Document:

Exhibit 10.35

 

	
   

  	
  PROMISSORY NOTE

  	
   

  
	
   

  	
  1-28-04

  	
   

  
	
   

  	
  (Date)

  	
   

  

 

FOR VALUE RECEIVED, Acorda
Therapeutics, Inc. an other located at the address stated below (“Maker”) promises, jointly and severally if more than one, to
pay to the order of General Electric Capital Corporation
or any subsequent holder hereof (each, a “Payee”) at its
office located at 83 Wooster Heights Road,
5th Fl. Danbury, CT 06810 or at such other place as Payee or the
holder hereof may designate, the principal sum of Six Million and 00/100
Dollars ($6,000,000.00), with interest on the unpaid principal balance, from
the date hereof through and including the dates of payment, at a fixed interest
rate of Nine and Ninety Three Hundredths percent (9.93%) per annum, to be paid
in lawful money of the United States, in Thirty Six (36) consecutive monthly
installments of principal and interest as follows:

 

	
  Periodic

  	
   

  	
   

  	
   

  
	
  Installment

  	
   

  	
  Amount

  	
   

  
	
  Six (6)

  	
   

  	
  $49,650.03

  	
   

  
	
  Twenty Nine (29)

  	
   

  	
  $226,673.20

  	
   

  

 

each (“Periodic Installment”) and a final installment
which shall be in the amount of the total outstanding principal and interest.
The first Periodic Installment shall be due and payable on 3-1-05 and
the following Periodic Installments and the final installment shall be due and
payable on the same day of each succeeding month (each, a “Payment Date”). Such
installments have been calculated on the basis of a 360 day year of twelve
30-day months. Each payment may, at the option of the Payee, be calculated and
applied on an assumption that such payment would be made on its due date.

 

The acceptance by Payee of any payment which is less
than payment in full of all amounts due and owing at such time shall not
constitute a waiver of Payee’s right to receive payment in full at such time or
at any prior or subsequent time.

 

The Maker hereby expressly authorizes the Payee to
insert the date value is actually given in the blank space on the face hereof
and on all related documents pertaining hereto.

 

This Note may be secured by a security agreement,
chattel mortgage, pledge agreement or like instrument (each of which is
hereinafter called a “Security Agreement”).

 

Time is of the essence hereof. If any installment or
any other sum due under this Note or any Security Agreement is not received
within ten (10) days after its due date, the Maker agrees to pay, in addition
to the amount of each such installment or other sum, a late payment charge of
five percent (5%) of the amount of said installment or other sum, but not
exceeding any lawful maximum. If (i) Maker fails to make payment of any amount
due hereunder within ten (10) days after the same becomes due and payable; or
(ii) Maker is in default under, or fails to perform under any term or condition
contained in any Security Agreement, then the entire principal sum remaining
unpaid, together with all accrued interest thereon and any other sum payable
under this Note or any Security Agreement, at the election of Payee, shall
immediately become due and payable, with interest thereon at the lesser of
eighteen percent (18%) per annum or the highest rate not prohibited by
applicable law from the date of such accelerated maturity until paid (both
before and after any judgment).

 

Maker may prepay in full, but not in part, its entire
indebtedness hereunder upon payment of the entire indebtedness plus an
additional sum as a premium equal to the following percentages of the remaining
principal balance for the indicated period:

 

Prior to the first annual anniversary date of this
note: Not Allowed.

Thereafter and prior to the second annual anniversary
date of this note: Six percent (6%)

Thereafter and prior to the third annual anniversary
date of this note: Five percent (5%)

Plus all other sums due hereunder or under any Security
Agreement

 

It is the intention of the parties hereto to comply
with the applicable usury laws; accordingly, it is agreed that, notwithstanding
any provision to the contrary in this Note or any Security Agreement, in no
event shall this Note or any Security Agreement require the payment or permit
the collection of interest in excess of the maximum amount permitted by
applicable law. If any such excess interest is contracted for, charged or
received under this Note or any Security Agreement, or if all of the principal
balance shall be prepaid, so that under any of such circumstances the amount of
interest contracted for, charged or received under this Note or any Security
Agreement on the principal balance shall exceed the maximum amount of interest
permitted by applicable law, then in such event (a) the provisions of this paragraph
shall govern and control, (b) neither Maker nor any other person or entity now
or hereafter liable for the payment hereof shall be obligated to pay the amount
of such interest to the extent that it is in excess of the maximum amount of
interest permitted by applicable law, (c) any such excess which may have been
collected shall be either applied as a credit against the then unpaid principal
balance or refunded to Maker, at the option of the Payee, and (d) the effective
rate of interest shall be automatically reduced to the maximum lawful contract
rate allowed under

 

 

applicable law as now or hereafter construed by the
courts having jurisdiction thereof. It is further agreed that without
limitation of the foregoing, all calculations of the rate of interest
contracted for, charged or received under this Note or any Security Agreement
which are made for the purpose of determining whether such rate exceeds the
maximum lawful contract rate, shall be made, to the extent permitted by
applicable law, by amortizing, prorating, allocating and spreading in equal
parts during the period of the full stated term of the indebtedness evidenced
hereby, all interest at any time contracted for, charged or received from Maker
or otherwise by Payee in connection with such indebtedness; provided, however,
that if any applicable state law is amended or the law of the United States of
America preempts any applicable state law, so that it becomes lawful for the Payee
to receive a greater interest per annum rate than is presently allowed, the
Maker agrees that, on the effective date of such amendment or preemption, as
the case may be, the lawful maximum hereunder shall be increased to the maximum
interest per annum rate allowed by the amended state law or the law of the
United States of America.

 

The Maker and all sureties, endorsers, guarantors or
any others (each such person, other than the Maker, an “Obligor”)
who may at any time become liable for the payment hereof jointly and severally
consent hereby to any and all extensions of time, renewals, waivers or
modifications of, and all substitutions or releases of, security or of any
party primarily or secondarily liable on this Note or any Security Agreement or
any term and provision of either, which may be made, granted or consented to by
Payee, and agree that suit may be brought and maintained against any one or
more of them, at the election of Payee without joinder of any other as a party
thereto, and that Payee shall not be required first to foreclose, proceed
against, or exhaust any security hereof in order to enforce payment of this
Note. The Maker and each Obligor hereby waives presentment, demand for payment,
notice of nonpayment, protest, notice of protest, notice of dishonor, and all other
notices in