installation of the conduit and/or the Cable, that the installation was
defective or that the conduit and/or the Cable needs to be repaired or replaced,
Landlord shall notify Tenant of any noncompliance or detected problems and
Tenant immediately shall cure the defects. If the Tenant fails to immediately
cure the defects, Tenant shall pay to Landlord upon demand the cost, as
reasonably determined by Landlord, of correcting any defects and repairing any
damage to the Building caused by such installation.

     It shall be a condition of Landlord's approval of the Initial Office
Alterations, the Initial Lab Alterations, and of any subsequent Alterations
involving MEP systems, that Tenant provide Landlord with (a) a certification of
an acoustical engineer satisfactory to Landlord that all equipment installed by
Tenant, when evaluated in the context of the anticipated use of the entire
Property, will comply with the City of Cambridge Noise Ordinance, and (b) a
certification

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<Page>

from a qualified engineer satisfactory to Landlord that the equipment installed
by Tenant will meet all applicable legal requirements, and will not result in
the reentrainment of exhaust into Base Building systems.

10.  ENTRY BY LANDLORD; RESERVATION OF CERTAIN RIGHTS.

     Landlord may enter the Premises to inspect, show or clean the Premises, or
to perform or facilitate the performance of repairs, alterations or additions to
the Premises or any portion of the Buildings or to inspect and conduct tests in
order to monitor Tenant's compliance with legal requirements governing
environmental substances. Except in emergencies or to provide Building services,
Landlord shall provide Tenant with reasonable prior verbal notice of entry
(which, in the case of the Lab Space only, shall mean at least 48 hours prior
verbal notice) and shall use reasonable efforts to minimize any interference
with Tenant's use of the Premises. If reasonably necessary, Landlord may
temporarily close all or a portion of the Premises to perform repairs,
alterations and additions. However, except in emergencies, Landlord will not
close the Premises if the work can reasonably be completed on weekends and after
Buildings Service Hours. Entry by Landlord shall not constitute a constructive
eviction or entitle Tenant to an abatement or reduction of Rent. Landlord
expressly reserves the right to install, use, maintain, repair, replace and
relocate utility chases, pipes, wiring, meters, and other equipment and fixtures
in and through the Buildings to service other portions of the Property, to make
additions to the Buildings and alter or relocate entranceways, common areas or
other facilities (including driveways, walkways and parking areas), and to grant
easements and other rights. Notwithstanding the foregoing, except in emergency
situations as determined by Landlord, Landlord shall exercise reasonable efforts
to perform any entry into the Premises in a manner that is reasonably designed
to minimize interference with the operation of Tenant's business in the
Premises.

11.  ASSIGNMENT AND SUBLETTING.

     11.01  Except in connection with a Permitted Transfer (defined in Section
11.04), Tenant shall not assign, sublease, transfer or encumber any interest in
this Lease or allow any third party to use any portion of the Premises
(collectively or individually, a "TRANSFER") without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned or
delayed if Landlord does not exercise its recapture rights under Section 11.02.
If the entity(ies) which directly or indirectly controls the voting
shares/rights of Tenant changes at any time, such change of ownership or control
shall constitute a Transfer unless Tenant is an entity whose outstanding stock
is listed on a recognized securities exchange or if at least 80% of its voting
stock is owned by another entity, the voting stock of which is so listed. Any
Transfer in violation of this Section shall, at Landlord's option, be deemed a
Default by Tenant as described in Section 18, and shall be voidable by Landlord.
In no event shall any Transfer, including a Permitted Transfer, release or
relieve Tenant from any obligation under this Lease.

     11.02  Tenant shall provide Landlord with financial statements for the
proposed transferee, a fully executed copy of the proposed assignment, sublease
or other Transfer documentation and such other information as Landlord may
reasonably request. Within 15 Business Days after receipt of the required
information and documentation, Landlord shall either: (a) consent to the
Transfer by execution of a consent agreement in a form reasonably designated by
Landlord; (b) reasonably refuse to consent to the Transfer in writing; or (c) in
the event of an assignment of this Lease or subletting of more than 90% of the
Rentable Square Footage of either the Office Space or the Lab Space for more
than 75% of the remaining Term (excluding unexercised options), recapture the
portion of the Premises that Tenant is proposing to Transfer. If Landlord
exercises its right to recapture, this Lease shall automatically be amended (or
terminated if the entire Premises is being assigned or sublet) to delete the
applicable portion of the Premises effective on the proposed effective date of
the Transfer, although Landlord may require Tenant to execute a reasonable
amendment or other document reflecting such reduction or termination. Tenant
shall pay Landlord a review fee of $1,500.00 for Landlord's review of any
Permitted Transfer or requested Transfer.

     11.03  Tenant shall pay Landlord 50% of all rent and other consideration
which Tenant receives as a result of a Transfer that is in excess of the Rent
payable to Landlord for the portion of the Premises and Term covered by the
Transfer. Tenant shall pay Landlord for Landlord's share of the excess within 30
days after Tenant's receipt of the excess. Tenant may deduct from the excess all
reasonable and customary expenses directly incurred by Tenant attributable to
the Transfer before determining the amount of any excess rent or consideration
payable to Landlord. If Tenant is in Default, Landlord may require that all
sublease payments be made directly to Landlord, in which case Tenant shall
receive a credit against Rent in the amount of Tenant's share of payments
received by Landlord.

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<Page>

     11.04  Tenant may assign this Lease to a successor to Tenant by purchase,
merger, consolidation or reorganization (an "OWNERSHIP CHANGE") or assign this
Lease or sublet all or a portion of the Premises to an Affiliate without the
consent of Landlord, provided that all of the following conditions are satisfied
(a "PERMITTED TRANSFER"): (a) Tenant is not in Default; (b) in the event of an
Ownership Change, Tenant's successor shall own substantially all of the assets
of Tenant and have a net worth which is at least equal to Tenant's net worth as
of the day prior to the proposed Ownership Change, or in the event of a Transfer
to an Affiliate (defined below), Tenant continues to have a net worth equal to
or greater than Tenant's net worth at the date of this Lease or the Affiliate
has a net worth equal to Tenant's net worth at the date of this Lease; (c) the
Permitted Use does not allow the Premises to be used for retail purposes; and
(d) Tenant shall give Landlord written notice at least 15 Business Days prior to
the effective date of the Permitted Transfer. Tenant's notice to Landlord shall
include information and documentation evidencing the Permitted Transfer and
showing that each of the above conditions has been satisfied. If requested by
Landlord, Tenant's successor shall sign a commercially reasonable form of
assumption agreement. "AFFILIATE" shall mean an entity controlled by,
controlling or under common control with Tenant.

12.  LIENS.

     Tenant shall not permit mechanics' or other liens to be placed upon the
Property, Premises or Tenant's leasehold interest in connection with any work or
service done or purportedly done by or for the benefit of Tenant or its
transferees. Tenant shall give Landlord notice at least 15 days prior to the
commencement of any work in the Premises to afford Landlord the opportunity,
where applicable, to post and record notices of non-responsibility. Tenant,
within 10 days of notice from Landlord, shall fully discharge any lien by
settlement, by bonding or by insuring over the lien in the manner prescribed by
the applicable lien Law and, if Tenant fails to do so, Tenant shall be deemed in
Default under this Lease and, in addition to any other remedies available to
Landlord as a result of such Default by Tenant, Landlord, at its option, may
bond, insure over or otherwise discharge the lien. Tenant shall reimburse
Landlord for any amount paid by Landlord, including, without limitation,
reasonable attorneys' fees.

13.  INDEMNITY AND WAIVER OF CLAIMS.

     Except to the extent caused by the negligence or willful misconduct of
Landlord or any Landlord Related Parties (defined below), Tenant shall
indemnify, defend and hold Landlord and Landlord Related Parties harmless
against and from all liabilities, obligations, damages, penalties, claims,
actions, costs, charges and expenses, including, without limitation, reasonable
attorneys' fees and other professional fees (if and to the extent permitted by
Law) (collectively referred to as "LOSSES"), which may be imposed upon, incurred
by or asserted against Landlord or any of the Landlord Related Parties by any
third party and arising out of or in connection with any damage or injury
occurring in the Premises or any acts or omissions (including violations of Law)
of Tenant, the Tenant Related Parties (defined below) or any of Tenant's
transferees, contractors or licensees. Except to the extent caused by the
negligence or willful misconduct of Tenant or any Tenant Related Parties,
Landlord shall indemnify, defend and hold Tenant, its trustees, members,
principals, beneficiaries, partners, officers, directors, employees and agents
("TENANT RELATED PARTIES") harmless against and from all Losses which may be
imposed upon, incurred by or asserted against Tenant or any of the Tenant
Related Parties by any third party and arising out of or in connection with the
acts or omissions (including violations of Law) of Landlord or the Landlord
Related Parties. Tenant hereby waives all claims against and releases Landlord
and its trustees, members, principals, beneficiaries, partners, officers,
directors, employees, Mortgagees (defined in Section 23) and agents (the
"LANDLORD RELATED PARTIES") from all claims for any injury to or death of
persons, damage to property or business loss in any manner related to (a) Force
Majeure, (b) acts of third parties, (c) the bursting or leaking of any tank,
water closet, drain or other pipe, (d) the inadequacy or failure of any security
or protective services, personnel or equipment, or (e) any matter not within the
reasonable control of Landlord. Notwithstanding the foregoing, except as
provided in Section 15 to the contrary, Tenant shall not be required to waive
any claims against Landlord (other than for loss or damage to Tenant's business)
where such loss or damage is due to the negligence or willful misconduct of
Landlord or any Landlord Related Parties.

14.  INSURANCE.

     Tenant shall maintain the following insurance ("TENANT'S INSURANCE"): (a)
Commercial General Liability Insurance applicable to the Premises and its
appurtenances providing, on an occurrence basis, a minimum combined single limit
of $5,000,000.00; (b) Property/Business Interruption Insurance written on an All
Risk or Special Cause of Loss Form, including

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<Page>

earthquake sprinkler leakage, at replacement cost value and with a replacement
cost endorsement covering all of Tenant's business and trade fixtures,
equipment, movable partitions, furniture, merchandise and other personal
property within the Premises ("TENANT'S PROPERTY") and any Leasehold
Improvements performed by or for the benefit of Tenant; (c) Workers'
Compensation Insurance in amounts required by Law; and (d) Employers Liability
Coverage of at least $5,000,000.00 per occurrence. Any company writing Tenant's
Insurance shall have an A.M. Best rating of not less than A-VIII. All Commercial
General Liability Insurance policies shall name as additional insureds Landlord
(or its successors and assignees), the managing agent for the Buildings (or any
successor), EOP Operating Limited Partnership, Equity Office Properties Trust
and their respective members, principals, beneficiaries, partners, officers,
directors, employees, and agents, and other designees of Landlord and its
successors as the interest of such designees shall appear. In addition, Landlord
shall be named as a loss payee with respect to Property/Business Interruption
Insurance on the Leasehold Improvements. All policies of Tenant's Insurance
shall contain endorsements that the insurer(s) shall give Landlord and its
designees at least 30 days' advance written notice of any cancellation,
termination, material change or lapse of insurance. Tenant shall provide
Landlord with a certificate of insurance evidencing Tenant's Insurance prior to
the earlier to occur of the Office Space Commencement Date or the date Tenant is
provided with possession of the Premises, and thereafter as necessary to assure
that Landlord always has current certificates evidencing Tenant's Insurance.
Landlord shall maintain so called All Risk property insurance on the Buildings
at replacement cost value as reasonably estimated by Landlord, together with
such other insurance coverage as Landlord, in its reasonable judgment, may elect
to maintain.

15.  SUBROGATION.

     Landlord and Tenant hereby waive and shall cause their respective insurance
carriers to waive any and all rights of recovery, claims, actions or causes of
action against the other for any loss or damage with respect to Tenant's
Property, Leasehold Improvements, the Buildings, the Premises, or any contents
thereof, including rights, claims, actions and causes of action based on
negligence, which loss or damage is (or would have been, had the insurance
required by this Lease been carried) covered by insurance. For the purposes of
this waiver, any deductible with respect to a party's insurance shall be deemed
covered by and recoverable by such party under valid and collectable policies of
insurance.

16.  CASUALTY DAMAGE.

     16.01  If all or any portion of the Premises becomes untenantable by fire
or other casualty to the Premises (collectively a "CASUALTY"), Landlord, with
reasonable promptness, shall cause a general contractor selected by Landlord to
provide Landlord and Tenant with a written estimate of the amount of time
required using standard working methods to Substantially Complete the repair and
restoration of the Premises and any Common Areas necessary to provide access to
the Premises ("COMPLETION ESTIMATE"). If the Completion Estimate indicates that
the Premises or any Common Areas necessary to provide access to the Premises
cannot be made tenantable within 270 days from the date the repair is started,
then either party shall have the right to terminate this Lease upon written
notice to the other within 10 days after receipt of the Completion Estimate.
Tenant, however, shall not have the right to terminate this Lease if the
Casualty was caused by the negligence or intentional misconduct of Tenant or any
Tenant Related Parties. In addition, Landlord, by notice to Tenant within 90
days after the date of the Casualty, shall have the right to terminate this
Lease if: (1) the Premises have been materially damaged and there is less than 2
years of the Term remaining on the date of the Casualty; (2) any Mortgagee
requires that the insurance proceeds be applied to the payment of the mortgage
debt; or (3) a material uninsured loss to the Buildings or Premises occurs.
Tenant shall have the right to terminate this Lease if: (a) a substantial
portion of the Premises has been damaged by Casualty and such damage cannot
reasonably be repaired within 60 days after receipt of the Completion Estimate;
(b) there is less than 1 year of the Term remaining on the date of the Casualty;
(c) the Casualty was not caused by the negligence or willful misconduct of
Tenant or its agents, employees or contractors; and (d) Tenant provides Landlord
with written notice of its intent to terminate within 30 days after the date of
Tenant's receipt of the Completion Estimate.

     16.02  If this Lease is not terminated, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, restore the Premises and Common
Areas. Such restoration shall be to substantially the same condition that
existed prior to the Casualty, except for modifications required by Law or any
other modifications to the Common Areas deemed desirable by Landlord. Upon
notice from Landlord, Tenant shall assign or endorse over to Landlord (or to any
party designated by

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<Page>

Landlord) all property insurance proceeds payable to Tenant under Tenant's
Insurance with respect to any Leasehold Improvements performed by or for the
benefit of Tenant; provided if the estimated cost to repair such Leasehold
Improvements exceeds the amount of insurance proceeds received by Landlord from
Tenant's insurance carrier, the excess cost of such repairs shall be paid by
Tenant to Landlord prior to Landlord's commencement of repairs. Within 15 days
of demand, Tenant shall also pay Landlord for any additional excess costs that
are determined during the performance of the repairs. In no event shall Landlord
be required to spend more for the restoration than the proceeds received by
Landlord, whether insurance proceeds or proceeds from Tenant. Landlord shall not
be liable for any inconvenience to Tenant, or injury to Tenant's business
resulting in any way from the Casualty or the repair thereof. Provided that
Tenant is not in Default, during any period of time that all or a material
portion of the Premises is rendered untenantable as a result of a Casualty, the
Rent shall abate for the portion of the Premises that is untenantable and not
used by Tenant.

17.  CONDEMNATION.

     Either party may terminate this Lease if any material part of the Premises
is taken or condemned for any public or quasi-public use under Law, by eminent
domain or private purchase in lieu thereof (a "TAKING"). Landlord shall also
have the right to terminate this Lease if there is a Taking of any portion of
the Buildings or Property which would have a material adverse effect on
Landlord's ability to profitably operate the remainder of the Buildings. The
terminating party shall provide written notice of termination to the other party
within 45 days after it first receives notice of the Taking. The termination
shall be effective as of the effective date of any order granting possession to,
or vesting legal title in, the condemning authority. If this Lease is not
terminated, Base Rent and Tenant's Pro Rata Share shall be appropriately
adjusted to account for any reduction in the square footage of the Buildings or
Premises. All compensation awarded for a Taking shall be the property of
Landlord. The right to receive compensation or proceeds are expressly waived by
Tenant, however, Tenant may file a separate claim for Tenant's Property and
Tenant's reasonable relocation expenses, provided the filing of the claim does
not diminish the amount of Landlord's award. If only a part of the Premises is
subject to a Taking and this Lease is not terminated, Landlord, with reasonable
diligence, will restore the remaining portion of the Premises as nearly as
practicable to the condition immediately prior to the Taking.

18.  EVENTS OF DEFAULT.

     18.01  In addition to any other default specifically described in this
Lease, each of the following occurrences shall be a "DEFAULT": (a) Tenant's
failure to pay any portion of Rent when due, if the failure continues for 5 days
after written notice to Tenant ("MONETARY DEFAULT"); (b) Tenant's failure (other
than a Monetary Default) to comply with any term, provision, condition or
covenant of this Lease, if the failure is not cured within 10 days after written
notice to Tenant provided, however, if Tenant's failure to comply cannot
reasonably be cured within 10 days, Tenant shall be allowed additional time (not
to exceed 60 days) as is reasonably necessary to cure the failure so long as
Tenant begins the cure within 10 days and diligently pursues the cure to
completion; (c) Tenant permits a Transfer without Landlord's required approval
or otherwise in violation of Section 11 of this Lease; (d) Tenant or any
Guarantor becomes insolvent, makes a transfer in fraud of creditors, makes an
assignment for the benefit of creditors, admits in writing its inability to pay
its debts when due or forfeits or loses its right to conduct business; (e) the
leasehold estate is taken by process or operation of Law; or (f) Tenant is in
default beyond any notice and cure period under any other lease or agreement
with Landlord at the Buildings or Property. If Landlord provides Tenant with
notice of Tenant's failure to comply with any specific provision of this Lease
on 3 separate occasions during any 12 month period, Tenant's subsequent
violation of such provision shall, at Landlord's option, be an incurable Default
by Tenant. All notices sent under this Section shall be in satisfaction of, and
not in addition to, notice required by Law.

     18.02  LANDLORD DEFAULT. Landlord shall be in default under this Lease if
(i) Landlord fails to perform any of its obligations hereunder and Landlord
fails to commence the performance of any of its obligations hereunder within 10
days after written notice thereof from Tenant to Landlord (provided that if such
failure cannot reasonably be cured within 10 days after written notice thereof
from Tenant to Landlord, Landlord shall be in default hereunder only if Landlord
fails to commence the cure of said failure within said 10 day period, or having
commenced the curative action within said 10 day period, fails to diligently
pursue same) and (ii) each Mortgagee (as defined in Section 23) of whose
identity Tenant has been notified in writing shall have failed to cure such
default within 30 days (or such longer period of time as may be specified in any
written agreement between Tenant and Mortgagee regarding such matter) after
receipt of written notice from Tenant of Landlord's failure to cure within the
time periods

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provided above. In the event of a default by Landlord under the Lease, Tenant
shall use reasonable efforts to mitigate its damages and losses arising from any
such default and Tenant may pursue any and all remedies available to it at law
or in equity, provided, however, in no event shall Tenant claim a constructive
or actual eviction or that the Premises have become unsuitable or unhabitable
prior to a default and failure to cure by Landlord and its Mortgagee under this
Lease and, further provided, in no event shall Tenant be entitled to receive
more than its actual direct damages, it being agreed that Tenant hereby waives
any claim it otherwise may have for special or consequential damages.

19.  REMEDIES.

     19.01  Upon Default, Landlord shall have the right to pursue any one or
more of the following remedies:

     (a)  Terminate this Lease, in which case Tenant shall immediately surrender
the Premises to Landlord. If Tenant fails to surrender the Premises, Landlord,
in compliance with Law, may enter upon and take possession of the Premises and
remove Tenant, Tenant's Property and any party occupying the Premises. Tenant
shall pay Landlord, on demand, all past due Rent and other losses and damages
Landlord suffers as a result of Tenant's Default, including, without limitation,
all Costs of Reletting (defined below) and any deficiency that may arise from
reletting or the failure to relet the Premises. "COSTS OF RELETTING" shall
include all reasonable costs and expenses incurred by Landlord in reletting or
attempting to relet the Premises, including, without limitation, legal fees,
brokerage commissions, the cost of alterations and the value of other
concessions or allowances granted to a new tenant. Landlord agrees to use
reasonable efforts to mitigate damages, provided that those efforts shall not
require Landlord to relet the Premises in preference to any other space in the
Building or to relet the Premises to any party that Landlord could reasonably
reject as a transferee pursuant to Section 11.

     (b)  Terminate Tenant's right to possession of the Premises and, in
compliance with Law, remove Tenant, Tenant's Property and any parties occupying
the Premises. Landlord may (but shall not be obligated to) relet all or any part
of the Premises, without notice to Tenant, for such period of time and on such
terms and conditions (which may include concessions, free rent and work
allowances) as Landlord in its absolute discretion shall determine. Landlord may
collect and receive all rents and other income from the reletting. Tenant shall
pay Landlord on demand all past due Rent, all Costs of Reletting and any
deficiency arising from the reletting or failure to relet the Premises. The
re-entry or taking of possession of the Premises shall not be construed as an
election by Landlord to terminate this Lease.

     19.02  In lieu of calculating damages under Section 19.01, Landlord may
elect to receive as damages the sum of (a) all Rent accrued through the date of
termination of this Lease or Tenant's right to possession, and (b) an amount
equal to the total Rent that Tenant would have been required to pay for the
remainder of the Term discounted to present value at the Prime Rate (defined
below) then in effect, minus the then present fair rental value of the Premises
for the remainder of the Term, similarly discounted, after deducting all
anticipated Costs of Reletting. "PRIME RATE" shall be the per annum interest
rate publicly announced as its prime or base rate by a federally insured bank
selected by Landlord in the state in which the Buildings are located.

     19.03  If Tenant is in Default of any of its non-monetary obligations under
the Lease, Landlord shall have the right to perform such obligations. Tenant
shall reimburse Landlord for the cost of such performance upon demand together
with an administrative charge equal to 10% of the cost of the work performed by
Landlord. The repossession or re-entering of all or any part of the Premises
shall not relieve Tenant of its liabilities and obligations under this Lease. No
right or remedy of Landlord shall be exclusive of any other right or remedy.
Each right and remedy shall be cumulative and in addition to any other right and
remedy now or subsequently available to Landlord at Law or in equity.

20.  LIMITATION OF LIABILITY.

     NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS LEASE, THE
LIABILITY OF LANDLORD (AND OF ANY SUCCESSOR LANDLORD) SHALL BE LIMITED TO THE
LESSER OF (A) THE INTEREST OF LANDLORD IN THE PROPERTY, OR (B) THE EQUITY
INTEREST LANDLORD WOULD HAVE IN THE PROPERTY IF THE PROPERTY WERE ENCUMBERED BY
THIRD PARTY DEBT IN AN AMOUNT EQUAL TO 70% OF THE VALUE OF THE PROPERTY. TENANT
SHALL LOOK SOLELY TO LANDLORD'S INTEREST IN THE PROPERTY FOR THE RECOVERY OF ANY
JUDGMENT OR AWARD AGAINST LANDLORD OR ANY LANDLORD RELATED PARTY. NEITHER

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LANDLORD NOR ANY LANDLORD RELATED PARTY SHALL BE PERSONALLY LIABLE FOR ANY
JUDGMENT OR DEFICIENCY, AND IN NO EVENT SHALL LANDLORD OR ANY LANDLORD RELATED
PARTY BE LIABLE TO TENANT FOR ANY LOST PROFIT, DAMAGE TO OR LOSS OF BUSINESS OR
ANY FORM OF SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGE. BEFORE FILING SUIT FOR AN
ALLEGED DEFAULT BY LANDLORD, TENANT SHALL GIVE LANDLORD AND THE MORTGAGEE(S)
WHOM TENANT HAS BEEN NOTIFIED HOLD MORTGAGES (DEFINED IN SECTION 23 BELOW),
NOTICE AND REASONABLE TIME TO CURE THE ALLEGED DEFAULT.

21.  INTENTIONALLY OMITTED.

22.  HOLDING OVER.

     If Tenant fails to surrender all or any part of the Premises at the
termination of this Lease, occupancy of the Premises after termination shall be
that of a tenancy at sufferance. Tenant's occupancy shall be subject to all the
terms and provisions of this Lease, and Tenant shall pay an amount (on a per
month basis without reduction for partial months during the holdover) equal to
150% of the sum of the Base Rent and Additional Rent due for the period
immediately preceding the holdover. No holdover by Tenant or payment by Tenant
after the termination of this Lease shall be construed to extend the Term or
prevent Landlord from immediate recovery of possession of the Premises by
summary proceedings or otherwise. If Landlord is unable to deliver possession of
the Premises to a new tenant or to perform improvements for a new tenant as a
result of Tenant's holdover and Tenant fails to vacate the Premises within 15
days after notice from Landlord, Tenant shall be liable for all damages that
Landlord suffers from the holdover.

23.  SUBORDINATION TO MORTGAGES; ESTOPPEL CERTIFICATE.

Tenant accepts this Lease subject and subordinate to any mortgage(s), deed(s) of
trust, ground lease(s) or other lien(s) now or subsequently arising upon the
Premises, the Buildings or the Property, and to renewals, modifications,
refinancings and extensions thereof (collectively referred to as a "MORTGAGE").
The party having the benefit of a Mortgage shall be referred to as a
"MORTGAGEE". This clause shall be self-operative, but upon request from a
Mortgagee, Tenant shall execute a commercially reasonable subordination
agreement in favor of the Mortgagee. As an alternative, a Mortgagee shall have
the right at any time to subordinate its Mortgage to this Lease. Upon request,
Tenant, without charge, shall attorn to any successor to Landlord's interest in
this Lease. Landlord and Tenant shall each, within 10 days after receipt of a
written request from the other, execute and deliver a commercially reasonable
estoppel certificate to those parties as are reasonably requested by the other
(including a Mortgagee or prospective purchaser). Without limitation, such
estoppel certificate may include a certification as to the status of this Lease,
the existence of any defaults and the amount of Rent that is due and payable.
Landlord shall reimburse Tenant for such reasonable legal costs, if any, as
Tenant may incur in complying with Landlord's request for an estoppel
certificate for each such request for any estoppel certificate commencing on the
third such request (and each additional request made by Landlord thereafter
during the initial Term). As of the date of this Lease, there is no mortgage,
deed of trust or ground lease currently encumbering the Premises, Buildings or
the Property. Notwithstanding the foregoing in this Section to the contrary, as
a condition precedent to the future subordination of this Lease to a future
Mortgage, Landlord shall be required to provide Tenant with a non-disturbance,
subordination, and attornment agreement in favor of Tenant from any Mortgagee
who comes into existence after the Commencement Date. Such non-disturbance,
subordination, and attornment agreement in favor of Tenant shall provide that,
so long as Tenant is paying the Rent due under the Lease and is not otherwise in
default under the Lease beyond any applicable cure period, its right to
possession and the other terms of the Lease shall remain in full force and
effect. Such non-disturbance, subordination, and attornment agreement may
include other commercially reasonable provisions in favor of the Mortgagee,
including, without limitation, additional time on behalf of the Mortgagee to
cure defaults of the Landlord and provide that (a) neither Mortgagee nor any
successor-in-interest shall be bound by (i) any payment of the Base Rent,
Additional Rent, or other sum due under this Lease for more than 1 month in
advance or (ii) any amendment or modification of the Lease made without the
express written consent of Mortgagee or any successor-in-interest; (b) neither
Mortgagee nor any successor-in-interest will be liable for (i) any act or
omission or warranties of any prior landlord (including Landlord), (ii) the
breach of any warranties or obligations relating to construction of improvements
on the Property or any tenant finish work performed or to have been performed by
any prior landlord (including Landlord), or (iii) the return of any security
deposit, except to the extent such deposits have been received by Mortgagee; and
(c) neither Mortgagee nor any successor-in-interest shall be subject to any
offsets or defenses which Tenant might have against any prior landlord
(including Landlord).

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<Page>

24.  NOTICE.

     All demands, approvals, consents or notices (collectively referred to as a
"NOTICE") shall be in writing and delivered by hand or sent by registered or
certified mail with return receipt requested or sent by overnight or same day
courier service at the party's respective Notice Address(es) set forth in
Section 1. Each notice shall be deemed to have been received on the earlier to
occur of actual delivery or the date on which delivery is refused, or, if Tenant
has vacated the Premises or any other Notice Address of Tenant without providing
a new Notice Address, 3 days after notice is deposited in the U.S. mail or with
a courier service in the manner described above. Either party may, at any time,
change its Notice Address (other than to a post office box address) by giving
the other party written notice of the new address.

25.  SURRENDER OF PREMISES.

     At the termination of this Lease or Tenant's right of possession, Tenant
shall remove Tenant's Property from the Premises, and quit and surrender the
Premises to Landlord, broom clean, and in good order, condition and repair,
ordinary wear and tear, damage by Casualty and damage which Landlord is
obligated to repair hereunder excepted. If Tenant fails to remove any of
Tenant's Property within 5 Business Days after termination of this Lease or
Tenant's right to possession, Landlord, at Tenant's sole cost and expense, shall
be entitled (but not obligated) to remove and store Tenant's Property. Landlord
shall not be responsible for the value, preservation or safekeeping of Tenant's
Property. Tenant shall pay Landlord, upon demand, the expenses and storage
charges incurred. If Tenant fails to remove Tenant's Property from the Premises
or storage, within 30 days after notice, Landlord may deem all or any part of
Tenant's Property to be abandoned and title to Tenant's Property shall vest in
Landlord. Tenant shall, prior to the expiration of the Term or upon the earlier
termination thereof, upon request by Landlord, cause to be performed by a
qualified environmental consultant approved by Landlord an inspection of the Lab
Space (including visual inspection, geiger counter evaluation, airborne and
surface monitoring) to confirm that the Lab Space is free of biological,
chemical and radioactive hazards. Tenant shall deliver a copy of the inspection
report ("INSPECTION REPORT") to Landlord. If the report is not reasonably
satisfactory to Landlord, Landlord shall so notify Tenant, indicating the nature
of Landlord's dissatisfaction. Tenant shall be responsible for abating or, at
Landlord's election if the Term hereof has expired, paying the cost of abating
any condition(s) indicated by Landlord.

26.  MISCELLANEOUS.

     26.01  This Lease shall be interpreted and enforced in accordance with the
Laws of the state or commonwealth in which the Buildings are located and
Landlord and Tenant hereby irrevocably consent to the jurisdiction and proper
venue of such state or commonwealth. If any term or provision of this Lease
shall to any extent be void or unenforceable, the remainder of this Lease shall
not be affected. If there is more than one Tenant or if Tenant is comprised of
more than one party or entity, the obligations imposed upon Tenant shall be
joint and several obligations of all the parties and entities, and requests or
demands from any one person or entity comprising Tenant shall be deemed to have
been made by all such persons or entities. Notices to any one person or entity
shall be deemed to have been given to all persons and entities. Tenant
represents and warrants to Landlord that each individual executing this Lease on
behalf of Tenant is authorized to do so on behalf of Tenant and that Tenant is
not, and the entities or individuals constituting Tenant or which may own or
control Tenant or which may be owned or controlled by Tenant are not, (i) in
violation of any laws relating to terrorism or money laundering, or (ii) among
the individuals or entities identified on any list compiled pursuant to
Executive Order 13224 for the purpose of identifying suspected terrorists or on
the most current list published by the U.S. Treasury Department Office of
Foreign Assets Control at its official website,
http://www.treas.gov/ofac/tllsdn.pdf or any replacement website or other
replacement official publication of such list.

     26.02  If either party institutes a suit against the other for violation of
or to enforce any covenant, term or condition of this Lease, the prevailing
party shall be entitled to reimbursement of all of its costs and expenses,
including, without limitation, reasonable attorneys' fees. Landlord and Tenant
hereby waive any right to trial by jury in any proceeding based upon a breach of
this Lease. Either party's failure to declare a default immediately upon its
occurrence, or delay in taking action for a default, shall not constitute a
waiver of the default, nor shall it constitute an estoppel.

     26.03  Whenever a period of time is prescribed for the taking of an action
by Landlord or Tenant (other than the payment of the Security Deposit or Rent),
the period of time for the

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<Page>

performance of such action shall be extended by the number of days that the
performance is actually delayed due to strikes, acts of God, shortages of labor
or materials, war, terrorist acts, civil disturbances and other causes beyond
the reasonable control of the performing party ("FORCE MAJEURE").

     26.04  Landlord shall have the right to transfer and assign, in whole or in
part, all of its rights and obligations under this Lease and in the Buildings
and Property. Upon transfer Landlord shall be released from any further
obligations hereunder and Tenant agrees to look solely to the successor in
interest of Landlord for the performance of such obligations, provided that, any
successor pursuant to a voluntary, third party transfer (but not as part of an
involuntary transfer resulting from a foreclosure or deed in lieu thereof) shall
have assumed Landlord's obligations under this Lease, and further provided that
Landlord and its successors, as the case may be, shall remain liable after their
respective periods of ownership with respect to any sums due in connection with
a breach or default by such party that arose during such period of ownership by
such party.

     26.05  Landlord has delivered a copy of this Lease to Tenant for Tenant's
review only and the delivery of it does not constitute an offer to Tenant or an
option. Tenant represents that it has dealt directly with and only with the
Broker as a broker in connection with this Lease. Tenant shall indemnify and
hold Landlord and the Landlord Related Parties harmless from all claims of any
other brokers claiming to have represented Tenant in connection with this Lease.
Landlord shall indemnify and hold Tenant and the Tenant Related Parties harmless
from all claims of any brokers claiming to have represented Landlord in
connection with this Lease.

     26.06  Time is of the essence with respect to Tenant's exercise of any
expansion, renewal or extension rights granted to Tenant. The expiration of the
Term, whether by lapse of time, termination or otherwise, shall not relieve
either party of any obligations which accrued prior to or which may continue to
accrue after the expiration or termination of this Lease.

     26.07  Tenant may peacefully have, hold and enjoy the Premises, subject to
the terms of this Lease, provided Tenant pays the Rent and fully performs all of
its covenants and agreements. This covenant shall be binding upon Landlord and
its successors only during its or their respective periods of ownership of the
Buildings.

     26.08  This Lease does not grant any rights to light or air over or about
the Buildings. Landlord excepts and reserves exclusively to itself any and all
rights not specifically granted to Tenant under this Lease. This Lease
constitutes the entire agreement between the parties and supersedes all prior
agreements and understandings related to the Premises, including all lease
proposals, letters of intent and other documents. Neither party is relying upon
any warranty, statement or representation not contained in this Lease. This
Lease may be modified only by a written agreement signed by an authorized
representative of Landlord and Tenant.

     26.09  Subject to the provisions of this Section 26.09, so long as no
Default has occurred and remains outstanding under this Lease, and provided
Tenant's employees execute Landlord's standard waiver of liability form, then
Tenant's employees (the "FITNESS CENTER USERS") shall be entitled to use the
Property's fitness center (the "FITNESS CENTER"). The use of the Fitness Center
shall be subject to the reasonable rules and regulations (including rules
regarding hours of use) established from time to time by Landlord for the
Fitness Center. There shall be no separate charge to Tenant for the use of the
Fitness Center; however, the costs of operating, maintaining and repairing the
Fitness Center shall be included as part of Expenses to the extent provided in
EXHIBIT B attached hereto. Tenant acknowledges that the provisions of this
Section shall not be deemed to be a representation by Landlord that Landlord
shall continuously maintain the Fitness Center (or any other fitness facility)
throughout the Term of this Lease, and Landlord shall have the right, at
Landlord's sole discretion, to expand, contract, eliminate or otherwise modify
the Fitness Center. No expansion, contraction or modification of the Fitness
Center, and no termination of Tenant's or the Fitness Center Users' rights to
the Fitness Center shall constitute a constructive eviction or entitle Tenant to
an abatement or reduction in Rent.

27.  ENVIRONMENTAL SUBSTANCES.

     27.01  "ENVIRONMENTAL LAW(S)" means all statutes, Laws, rules, regulations,
codes, ordinances, standards, guidelines, authorizations and orders of federal,
state and local public authorities pertaining to any of the Environmental
Substances or to environmental compliance, contamination, cleanup or disclosures
of any release or threat of release to the environment, of any hazardous or
toxic substances, wastes or materials, any pollutants or contaminants which are
included under or regulated by any municipal, county, state or federal statutes,
Laws, rules,

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<Page>

regulations, codes, ordinances, standards, guidelines, authorizations or orders,
including, without limitation, the Toxic Substances Control Act, 15 U.S.C.
Section 2601, ET SEQ.; the Clean Water Act, 33 U.S.C. Section 1251, ET SEQ.; the
Clean Air Act, 42 U.S.C. Section 7401, ET SEQ.; the Safe Drinking Water Act, 42
U.S.C. Section 300f-300j, ET SEQ.; the Federal Water Pollution Control Act, 33
U.S.C. Section 1321, ET SEQ.; the Solid Waste Disposal Act, 42 U.S.C. Section
6901, ET SEQ.; the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. Section 9601 ET SEQ.; the Federal Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901 ET SEQ.; the Superfund
Amendments and Reauthorization Act of 1986, Public Law No. 99-499 (signed into
law October 17, 1986); M.G.L. c.21C; and oil and hazardous materials as defined
in M.G.L. c.21E, as any of the same are from time to time amended, and the rules
and regulations promulgated thereunder, and any judicial or administrative
interpretation thereof, including any judicial or administrative orders or
judgments, and all other federal, state and local statutes, Laws, rules,
regulations, codes, ordinances, standards, guidelines, authorizations and orders
regulating the generation, storage, containment or disposal of any Environmental
Substances, including but not limited to those relating to lead paint, radon
gas, asbestos, storage and disposal of oil and hazardous wastes, substances and
materials, and underground and above-ground oil storage tanks; and any
amendments, modifications or supplements of any of the foregoing.

     27.02  "ENVIRONMENTAL SUBSTANCES" means, but shall not be limited to, any
hazardous substances, hazardous waste, environmental substances, oil, petroleum
products and any waste or substance, which because of its quantitative
concentration, chemical, biological, radioactive, flammable, explosive,
infectious or other characteristics, constitutes or may reasonably be expected
to constitute or contribute to a danger or hazard to public health, safety or
welfare or to the environment, including without limitation any asbestos
(whether or not friable) and any asbestos-containing materials, lead paint,
waste oils, solvents and chlorinated oils, polychlorinated biphenyls (PCBs),
toxic metals, etchants, pickling and plating wastes, explosives, reactive metals
and compounds, pesticides, herbicides, radon gas, urea formaldehyde foam
insulation and chemical, biological and radioactive wastes, or any other similar
materials which are mentioned under or regulated by any Environmental Law; and
the regulations adopted under these acts, and including any other products or
materials subsequently found by an authority of competent jurisdiction to have
adverse effects on the environment or the health and safety of persons.

     27.03  Tenant shall not cause or permit any Environmental Substances to be
generated, produced, brought upon, used, stored, treated or disposed of in or
about or on the Buildings by Tenant, its agents, employees, contractors,
subtenants or invitees without (i) Landlord's prior written consent, and (ii)
strictly complying with all applicable Environmental Laws and Laws pertaining to
the transportation, storage, use or disposal of such Environmental Substances,
including obtaining proper permits. Landlord may take into account any factors
or facts that Landlord reasonably believes relevant in determining whether to
grant its consent. Landlord consents to Tenant's use in the Lab Space of the
Environmental Substances listed in EXHIBIT H. From time to time at Landlord's
request, Tenant shall execute affidavits, representations and the like
concerning Tenant's best knowledge and belief regarding the presence or absence
of Environmental Substances on the Premises or the Property, and shall provide
copies of all required permits for Tenant's activities in the Premises.
Furthermore, on a quarterly basis beginning on the Office Space Commencement
Date or more often if reasonably required by Landlord's mortgagee(s), Tenant
shall provide Landlord with a list detailing the types and amounts of all
Environmental Substances being generated, produced, brought upon, used, stored,
treated or disposed of by or on behalf of Tenant in or about or on the Premises,
Buildings or Property and, upon Landlord's request, copies of any manifests or
other federal, state or municipal filings by Tenant with respect to such
Environmental Substances. Tenant agrees to pay the cost of any environmental
inspection or assessment requested by Landlord, any lender that holds a security
interest in the Property or this Lease, or by any insurance carrier, to the
extent that such inspection or assessment pertains to any release, threat of
release, contamination, claim of contamination, loss or damage or determination
of condition (together, "ENVIRONMENTAL INCIDENTS") in the Premises other than
Environmental Incidents arising prior to the date Tenant occupies the Premises
for the conduct of its business or migrating to the Premises from some other
part of the Buildings through no fault, act or omission of Tenant.

     27.04  If Tenant's transportation, storage, use or disposal of
Environmental Substances on the Property results in the contamination of the
soil or surface or ground water or loss or damage to person(s) or property,
Tenant agrees to: (a) notify Landlord immediately of any release, threat of
release, contamination, claim of contamination, loss or damage; (b) after
consultation with Landlord, clean up the release, threat of release, or
contamination in full compliance with all applicable statutes, regulations and
standards and (c) indemnify, defend

                                       18
<Page>

and hold Landlord, ground landlord, if any, and the Landlord Related Parties
harmless from and against any claims, suits, causes of action, costs and fees,
including attorneys' fees and costs, arising from or connected with any such
release, threat of release, contamination, claim of contamination, loss or
damage. In the event of such contamination, Tenant agrees to cooperate fully
with Landlord and provide such documents, affidavits and information as may be
requested by Landlord (1) to comply with any Environmental Law or Laws, (2) to
comply with the reasonable request of any lender, purchaser or tenant, and/or
(3) for any other reasonable reason deemed necessary by Landlord. Tenant shall
notify Landlord promptly in the event of any spill or other release of any
Environmental Substance at, in, on, under or about the Premises which is
required to be reported to a governmental authority under any Environmental Law
or Laws, shall promptly forward to Landlord copies of any notices received by
Tenant relating to alleged violations of any Environmental Law or Laws and shall
promptly pay when due any fine or assessment against Landlord, Tenant, or the
Premises relating to any violation during the Term of any Environmental Law or
Laws by Tenant, its employees, agents, independent contractors, or invitees or
with respect to the Premises or Property. If any governmental authority files a
lien against the Premises due to any act or omission, intentional or
unintentional, of Tenant, its agents, employees, or invitees, or for which
Tenant is responsible, resulting in the releasing, spilling, leaking, leaching,
pumping, emitting, pouring, emptying or dumping of any Environmental Substance,
Tenant shall, within thirty (30) days from the date that Tenant is first given
notice of such lien (or within such shorter period of time as may be specified
by Landlord if such governmental authority takes steps to cause the Premises to
be sold pursuant to such lien) either (A) pay the claim and remove the lien or
(B) furnish a cash deposit, bond or such other security as is satisfactory in
all respects to Landlord and sufficient to discharge the lien completely.

     27.05  The provisions of this Section 27 survive the expiration or earlier
termination of this Lease.

28.  MEDICAL WASTE POLICY.

     28.01  Tenant hereby agrees to furnish to Landlord upon demand, written
evidence that Tenant has established a written policy (the "MEDICAL WASTE
POLICY") concerning the identification, collection, storage, decontamination and
disposal of Hazardous Medical Waste (defined below) and Infectious Waste
(defined below). Tenant is responsible for the proper containment and
identification of its Hazardous Medical Waste and Infectious Waste, the disposal
of the Hazardous Medical Waste and Infectious Waste and the transportation of
the Hazardous Medical Waste and Infectious Waste using a properly qualified
agent (including, but not limited to, Stericycle). Landlord shall have the right
to reasonably designate an area within the Premises for the pick-up of Hazardous
Medical Waste and Infectious Waste.

     28.02  Hazardous Medical Waste is defined as used needles and syringes,
gloves and linen, uniforms and laundry, and cleaning equipment or materials used
to clean any of the foregoing; any solid, liquid or gas that is capable of
producing harmful affects on humans or the environment; material that is
ignitable, corrosive, reactive or toxic; or any materials that are classified as
hazardous medical waste by Law.

     28.03  Infectious Waste is defined as any waste that contains pathogens or
is capable of producing infectious disease; material contaminated by potentially
infectious materials (taking into consideration the factors necessary for
induction of disease, which include, but are not limited to, adequate dose,
resistance of host, portal of entry and presence of a pathogen and virulence);
material that contains pathogens with sufficient virulence and quantity so that
exposure to the waste by a susceptible host could result in an infectious
disease; or wastes capable of causing disease. Including but not limited to:

     (a)  Cultures and stocks of agents infectious to humans, and associated
biologicals (including but not limited to cultures from medical laboratories;
waste from the production of biologicals; discarded live and attenuated
vaccines, and culture dishes and devices used to transfer, inoculate and mix
cultures);

     (b)  Human pathological wastes (including but not limited to tissue, organs
and body parts [except teeth and the contiguous structures of bone and gum], and
body fluids that are removed during medical procedures and specimens of body
fluids and their containers);

     (c)  Discarded waste blood and blood components (including but not limited
to serum and plasma) and saturated material containing free flowing blood and
blood components (including but not limited to lab specimens);

                                       19
<Page>

     (d)  Discarded sharps used in human patient care, medical research or
clinical or pharmaceutical laboratories (including but not limited to
hypodermic, I.V., and other medical needles; hypodermic and I.V. syringes;
Pasteur pipettes; scalpel blades; blood vials; and broken or unbroken glassware
in contact with infectious agents, including slides or cover slips); and

     (e)  Discarded hypodermic, I.V. and other medical needles, hypodermic,
I.V., syringes, sharps and scalpel blades and whether used or unused (as it is
often difficult to determine if they have been used).

     28.04  Tenant further agrees that such Medical Waste Policy shall
incorporate the following elements: (a) Tenant's employees and agents shall be
expressly forbidden from disposing of any Hazardous Medical Waste or Infectious
Waste within the Premises or the Buildings in a manner which is contrary to the
terms of the Medical Waste Policy; (b) all such Hazardous Medical Waste and
Infectious Waste shall be collected, stored, decontaminated and removed from the
Premises and the Buildings by a qualified party in compliance with all
applicable Laws and guidelines (including, without limitation, the Occupational
Safety and Health Act) of any local, state or federal entity having jurisdiction
over this matter; (c) Infectious Waste shall be separated from other waste by
containing it in disposable red plastic bags/containers which are impervious to
moisture; (d) needles and sharps shall be contained in disposable rigid
containers which can be sealed with a tight fitting lid; (e) all spills of
Infectious Waste shall be wiped immediately using a spill kit that contains
instructions and disposable red plastic bags; (f) any spillage, or injury from
handling Infectious Waste shall be immediately reported to Landlord and Landlord
shall immediately be given a specific incident report; and (g) Tenant and its
employees and agents shall at all times employ proper procedures, including,
without limitation, the use of tags, signs or other appropriate written
communication, to prevent accidental injury or illness to other tenants in the
Buildings (including their employees, agents and invitees) resulting from
Tenant's collection, storage, decontamination and disposal of Hazardous Medical
Waste and Infectious Waste. Tenant hereby covenants and agrees that at all times
during the Term, Tenant and its employees and agents shall adhere to the terms
and conditions of the Medical Waste Policy. Tenant agrees to indemnify, defend
and hold Landlord and the Landlord Related Parties harmless from and against any
and all liabilities, obligations, damages, penalties, claims, costs, charges or
expenses, including without limitation, attorney's fees, clean-up costs, fines
or penalties arising out of or resulting from Tenant's violation of this
Paragraph.

     28.05  The provisions of this Section 28 survive the expiration or earlier
termination of this Lease.

29.  LAB STANDARDS.

     Tenant shall keep and maintain the Lab Space in accordance with (i) the
Institute of Laboratory Animal Resources "GUIDE FOR THE CARE AND USE OF
LABORATORY ANIMALS", (ii) the Animal Welfare Act (7 U.S.C. 2131 et. Seq.), and
(iii) all other applicable Federal, State and local Laws, guidelines and
policies relating to the operation and maintenance of biomedical laboratory
facilities (collectively, the "LAB STANDARDS").

     29.01  Landlord acknowledges that as part of Tenant's operations in the Lab
Space, Tenant may perform certain medical research work on animals (the
"PERMITTED ANIMALS"). Tenant shall at all times keep and maintain the Permitted
Animals utilized by Tenant in accordance with the Lab Standards. All animals
brought onto the Property shall be transported in accordance with such rules and
regulations as Landlord shall reasonably designate. All animals kept in the Lab
Space shall be caged or restrained at all times. In no event shall Tenant use or
occupy the Lab Space in a manner that would be inconsistent with the character
and dignity of the Buildings or the Cambridge Science Center and Landlord may
require Tenant to immediately cease any business, procedures, activities or
other use which is causing disturbance of, or interference with Landlord's
operation and management of the Cambridge Science Center or the use and
occupancy thereof by any tenant therein.

     29.02  Without limiting the limitations imposed by the Permitted Use
clause, Tenant shall not use or permit the Lab Space to be used for any purpose
that would allow animal, medical or medicinal odors, fumes or noises to emanate
from the Lab Space. In the event such odors, fumes or noises do emanate from the
Lab Space, Tenant, at its sole cost and expense, shall be responsible for taking
whatever steps are necessary in accordance with all applicable Laws and the
terms of this Lease in order to either eliminate such odors, fumes or noises or
to keep such odors, fumes or noises from emanating from the Buildings in a
manner approved by Landlord. Such steps may include the installation of an
exhaust system or sound proofing in accordance

                                       20
<Page>

with plans and specifications approved by Landlord. If Landlord and Tenant are
unable to reach an agreement on the course of action Tenant will take to correct
the odor or noise problem, as the case may be, within 10 days after the date
Landlord first contacts Tenant to inform Tenant of the odor or noise problem,
Landlord (in its reasonable discretion) shall determine the course of action
Tenant shall take to correct the odor or noise problem. Such work to correct the
odor or noise problem shall be completed by Tenant within 30 days of the date a
determination is made by either Landlord or Landlord and Tenant (as applicable)
as to the scope of work Tenant shall perform.

     29.03  Tenant agrees to be solely responsible for the disposal of all
medical, infectious and hazardous waste (including without limitation, all
needles, syringes, bloodbags, bandages and vials) and all animal bodies or parts
that are generated in the Tenant's Lab Space and to indemnify and hold Landlord
harmless from and against all liabilities, obligations, damages, penalties,
claims, costs, charges and expenses which may be imposed upon, incurred by, or
asserted against Landlord in connection with the generation and existence of
such medical, infectious and/or hazardous waste (including without limitation,
all needles, syringes, bloodbags, bandages and vials) and all animal bodies or
parts and the removal thereof from the Lab Space. Tenant agrees to comply with
all Laws, ordinances, orders, rules, and regulations of any governmental or
regulatory agency with respect to the generation, existence, removal, storage
and disposal of any such medical, infectious and/or hazardous waste (including
without limitation, all needles, syringes, bloodbags, bandages and vials) and
all animal bodies and parts.

     29.04  Tenant agrees to contract with a licensed and insured medical waste
disposal vendor acceptable to Landlord for the lawful disposal of all medical,
infectious and hazardous waste (including without limitation, all needles,
syringes, blood bags, bandages and vials) and all animal bodies and parts that
are generated in Tenant's Lab Space, and to provide a copy of such contract to
Landlord. If vendors are changed, Tenant agrees to notify Landlord of such
change prior to the effective date thereof and to provide the appropriate
documentation to Landlord. In no event shall any medical, infectious and/or
hazardous waste be placed or stored outside of the Lab Space, it being agreed
that all such materials shall be kept in the Lab Space until picked up by the
approved medical waste disposal vendor.

     29.05  Tenant, at Tenant's sole cost and expense, shall obtain and maintain
throughout the Term any licenses, permits or zoning approvals required by any
governmental body for the conduct of Tenant's business and medical uses with the
Lab Space.

     29.06  In the event Tenant's activities in the Buildings result in any
disturbance, disruption of or interference with the business of the Buildings,
including, but not limited to, demonstrations, pickets, boycotts and/or
confrontations or disputes on or about the Property opposing or supporting
Tenant's activities (a "USE DISPUTE"), then Tenant shall take all actions
necessary to resolve the Use Dispute and to have the demonstrators, picketers or
other individuals engaged in the Use Dispute removed from the Property in an
expeditious manner. Tenant shall have no claim for damages against Landlord or
any of the Landlord Related Parties, as a result of the above actions.

30.  ENVIRONMENTAL REPRESENTATION.

     30.01  Landlord represents, to its knowledge based solely upon that certain
Phase I Environmental Site Assessment by Ransom Environmental Consultants, Inc.,
dated August 20, 1996, as reviewed by Haley & Aldrich, Inc. pursuant to a letter
dated November 21, 1996, that the Premises are free of Hazardous Materials (as
defined below) in amounts and conditions which are in violation of applicable
environmental laws.

     30.02  As used in this Section, "HAZARDOUS MATERIALS" shall mean any
material or substance that is now or hereafter defined or regulated by any
statute, regulation, ordinance, or governmental authority thereunder, as
radioactive, toxic, hazardous, or waste, including but not limited to (i)
petroleum and any of its constituents or byproducts, (ii) radioactive materials,
(iii) asbestos in any form or condition, and (iv) substances or materials
regulated by any of the following, as amended from time to time, and any rules
promulgated thereunder: the Comprehensive Environmental Response Compensation
and Liability Act of 1980, 42 U.S.C. Sections 9601 et seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; the Toxic
Substances Control Act, 15 U.S.C. Sections 2601, et seq.; the Clean Water Act,
33 U.S.C. Sections 1251 et seq; the Clean Air Act, 42 U.S.C. Sections 7401 et
seq.

                                       21
<Page>

     Landlord and Tenant have executed this Lease as of the day and year first
above written.

<Table>
<Caption>
<S>                                 <C>
WITNESS/ATTEST:                         LANDLORD:

                                        MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE
                                        LIMITED LIABILITY COMPANY

                                        By: Equity Office Management, L.L.C., a Delaware
                                            limited liability company, its non-member manager

/s/ Kim Ruby                                By:    /s/ Maryann Gilligan Suydam
---------------------------------                  ------------------------------

Name (print): Kim Ruby                      Name:  Maryann Gilligan Suydam
              -------------------                  ------------------------------

                                            Title: Senior Vice President
---------------------------------                  ------------------------------

Name (print):
              -------------------

WITNESS/ATTEST:                         TENANT:

                                        COMBINATORX, INCORPORATED, A DELAWARE
                                        CORPORATION

/s/ Elizabeth K. Tibbetts               By:    /s/ Robert Forrester
---------------------------------              ------------------------------

Name (print): Elizabeth K. Tibbetts     Name:  Robert Forrester
              ---------------------            ------------------------------

                                        Title: Executive Vice President and
                                               Chief Financial Officer
---------------------------------              ------------------------------

Name (print):
              --------------------      -------------------------------------
                                        Tenant's Tax ID Number (SSN or FEIN)
</Table>

                                       22
<Page>

                                    EXHIBIT A

                        OUTLINE AND LOCATION OF PREMISES

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

                         [Diagrams of leased premises.]

                                        1
<Page>

                                   EXHIBIT A-1

                     OUTLINE AND LOCATION OF OFFERING SPACE

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

                               [Diagram of premises.]

                                        2
<Page>

                                   EXHIBIT A-2

                      OUTLINE AND LOCATION OF REFUSAL SPACE

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

                      [Diagram of right of first refusal space.]

                                        3
<Page>

                                    EXHIBIT B

                               EXPENSES AND TAXES

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

1.        PAYMENTS.

     1.01   EXPENSE EXCESS AND TAX EXCESS WITH RESPECT TO THE OFFICE BUILDING.
Tenant shall pay Tenant's Pro Rata Share for the Office Building of the amount,
if any, by which Expenses (defined below) relating to the Office Building (the
"OFFICE EXPENSES") for each calendar year during the Term exceed Office Expenses
for the Base Year (the "EXPENSE EXCESS") and also the amount, if any, by which
Taxes (defined below) reasonably apportioned to the Office Building (the "OFFICE
TAXES") for each Fiscal Year during the Term exceed Office Taxes for the Base
Year (the "TAX EXCESS"). If Office Expenses and/or Office Taxes in any calendar
year or Fiscal Year decrease below the amount of Office Expenses or Office Taxes
for the Base Year, Tenant's Pro Rata Share of Office Expenses or Office Taxes,
as the case may be, for that calendar year or Fiscal Year shall be $0. Landlord
shall provide Tenant with a good faith estimate of the Expense Excess and of the
Tax Excess for each calendar year or Fiscal Year during the Term. On or before
the first day of each month, Tenant shall pay to Landlord a monthly installment
equal to one-twelfth of Tenant's Pro Rata Share for the Office Building of
Landlord's estimate of both the Expense Excess and Tax Excess. If Landlord
determines that its good faith estimate was incorrect by a material amount,
Landlord may provide Tenant with a revised estimate. After its receipt of a
revised estimate, Tenant's monthly payments shall be based upon the revised
estimate. If Landlord does not provide Tenant with an estimate of the Expense
Excess or the Tax Excess by the first day of a calendar year or Fiscal Year, as
the case may be, Tenant shall continue to pay monthly installments based on the
previous calendar year's or Fiscal Year's estimate(s), as the case may be, until
Landlord provides Tenant with the new estimate. Upon delivery of the new
estimate, an adjustment shall be made for any month for which Tenant paid
monthly installments based on the previous calendar year's or Fiscal Year's
estimate(s). Tenant shall pay Landlord the amount of any underpayment within 30
days after receipt of the new estimate. Any overpayment shall be refunded to
Tenant within 30 days or credited against the next due future installment(s) of
Additional Rent.

     As soon as is practical following the end of each calendar year or Fiscal
Year, as the case may be, Landlord shall furnish Tenant with a statement of the
actual Office Expenses and Expense Excess and the actual Office Taxes and Tax
Excess for the prior calendar year or Fiscal Year, as the case may be. If the
estimated Expense Excess or estimated Tax Excess for the prior calendar year or
Fiscal Year, as the case may be, is more than the actual Expense Excess or
actual Tax Excess for the prior calendar year or Fiscal Year, as the case may
be, Landlord shall either provide Tenant with a refund or apply any overpayment
by Tenant against Additional Rent due or next becoming due, provided if the Term
expires before the determination of the overpayment, Landlord shall refund any
overpayment to Tenant after first deducting the amount of Rent due. If the
estimated Expense Excess or estimated Tax Excess for the prior calendar year or
Fiscal Year, as the case may be, is less than the actual Expense Excess or
actual Tax Excess, for such prior calendar year or Fiscal Year, as the case may
be, Tenant shall pay Landlord, within 30 days after its receipt of the statement
of Office Expenses or Office Taxes, any underpayment for the prior calendar year
or Fiscal Year, as the case may be.

     1.02   EXPENSES AND TAXES WITH RESPECT TO THE SCIENCE BUILDING. Tenant
shall pay Tenant's Pro Rata Share for the Science Building of Expenses relating
to the Science Building for each calendar year during the Term (the "LAB
EXPENSES") and Taxes reasonably apportioned to the Science Building for each
Fiscal Year during the Term (the "LAB TAXES"). Landlord shall provide Tenant
with a good faith estimate of the Lab Expenses and of the Lab Taxes for each
calendar year or Fiscal Year during the Term. On or before the first day of each
month, Tenant shall pay to Landlord a monthly installment equal to one-twelfth
of Tenant's Pro Rata Share for the Science Building of Landlord's estimate of
the Lab Expenses and one-twelfth of Tenant's Pro Rata Share for the Science
Building of Landlord's estimate of the Lab Taxes. If Landlord determines that
its good faith estimate of the Lab Expenses or of the Lab Taxes was incorrect by
a material amount, Landlord may provide Tenant with a revised estimate. After
its receipt of the revised estimate, Tenant's monthly payments shall be based
upon the revised estimate. If Landlord does not provide Tenant with an estimate
of the Lab Expenses by January 1 of a calendar year, or the Lab Taxes by the
start of each new Fiscal Year, Tenant shall continue to

                                        1
<Page>

pay monthly installments based on the previous calendar year's or Fiscal Year's
estimate(s), as the case may be, until Landlord provides Tenant with the new
estimate. Upon delivery of the new estimate, an adjustment shall be made for any
month for which Tenant paid monthly installments based on the previous calendar
year's or Fiscal Year's estimate(s). Tenant shall pay Landlord the amount of any
underpayment within 30 days after receipt of the new estimate. Any overpayment
shall be refunded to Tenant within 30 days or credited against the next due
future installment(s) of Additional Rent.

     As soon as is practical following the end of each calendar year or Fiscal
Year, as the case may be, Landlord shall furnish Tenant with a statement of the
actual Lab Expenses and the actual Lab Taxes for the prior calendar year or
Fiscal Year, as the case may be. If the estimated Lab Expenses and/or estimated
Lab Taxes for the prior calendar year or Fiscal Year, as the case may be, is
more than the actual Lab Expenses and/or actual Lab Taxes for the prior calendar
year or Fiscal Year, as the case may be, Landlord shall apply any overpayment by
Tenant against Additional Rent due or next becoming due, provided if the Term
expires before the determination of the overpayment, Landlord shall refund any
overpayment to Tenant after first deducting the amount of Rent due. If the
estimated Lab Expenses and/or estimated Lab Taxes for the prior calendar year or
Fiscal Year, as the case may be, is less than the actual Lab Expenses and/or
actual Lab Taxes for such prior calendar year or Fiscal Year, as the case may
be, Tenant shall pay Landlord, within 30 days after its receipt of the statement
of Lab Expenses and/or Lab Taxes, any underpayment for the prior calendar year.

2.       EXPENSES.

     2.01   "EXPENSES" means all costs and expenses incurred in each calendar
year in connection with operating, maintaining, repairing, and managing the
Office Building, with respect to Office Expenses and all costs and expenses
incurred in each calendar year in connection with operating, maintaining,
repairing, and managing the Science Building, with respect to Lab Expenses.
Expenses include, without limitation: (a) all labor and labor related costs,
including wages, salaries, bonuses, taxes, insurance, uniforms, training,
retirement plans, pension plans and other employee benefits for personnel at or
below the level of general manager; provided that if any employee performs
services in connection with the Building and other buildings, costs associated
with such employee may be proportionately included in Expenses based on the
percentage of time such employee spends in connection with the operation,
maintenance and management of the Building; (b) management fees; (c) the cost of
equipping, staffing and operating an on-site and/or off-site management office
for the Buildings, provided if the management office services one or more other
buildings or properties, the shared costs and expenses of equipping, staffing
and operating such management office(s) shall be equitably prorated and
apportioned between the Building and the other buildings or properties; (d)
accounting costs; (e) the cost of services; (f) rental and purchase cost of
parts, supplies, tools and equipment; (g) insurance premiums and deductibles;
(h) electricity, gas and other utility costs; (i) Expenses of periodic routine
testing to assure that the Premises and surrounding land are free of hazardous
materials, agents or substances, and to assure compliance with codes,
regulations and Laws; and (j) the amortized cost of capital improvements (as
distinguished from replacement parts or components installed in the ordinary
course of business) made subsequent to the Base Year which are: (1) performed
primarily to reduce current or future operating expense costs, upgrade Buildings
security or otherwise improve the operating efficiency of the Property; or (2)
required to comply with any Laws that are enacted, or first interpreted to apply
to the Property, after the date of this Lease. The cost of capital improvements
shall be amortized by Landlord over the lesser of the Payback Period (defined
below) or the useful life of the capital improvement as reasonably determined by
Landlord. The amortized cost of capital improvements may, at Landlord's option,
include actual or imputed interest at the rate that Landlord would reasonably be
required to pay to finance the cost of the capital improvement. "PAYBACK PERIOD"
means the reasonably estimated period of time that it takes for the cost savings
resulting from a capital improvement to equal the total cost of the capital
improvement. Landlord, by itself or through an affiliate, shall have the right
to directly perform, provide and be compensated for any services under this
Lease. If Landlord incurs Expenses for the Buildings or Property together with
one or more other buildings or properties, whether pursuant to a reciprocal
easement agreement, common area agreement or otherwise, the shared costs and
expenses shall be equitably prorated and apportioned between the Buildings and
Property and the other buildings or properties.

     2.02   Expenses shall not include: the cost of capital improvements (except
as set forth above); depreciation; ground lease rental; principal payments of
mortgage and other non-operating debts of Landlord; the cost of repairs or other
work to the extent Landlord is reimbursed by insurance or condemnation proceeds;
any expenses for which Landlord has received actual reimbursement (other than
through Expenses); costs in connection with leasing

                                        2
<Page>

space in the Buildings, including brokerage commissions; lease concessions,
rental abatements and construction allowances granted to specific tenants;
attorneys' fees and other expenses incurred in connection with negotiations or
disputes with prospective tenants or tenants or other occupants of the Building;
costs incurred in connection with the sale, financing or refinancing of the
Buildings; fines, interest and penalties incurred due to the late payment of
Taxes or Expenses; organizational expenses associated with the creation and
operation of the entity which constitutes Landlord; sums (other than management
fees, it being agreed that the management fees included in Expenses are as
described in Section 2.01 above) paid to subsidiaries or other affiliates of
Landlord for services on or to the Property, Building and/or Premises, but only
to the extent that the costs of such services exceed the competitive cost for
such services rendered by persons or entities of similar skill, competence and
experience; fines or penalties incurred as a result of violation by Landlord of
any applicable Laws; costs incurred by Landlord in connection with the
correction of defects in design and original construction of the Buildings or
Property; all bad debt loss, rent loss, or reserves for bad debt or rent loss;
the cost or expense of any services or benefits provided generally to other
tenants in the Building and not provided or available to Tenant; Landlord's
charitable and political contributions; the cost of complying with any laws in
effect (and as enforced) on the Commencement Date, provided that if any portion
of the Building that was in compliance with all applicable laws on the
Commencement Date becomes out of compliance due to normal wear and tear, the
cost of bringing such portion of the Building into compliance shall be included
in Expenses unless otherwise excluded pursuant to the terms hereof; all costs of
purchasing or leasing major sculptures, paintings or other major works or
objects of art (as opposed to decorations purchased or leased by Landlord for
display in the Common Areas of the Building); payments for rented equipment, the
cost of which would constitute a capital expenditure if the equipment were
purchased, in which event, Section 2.01 above would govern the determination of
whether such costs are included in Expenses; costs of signs in or on the
Building identifying the owner of the Building or any tenant in the Building; to
the extent any services (on a per square foot basis) are provided to a tenant or
occupant of the Building at a level that is materially greater than the level at
which such services are available to Tenant, the cost of providing such services
at a level that is over and above the level available to Tenant shall be
excluded from Expenses; or any penalties or damages that Landlord pays to Tenant
under this Lease or to other tenants in the Buildings under their respective
leases.

     2.03   If at any time during a calendar year the Buildings are not at least
95% occupied or Landlord is not supplying services to at least 95% of the total
Rentable Square Footage of the Buildings, Expenses shall, at Landlord's option,
be determined as if the Buildings had been 95% occupied and Landlord had been
supplying services to 95% of the Rentable Square Footage of the Buildings. If
Expenses for a calendar year are determined as provided in the prior sentence,
Expenses for the Base Year shall also be determined in such manner.
Notwithstanding the foregoing, Landlord may calculate the extrapolation of
Expenses under this Section based on 100% occupancy and service so long as such
percentage is used consistently for each year of the Term (including the Base
Year). The extrapolation of Expenses under this Section shall be performed in
accordance with the methodology specified by the Building Owners and Managers
Association.

3.   "TAXES" shall mean: (a) all real property taxes and other assessments on
the Buildings and/or Property, including, but not limited to, gross receipts
taxes, assessments for special improvement districts and building improvement
districts, governmental charges, fees and assessments for police, fire, traffic
mitigation or other governmental service of purported benefit to the Property,
taxes and assessments levied in substitution or supplementation in whole or in
part of any such taxes and assessments and the Property's share of any real
estate taxes and assessments under any reciprocal easement agreement, common
area agreement or similar agreement as to the Property; (b) all personal
property taxes for property that is owned by Landlord and used in connection
with the operation, maintenance and repair of the Property; and (c) all costs
and fees incurred in connection with seeking reductions in any tax liabilities
described in (a) and (b), including, without limitation, any costs incurred by
Landlord for compliance, review and appeal of tax liabilities. Without
limitation, Taxes shall not include any income, capital levy, transfer, capital
stock, gift, estate or inheritance tax. If a change in Taxes is obtained for any
year of the Term during which Tenant paid Tenant's Pro Rata Share of any Tax
Excess or Lab Taxes, then Taxes for that year will be retroactively adjusted and
Landlord shall provide Tenant with a credit, if any, based on the adjustment.
Likewise, if a change is obtained for Taxes for the Base Year, Taxes for the
Base Year shall be restated and the Tax Excess for all subsequent years shall be
recomputed. Tenant shall pay Landlord the amount of Tenant's Pro Rata Share of
any such increase in the Tax Excess or the Lab Taxes within 30 days after
Tenant's receipt of a statement from Landlord.

4.   AUDIT RIGHTS. Tenant, within 365 days after receiving Landlord's statement
of Expenses, may give Landlord written notice ("REVIEW NOTICE") that Tenant
intends to review Landlord's

                                        3
<Page>

records of the Expenses for the calendar year to which the statement applies.
Within a reasonable time after receipt of the Review Notice, Landlord shall make
all pertinent records available for inspection that are reasonably necessary for
Tenant to conduct its review. If any records are maintained at a location other
than the management office for the Buildings, Tenant may either inspect the
records at such other location or pay for the reasonable cost of copying and
shipping the records. If Tenant retains an agent to review Landlord's records,
the agent must be with a CPA firm licensed to do business in the state or
commonwealth where the Landlord's records or the Property is located. Tenant
shall be solely responsible for all costs, expenses and fees incurred for the
audit. However, notwithstanding the foregoing, if Landlord and Tenant determine
that Expenses for the Building for the year in question were less than stated by
more than 5%, Landlord, within 30 days after its receipt of paid invoices
therefor from Tenant, shall reimburse Tenant for the reasonable amounts paid by
Tenant to third parties in connection with such review by Tenant. Within 90 days
after the records are made available to Tenant, Tenant shall have the right to
give Landlord written notice (an "OBJECTION NOTICE") stating in reasonable
detail any objection to Landlord's statement of Expenses for that year. If
Tenant fails to give Landlord an Objection Notice within the 90 day period or
fails to provide Landlord with a Review Notice within the 365 day period
described above, Tenant shall be deemed to have approved Landlord's statement of
Expenses and shall be barred from raising any claims regarding the Expenses for
that year. If Tenant provides Landlord with a timely Objection Notice, Landlord
and Tenant shall work together in good faith to resolve any issues raised in
Tenant's Objection Notice. If Landlord and Tenant determine that Expenses for
the calendar year are less than reported, Landlord shall provide Tenant with a
credit against the next installment of Rent in the amount of the overpayment by
Tenant. Likewise, if Landlord and Tenant determine that Expenses for the
calendar year are greater than reported, Tenant shall pay Landlord the amount of
any underpayment within 30 days. The records obtained by Tenant shall be treated
as confidential. In no event shall Tenant be permitted to examine Landlord's
records or to dispute any statement of Expenses unless Tenant has paid and
continues to pay all Rent when due.

                                        4
<Page>

                                    EXHIBIT C

                                   WORK LETTER

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

I.   WORK LETTER RELATING TO THE OFFICE SPACE. As used in this Section I of this
Work Letter, the "OFFICE SPACE" shall be deemed to mean the Office Space, as
initially defined in the attached Lease.

1.   ALTERATIONS AND ALLOWANCE.

     A.     Tenant, following the delivery of the Office Space by Landlord and
            the full and final execution and delivery of the Lease to which this
            Exhibit is attached and all prepaid rental and security deposits
            required under such agreement, shall have the right to perform
            alterations and improvements in the Office Space (the "INITIAL
            OFFICE ALTERATIONS"). Notwithstanding the foregoing, Tenant and its
            contractors shall not have the right to perform Initial Office
            Alterations in the Office Space unless and until Tenant has complied
            with all of the terms and conditions of Section 9 of the Lease,
            including, without limitation, approval by Landlord of the final
            plans for the Initial Office Alterations and the contractors to be
            retained by Tenant to perform such Initial Office Alterations.
            Tenant shall be responsible for all elements of the design of
            Tenant's Plans (including, without limitation, compliance with law,
            functionality of design, the structural integrity of the design, the
            configuration of the Office Space and the placement of Tenant's
            furniture, appliances and equipment), and Landlord's approval of
            Tenant's Plans shall in no event relieve Tenant of the
            responsibility for such design. Landlord's approval of the
            contractors to perform the Initial Office Alterations shall not be
            unreasonably withheld, delayed or conditioned. The parties agree
            that Landlord's approval of the general contractor to perform the
            Initial Office Alterations shall not be considered to be
            unreasonably withheld if any such general contractor (i) does not
            have trade references reasonably acceptable to Landlord, (ii) does
            not maintain insurance as required pursuant to the terms of this
            Lease, (iii) does not have the ability to be bonded for the work in
            an amount of no less than 150% of the total estimated cost of the
            Initial Office Alterations, (iv) does not provide current financial
            statements reasonably acceptable to Landlord, or (v) is not licensed
            as a contractor in the state/municipality in which the Office Space
            is located. Tenant acknowledges the foregoing is not intended to be
            an exclusive list of the reasons why Landlord may reasonably
            withhold its consent to a general contractor.

     B.     Provided Tenant is not in default, Landlord agrees to contribute the
            sum of $811,575.00 (the "OFFICE ALLOWANCE") toward the cost of
            performing the Initial Office Alterations in preparation of Tenant's
            occupancy of the Office Space. The Office Allowance may only be used
            for the cost of preparing design and construction documents and
            mechanical and electrical plans for the Initial Office Alterations
            and for hard costs in connection with the Initial Office
            Alterations. The Office Allowance shall be paid to Tenant or, at
            Landlord's option, to the order of the general contractor that
            performed the Initial Office Alterations, within 30 days following
            receipt by Landlord of (1) receipted bills covering all labor and
            materials expended and used in the Initial Office Alterations; (2) a
            sworn contractor's affidavit from the general contractor and a
            request to disburse from Tenant containing an approval by Tenant of
            the work done; (3) full and final waivers of lien; (4) as-built
            plans of the Initial Office Alterations; and (5) the certification
            of Tenant and its architect that the Initial Office Alterations have
            been installed in a good and workmanlike manner in accordance with
            the approved plans, and in accordance with applicable laws, codes
            and ordinances. The Office Allowance shall be disbursed in the
            amount reflected on the receipted bills meeting the requirements
            above. Notwithstanding anything herein to the contrary, Landlord
            shall not be obligated to disburse any portion of the Office
            Allowance during the continuance of an uncured default under the
            Lease, and Landlord's obligation to disburse shall only resume when
            and if such default is cured.

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     C.     In no event shall the Office Allowance be used for the purchase of
            equipment, furniture or other items of personal property of Tenant.
            If Tenant does not submit a request for payment of the entire Office
            Allowance to Landlord in accordance with the provisions contained in
            this Exhibit by January 31, 2007, any unused amount shall accrue to
            the sole benefit of Landlord, it being understood that Tenant shall
            not be entitled to any credit, abatement or other concession in
            connection therewith. Tenant shall be responsible for all applicable
            state sales or use taxes, if any, payable in connection with the
            Initial Office Alterations and/or Office Allowance.

     D.     Tenant agrees to accept the Office Space in its "as-is" condition
            and configuration, it being agreed that Landlord shall not be
            required to perform any work or, except as provided above with
            respect to the Office Allowance, incur any costs in connection with
            the construction or demolition of any improvements in the Office
            Space.

     E.     This Exhibit shall not be deemed applicable to any additional space
            added to the Premises at any time or from time to time, whether by
            any options under the Lease or otherwise, or to any portion of the
            original Premises or any additions to the Premises in the event of a
            renewal or extension of the original Term of the Lease, whether by
            any options under the Lease or otherwise, unless expressly so
            provided in the Lease or any amendment or supplement to the Lease.

II.  WORK LETTER RELATING TO THE LAB SPACE. As used in this Section II of this
Work Letter, the "LAB SPACE" shall be deemed to mean the Lab Space, as initially
defined in the attached Lease.

1.   ALTERATIONS AND ALLOWANCE.

     A.     Tenant, following the delivery of the Lab Space by Landlord and the
            full and final execution and delivery of the Lease to which this
            Exhibit is attached and all prepaid rental and security deposits
            required under such agreement, shall have the right to perform
            alterations and improvements in the Lab Space (the "INITIAL LAB
            ALTERATIONS"). Notwithstanding the foregoing, Tenant and its
            contractors shall not have the right to perform Initial Lab
            Alterations in the Lab Space unless and until Tenant has complied
            with all of the terms and conditions of Section 9 of the Lease,
            including, without limitation, approval by Landlord of the final
            plans for the Initial Lab Alterations and the contractors to be
            retained by Tenant to perform such Initial Lab Alterations. Tenant
            shall be responsible for all elements of the design of Tenant's
            Plans (including, without limitation, compliance with law,
            functionality of design, the structural integrity of the design, the
            configuration of the Lab Space and the placement of Tenant's
            furniture, appliances and equipment), and Landlord's approval of
            Tenant's Plans shall in no event relieve Tenant of the
            responsibility for such design. Landlord's approval of the
            contractors to perform the Initial Lab Alterations shall not be
            unreasonably withheld, delayed or conditioned. The parties agree
            that Landlord's approval of the general contractor to perform the
            Initial Lab Alterations shall not be considered to be unreasonably
            withheld if any such general contractor (i) does not have trade
            references reasonably acceptable to Landlord, (ii) does not maintain
            insurance as required pursuant to the terms of this Lease, (iii)
            does not have the ability to be bonded for the work in an amount of
            no less than 150% of the total estimated cost of the Initial Lab
            Alterations, (iv) does not provide current financial statements
            reasonably acceptable to Landlord, or (v) is not licensed as a
            contractor in the state/municipality in which the Lab Space is
            located. Tenant acknowledges the foregoing is not intended to be an
            exclusive list of the reasons why Landlord may reasonably withhold
            its consent to a general contractor.

     B.     Provided Tenant is not in default, Landlord agrees to contribute the
            sum of $3,203,775.00 (the "LAB ALLOWANCE") toward the cost of
            performing the Initial Lab Alterations in preparation of Tenant's
            occupancy of the Lab Space. The Lab Allowance may only be used for
            the cost of preparing design and construction documents and
            mechanical and electrical plans for the Initial Lab Alterations and
            for hard costs in connection with the Initial Lab Alterations. The
            Lab Allowance shall be paid to Tenant or, at Landlord's option, to
            the order of the general contractor that performed the Initial Lab
            Alterations, within 30 days following receipt by Landlord of (1)
            receipted bills covering all labor and materials expended and

                                        2
<Page>

            used in the Initial Lab Alterations; (2) a sworn contractor's
            affidavit from the general contractor and a request to disburse from
            Tenant containing an approval by Tenant of the work done; (3) full
            and final waivers of lien; (4) as-built plans of the Initial Lab
            Alterations; and (5) the certification of Tenant and its architect
            that the Initial Lab Alterations have been installed in a good and
            workmanlike manner in accordance with the approved plans, and in
            accordance with applicable laws, codes and ordinances. The Lab
            Allowance shall be disbursed in the amount reflected on the
            receipted bills meeting the requirements above. Notwithstanding
            anything herein to the contrary, Landlord shall not be obligated to
            disburse any portion of the Lab Allowance during the continuance of
            an uncured default under the Lease, and Landlord's obligation to
            disburse shall only resume when and if such default is cured.

     C.     In no event shall the Lab Allowance be used for the purchase of
            equipment, furniture or other items of personal property of Tenant.
            If Tenant does not submit a request for payment of the entire Lab
            Allowance to Landlord in accordance with the provisions contained in
            this Exhibit by January 31, 2007, any unused amount shall accrue to
            the sole benefit of Landlord, it being understood that Tenant shall
            not be entitled to any credit, abatement or other concession in
            connection therewith. Tenant shall be responsible for all applicable
            state sales or use taxes, if any, payable in connection with the
            Initial Lab Alterations and/or Lab Allowance.

     D.     Tenant agrees to accept the Lab Space in its "as-is" condition and
            configuration, it being agreed that Landlord shall not be required
            to perform any work or, except as provided above with respect to the
            Lab Allowance, incur any costs in connection with the construction
            or demolition of any improvements in the Lab Space.

     E.     This Exhibit shall not be deemed applicable to any additional space
            added to the Premises at any time or from time to time, whether by
            any options under the Lease or otherwise, or to any portion of the
            original Premises or any additions to the Premises in the event of a
            renewal or extension of the original Term of the Lease, whether by
            any options under the Lease or otherwise, unless expressly so
            provided in the Lease or any amendment or supplement to the Lease.

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<Page>

                                    EXHIBIT D

                         BUILDING RULES AND REGULATIONS

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

     The following rules and regulations shall apply, where applicable, to the
Premises, the Buildings, the parking facilities (if any), the Property and the
appurtenances. In the event of a conflict between the following rules and
regulations and the remainder of the terms of the Lease, the remainder of the
terms of the Lease shall control. Capitalized terms have the same meaning as
defined in the Lease.

1.   Sidewalks, doorways, vestibules, halls, stairways and other similar areas
     shall not be obstructed by Tenant or used by Tenant for any purpose other
     than ingress and egress to and from the Premises. No rubbish, litter,
     trash, or material shall be placed, emptied, or thrown in those areas. At
     no time shall Tenant permit Tenant's employees to loiter in Common Areas or
     elsewhere about the Buildings or Property.

2.   Plumbing fixtures and appliances shall be used only for the purposes for
     which designed and no sweepings, rubbish, rags or other unsuitable material
     shall be thrown or placed in the fixtures or appliances.

3.   No signs, advertisements or notices shall be painted or affixed to windows,
     doors or other parts of the Buildings, except those of such color, size,
     style and in such places as are first approved in writing by Landlord. All
     tenant identification and suite numbers at the entrance to the Premises
     shall be installed by Landlord, at Tenant's cost and expense, using the
     standard graphics for the Buildings. Except in connection with the hanging
     of lightweight pictures and wall decorations, no nails, hooks or screws
     shall be inserted into any part of the Premises or Buildings except by the
     Building maintenance personnel without Landlord's prior approval, which
     approval shall not be unreasonably withheld.

4.   Landlord may provide and maintain in the first floor (main lobby) of the
     Buildings an alphabetical directory board or other directory device listing
     tenants and no other directory shall be permitted unless previously
     consented to by Landlord in writing.

5.   Tenant shall not place any lock(s) on any door in the Premises or Buildings
     without Landlord's prior written consent, which consent shall not be
     unreasonably withheld, and Landlord shall have the right at all times to
     retain and use keys or other access codes or devices to all locks within
     and into the Premises. A reasonable number of keys to the locks on the
     entry doors in the Premises shall be furnished by Landlord to Tenant at
     Tenant's cost and Tenant shall not make any duplicate keys. All keys shall
     be returned to Landlord at the expiration or early termination of the
     Lease.

6.   All contractors, contractor's representatives and installation technicians
     performing work in the Buildings shall be subject to Landlord's prior
     approval, which approval shall not be unreasonably withheld, and shall be
     required to comply with Landlord's standard rules, regulations, policies
     and procedures, which may be revised from time to time. Landlord has no
     obligation to allow any particular telecommunication service provider to
     have access to the Buildings or to the Premises. If Landlord permits
     access, Landlord may condition the access upon the payment to Landlord by
     the service provider of fees assessed by Landlord in Landlord's sole
     discretion.

7.   Movement in or out of the Buildings of furniture or office equipment, or
     dispatch or receipt by Tenant of merchandise or materials requiring the use
     of elevators, stairways, lobby areas or loading dock areas, shall be
     restricted to hours reasonably designated by Landlord. Tenant shall obtain
     Landlord's prior approval by providing a detailed listing of the activity,
     which approval shall not be unreasonably withheld. If approved by Landlord,
     the activity shall be under the supervision of Landlord and performed in
     the manner required by Landlord. Tenant shall assume all risk for damage to
     articles moved and injury to any persons resulting from the activity. If
     equipment, property, or personnel of Landlord or of any other party is
     damaged or injured as a result of or in connection with the activity,
     Tenant shall be solely liable for any resulting damage, loss or injury.

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<Page>

8.   Landlord shall have the right to approve the weight, size, or location of
     heavy equipment or articles in and about the Premises, which approval shall
     not be unreasonably withheld. Damage to the Buildings or Property by the
     installation, maintenance, operation, existence or removal of property of
     Tenant shall be repaired at Tenant's sole expense.

9.   Corridor doors, when not in use, shall be kept closed.

10.  Tenant shall not: (1) make or permit any improper, objectionable or
     unpleasant noises or odors in the Buildings, or otherwise interfere in any
     way with other tenants or persons having business with them; (2) solicit
     business or distribute or cause to be distributed, in any portion of the
     Buildings or Property, handbills, promotional materials or other
     advertising; or (3) conduct or permit other activities in the Buildings or
     Property that might, in Landlord's sole opinion, constitute a nuisance.

11.  No animals, except those assisting handicapped persons, shall be brought
     into the Buildings or kept in or about the Premises.

12.  No inflammable, explosive or dangerous fluids or substances shall be used
     or kept by Tenant in the Premises, Buildings or about the Property, except
     for those substances as are typically found in similar premises used for
     general office purposes and are being used by Tenant in a safe manner and
     in accordance with all applicable Laws. Tenant shall not, without
     Landlord's prior written consent, use, store, install, spill, remove,
     release or dispose of, within or about the Premises or any other portion of
     the Property, any asbestos-containing materials or any solid, liquid or
     gaseous material now or subsequently considered toxic or hazardous under
     the provisions of 42 U.S.C. Section 9601 et seq., M.G.L. c. 21C, M.G.L. c.
     21E or any other applicable environmental Law which may now or later be in
     effect. Tenant shall comply with all Laws pertaining to and governing the
     use of these materials by Tenant and shall remain solely liable for the
     costs of abatement and removal.

13.  Tenant shall not use or occupy the Premises in any manner or for any
     purpose which might injure the reputation or impair the present or future
     value of the Premises or the Buildings. Tenant shall not use, or permit any
     part of the Premises to be used for lodging, sleeping or for any illegal
     purpose.

14.  Tenant shall not take any action which would violate Landlord's labor
     contracts or which would cause a work stoppage, picketing, labor disruption
     or dispute or interfere with Landlord's or any other tenant's or occupant's
     business or with the rights and privileges of any person lawfully in the
     Buildings ("LABOR DISRUPTION"). Tenant shall take the actions necessary to
     resolve the Labor Disruption, and shall have pickets removed and, at the
     request of Landlord, immediately terminate any work in the Premises that
     gave rise to the Labor Disruption, until Landlord gives its written consent
     for the work to resume. Tenant shall have no claim for damages against
     Landlord or any of the Landlord Related Parties nor shall the Office Space
     Commencement Date, the Lab Space Commencement Date or the Term be extended
     as a result of the above actions.

15.  Tenant shall not install, operate or maintain in the Premises or in any
     other area of the Buildings, electrical equipment that would overload the
     electrical system beyond its capacity for proper, efficient and safe
     operation as determined solely by Landlord. Tenant shall not furnish
     cooling or heating to the Premises, including, without limitation, the use
     of electric or gas heating devices, without Landlord's prior written
     consent. Tenant shall not use more than its proportionate share of
     telephone lines and other telecommunication facilities available to service
     the Buildings in which the Premises are located.

16.  Tenant shall not operate or permit to be operated a coin or token operated
     vending machine or similar device (including, without limitation,
     telephones, lockers, toilets, scales, amusement devices and machines for
     sale of beverages, foods, candy, cigarettes and other goods), except for
     machines for the exclusive use of Tenant's employees and invitees.

17.  Bicycles and other vehicles are not permitted inside the Buildings or on
     the walkways outside the Buildings, except in areas designated by Landlord.

18.  Landlord may from time to time adopt systems and procedures for the
     security and safety of the Buildings and Property, their occupants, entry,
     use and contents. Tenant,

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<Page>

     its agents, employees, contractors, guests and invitees shall comply with
     Landlord's systems and procedures.

19.  Landlord shall have the right to prohibit the use of the name of the
     Buildings or any other publicity by Tenant that in Landlord's sole opinion
     may impair the reputation of the Buildings or their desirability. Upon
     written notice from Landlord, Tenant shall refrain from and discontinue
     such publicity immediately.

20.  Neither Tenant nor its agents, employees, contractors, guests or invitees
     shall smoke or permit smoking in the Common Areas, unless a portion of the
     Common Areas have been declared a designated smoking area by Landlord, nor
     shall the above parties allow smoke from the Premises to emanate into the
     Common Areas or any other part of the Buildings. Landlord shall have the
     right to designate the Buildings (including the Premises) as a non-smoking
     building.

21.  Landlord shall have the right to designate and approve standard window
     coverings for the Premises and to establish rules to assure that the
     Buildings present a uniform exterior appearance. Tenant shall ensure, to
     the extent reasonably practicable, that window coverings are closed on
     windows in the Premises while they are exposed to the direct rays of the
     sun.

22.  Deliveries to and from the Premises shall be made only at the times in the
     areas and through the entrances and exits reasonably designated by
     Landlord. Tenant shall not make deliveries to or from the Premises in a
     manner that might interfere with the use by any other tenant of its
     premises or of the Common Areas, any pedestrian use, or any use which is
     inconsistent with good business practice.

23.  The work of cleaning personnel shall not be hindered by Tenant after 5:30
     P.M., and cleaning work may be done at any time when the offices are
     vacant. Windows, doors and fixtures may be cleaned at any time. Tenant
     shall provide adequate waste and rubbish receptacles to prevent
     unreasonable hardship to the cleaning service.

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                                    EXHIBIT E

                              ADDITIONAL PROVISIONS

     This Exhibit is attached to and made a part of the Lease by and between
MA-RIVERVIEW/245 FIRST STREET, L.L.C., A DELAWARE LIMITED LIABILITY COMPANY
("LANDLORD") and COMBINATORX, INCORPORATED, A DELAWARE CORPORATION ("TENANT")
for space in the Buildings located at 245 First Street, Cambridge, Massachusetts
02142.

1.   LETTER OF CREDIT.

     1.01.  GENERAL PROVISIONS. Concurrently with Tenant's execution of this
            Lease, Tenant shall deliver to Landlord, as collateral for the full
            performance by Tenant of all of its obligations under this Lease and
            for all losses and damages Landlord may suffer as a result of any
            Default by Tenant under this Lease, a standby, unconditional,
            irrevocable, transferable letter of credit (the "LETTER OF CREDIT")
            in the form of EXHIBIT G hereto and containing the terms required
            herein, in the face amount of $2,500,000.00 (the "LETTER OF CREDIT
            AMOUNT"), naming Landlord as beneficiary, issued (or confirmed) by a
            financial institution acceptable to Landlord in Landlord's sole
            discretion, permitting multiple and partial draws thereon, and
            otherwise in form acceptable to Landlord in its sole discretion.
            Tenant shall cause the Letter of Credit to be continuously
            maintained in effect (whether through replacement, renewal or
            extension) in the Letter of Credit Amount through the date (the
            "FINAL LC EXPIRATION DATE") that is 120 days after the scheduled
            expiration date of the Term or any renewal Term. If the Letter of
            Credit held by Landlord expires earlier than the Final LC Expiration
            Date (whether by reason of a stated expiration date or a notice of
            termination or non-renewal given by the issuing bank), Tenant shall
            deliver a new Letter of Credit or certificate of renewal or
            extension to Landlord not later than 30 days prior to the expiration
            date of the Letter of Credit then held by Landlord. Any renewal or
            replacement Letter of Credit shall comply with all of the provisions
            of this Section 1, shall be irrevocable, transferable and shall
            remain in effect (or be automatically renewable) through the Final
            LC Expiration Date upon the same terms as the expiring Letter of
            Credit or such other terms as may be acceptable to Landlord in its
            sole discretion.

     1.02.  DRAWINGS UNDER LETTER OF CREDIT. Landlord shall have the immediate
            right to draw upon the Letter of Credit, in whole or in part, at any
            time and from time to time: (i) if a Default occurs; or (ii) if the
            Letter of Credit held by Landlord expires earlier than the Final LC
            Expiration Date (whether by reason of a stated expiration date or a
            notice of termination or non-renewal given by the issuing bank), and
            Tenant fails to deliver to Landlord, at least 30 days prior to the
            expiration date of the Letter of Credit then held by Landlord, a
            renewal or substitute Letter of Credit that is in effect and that
            complies with the provisions of this Section 1. No condition or term
            of this Lease shall be deemed to render the Letter of Credit
            conditional to justify the issuer of the Letter of Credit in failing
            to honor a drawing upon such Letter of Credit in a timely manner.
            Tenant hereby acknowledges and agrees that Landlord is entering into
            this Lease in material reliance upon the ability of Landlord to draw
            upon the Letter of Credit upon the occurrence of any Default by
            Tenant under this Lease or upon the occurrence of any of the other
            events described above in this Section 1.02.

     1.03.  USE OF PROCEEDS BY LANDLORD. The proceeds of the Letter of Credit
            shall constitute Landlord's sole and separate property (and not
            Tenant's property or the property of Tenant's bankruptcy estate) and
            Landlord may immediately upon any draw (and without notice to
            Tenant) apply or offset the proceeds of the Letter of Credit: (i)
            against any Rent payable by Tenant under this Lease that is not paid
            when due; (ii) against all losses and damages that Landlord has
            suffered or that Landlord reasonably estimates that it may suffer as
            a result of any Default by Tenant under this Lease; (iii) against
            any costs incurred by Landlord in connection with the Lease
            (including attorneys' fees); and (iv) against any other amount that
            Landlord may spend or become obligated to spend by reason of
            Tenant's Default. Provided Tenant has performed all of its
            obligations under this Lease, Landlord agrees to pay to Tenant
            within 30 days after the Final LC Expiration Date the amount of any
            proceeds of the Letter of Credit received by Landlord and not
            applied as allowed above; provided, that if prior to the Final LC
            Expiration Date a voluntary petition is filed by Tenant or any
            Guarantor, or an

                                        1
<Page>

            involuntary petition is filed against Tenant or any Guarantor by any
            of Tenant's or Guarantor's creditors, under the Federal Bankruptcy
            Code, then Landlord shall not be obligated to make such payment in
            the amount of the unused Letter of Credit proceeds until either all
            preference issues relating to payments under this Lease have been
            resolved in such bankruptcy or reorganization case or such
            bankruptcy or reorganization case has been dismissed, in each case
            pursuant to a final court order not subject to appeal or any stay
            pending appeal.

     1.04.  ADDITIONAL COVENANTS OF TENANT. If, as result of any application or
            use by Landlord of all or any part of the Letter of Credit, the
            amount of the Letter of Credit shall be less than the Letter of
            Credit Amount, Tenant shall, within 5 days thereafter, provide
            Landlord with additional letter(s) of credit in an amount equal to
            the deficiency (or a replacement letter of credit in the total
            Letter of Credit Amount), and any such additional (or replacement)
            letter of credit shall comply with all of the provisions of this
            Section 1, and if Tenant fails to comply with the foregoing,
            notwithstanding anything to the contrary contained in this Lease,
            the same shall constitute an incurable Default by Tenant. Tenant
            further covenants and warrants that it will neither assign nor
            encumber the Letter of Credit or any part thereof and that neither
            Landlord nor its successors or assigns will be bound by any such
            assignment, encumbrance, attempted assignment or attempted
            encumbrance.

     1.05.  TRANSFER OF LETTER OF CREDIT. Landlord may, at any time and without
            notice to Tenant and without first obtaining Tenant's consent
            thereto, transfer all or any portion of its interest in all or a
            portion of the Buildings and, in connection therewith, to the Letter
            of Credit, to another party, person or entity, including Landlord's
            mortgagee, if any, and/or to have the Letter of Credit reissued in
            the name of Landlord's mortgagee, if any. If Landlord transfers its
            interest in the Buildings and transfers the Letter of Credit (or any
            proceeds thereof then held by Landlord) in whole or in part to the
            transferee, Landlord shall, without any further agreement between
            the parties hereto, thereupon be released by Tenant from all
            liability therefor. The provisions hereof shall apply to every
            transfer or assignment of all or any part of the Letter of Credit to
            a new landlord. In connection with any such transfer of the Letter
            of Credit by Landlord, Tenant shall, at Tenant's sole cost and
            expense, execute and submit to the issuer of the Letter of Credit
            such applications, documents and instruments as may be necessary to
            effectuate such transfer. Tenant shall be responsible for paying the
            issuer's transfer and processing fees in connection with any
            transfer of the Letter of Credit and, if Landlord advances any such
            fees (without having any obligation to do so), Tenant shall
            reimburse Landlord for any such transfer or processing fees within
            10 days after Landlord's written request therefor.

     1.06.  REDUCTION IN LETTER OF CREDIT AMOUNT. Provided (a) no Monetary
            Default or material non-Monetary Default has occurred hereunder in
            the 12 month period prior to each requested letter of credit
            reduction date, and (b) as of each requested letter of credit
            reduction date (x) Tenant is a publicly traded company (i.e.,
            Tenant's stock is being traded on a national securities exchange,
            including, but not limited to, the NYSE, the NASDAQ Stock Market, or
            the NASDAQ Small Cap Market System), (y) Tenant's audited financial
            statements prepared in accordance with generally accepted accounting
            principles by an independent certified public accountant for each of
            the three most recent quarters immediately preceding the applicable
            letter of credit reduction date show that Tenant has had at least
            $25,000,000.00 in cash or cash equivalent investments, and (z)
            Tenant has an average fully diluted market capitalization of at
            least $200,000,000.00 determined using the average of the volume
            weighted average price for Tenant over the 20 trading days
            immediately preceding the applicable letter of credit reduction date
            (each of the foregoing are individually referred to herein as a
            "CONTINGENCY REQUIREMENT" and collectively as the "CONTINGENCY
            REQUIREMENTS"), THEN Tenant may reduce the Letter of Credit Amount
            as follows: (i) $2,000,000.00 effective as of third anniversary of
            the Lab Space Commencement Date; (ii) $1,625,000.00 effective as of
            the fourth anniversary of the Lab Space Commencement Date; (iii)
            $1,250,000.00 effective as of fifth anniversary of the Lab Space
            Commencement Date; (iv) $875,000.00 effective as of sixth
            anniversary of the Lab Space Commencement Date, and (v) $500,000.00
            effective as of seventh anniversary of the Lab Space Commencement
            Date. If Tenant is not entitled to reduce the Letter of Credit
            Amount as of a particular reduction effective date due to Tenant's
            failure to

                                        2
<Page>

            satisfy each of the Contingency Requirements prior to that
            particular reduction effective date, then any subsequent
            reduction(s) Tenant is entitled to hereunder shall be reduced by the
            amount of the reduction Tenant would have been entitled to had
            Tenant satisfied each of the Contingency Requirements prior to that
            particular earlier reduction effective date. Notwithstanding
            anything to the contrary contained herein, if Tenant has been in
            Monetary Default or material non-Monetary Default under this Lease
            at any time prior to the effective date of any reduction of the
            Letter of Credit Amount and Tenant has failed to cure such Monetary
            Default or material non-Monetary Default within any applicable cure
            period, then Tenant shall have no further right to reduce the Letter
            of Credit Amount as described herein. Any reduction in the Letter of
            Credit Amount shall be accomplished by Tenant providing Landlord
            with a substitute letter of credit in the reduced amount.

     1.07.  NATURE OF LETTER OF CREDIT. Landlord and Tenant (1) acknowledge and
            agree that in no event or circumstance shall the Letter of Credit or
            any renewal thereof or substitute therefor or any proceeds thereof
            (including the LC Proceeds Account) be deemed to be or treated as a
            "security deposit" under any Law applicable to security deposits in
            the commercial context ("SECURITY DEPOSIT LAWS"), (2) acknowledge
            and agree that the Letter of Credit (including any renewal thereof
            or substitute therefor or any proceeds thereof) is not intended to
            serve as a security deposit, and the Security Deposit Laws shall
            have no applicability or relevancy thereto, and (3) waive any and
            all rights, duties and obligations either party may now or, in the
            future, will have relating to or arising from the Security Deposit
            Laws.

            Tenant hereby waives the provisions of any Laws, now or hereafter in
            effect, which (i) establish the time frame by which Landlord must
            refund a security deposit under a lease, and/or (ii) provide that
            Landlord may claim from the security deposit only those sums
            reasonably necessary to remedy defaults in the payment of rent, to
            repair damage caused by Tenant or to clean the Premises, it being
            agreed that Landlord may, in addition, claim those sums specified in
            this Section 1 above and/or those sums reasonably necessary to
            compensate Landlord for any loss or damage caused by Tenant's breach
            of this Lease or the acts or omission of Tenant or any other Tenant
            Related Parties, including any damages Landlord suffers following
            termination of the Lease.

2.   PARKING.

     2.01.  During the initial Term, Tenant agrees to lease from Landlord and
            Landlord agrees to lease to Tenant a total of up to 48 unreserved
            parking spaces (the "SPACES"), for the use of Tenant and its
            employees, in the parking facility owned by Landlord that serves the
            Buildings (the "PARKING FACILITY"), and if the Parking Facility
            includes a garage, then such Spaces may be in such garage. No
            deductions or allowances shall be made for days when Tenant or any
            of its employees does not utilize the Parking Facility or for Tenant
            utilizing less than all of the Spaces. Tenant may from time to time
            (but not more often than one time per month) request additions or
            reductions in the number of Spaces leased by Tenant hereunder,
            provided that in no event shall Tenant shall have the right to lease
            or otherwise use more than the number of unreserved Spaces set forth
            above.

     2.02.  During the initial Term, Tenant shall pay Landlord, as Additional
            Rent in accordance with Section 4 of the Lease, the sum of $210.00
            per month, plus applicable tax thereon, if any, for each unreserved
            Space leased by Tenant hereunder, as such rate may be adjusted from
            time-to-time to reflect the then current rate for parking in the
            Parking Facility.

     2.03.  Except for particular spaces and areas designated by Landlord for
            reserved parking, all parking in the Parking Facility shall be on an
            unreserved, first-come, first-served basis. However, the Parking
            Facility shall always be managed by Landlord (whether using valet
            parking or otherwise) so that, subject to the provisions of this
            Section 2, the Tenant will be always be able to utilize the number
            of Spaces leased by Tenant hereunder.

     2.04.  Landlord shall not be responsible for money, jewelry, automobiles or
            other personal property lost in or stolen from the Parking Facility
            regardless of whether

                                        3
<Page>

            such loss or theft occurs when the Parking Facility is locked or
            otherwise secured. Except as caused by the negligence or willful
            misconduct of Landlord and without limiting the terms of the
            preceding sentence, Landlord shall not be liable for any loss,
            injury or damage to persons using the Parking Facility or
            automobiles or other property therein, it being agreed that, to the
            fullest extent permitted by law, the use of the Spaces shall be at
            the sole risk of Tenant and its employees.

     2.05.  Landlord shall have the right from time to time to designate the
            location of the Spaces and to promulgate reasonable rules and
            regulations regarding the Parking Facility, the Spaces and the use
            thereof, including, but not limited to, rules and regulations
            controlling the flow of traffic to and from various parking areas,
            the angle and direction of parking and the like. Tenant shall comply
            with and cause its employees to comply with all such rules and
            regulations as well as all reasonable additions and amendments
            thereto.

     2.06.  Tenant shall not store or permit its employees to store any
            automobiles in the Parking Facility without the prior written
            consent of Landlord. Except for emergency repairs, Tenant and its
            employees shall not perform any work on any automobiles while
            located in the Parking Facility or on the Property. If it is
            necessary for Tenant or its employees to leave an automobile in the
            Parking Facility overnight, Tenant shall provide Landlord with prior
            notice thereof designating the license plate number and model of
            such automobile.

     2.07.  Landlord shall have the right to temporarily close the Parking
            Facility or certain areas therein in order to perform necessary
            repairs, maintenance and improvements to the Parking Facility.

     2.08.  Tenant shall not assign or sublease any of the Spaces without the
            consent of Landlord. Landlord shall have the right to terminate this
            Parking Agreement with respect to any Spaces that Tenant desires to
            sublet or assign.

     2.09.  Landlord may elect to provide parking cards or keys to control
            access to the Parking Facility. In such event, Landlord shall
            provide Tenant with one card or key for each Space that Tenant is
            leasing hereunder, provided that Landlord shall have the right to
            require Tenant or its employees to place a deposit on such access
            cards or keys and to pay a fee for any lost or damaged cards or
            keys.

     2.10.  Landlord hereby reserves the right to enter into a management
            agreement or lease with an entity for the Parking Facility ("PARKING
            FACILITY OPERATOR"). In such event, Tenant, upon request of
            Landlord, shall enter into a parking agreement with the Parking
            Facility Operator and pay the Parking Facility Operator the monthly
            charge established hereunder, and Landlord shall have no liability
            for claims arising through acts or omissions of the Parking Facility
            Operator unless caused by Landlord's negligence or willful
            misconduct. It is understood and agreed that the identity of the
            Parking Facility Operator may change from time to time during the
            Term. In connection therewith, any parking lease or agreement
            entered into between Tenant and a Parking Facility Operator shall be
            freely assignable by such Parking Facility Operator or any
            successors thereto.

     2.11.  Tenant, at its sole cost and expense, shall comply with the
            applicable terms and conditions of the City of Cambridge Traffic
            Ordinance, including, without limitation, the PTDM Ordinance. Tenant
            shall reasonably cooperate with Landlord as reasonably required for
            Landlord to fulfill its obligations under the PTDM Ordinance.

3.   FIRST EXTENSION OPTION.

     3.01.  GRANT OF OPTION; CONDITIONS. Tenant shall have the right to extend
            the Term (the "FIRST EXTENSION OPTION") with respect to the entire
            Premises only for one additional period of 5 years commencing on the
            day following the Termination Date of the initial Term and ending on
            the 5th anniversary of the Termination Date (the "FIRST EXTENSION
            TERM"), if:

            A.   Landlord receives notice of exercise ("FIRST INITIAL EXTENSION
                 NOTICE") not less than 12 full calendar months prior to the
                 expiration of the initial

                                        4
<Page>

                 Term and not more than 15 full calendar months prior to the
                 expiration of the initial Term; and

            B.   Tenant is not in Default under the Lease beyond any applicable
                 cure periods at the time that Tenant delivers its First Initial
                 Extension Notice or at the time Tenant delivers its First
                 Binding Notice (as defined below); and

            C.   No more than 25% of the Office Space (in the aggregate) and no
                 more than 25% of the Lab Space (in the aggregate) is sublet
                 (other than pursuant to a Permitted Transfer, as defined in
                 Section 11 of the Lease) at the time that Tenant delivers its
                 First Initial Extension Notice or at the time Tenant delivers
                 its First Binding Notice, provided, however, and
                 notwithstanding anything to the contrary in the foregoing
                 contained, if more than 25% of either the Office Space or the
                 Lab Space, but not both, is sublet (other than pursuant to a
                 Permitted Transfer), Tenant's First Extension Option shall
                 still be available with respect to whichever of the Office
                 Space or the Lab Space is subject to subleases of 25% or less
                 of its space. Thus, for example, if 35% of the Lab Space is
                 sublet (other than pursuant to a Permitted Transfer), but only
                 20% of the Office Space is sublet, Tenant's First Extension
                 Option shall not apply to the Lab Space, but Tenant's First
                 Extension Option shall apply to the Office Space. In the event
                 more than 25% of the Office Space and more than 25% of the Lab
                 Space is sublet (other than pursuant to a Permitted Transfer),
                 then Tenant's First Extension Option shall not be available
                 with respect to either the Office Space or the Lab Space; and

            D.   The Lease has not been assigned (other than pursuant to a
                 Permitted Transfer, as defined in Section 11 of the Lease)
                 prior to the date that Tenant delivers its First Initial
                 Extension Notice or prior to the date Tenant delivers its First
                 Binding Notice.

     3.02.  TERMS APPLICABLE TO PREMISES DURING FIRST EXTENSION TERM.

            A.   The initial Base Rent rate per rentable square foot for the
                 Premises during the First Extension Term shall equal the
                 Prevailing Market (hereinafter defined) rate per rentable
                 square foot for the Premises. Base Rent during the First
                 Extension Term shall increase, if at all, in accordance with
                 the increases assumed in the determination of Prevailing Market
                 rate. Base Rent attributable to the Premises shall be payable
                 in monthly installments in accordance with the terms and
                 conditions of Section 4 of the Lease.

            B.   Tenant shall pay Additional Rent (i.e., Taxes and Expenses) for
                 the Premises during the First Extension Term in accordance with
                 EXHIBIT B of the Lease, and the manner and method in which
                 Tenant reimburses Landlord for Tenant's share of Taxes and
                 Expenses and the Base Year, if any, applicable to such matter,
                 shall be some of the factors considered in determining the
                 Prevailing Market rate for the First Extension Term.

     3.03.  PROCEDURE FOR DETERMINING PREVAILING MARKET. Within 30 days after
            receipt of Tenant's First Initial Extension Notice, Landlord shall
            advise Tenant of the applicable Base Rent rate for the Premises for
            the First Extension Term. Tenant, within 15 days after the date on
            which Landlord advises Tenant of the applicable Base Rent rate for
            the First Extension Term, shall either (i) give Landlord final
            binding written notice ("FIRST BINDING NOTICE") of Tenant's exercise
            of its First Extension Option, or (ii) if Tenant disagrees with
            Landlord's determination, provide Landlord with written notice of
            rejection (the "FIRST REJECTION NOTICE"). If Tenant fails to provide
            Landlord with either a First Binding Notice or First Rejection
            Notice within such 15 day period, Tenant's First Extension Option
            shall be null and void and of no further force and effect. If Tenant
            provides Landlord with a First Binding Notice, Landlord and Tenant
            shall enter into the First Extension Amendment (as defined below)
            upon the terms and conditions set forth herein. If Tenant provides
            Landlord with a First Rejection Notice, Landlord and Tenant shall
            work together in good faith to agree upon the Prevailing Market rate
            for the Premises during the First Extension Term. When Landlord and
            Tenant have agreed upon the Prevailing Market rate for the

                                        5
<Page>

            Premises, such agreement shall be reflected in a written agreement
            between Landlord and Tenant, whether in a letter or otherwise, and
            Landlord and Tenant shall enter into the First Extension Amendment
            in accordance with the terms and conditions hereof. Notwithstanding
            the foregoing, if Landlord and Tenant are unable to agree upon the
            Prevailing Market rate for the Premises within 30 days after the
            date Tenant provides Landlord with the First Rejection Notice,
            Tenant, by written notice to Landlord (the "FIRST ARBITRATION
            NOTICE") within 5 days after the expiration of such 30 day period,
            shall have the right to have the Prevailing Market rate determined
            in accordance with the arbitration procedures described in Section
            3.04 below. If Landlord and Tenant are unable to agree upon the
            Prevailing Market rate for the Premises within the 30 day period
            described and Tenant fails to timely exercise its right to
            arbitrate, Tenant's First Extension Option shall be deemed to be
            null and void and of no further force and effect.

     3.04.  ARBITRATION PROCEDURE.

            A.   If Tenant provides Landlord with a First Arbitration Notice,
                 Landlord and Tenant, within 5 days after the date of the First
                 Arbitration Notice, shall each simultaneously submit to the
                 other, in a sealed envelope, its good faith estimate of the
                 Prevailing Market rate for the Premises during the First
                 Extension Term (collectively referred to as the "ESTIMATES").
                 If the higher of such Estimates is not more than 105% of the
                 lower of such Estimates, then Prevailing Market rate shall be
                 the average of the two Estimates. If the Prevailing Market rate
                 is not resolved by the exchange of Estimates, then, within 7
                 days after the exchange of Estimates, Landlord and Tenant shall
                 each select an appraiser to determine which of the two
                 Estimates most closely reflects the Prevailing Market rate for
                 the Premises during the First Extension Term. Each appraiser so
                 selected shall be certified as an MAI appraiser or as an ASA
                 appraiser and shall have had at least 5 years experience within
                 the previous 10 years as a real estate appraiser working in
                 Cambridge, Massachusetts, with working knowledge of current
                 rental rates and practices. For purposes hereof, an "MAI"
                 appraiser means an individual who holds an MAI designation
                 conferred by, and is an independent member of, the American
                 Institute of Real Estate Appraisers (or its successor
                 organization, or in the event there is no successor
                 organization, the organization and designation most similar),
                 and an "ASA" appraiser means an individual who holds the Senior
                 Member designation conferred by, and is an independent member
                 of, the American Society of Appraisers (or its successor
                 organization, or, in the event there is no successor
                 organization, the organization and designation most similar).

            B.   Upon selection, Landlord's and Tenant's appraisers shall work
                 together in good faith to agree upon which of the two Estimates
                 most closely reflects the Prevailing Market rate for the
                 Premises. The Estimate chosen by such appraisers shall be
                 binding on both Landlord and Tenant as the Base Rent rate for
                 the Premises during the First Extension Term. If either
                 Landlord or Tenant fails to appoint an appraiser within the 7
                 day period referred to above, the appraiser appointed by the
                 other party shall be the sole appraiser for the purposes
                 hereof. If the two appraisers cannot agree upon which of the
                 two Estimates most closely reflects the Prevailing Market
                 within 20 days after their appointment, then, within 10 days
                 after the expiration of such 20 day period, the two appraisers
                 shall select a third appraiser meeting the aforementioned
                 criteria. Once the third appraiser (i.e. arbitrator) has been
                 selected as provided for above, then, as soon thereafter as
                 practicable but in any case within 14 days, the arbitrator
                 shall make his determination of which of the two Estimates most
                 closely reflects the Prevailing Market rate and such Estimate
                 shall be binding on both Landlord and Tenant as the Base Rent
                 rate for the Premises. If the arbitrator believes that expert
                 advice would materially assist him, he may retain one or more
                 qualified persons to provide such expert advice. The parties
                 shall share equally in the costs of the arbitrator and of any
                 experts retained by the arbitrator. Any fees of any appraiser,
                 counsel or experts engaged directly by Landlord or Tenant,
                 however, shall be borne by the party retaining such appraiser,
                 counsel or expert.

            C.   If the Prevailing Market rate has not been determined by the

                                        6
<Page>

                 commencement date of the First Extension Term, Tenant shall pay
                 Base Rent upon the terms and conditions in effect during the
                 last month of the initial Term for the Premises until such time
                 as the Prevailing Market rate has been determined. Upon such
                 determination, the Base Rent for the Premises shall be
                 retroactively adjusted to the commencement of the First
                 Extension Term for the Premises. If such adjustment results in
                 an underpayment of Base Rent by Tenant, Tenant shall pay
                 Landlord the amount of such underpayment within 30 days after
                 the determination thereof. If such adjustment results in an
                 overpayment of Base Rent by Tenant, Landlord shall credit such
                 overpayment against the next installment of Base Rent due under
                 the Lease and, to the extent necessary, any subsequent
                 installments, until the entire amount of such overpayment has
                 been credited against Base Rent.

     3.05.  FIRST EXTENSION AMENDMENT. If Tenant is entitled to and properly
            exercises its First Extension Option, Landlord shall prepare an
            amendment (the "FIRST EXTENSION AMENDMENT") to reflect changes in
            the Base Rent, Term, Termination Date and other appropriate terms.
            The First Extension Amendment shall be sent to Tenant within a
            reasonable time after Landlord's receipt of the First Binding Notice
            or other written agreement by Landlord and Tenant regarding the
            Prevailing Market rate, and Tenant shall execute and return the
            First Extension Amendment to Landlord within 15 days after Tenant's
            receipt of same, but, upon final determination of the Prevailing
            Market rate applicable during the First Extension Term as described
            herein, an otherwise valid exercise of the First Extension Option
            shall be fully effective whether or not the First Extension
            Amendment is executed.

     3.06.  DEFINITION OF PREVAILING MARKET. For purposes of this First
            Extension Option, "PREVAILING MARKET" shall mean the arms length
            fair market annual rental rate per rentable square foot under
            renewal leases and amendments entered into on or about the date on
            which the Prevailing Market is being determined hereunder for space
            comparable to the Premises in the Buildings and office buildings
            comparable to the Buildings in Cambridge, Massachusetts. The
            determination of Prevailing Market shall take into account any
            material economic differences between the terms of this Lease and
            any comparison lease or amendment, such as rent abatements,
            construction costs and other concessions and the manner, if any, in
            which the landlord under any such lease is reimbursed for operating
            expenses and taxes. The determination of Prevailing Market shall
            also take into consideration any reasonably anticipated changes in
            the Prevailing Market rate from the time such Prevailing Market rate
            is being determined and the time such Prevailing Market rate will
            become effective under this Lease.

4.   SECOND EXTENSION OPTION.

     4.01.  GRANT OF OPTION; CONDITIONS. Tenant shall have the right to extend
            the First Extension Term (the "SECOND EXTENSION OPTION") with
            respect to the entire Premises only for one additional period of 5
            years commencing on the day following the Termination Date of the
            First Extension Term and ending on the 5th anniversary of the
            Termination Date of the First Extension Term (the "SECOND EXTENSION
            TERM"), if:

            A.   Landlord receives notice of exercise ("SECOND INITIAL EXTENSION
                 NOTICE") not less than 12 full calendar months prior to the
                 expiration of the First Extension Term and not more than 15
                 full calendar months prior to the expiration of the First
                 Extension Term; and

            B.   Tenant is not in Default under the Lease beyond any applicable
                 cure periods at the time that Tenant delivers its Second
                 Initial Extension Notice or at the time Tenant delivers its
                 Second Binding Notice (as defined below); and

            C.   No more than 25% of the Office Space (in the aggregate) and no
                 more than 25% of the Lab Space (in the aggregate) is sublet
                 (other than pursuant to a Permitted Transfer, as defined in
                 Section 11 of the Lease) at the time that Tenant delivers its
                 Second Initial Extension Notice or at the time Tenant delivers
                 its Second Binding Notice, provided, however, and
                 notwithstanding anything to the contrary in the foregoing
                 contained, if

                                        7
<Page>

                 more than 25% of either the Office Space or the Lab Space, but
                 not both, is sublet (other than pursuant to a Permitted
                 Transfer), Tenant's Second Extension Option shall still be
                 available with respect to whichever of the Office Space or the
                 Lab Space is subject to subleases of 25% or less of its space.
                 Thus, for example, if 35% of the Lab Space is sublet (other
                 than pursuant to a Permitted Transfer), but only 20% of the
                 Office Space is sublet, Tenant's Second Extension Option shall
                 not apply to the Lab Space, but Tenant's Second Extension
                 Option shall apply to the Office Space. In the event more than
                 25% of the Office Space and more than 25% of the Lab Space is
                 sublet (other than pursuant to a Permitted Transfer), then
                 Tenant's Second Extension Option shall not be available with
                 respect to either the Office Space or the Lab Space; and; and

            D.   The Lease has not been assigned (other than pursuant to a
                 Permitted Transfer, as defined in Section 11 of the Lease)
                 prior to the date that Tenant delivers its Second Initial
                 Extension Notice or prior to the date Tenant delivers its
                 Second Binding Notice;

            E.   Tenant has exercised its First Extension Option in accordance
                 with Section 3 of this EXHIBIT E.

     4.02.  TERMS APPLICABLE TO PREMISES DURING SECOND EXTENSION TERM.

            A.   The initial Base Rent rate per rentable square foot for the
                 Premises during the Second Extension Term shall equal the
                 Prevailing Market (hereinafter defined) rate per rentable
                 square foot for the Premises. Base Rent during the Second
                 Extension Term shall increase, if at all, in accordance with
                 the increases assumed in the determination of Prevailing Market
                 rate. Base Rent attributable to the Premises shall be payable
                 in monthly installments in accordance with the terms and
                 conditions of Section 4 of the Lease.

            B.   Tenant shall pay Additional Rent (i.e., Taxes and Expenses) for
                 the Premises during the Second Extension Term in accordance
                 with EXHIBIT B of the Lease, and the manner and method in which
                 Tenant reimburses Landlord for Tenant's share of Taxes and
                 Expenses, and the Base Year, if any, applicable to such matter,
                 shall be some of the factors considered in determining the
                 Prevailing Market rate for the Second Extension Term.

     4.03.  PROCEDURE FOR DETERMINING PREVAILING MARKET. Within 30 days after
            receipt of Tenant's Second Initial Extension Notice, Landlord shall
            advise Tenant of the applicable Base Rent rate for the Premises for
            the Second Extension Term. Tenant, within 15 days after the date on
            which Landlord advises Tenant of the applicable Base Rent rate for
            the Second Extension Term, shall either (i) give Landlord final
            binding written notice ("SECOND BINDING NOTICE") of Tenant's
            exercise of its Second Extension Option, or (ii) if Tenant disagrees
            with Landlord's determination, provide Landlord with written notice
            of rejection (the "SECOND REJECTION NOTICE"). If Tenant fails to
            provide Landlord with either a Second Binding Notice or Second
            Rejection Notice within such 15 day period, Tenant's Second
            Extension Option shall be null and void and of no further force and
            effect. If Tenant provides Landlord with a Second Binding Notice,
            Landlord and Tenant shall enter into the Second Extension Amendment
            (as defined below) upon the terms and conditions set forth herein.
            If Tenant provides Landlord with a Second Rejection Notice, Landlord
            and Tenant shall work together in good faith to agree upon the
            Prevailing Market rate for the Premises during the Second Extension
            Term. When Landlord and Tenant have agreed upon the Prevailing
            Market rate for the Premises, such agreement shall be reflected in a
            written agreement between Landlord and Tenant, whether in a letter
            or otherwise, and Landlord and Tenant shall enter into the Second
            Extension Amendment in accordance with the terms and conditions
            hereof. Notwithstanding the foregoing, if Landlord and Tenant are
            unable to agree upon the Prevailing Market rate for the Premises
            within 30 days after the date Tenant provides Landlord with the
            Second Rejection Notice, Tenant, by written notice to Landlord (the
            "SECOND ARBITRATION NOTICE") within 5 days after the expiration of
            such 30 day period, shall have the right to have the Prevailing
            Market rate determined in accordance with the arbitration procedures
            described in

                                        8
<Page>

            Section 4.04 below. If Landlord and Tenant are unable to agree upon
            the Prevailing Market rate for the Premises within the 30 day period
            described and Tenant fails to timely exercise its right to
            arbitrate, Tenant's Second Extension Option shall be deemed to be
            null and void and of no further force and effect.

     4.04.  ARBITRATION PROCEDURE.

            A.   If Tenant provides Landlord with a Second Arbitration Notice,
                 Landlord and Tenant, within 5 days after the date of the Second
                 Arbitration Notice, shall each simultaneously submit to the
                 other, in a sealed envelope, its good faith estimate of the
                 Prevailing Market rate for the Premises during the Second
                 Extension Term (collectively referred to as the "ESTIMATES").
                 If the higher of such Estimates is not more than 105% of the
                 lower of such Estimates, then Prevailing Market rate shall be
                 the average of the two Estimates. If the Prevailing Market rate
                 is not resolved by the exchange of Estimates, then, within 7
                 days after the exchange of Estimates, Landlord and Tenant shall
                 each select an appraiser to determine which of the two
                 Estimates most closely reflects the Prevailing Market rate for
                 the Premises during the Second Extension Term. Each appraiser
                 so selected shall be certified as an MAI appraiser or as an ASA
                 appraiser and shall have had at least 5 years experience within
                 the previous 10 years as a real estate appraiser working in
                 Cambridge, Massachusetts, with working knowledge of current
                 rental rates and practices. For purposes hereof, an "MAI"
                 appraiser means an individual who holds an MAI designation
                 conferred by, and is an independent member of, the American
                 Institute of Real Estate Appraisers (or its successor
                 organization, or in the event there is no successor
                 organization, the organization and designation most similar),
                 and an "ASA" appraiser means an individual who holds the Senior
                 Member designation conferred by, and is an independent member
                 of, the American Society of Appraisers (or its successor
                 organization, or, in the event there is no successor
                 organization, the organization and designation most similar).

            B.   Upon selection, Landlord's and Tenant's appraisers shall work
                 together in good faith to agree upon which of the two Estimates
                 most closely reflects the Prevailing Market rate for the
                 Premises. The Estimate chosen by such appraisers shall be
                 binding on both Landlord and Tenant as the Base Rent rate for
                 the Premises during the Second Extension Term. If either
                 Landlord or Tenant fails to appoint an appraiser within the 7
                 day period referred to above, the appraiser appointed by the
                 other party shall be the sole appraiser for the purposes
                 hereof. If the two appraisers cannot agree upon which of the
                 two Estimates most closely reflects the Prevailing Market
                 within 20 days after their appointment, then, within 10 days
                 after the expiration of such 20 day period, the two appraisers
                 shall select a third appraiser meeting the aforementioned
                 criteria. Once the third appraiser (i.e. arbitrator) has been
                 selected as provided for above, then, as soon thereafter as
                 practicable but in any case within 14 days, the arbitrator
                 shall make his determination of which of the two Estimates most
                 closely reflects the Prevailing Market rate and such Estimate
                 shall be binding on both Landlord and Tenant as the Base Rent
                 rate for the Premises. If the arbitrator believes that expert
                 advice would materially assist him, he may retain one or more
                 qualified persons to provide such expert advice. The parties
                 shall share equally in the costs of the arbitrator and of any
                 experts retained by the arbitrator. Any fees of any appraiser,
                 counsel or experts engaged directly by Landlord or Tenant,
                 however, shall be borne by the party retaining such appraiser,
                 counsel or expert.

            C.   If the Prevailing Market rate has not been determined by the
                 commencement date of the Second Extension Term, Tenant shall
                 pay Base Rent upon the terms and conditions in effect during
                 the last month of the First Extension Term for the Premises
                 until such time as the Prevailing Market rate has been
                 determined. Upon such determination, the Base Rent for the
                 Premises shall be retroactively adjusted to the commencement of
                 the Second Extension Term for the Premises. If such adjustment
                 results in an underpayment of Base Rent by Tenant, Tenant shall
                 pay Landlord the amount of such underpayment within 30 days
                 after

                                        9
<Page>

               the determination thereof. If such adjustment results in an
               overpayment of Base Rent by Tenant, Landlord shall credit such
               overpayment against the next installment of Base Rent due under
               the Lease and, to the extent necessary, any subsequent
               installments, until the entire amount of such overpayment has
               been credited against Base Rent.

     4.05.  SECOND EXTENSION AMENDMENT. If Tenant is entitled to and properly
            exercises its Second Extension Option, Landlord shall prepare an
            amendment (the "SECOND EXTENSION AMENDMENT") to reflect changes in
            the Base Rent, Term, Termination Date and other appropriate terms.
            The Second Extension Amendment shall be sent to Tenant within a
            reasonable time after Landlord's receipt of the Second Binding
            Notice or other written agreement by Landlord and Tenant regarding
            the Prevailing Market rate, and Tenant shall execute and return the
            Second Extension Amendment to Landlord within 15 days after Tenant's
            receipt of same, but, upon final determination of the Prevailing
            Market rate applicable during the Second Extension Term as described
            herein, an otherwise valid exercise of the Second Extension Option
            shall be fully effective whether or not the Second Extension
            Amendment is executed.

     4.06.  DEFINITION OF PREVAILING MARKET. For purposes of this Second
            Extension Option, "PREVAILING MARKET" shall mean the arms length
            fair market annual rental rate per rentable square foot under
            renewal leases and amendments entered into on or about the date on
            which the Prevailing Market is being determined hereunder for space
            comparable to the Premises in the Buildings and office buildings
            comparable to the Buildings in Cambridge, Massachusetts. The
            determination of Prevailing Market shall take into account any
            material economic differences between the terms of this Lease and
            any comparison lease or amendment, such as rent abatements,
            construction costs and other concessions and the manner, if any, in
            which the landlord under any such lease is reimbursed for operating
            expenses and taxes. The determination of Prevailing Market shall
            also take into consideration any reasonably anticipated changes in
            the Prevailing Market rate from the time such Prevailing Market rate
            is being determined and the time such Prevailing Market rate will
            become effective under this Lease.

5.   RIGHT OF FIRST OFFER.

     5.01.  GRANT OF OPTION; CONDITIONS. Tenant shall have the continuing right
            of first offer (the "RIGHT OF FIRST OFFER") with respect to the
            18,035 rentable square feet known as suite number 1700 on the 17th
            floor of the Office Building shown on the demising plan attached
            hereto as EXHIBIT A-1 (the "OFFERING SPACE"). Tenant's Right of
            First Offer shall be exercised as follows: at any time after
            Landlord has determined that the existing tenant in any portion of
            the Offering Space will not extend or renew the term of its lease
            for such portion of the Offering Space (but prior to leasing such
            portion of the Offering Space to a party other than the existing
            tenant), Landlord shall advise Tenant (the "ROFO ADVICE") of the
            terms under which Landlord is prepared to lease the applicable
            Offering Space to Tenant for the remainder of the Term, which terms
            shall reflect the Prevailing Market (hereinafter defined) rate for
            such Offering Space as reasonably determined by Landlord. Tenant may
            lease such Offering Space in its entirety only, under such terms, by
            delivering written notice of exercise to Landlord (the "ROFO NOTICE
            OF EXERCISE") within 5 Business Days after the date the ROFO Advice
            is deemed to have been received by Tenant (in accordance with
            Section 24 of the Lease), except that Tenant shall have no such
            Right of First Offer and Landlord need not provide Tenant with a
            ROFO Advice, if:

            A.   Tenant is in Default under the Lease beyond any applicable cure
                 periods at the time that Landlord would otherwise deliver the
                 ROFO Advice; or

            B.   the Premises, or any portion thereof, is sublet (other than
                 pursuant to a Permitted Transfer, as defined in Section 11 of
                 the Lease) at the time Landlord would otherwise deliver the
                 ROFO Advice; or

            C.   the Lease has been assigned (other than pursuant to a Permitted
                 Transfer, as defined in Section 11 of the Lease) prior to the
                 date Landlord would otherwise deliver the ROFO Advice; or

                                       10
<Page>

            D.   Tenant is not occupying the Premises on the date Landlord would
                 otherwise deliver the ROFO Advice; or

            E.   the applicable portion of the Offering Space is not intended
                 for the exclusive use of Tenant during the Term; or

            F.   the existing tenant in the applicable portion of the Offering
                 Space is interested in extending or renewing its lease for such
                 applicable portion of the Offering Space or entering into a new
                 lease for such applicable portion of the Offering Space.

     5.02.  TERMS FOR OFFERING SPACE.

            A.   The term for each applicable portion of the Offering Space
                 shall commence upon the commencement date stated in the ROFO
                 Advice and thereupon each such applicable portion of the
                 Offering Space shall be considered a part of the Premises,
                 provided that all of the terms stated in the ROFO Advice shall
                 govern Tenant's leasing of such applicable portion of the
                 Offering Space and only to the extent that they do not conflict
                 with the ROFO Advice, the terms and conditions of this Lease
                 shall apply to such applicable portion of the Offering Space.

            B.   Tenant shall pay Base Rent and Additional Rent for each
                 applicable portion of the Offering Space in accordance with the
                 terms and conditions of the ROFO Advice, which terms and
                 conditions shall reflect the Prevailing Market rate for such
                 applicable portion of the Offering Space as determined in
                 Landlord's reasonable judgment.

            C.   Each applicable portion of the Offering Space (including
                 improvements and personalty, if any) shall be accepted by
                 Tenant in its condition and as-built configuration existing on
                 the earlier of the date Tenant takes possession of the
                 applicable portion of the Offering Space or as of the date the
                 term for such applicable portion of the Offering Space
                 commences, unless the ROFO Advice specifies any work to be
                 performed by Landlord in such applicable portion of the
                 Offering Space, in which case Landlord shall perform such work
                 in the applicable portion of the Offering Space. If Landlord is
                 delayed delivering possession of the applicable portion of the
                 Offering Space due to the holdover or unlawful possession of
                 such space by any party, Landlord shall use reasonable efforts
                 to obtain possession of the space, and the commencement of the
                 term for such applicable portion of the Offering Space shall be
                 postponed until the date Landlord delivers possession of the
                 applicable portion of the Offering Space to Tenant free from
                 occupancy by any party.

     5.03.  TERMINATION OF RIGHT OF FIRST OFFER. The rights of Tenant hereunder
            with respect to each applicable portion of the Offering Space shall
            terminate on the earlier to occur of: (i) November 30, 2014; (ii)
            Tenant's failure to exercise its Right of First Offer within the 5
            Business Day period provided in Section 5.01 above; and (iii) the
            date Landlord would have provided Tenant a ROFO Advice if Tenant had
            not been in violation of one or more of the conditions set forth in
            Section 5.01 above. In addition, if Landlord provides Tenant with a
            ROFO Advice for any portion of the Offering Space that contains
            expansion rights (whether such rights are described as an expansion
            option, right of first refusal, right of first offer or otherwise)
            with respect to any other portion of the Offering Space (such other
            portion of the Offering Space subject to such expansion rights is
            referred to herein as the "ENCUMBERED OFFERING SPACE") and Tenant
            does not exercise its Right of First Offer to lease the Offering
            Space described in the ROFO Advice, Tenant's Right of First Offer
            with respect to the Encumbered Offering Space shall be subject and
            subordinate to all such expansion rights contained in the ROFO
            Advice. Notwithstanding the foregoing, if (i) Tenant was entitled to
            exercise its Right of First Offer, but failed to provide Landlord
            with a ROFO Notice of Exercise within the 5 Business Day period
            provided in Section 5.01 above, and (ii) Landlord does not enter
            into a lease for the applicable portion of the Offering Space within
            a period of 12 months following the date of the ROFO Advice, Tenant
            shall once again have a Right of First Offer with respect to such
            portion of the Offering Space. In addition, subject to the
            provisions of sub-clauses (i) and (iii) in the first sentence of
            this Section 5.03 above, if Landlord

                                       11
<Page>

            does enter into a lease for the applicable portion of the Offering
            Space with a third party tenant (the "ROFO PROSPECT"), Tenant shall
            have a Right of First Offer on such portion of the Offering Space
            (subject to the terms hereof) upon the expiration of the lease
            (including any renewals or extensions thereof) with the ROFO
            Prospect.

     5.04.  OFFERING AMENDMENT. If Tenant exercises its Right of First Offer,
            Landlord shall prepare an amendment (the "OFFERING AMENDMENT")
            adding the applicable portion of the Offering Space to the Premises
            on the terms set forth in the ROFO Advice and reflecting the changes
            in the Base Rent, Rentable Square Footage of the Premises, Tenant's
            Pro Rata Share and other appropriate terms. A copy of the Offering
            Amendment shall be sent to Tenant within a reasonable time after
            Landlord's receipt of the ROFO Notice of Exercise executed by
            Tenant, and Tenant shall execute and return the Offering Amendment
            to Landlord within 15 days thereafter, but an otherwise valid
            exercise of the Right of First Offer shall be fully effective
            whether or not the Offering Amendment is executed.

     5.05.  DEFINITION OF PREVAILING MARKET. For purposes of this Right of First
            Offer provision, "PREVAILING MARKET" shall mean the annual rental
            rate per square foot for space comparable to the applicable portion
            of the Offering Space in the Office Building and office buildings
            comparable to the Office Building in the Cambridge, Massachusetts
            area under leases and renewal and expansion amendments being entered
            into at or about the time that Prevailing Market is being
            determined, giving appropriate consideration to tenant concessions,
            brokerage commissions, tenant improvement allowances, existing
            improvements in the space in question, and the method of allocating
            operating expenses and taxes. Notwithstanding the foregoing, space
            leased under any of the following circumstances shall not be
            considered to be comparable for purposes hereof: (i) the lease term
            is for less than the lease term of the applicable Offering Space,
            (ii) the space is encumbered by the option rights of another tenant,
            or (iii) the space has a lack of windows and/or an awkward or
            unusual shape or configuration. The foregoing is not intended to be
            an exclusive list of space that will not be considered to be
            comparable.

     5.06.  SUBORDINATION. Notwithstanding anything herein to the contrary,
            Tenant's Right of First Offer is subject and subordinate to the
            expansion rights (whether such rights are designated as a right of
            first offer, right of first refusal, expansion option or otherwise)
            of any tenant of the Buildings existing on the date hereof.

6.   RIGHT OF FIRST REFUSAL.

     6.01.  GRANT OF OPTION; CONDITIONS. Tenant shall have the one time right of
            first refusal (the "RIGHT OF FIRST REFUSAL") with respect to the
            approximately 23,199 rentable square feet of space known as suite
            number 300 on the 3rd floor of the Science Building shown on the
            demising plan attached hereto as EXHIBIT A-2 (the "REFUSAL SPACE").
            As of the date of this Lease, the Refusal Space is currently vacant
            and unoccupied. Tenant's Right of First Refusal shall be exercised
            as follows: when Landlord has a prospective tenant (the "ROFR
            PROSPECT") interested in leasing any portion of the Refusal Space in
            connection with the initial lease up of the Refusal Space, Landlord
            shall advise Tenant (the "ROFR ADVICE") of the terms under which
            Landlord is prepared to lease the applicable portion of the Refusal
            Space to such ROFR Prospect and Tenant may lease the applicable
            portion of the Refusal Space, under such terms, by providing
            Landlord with written notice of exercise (the "ROFR NOTICE OF
            EXERCISE") within 5 Business Days after the date the ROFR Advice is
            deemed to have been received by Tenant (in accordance with Section
            24 of the Lease), except that Tenant shall have no such Right of
            First Refusal and Landlord need not provide Tenant with a ROFR
            Advice, if:

            A.   Tenant is in Default under the Lease beyond any applicable cure
                 periods at the time that Landlord would otherwise deliver the
                 ROFR Advice; or

            B.   the Premises, or any portion thereof, is sublet (other than
                 pursuant to a Permitted Transfer, as defined in Section 11 of
                 the Lease) at the time Landlord would otherwise deliver the
                 ROFR Advice; or

                                       12
<Page>

            C.   the Lease has been assigned (other than pursuant to a Permitted
                 Transfer, as defined in Section 11 of the Lease) prior to the
                 date Landlord would otherwise deliver the ROFR Advice; or

            D.   the applicable portion of the Refusal Space is not intended for
                 the exclusive use of Tenant during the Term; or

            E.   Tenant is not occupying the Premises on the date Landlord would
                 otherwise deliver the ROFR Advice.

     6.02.  TERMS FOR REFUSAL SPACE.

            A.   The term for each applicable portion of the Refusal Space shall
                 commence upon the commencement date stated in the ROFR Advice
                 and thereupon each such applicable portion of the Refusal Space
                 shall be considered a part of the Premises, provided that all
                 of the terms stated in the ROFR Advice, including the
                 termination date set forth in the ROFR Advice, shall govern
                 Tenant's leasing of such applicable portion of the Refusal
                 Space and only to the extent that they do not conflict with the
                 ROFR Advice, the terms and conditions of the Lease shall apply
                 to such applicable portion of the Refusal Space. Tenant shall
                 pay Base Rent and Additional Rent for the Refusal Space in
                 accordance with the terms and conditions of the ROFR Advice.

            B.   Each applicable portion of the Refusal Space (including
                 improvements and personalty, if any) shall be accepted by
                 Tenant in its condition and as-built configuration existing on
                 the earlier of the date Tenant takes possession of the
                 applicable portion of the Refusal Space or the date the term
                 for such applicable portion of the Refusal Space commences,
                 unless the ROFR Advice specifies work to be performed by
                 Landlord in such applicable portion of the Refusal Space, in
                 which case Landlord shall perform such work in the applicable
                 portion of the Refusal Space. If Landlord is delayed delivering
                 possession of the applicable portion of the Refusal Space due
                 to the holdover or unlawful possession of such space by any
                 party, Landlord shall use reasonable efforts to obtain
                 possession of the space, and the commencement of the term for
                 such applicable portion of the Refusal Space shall be postponed
                 until the date Landlord delivers possession of the applicable
                 portion of the Refusal Space to Tenant free from occupancy by
                 any party.

     6.03.  TERMINATION OF RIGHT OF FIRST REFUSAL. The rights of Tenant
            hereunder with respect to each applicable portion of the Refusal
            Space shall terminate on the earlier to occur of (i) December 30,
            2007; (ii) Tenant's failure to exercise its Right of First Refusal
            within the 5 Business Day period provided in Section 6.01 above; and
            (iii) the date Landlord would have provided Tenant a ROFR Advice if
            Tenant had not been in violation of one or more of the conditions
            set forth in Section 6.01 above. In addition, if Landlord provides
            Tenant with a ROFR Advice for any portion of the Refusal Space that
            contains expansion rights (whether such rights are described as an
            expansion option, right of first refusal, right of first offer or
            otherwise) with respect to any other portion of the Refusal Space
            (such other portion of the Refusal Space subject to such expansion
            rights is referred to herein as the "ENCUMBERED REFUSAL SPACE") and
            Tenant does not exercise its Right of First Refusal to lease the
            Refusal Space described in the ROFR Advice, Tenant's Right of First
            Refusal with respect to the Encumbered Refusal Space shall be
            subject and subordinate to all such expansion rights contained in
            the ROFR Advice.

     6.04.  REFUSAL SPACE AMENDMENT. If Tenant exercises its Right of First
            Refusal, Landlord shall prepare an amendment (the "REFUSAL SPACE
            AMENDMENT") adding the applicable portion of the Refusal Space to
            the Premises on the terms set forth in the ROFR Advice and
            reflecting the changes in the Base Rent, Rentable Square Footage of
            the Premises, Tenant's Pro Rata Share and other appropriate terms. A
            copy of the Refusal Space Amendment shall be sent to Tenant within a
            reasonable time after Landlord's receipt of the ROFR Notice of
            Exercise executed by Tenant, and Tenant shall execute and return the
            Refusal Space Amendment to Landlord within 15 days thereafter, but
            an otherwise valid

                                       13
<Page>

            exercise of the Right of First Refusal shall be fully effective
            whether or not the Refusal Space Amendment is executed.

                                       14
<Page>

                                    EXHIBIT F

                                 NOTICE OF LEASE

     Notice is hereby given pursuant to Massachusetts General Laws, Chapter 183,
Section 4 of the following lease:

1.   LANDLORD:             [insert name of landlord as shown in lease]

2.   TENANT:               [insert name of tenant as shown in lease]

3.   DATE OF LEASE:        _____________ __,____.

4.   PREMISES:             [describe premises as described in lease, e.g.,"
                           _______ rentable square feet of space as more
                           particularly described in the Lease on the _____
                           floor of the buildings known as and
                           numbered_________________, ________Massachusetts, and
                           more particularly described on EXHIBIT A attached
                           hereto"].

5.   LEASE TERM:           [insert lease term without extensions].

6.   EXTENSION RIGHTS:     [insert extension options, e.g., "Two (2) options to
                           extend the term for five (5) years each, on the terms
                           and conditions provided for by the Lease." If there
                           are no extension rights, delete #6].

     The foregoing is a summary of certain terms of the Lease for purposes of
giving notice thereof, and shall not be deemed to modify or amend the terms of
the Lease.

     [USEFUL BUT NOT NECESSARY: FOR LANDLORD'S TITLE, SEE DEED OF
____________________ TO LANDLORD DATED ___________, ____ RECORDED WITH
THE_____________ REGISTRY OF DEEDS IN BOOK ____, PAGE ___ ].

     This Notice is executed under seal this ___ day of ___________________,
_______.

                                 LANDLORD: [INSERT NAME OF LANDLORD]

                                 By:
                                    -------------------------------
                                    Name:
                                    Title:

                                 TENANT: [INSERT NAME OF TENANT]

                                 By:
                                       -------------------------------
                                       Name:
                                       Title:

                                        1
<Page>

                        THE COMMONWEALTH OF MASSACHUSETTS

___________, ss.

     On this ___ day of ___________ 20___, before me, the undersigned notary
public, personally appeared _____________________, proved to me through
satisfactory evidence of identification, which was / / photographic
identification with signature issued by a federal or state governmental agency,
/ / oath or affirmation of a credible witness, / / personal knowledge of the
undersigned, to be the person whose name is signed on the preceding or attached
document(s), and acknowledged to me that (he)(she) signed it voluntarily for its
stated purpose. (as partner for ______partnership) (as ____ of
________corporation), (as ____ of ____ limited liability company), (as attorney
in fact for_______________).

     Notary Public: ____________________________
     My Commission Expires: ____________________

                        THE COMMONWEALTH OF MASSACHUSETTS

___________, ss.

     On this ___ day of ___________ 2005, before me, the undersigned notary
public, personally appeared ___________, proved to me through satisfactory
evidence of identification, which was / / photographic identification with
signature issued by a federal or state governmental agency, / / oath or
affirmation of a credible witness, / / personal knowledge of the undersigned, to
be the person whose name is signed on the preceding or attached document(s), and
acknowledged to me that (he)(she) signed it voluntarily for its stated purpose.
(as partner for ______partnership) (as ____ of ________corporation), (as ____ of
____ limited liability company), (as attorney in fact for_______________).

     Notary Public: _________________________________
     My Commission Expires: _________________________

                                        2
<Page>

                                    EXHIBIT A

                           Description of the Premises

                                        3
<Page>

                                    EXHIBIT G

                              LETTER OF CREDIT FORM

                         -------------------------------
                         [Name of Financial Institution]

                                                   Irrevocable Standby
                                                   Letter of Credit
                                                   No. ______________________
                                                   Issuance Date:_____________
                                                   Expiration Date:____________
                                                   Applicant:  CombinatoRx,
                                                   Incorporated

BENEFICIARY

MA-Riverview/245 First Street, L.L.C.
c/o Equity Office
100 Summer Street
Boston, Massachusetts 02110
Attention:  Property Manager

Ladies/Gentlemen:

     We hereby establish our Irrevocable Standby Letter of Credit in your favor
for the account of the above referenced Applicant in the amount of Two Million
Five Hundred Thousand and 00/100 U.S. Dollars ($2,500,000.00) available for
payment at sight by your draft drawn on us when accompanied by the following
documents:

1.   An original copy of this Irrevocable Standby Letter of Credit.

2.   Beneficiary's dated statement purportedly signed by an authorized signatory
     or agent reading: "This draw in the amount of ______________________ U.S.
     Dollars ($____________) under your Irrevocable Standby Letter of Credit No.
     ____________________ represents funds due and owing to us pursuant to the
     terms of that certain lease by and between MA-RIVERVIEW/245 FIRST STREET,
     L.L.C., A DELAWARE LIMITED LIABILITY COMPANY, as landlord, and COMBINATORX,
     INCORPORATED, A DELAWARE CORPORATION, as tenant, and/or any amendment to
     the lease or any other agreement between such parties related to the
     lease."

     It is a condition of this Irrevocable Standby Letter of Credit that it will
be considered automatically renewed for a one year period upon the expiration
date set forth above and upon each anniversary of such date, unless at least 60
days prior to such expiration date or applicable anniversary thereof, we notify
you in writing, by certified mail return receipt requested or by recognized
overnight courier service, that we elect not to so renew this Irrevocable
Standby Letter of Credit. A copy of any such notice shall also be sent, in the
same manner, to: Equity Office Properties Trust, 2 North Riverside Plaza, Suite
2100, Chicago, Illinois 60606, Attention: Treasury Department. In addition to
the foregoing, we understand and agree that you shall be entitled to draw upon
this Irrevocable Standby Letter of Credit in accordance with 1 and 2 above in
the event that we elect not to renew this Irrevocable Standby Letter of Credit
and, in addition, you provide us with a dated statement purportedly signed by an
authorized signatory or agent of Beneficiary stating that the Applicant has
failed to provide you with an acceptable substitute irrevocable standby letter
of credit in accordance with the terms of the above referenced lease. We further
acknowledge and agree that: (a) upon receipt of the documentation required
herein, we will honor your draws against this Irrevocable Standby Letter of
Credit without inquiry into the accuracy of Beneficiary's signed statement and
regardless of whether Applicant disputes the content of such statement; (b) this
Irrevocable Standby Letter of Credit shall permit partial draws and, in the
event you elect to draw upon less than the full stated amount hereof, the stated
amount of this Irrevocable Standby Letter of Credit shall be automatically
reduced by the amount of such partial draw; and (c) you shall be entitled to
transfer your interest in this Irrevocable Standby Letter of Credit from time to
time and more than one time without our approval and without charge. In the
event of a transfer, we reserve the right to require reasonable evidence of such
transfer as a condition to any draw hereunder.

     This Irrevocable Standby Letter of Credit is subject to the Uniform Customs
and Practice for Documentary Credits (1993 revision) ICC Publication No. 500.

                                        1
<Page>

     We hereby engage with you to honor drafts and documents drawn under and in
compliance with the terms of this Irrevocable Standby Letter of Credit.

     All communications to us with respect to this Irrevocable Standby Letter of
Credit must be addressed to our office located at
______________________________________________ to the attention of
__________________________________.

                                   Very truly yours,

                                   ---------------------------

                                            [name]
                                   ---------------------------

                                            [title}
                                   ---------------------------

                                        2
<Page>

                                    EXHIBIT H

                        LIST OF ENVIRONMENTAL SUBSTANCES

                                        1Securities Purchase Agreement

Exhibit 4.1

SECURITIES PURCHASE AGREEMENT

This Securities Purchase Agreement (this “Agreement”) is dated as of October 21, 2005, among Mines Management, Inc., an Idaho corporation (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended (the “Securities Act”) and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:

ARTICLE I.

DEFINITIONS

1.1

Definitions

.  In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings indicated in this Section 1.1:

“Action” shall have the meaning ascribed to such term in Section 3.1(j).

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 144 under the Securities Act.  With respect to a Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as such Purchaser will be deemed to be an Affiliate of such Purchaser.

“Claims” shall have the meaning ascribed to such term in Section 3.1(n).

“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

“Closing Date” means the Trading Day when all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived.

“Commission” means the Securities and Exchange Commission.

1

Exhibit 4.1

“Common Stock” means the common stock of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter have been reclassified or changed into. 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

“Company Counsel” means Davis Graham & Stubbs LLP, 1550 Seventeenth Street, Suite 500, Denver, Colorado 80202, Telephone (303) 892-9400, Fax (303) 893-1379.

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered concurrently herewith. 

“Discussion Time” shall have the meaning ascribed to such term in Section 3.2(h).

 “Effective Date” means the date that the Registration Statement filed by the Company pursuant to the Registration Rights Agreement is first declared effective by the Commission.

“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(r). 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

“Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted by a majority of the non-employee members of the Board of Directors of the Company or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise, exchange or conversion price of any such securities, and (c) securities issued pursuant to acquisitions or strategic transactions, provided any such issuance shall only be to a Person which is, itself or through its subsidiaries, an operating company in a business synergistic with the business of the Company and in which the Company receives benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

2

Exhibit 4.1

 “FW” means Feldman Weinstein LLP with offices located at 420 Lexington Avenue, Suite 2620, New York, New York 10170-0002.

“GAAP” shall have the meaning ascribed to such term in Section 3.1(h).

 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

“Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c). 

“Liens” means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

“Material Permits” shall have the meaning ascribed to such term in Section 3.1(m).

“Per Share Purchase Price” equals $6.00, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.9.

“Registration Rights Agreement” means the Registration Rights Agreement, dated the date hereof, among the Company and the Purchasers, in the form of Exhibit A attached hereto.

“Registration Statement” means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchasers of the Shares and the Warrant Shares. 

“Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or 

3

Exhibit 4.1

regulation hereafter adopted by the Commission having substantially the same effect as such Rule. 

“SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).

“Securities” means the Shares, the Warrants and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended.

“Shares” means the shares of Common Stock issued or issuable to each Purchaser pursuant to this Agreement.

“Short Sales” shall include all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act. 

 “Subscription Amount” means, as to each Purchaser, the aggregate amount to be paid for Shares and Warrants purchased hereunder as specified below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount”, in United States Dollars and in immediately available funds.

“Subsequent Financing Notice” shall have the meaning ascribed to such term in Section 4.13. 

“Subsidiary” means any subsidiary of the Company as set forth on Schedule 3.1(a).

“Trading Day” means a day on which the Common Stock is traded on a Trading Market.

“Trading Market” means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the American Stock Exchange, the New York Stock Exchange, the Nasdaq National Market or the OTC Bulletin Board.

“Transaction Documents” means this Agreement, the Warrants and the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern Time); (b)  if the Common Stock is not then listed or quoted on a Trading Market and if prices for the Common Stock are then quoted on the OTC Bulletin Board, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTC Bulletin Board; (c) if the Common Stock is not then listed or quoted on the OTC Bulletin Board and if prices for the 

4

Exhibit 4.1

Common Stock are then reported in the “Pink Sheets” published by the Pink Sheets, LLC (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported; or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Purchasers and reasonably acceptable to the Company. 

“Warrants” means collectively the Common Stock purchase warrants, in the form of Exhibit C delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Warrants shall be exercisable immediately and have a term of exercise equal to five years.

“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.

ARTICLE II.

PURCHASE AND SALE

2.1

Closing.  On the Closing Date, upon the terms and subject to the conditions set forth herein, concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and each Purchaser agrees to purchase, severally and not jointly, up to an aggregate of $15,000,000 of Shares and Warrants.  Each Purchaser shall deliver to the Company via wire transfer or a certified check immediately available funds equal to their Subscription Amount and the Company shall deliver to each Purchaser their respective Shares and Warrants as determined pursuant to Section 2.2(a) and the other items set forth in Section 2.2 issuable at the Closing.  Upon satisfaction of the conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of FW, or such other location as the parties shall mutually agree.

2.2

Deliveries

.

(a)

On the Closing Date or at such other time set forth below, the Company shall deliver or cause to be delivered to each Purchaser the following:

(i)

this Agreement duly executed by the Company;

(ii)

a legal opinion of Company Counsel, in the form of Exhibit B attached hereto; 

(iii)

a copy of the irrevocable instructions to the Company’s transfer agent instructing the transfer agent to deliver, within 3 Trading Days after the Closing Date, a certificate evidencing a number of Shares equal to such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, registered in the name of such Purchaser;

5

Exhibit 4.1

(iv)

within 3 Trading Days after the Closing Date, a Warrant registered in the name of such Purchaser to purchase up to a number of shares of Common Stock equal to 50% of such Purchaser’s Subscription Amount divided by the Per Share Purchase Price, with an exercise price equal to $8.25, subject to adjustment therein; and

(v)

the Registration Rights Agreement duly executed by the Company.

(b)

On the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

(i)

this Agreement duly executed by such Purchaser;

(ii)

such Purchaser’s Subscription Amount by wire transfer to the account as specified in writing by the Company; and

(iii)

the Registration Rights Agreement duly executed by such Purchaser.

2.3

Closing Conditions. 

(a)

The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:

(i)

the accuracy in all material respects when made and on the Closing Date of the representations and warranties of the Purchasers contained herein; 

(ii)

all obligations, covenants and agreements of the Purchasers required to be performed at or prior to the Closing Date shall have been performed; and

(iii)

the delivery by the Purchasers of the items set forth in Section 2.2(b) of this Agreement.

(b)

The respective obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

(i)

the accuracy in all material respects on the Closing Date of the representations and warranties of the Company contained herein;

(ii)

all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed; 

(iii)

the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement; 

(iv)

there shall have been no Material Adverse Effect with respect to the Company since the date hereof; and

6

Exhibit 4.1

(v)

from the date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the Closing), and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg Financial Markets shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of each Purchaser, makes it impracticable or inadvisable to purchase the Shares at the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1

Representations and Warranties of the Company.  

Except as set forth under the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof, the Company hereby makes the representations and warranties set forth below to each Purchaser:

(a)

Subsidiaries.  All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a).  The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.  If the Company has no subsidiaries, then references in the Transaction Documents to the Subsidiaries will be disregarded.

(b)

Organization and Qualification.  The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.  Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents.  Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect 

7

Exhibit 4.1

on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and, to the Company’s knowledge, no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

(c)

Authorization; Enforcement.  The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder.  The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other than in connection with the Required Approvals.  Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies.

(d)

No Conflicts.  The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the Shares and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, to the Company’s best knowledge, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

(e)

Filings, Consents and Approvals.  The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the 

8

Exhibit 4.1

Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Registration Statement, (iii) application(s) to each applicable Trading Market for the listing of the Shares and Warrant Shares for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

(f)

Issuance of the Securities.  The Shares and the Warrants are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents.  The Warrant Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.  The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants.

(g)

Capitalization.  The capitalization of the Company is as set forth in the Company’s most recent periodic report filed with the Commission.  The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee stock purchase plan and pursuant to the conversion or exercise of outstanding Common Stock Equivalents.  No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents.  Except as a result of the purchase and sale of the Securities and as set forth on Schedule 3.1(g), there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents.  The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities.  No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Securities.  There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

9

Exhibit 4.1

(h)

SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.  The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

(i)

Material Changes.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in the SEC Reports, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or required to be disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information.

(j)

Litigation.  There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely 

10

Exhibit 4.1

affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.  There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

(k)

Labor Relations.  No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company which could reasonably be expected to result in a Material Adverse Effect.

(l)

Compliance.  Neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business except in each case as could not have a Material Adverse Effect.

(m)

Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

(n)

Title to Assets.  Except as disclosed in Schedule 3.1(n) or as could not reasonably be expected to have a Material Adverse Effect, and except for any such liens, encumbrances or other burdens on production that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect, each of the Company and its Subsidiaries:

(A)

owns record title to all of its fee lands and patented mining claims, subject to the reservations, limitations and exceptions set forth in the patents by which those fee lands were conveyed out of the United States government, provided that, to the extent the Company or any of its Subsidiaries owns only the mineral estate within any of the fee lands or patented mining 

11

Exhibit 4.1

claims, the Company and its Subsidiaries make no representation or warranty as to their rights to use the surface of such portions of those fee lands or patented mining claims;

(B)

subject to the paramount title of the United States, owns record title to all of its unpatented mining claims and millsites (the “Claims”) and, to the knowledge of the Company and its Subsidiaries, from and after the date either the Company or its Subsidiaries acquired an interest in the Claims, (i) assessment work which was performed in accordance with industry standards and which was required in order to maintain the Claims has been performed and affidavits of the performance of such work have been timely and properly filed and recorded with the appropriate governmental agencies; and (ii) all claim maintenance fees required to maintain the Claims have been timely paid, and all required filings and recordings with governmental agencies associated with the payment of such claim maintenance fees have been timely made. The Company and its Subsidiaries do not make and expressly disclaim any representation or warranty as to (i) whether any of the Claims contains a discovery of valuable minerals; (ii) the absence of any patented or unpatented mining claims in conflict with the Claims; (iii) whether or not any of the Claims comprise a contiguous group of claims or are free from inferior gaps or fractions; (iv) whether or not the Company or its Subsidiaries or any of their respective predecessors-in-title established or maintained pedis possessio rights with respect to any of the Claims; (v) what rights the Company or any of its Subsidiaries have to use the surface of any of the Claims for any purpose; or (vi) otherwise as to the validity of any of the Claims or the use of the same; and

(C)

owns its personal property; 

in each case free and clear of all liens, encumbrances or burdens on production arising by, through or under the Company and its Subsidiaries.

(ii)

All leases of real and personal property of the Company and each of its Subsidiaries are valid and subsisting and in full force and effect, and the Company has not received any notices of default thereunder.

(o)

Patents and Trademarks.  The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, copyrights, licenses and other similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).  Neither the Company nor any Subsidiary has received a written notice that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person.  To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights of others.

(p)

Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as 

12

Exhibit 4.1

are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount.  Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

(q)

Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $60,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company.

(r)

Sarbanes-Oxley; Internal Accounting Controls.  The Company is in material compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date.  The Company and the Subsidiaries is in the process of implementing a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 

(s)

Certain Fees.  No brokerage or finder’s fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents.  The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.

(t)

Private Placement. Assuming the accuracy of the Purchasers representations and warranties set forth in Section 3.2, the Securities (assuming no change in applicable law and no unlawful distribution of the Securities by the Purchasers or other parties) will be issued to the Purchasers in compliance with applicable exemptions from the registration requirements of the Securities Act. The issuance and 

13

Exhibit 4.1

sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

(u)

Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.  The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

(v)

Registration Rights.  Other than each of the Purchasers, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.

(w)

Listing and Maintenance Requirements.  The Company’s Common Stock is registered pursuant to Section 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.

(x)

Application of Takeover Protections.  The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

(y)

Disclosure.  The Company confirms that, neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel with any information that constitutes or might constitute material, non-public information.   The Company understands and confirms that the Purchasers will rely on the foregoing representations and covenants in effecting transactions in securities of the Company.  All disclosure provided to the Purchasers regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, furnished by or on behalf of the Company with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The Company acknowledges 

14

Exhibit 4.1

and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

(z)

No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions, including, without limitation, under the rules and regulations of any Trading Market on which any of the securities of the Company are listed or designated. 

(aa)

Solvency.  Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid.  The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).  The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date.  The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.  For the purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company’s balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

(bb)

Form S-3 Eligibility.  The Company is eligible to register the resale of the Securities for resale by the Purchaser on Form S-3 promulgated under the Securities Act.

15

Exhibit 4.1

(cc)

Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.

(dd)

No General Solicitation.  Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising.  The Company has offered the Securities for sale only to the Purchasers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

(ee)

Foreign Corrupt Practices.  Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is  in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.

(ff)

Accountants.  The Company’s accountants are set forth on Schedule 3.1(ff) of the Disclosure Schedule.  To the knowledge of the Company, such accountants, who the Company expects will express their opinion with respect to the financial statements to be included in the Company’s Annual Report on Form 10-K for the year ending December 31, 2005, are a registered public accounting firm as required by the Securities Act.

(gg)

Acknowledgment Regarding Purchasers’ Purchase of Securities.  The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby.  The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental to the Purchasers’ purchase of the Securities.  The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

(hh)

Acknowledgement Regarding Purchasers’ Trading Activity.  Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Section 4.14 hereof), it is understood and agreed by the Company (i) that none of the Purchasers have been asked to agree, nor has any Purchaser agreed, to desist from purchasing or 

16

Exhibit 4.1

selling, long and/or short, securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other transactions by any Purchaser, including Short Sales, and specifically including, without limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company’s publicly-traded securities; (iii) that any Purchaser, and counter parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, presently may have a “short” position in the Common Stock, and (iv) that each Purchaser shall not be deemed to have any affiliation with or control over any arm’s length counter-party in any “derivative” transaction.  The Company further understands and acknowledges that (a) one or more Purchasers may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Warrant Shares deliverable with respect to Securities are being determined and (b) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted.  The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

(ii)

Manipulation of Price.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities (other than for the placement agent’s placement of the Securities), or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company.

3.2

Representations and Warranties of the Purchasers

.  Each Purchaser hereby, for itself and for no other Purchaser, represents and warrants as of the date hereof and as of the Closing Date to the Company as follows:

(a)

Organization; Authority.  Such Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by such Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of such Purchaser.  Each Transaction Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief 

17

Exhibit 4.1

or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

(b)

Own Account.  Such Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no arrangement or understanding with any other persons regarding the distribution of such Securities (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law.  Such Purchaser is acquiring the Securities hereunder in the ordinary course of its business. Such Purchaser does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Securities.

(c)

Purchaser Status.  At the time such Purchaser was offered the Securities, it was, and at the date hereof it is, and on each date on which it exercises any Warrants, it will be either: (i) an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.  Such Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.  

(d)

Experience of Such Purchaser.  Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment.  Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

(e)

General Solicitation.  Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

(f)

 Rule 144. Such Purchaser understands that the Securities must be held indefinitely unless such Securities are registered under the Securities Act or an exemption from registration is available. Such Purchaser acknowledges that it is familiar with Rule 144, and that such Purchaser has been advised that Rule 144 permits resales only under certain circumstances. Such Purchaser understands that to the extent that Rule 144 is not available, such Purchaser will be unable to sell any Securities without either registration under the Securities Act or the existence of another exemption from such registration requirement. 

18

Exhibit 4.1

(g)

Opportunities for Additional Information. Such Purchaser acknowledges that such Purchaser has had the opportunity to ask questions of and receive answers from, or obtain additional information from, the executive officers of the Company concerning the financial and other affairs of the Company, and to the extent deemed necessary in light of such Purchaser’s personal knowledge of the Company’s affairs, such Purchaser has asked such questions and received answers to the full satisfaction of such Purchaser, and such Purchaser desires to invest in the Company.

(h)

Short Sales and Confidentiality Prior To The Date Hereof.  Other than the transaction contemplated hereunder, such Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any disposition, including Short Sales (but not including the location and/or reservation of borrowable shares of Common Stock), in the securities of the Company during the period commencing from the time that such Purchaser first received a term sheet from the Company or any other Person setting forth the material terms of the transactions contemplated hereunder until the date hereof (“Discussion Time”).  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser's assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.  Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

The Company acknowledges and agrees that each Purchaser does not make or has not made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2.

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1

Transfer Restrictions.  

(a)

The Securities may only be disposed of in compliance with state and federal securities laws.  In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect 

19

Exhibit 4.1

that such transfer does not require registration of such transferred Securities under the Securities Act.  As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of a Purchaser under this Agreement and the Registration Rights Agreement.

(b)

The Purchasers agree to the imprinting, so long as is required by this Section 4.1(b), of a legend on any of the Securities in the following form:

THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

The Company acknowledges and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties.  Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith.  Further, no notice shall be required of such pledge.  At the appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.

20

Exhibit 4.1

(c)

Certificates evidencing the Shares and Warrant Shares shall not contain any legend (including the legend set forth in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Shares or Warrant Shares pursuant to Rule 144, or (iii) if such Shares or Warrant Shares are eligible for sale under Rule 144(k), or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission).  The Company shall cause its counsel to issue a legal opinion to the Company’s transfer agent promptly after the Effective Date if required by the Company’s transfer agent to effect the removal of the legend hereunder.  If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the resale of the Warrant Shares, such Warrant Shares shall be issued free of all legends.  The Company agrees that following the Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Company’s transfer agent of a certificate representing Shares or Warrant Shares, as the case may be, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), make best efforts to deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all restrictive and other legends.  The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section.  Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent of the Company to the Purchasers by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System.

(d)

In addition to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Shares or Warrant Shares (based on the Closing Price of the Common Stock on the date such Securities are submitted to the Company’s transfer agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day beginning two Trading Days after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.

(e)

Each Purchaser, severally and not jointly with the other Purchasers, agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom.

4.2

Furnishing of Information

21

Exhibit 4.1

.  As long as any Purchaser owns Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act.  As long as any Purchaser owns Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchasers and make publicly available in accordance with Rule 144(c) such information as is required for the Purchasers to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, all to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the limitation of the exemptions provided by Rule 144.

4.3

Integration

.  The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchasers or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

4.4

Securities Laws Disclosure; Publicity.  The Company shall, by 8:30 a.m. Eastern time on the Trading Day following the date hereof, issue a Current Report on Form 8-K, reasonably acceptable to each Purchaser disclosing the material terms of the transactions contemplated hereby, and shall attach the Transaction Documents thereto.  The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication.  Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except (i) as required by federal securities law in connection with the registration statement contemplated by the Registration Rights Agreement and (ii) to the extent such disclosure is required by law or Trading Market regulations.

4.5

Shareholder Rights Plan.  No claim will be made or enforced by the Company or, to the knowledge of the Company, any other Person that any Purchaser is an “Acquiring Person” under any shareholder rights plan or similar plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.

22

Exhibit 4.1

4.6

Non-Public Information.  The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser shall have executed a written agreement regarding the confidentiality and use of such information.  The Company understands and confirms that each Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company.

4.7

Use of Proceeds.  Except as set forth on Schedule 4.7 attached hereto, the Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and not for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), to redeem any Common Stock or Common Stock Equivalents or to settle any outstanding litigation.

4.8

[Intentionally Omitted]

4.9

Indemnification of Purchasers.   Subject to the provisions of this Section 4.9, the Company will indemnify and hold the Purchasers and their directors, officers, shareholders, members, partners, employees and agents (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against a Purchaser, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of such Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of such Purchaser’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings such Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by such Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance).  If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing.  Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed within 20 days after receipt of any indemnification notice to assume such defense and to employ counsel, or (iii) the named parties to any such Proceeding (including any impleaded parties) include both such Purchaser Party and the Company, and such Purchaser Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Purchaser Party and the Company (in which case, if such Purchaser Party notifies the Company in writing that it elects to employ separate counsel at the expense of the Company, the Company shall not have the right to assume the defense thereof and the reasonable fees and expenses of one separate counsel shall be at the expense of the Company).  The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or 

23

Exhibit 4.1

delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchasers in this Agreement or in the other Transaction Documents.

4.10

Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Warrant Shares pursuant to any exercise of the Warrants.   

4.11

Listing of Common Stock.

  The Company hereby agrees to use best efforts to maintain the listing of the Common Stock on a Trading Market, and as soon as reasonably practicable following the Closing (but not later than the earlier of the Effective Date and the first anniversary of the Closing Date) to list all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application all of the Shares and Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed on such other Trading Market as promptly as possible.  The Company will take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market.

4.12

Equal Treatment of Purchasers.  No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents.  For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended to treat for the Company the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

4.13

Subsequent Equity Sales.  

(a)

From the date hereof until 90 days after the Effective Date, neither the Company nor any Subsidiary shall issue shares of Common Stock or Common Stock Equivalents without the prior written consent of the holders of at least 85% of the ten-outstanding Shares; provided, however, the 90 day period set forth in this Section 4.13 shall be extended for the number of Trading Days during such period in which (i) trading in the Common Stock is suspended by any Trading Market, or (ii) following the Effective Date, the Registration Statement is not effective or the prospectus included in the Registration Statement may not be used by the Purchasers for the resale of the Shares and Warrant Shares.  

24

Exhibit 4.1

(b)

From the date hereof until such time as no Purchaser holds any of the Securities, the Company shall be prohibited from effecting or entering into an agreement to effect any Subsequent Financing involving a “Variable Rate Transaction”.  The term “Variable Rate Transaction” shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive additional shares of Common Stock either (A) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities, or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may sell securities at a future determined price.  Any Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Nothing in this provision is intended or shall be interpreted to preclude the Company from incurring indebtedness with or without a variable interest rate, or to preclude convertible instruments with conventional price-based dilution protections.

(c)

Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.

4.14

Short Sales and Confidentiality After The Date Hereof.  Each Purchaser severally and not jointly with the other Purchasers covenants that neither it nor any affiliates acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period after the Discussion Time and ending at the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4.  Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.4, such Purchaser will maintain, the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).  Each Purchaser understands and acknowledges, severally and not jointly with any other Purchaser, that the Commission currently takes the position that coverage of short sales of shares of the Common Stock “against the box” prior to the Effective Date of the Registration Statement with the Securities is a violation of Section 5 of the Securities Act, as set forth in Item 65, Section 5 under Section A, of the Manual of Publicly Available Telephone Interpretations, dated July 1997, compiled by the Office of Chief Counsel, Division of Corporation Finance.  Notwithstanding the foregoing, no Purchaser makes any representation, warranty or covenant hereby that it will not engage in Short Sales in the securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced as described in Section 4.4.  Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser's assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser's assets, the covenant set forth 

25

Exhibit 4.1

above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.

4.15

Delivery of Securities After Closing.  The Company shall deliver, or cause to be delivered, the respective Securities purchased by each Purchaser to such Purchaser within 3 Trading Days of the Closing Date.

ARTICLE V.

MISCELLANEOUS

5.1

Termination.  This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before October 25, 2005; provided, however, that no such termination will affect the right of any party to sue for any breach by the other party (or parties).

5.2

Fees and Expenses.  Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.  The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities.

5.3

Entire Agreement.  The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

5.4

Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given.  The address for such notices and communications shall be as set forth on the signature pages attached hereto.

5.5

Amendments; Waivers.  No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and each Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waiver is sought.  No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a 

26

Exhibit 4.1

waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner impair the exercise of any such right.

5.6

Headings.  The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.  The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

5.7

Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.  The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser.  Any Purchaser, in compliance with all applicable securities laws and subject to the restrictions set forth in the Transaction Documents, may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions hereof that apply to the “Purchasers”.

5.8

No Third-Party Beneficiaries.  This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9.

5.9

Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof.  Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof.  Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.  The parties hereby waive all rights to a trial by jury.  If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its 

27

Exhibit 4.1

attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

5.10

Survival.  The representations and warranties of the Company and the Purchasers contained in Section 3.1(cc) and Section 3.2 shall survive for the applicable statute of limitations and those contained in Section 3.1, with the exception of Section 3.1(cc), shall survive the execution and delivery hereof and the Closing until the date two (2) years from the Closing Date.

5.11

Execution.  This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

5.12

Severability.  If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

5.13

Rescission and Withdrawal Right.  Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights.

5.14

Replacement of Securities.  If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity, if requested.  The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Securities.

5.15

Remedies.  In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents.  The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

28

Exhibit 4.1

5.16

Payment Set Aside.  To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

5.17

Independent Nature of Purchasers’ Obligations and Rights.  The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance of the obligations of any other Purchaser under any Transaction Document.  Nothing contained herein or in any Transaction Document, and no action taken by any Purchaser pursuant thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents.  Each Purchaser shall be entitled to independently protect and enforce its rights, including without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any proceeding for such purpose.  Each Purchaser has been represented by its own separate legal counsel in their review and negotiation of the Transaction Documents.  For reasons of administrative convenience only, Purchasers and their respective counsel have chosen to communicate with the Company through FW.  FW does not represent the Purchasers but only The Shemano Group, who has acted as placement agent to the transaction.  The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by the Purchasers.

5.18

Liquidated Damages.  The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.

5.19

Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto.

(Signature Pages Follow)

29

Exhibit 4.1

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

	MINES MANAGEMENT, INC.

     /s/ James H. Moore

	 
	By:__________________________________________

     Name:  James H. Moore

     Title:  Chief Financial Officer/Treasurer

	 
	With a copy to (which shall not constitute notice):

	 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

30

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Alexandra Global Master Fund Ltd.

Signature of Authorized Signatory of Purchaser:  /s/ Mikhail Filimonov

Name of Authorized Signatory:  Mikhail Filimonov

Title of Authorized Signatory:  Chairman and Chief Executive Officer

Email Address of Purchaser:  

Address for Notice of Purchaser:

c/o Alexandra Investment Management, LLC

767 Third Avenue, 39th Floor

New York, NY  10017

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $1,500,000.00

Shares:  250,000

Warrant Shares:  125,000

EIN Number:  N/A

[SIGNATURE PAGES CONTINUE]

31

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Whalehaven Capital Fund Limited

Signature of Authorized Signatory of Purchaser:  /s/ Arthur Jones

Name of Authorized Signatory:  Arthur Jones

Title of Authorized Signatory:  Director

Email Address of Purchaser:  eschemenauer@consolidated.bm (Evan Schemenauer)

Address for Notice of Purchaser:

14 Par-La-Ville Road, 3rd Floor

P.O. Box HM 2257

Hamilton 

HM JX

Bermuda

Address for Delivery of Securities for Purchaser (if not same as above):

c/o Research Capital, *DTC #5029

Suite 564, 1055 Dunsmuir St.

Vancouver, BC

V7X 1LA

Canada

Subscription Amount:  $750,000

Shares:  125,000

Warrant Shares:  62,500

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

32

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Iroquois Master Fund Ltd.

Signature of Authorized Signatory of Purchaser:  /s/ Joshua Silver

Name of Authorized Signatory:  Joshua Silver

Title of Authorized Signatory:  Authorized Signatory

Email Address of Purchaser:  jsilver@ICfund.com

Address for Notice of Purchaser:

641 Lexington Avenue, 26th Floor

NY, NY  10022

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $350,000

Shares:  58,333

Warrant Shares:  29,167

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

33

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Omicron Master Trust

Signature of Authorized Signatory of Purchaser:  /s/ Bruce Bernstein

Name of Authorized Signatory:  Bruce Bernstein

Title of Authorized Signatory:  Managing Partner

Email Address of Purchaser:  bb@omicroncapital.com

Address for Notice of Purchaser:

650 Fifth Ave., 24th Fl.

New York, New York  10019

Tel:  212-258-2302

Fax:  212-258-2315

E-mail:  bd@omicroncapital.com

Attn:  Brian Daly

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $250,002

Shares:  41,667

Warrant Shares:  20,834

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

34

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  SDS Capital Group SPC, Ltd.

Signature of Authorized Signatory of Purchaser:  /s/ Scott E. Derby

Name of Authorized Signatory:  Scott E. Derby

Title of Authorized Signatory:  General Counsel

Email Address of Purchaser:  steve@sdscapital.com/murray@sdscapital.com

Address for Notice of Purchaser:

SDS Capital Group SPC, Ltd.

c/o SDS Management, LLC

Attn:  General Counsel

53 Forest Avenue, 2nd Floor

Old Greenwich, CT  06870

Address for Delivery of Securities for Purchaser (if not same as above):

SDS Capital Group SPC, Ltd.

c/o Citigroup Global Markets Inc.

     Equity Prime Broker

Attn:  Freddy Rojas

390 Greenwich, St., 5th Floor

New York, NY  10013

Tel:  (212) 723-4832

Via Trackable Service Please

Subscription Amount:  $300,000

Shares:  50,000

Warrant Shares:  25,000

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

35

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Nite Capital LP

Signature of Authorized Signatory of Purchaser:  /s/ Keith A. Goodman

Name of Authorized Signatory:  Keith A. Goodman

Title of Authorized Signatory:  Manager of the General Partner

Email Address of Purchaser:  keith@nitecapital.com

Address for Notice of Purchaser:

Nite Capital LP

100 East Cook Avenue, Ste. 201

Libertyville, IL  60048

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $600,000

Shares:  100,000

Warrant Shares:  507,000

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

36

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  GSSF Master Fund, LP

Signature of Authorized Signatory of Purchaser:  /s/ E.B. Lyon IV

Name of Authorized Signatory:  E.B. Lyon IV

Title of Authorized Signatory:  Authorized Agent

Email Address of Purchaser:  tim@gryphonlp.com

Address for Notice of Purchaser:

100 Crescent Court, Suite 490

Dallas, Texas  75201

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $600,000

Shares:  100,000

Warrant Shares:  50,000

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

37

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Gryphon Master Fund, L.P.

Signature of Authorized Signatory of Purchaser:  /s/ E.B. Lyon IV

Name of Authorized Signatory:  E.B. Lyon IV

Title of Authorized Signatory:  Authorized Agent

Email Address of Purchaser:  tim@gryphonlp.com

Address for Notice of Purchaser:

100 Crescent Court, Suite 490

Dallas, Texas  75201

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $1,200,000.00

Shares:  200,000

Warrant Shares:  100,000

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

38

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  Cranshire Capital, L.P.

Signature of Authorized Signatory of Purchaser:  /s/ Mitchell D. Kopin

Name of Authorized Signatory:  Mitchell D. Kopin

Title of Authorized Signatory:  President - Downsview Capital, The General Partner

Email Address of Purchaser:  mkopin@cranshireccapital.com

Address for Notice of Purchaser:

666 Dundee Rd, Suite 1901

Northbrook, IL  60062

Address for Delivery of Securities for Purchaser (if not same as above):

Subscription Amount:  $300,000

Shares:  50,000

Warrant Shares:  25,000

EIN Number:  364055954

[SIGNATURE PAGES CONTINUE]

39

Exhibit 4.1

[PURCHASER SIGNATURE PAGES TO MGN SECURITIES PURCHASE AGREEMENT]

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

Name of Purchaser:  DKR Soundshore Oasis Holding Fund Ltd.

Signature of Authorized Signatory of Purchaser:  /s/ Brad Caswell

Name of Authorized Signatory:  Brad Caswell

Title of Authorized Signatory:  Director

Email Address of Purchaser:  rnarasi@dkrcapital.com

Address for Notice of Purchaser:

Mailing Address:

Legal Address:

1281 East Main Street, 3rd Floor

18 Church Street

Stamford, CT  06902Hamilton HM11 Bermuda

Address for Delivery of Securities for Purchaser (if not same as above):

1281 East Main Street, 3rd Floor

Stamford, CT  06902

Subscription Amount:  $250,000

Shares:  41,667

Warrant Shares:  20,833

EIN Number:  [PROVIDE THIS UNDER SEPARATE COVER]

[SIGNATURE PAGES CONTINUE]

40

Exhibit 4.1

MINES MANAGEMENT, INC.

DISCLOSURE SCHEDULES

The section numbers in these Disclosure Schedules correspond to the section numbers in the Securities Purchase Agreement, dated October 21, 2005, by and among Mines Management, Inc. and the purchasers identified on the signature page thereto (the “Agreement”); provided however, that any matter disclosed in one section or subsection of these Schedules shall be deemed disclosed for purposes of and incorporated into the other sections or subsections of these Disclosure Schedules (and shall be deemed disclosed for purposes of the representations and warranties related to such section(s)) where the applicability of such information to such other section(s) is reasonably apparent by cross reference.

41

Exhibit 4.1

Schedule 3.1(a)

Subsidiaries

Newhi, Inc., a Washington corporation

42

Exhibit 4.1

Schedule 3.1(g)

Capitalization

Outstanding Options

1998 Stock Option Plan

	Exercise Price

	Number Outstanding

	Expiration Date

	$0.40

	100,000

	09-15-2007

2003 Stock Option Plan:

	Exercise Price

	Number Outstanding

	Expiration Date

	$1.60

	500,000

	03-04-2008

	$1.85

	210,000

	08-27-2008

	$4.65

	594,500

	05-02-2009

	$3.95

	20,000

	06-21-2009

	$5.71

	250,000

	08-30-2009

	$3.93

	180,000

	01-31-2010

	$4.92

	25,000

	06-05-2010

Service Options granted to Michael Bayback:

	Exercise Price

	Number Outstanding

	Expiration Date

	$4.01

	214,000

	01-28-2007

Outstanding Warrants

Granted in connection with February 2004 private placement:

	Exercise Price

	Number Outstanding

	Expiration Date

	$7.25

	511,000

	02-18-2009

43

Exhibit 4.1

Schedule 3.1(j)

Litigation

Montana Reserves Company v. Noranda Minerals Corp. et al, filed in the Superior Court for the State of Washington in the County of Spokane on August 11, 2005, regarding the net proceeds royalty described herein on Schedule 3.1(n). 

44

Exhibit 4.1

Schedule 3.1(n)

Title to Assets

1.  Net proceeds royalty defined and created by that certain Agreement and Assignment of New Proceeds Royalty, dated May 13, 1993, between Noranda Minerals Corp. and Montana Reserves Company (“MRC”).

2.  Production payments originally payable to Jascan Resources Inc. and Atlantic Goldfields Inc. pursuant to those certain Purchase and Sale Agreements between Jascan and MRC and Atlantic and MRC, dated August 16, 1988, as amended by those certain Amendments to Purchase and Sale Agreement between Jascan and MRC and Atlantic and MRC.  

45

Exhibit 4.1

Schedule 3.1(s)

Certain Fees

Exclusive Finder’s Agreement, dated October 10, 2005, between the Company and The Shemano Group, Inc. and any fee-splitting arrangements between Shemano and any other Person thereunder. 

46

Exhibit 4.1

Schedule 3.1(v)

Registration Rights

Registration Rights Agreement, dated February 3, 2004, among the Company and the purchasers named therein. 

47

Exhibit 4.1

Schedule 3.1(ff)

Accountants

LeMaster & Daniels, PLLC

48

Exhibit 4.1

Schedule 4.7

Use of Proceeds

None. 

49

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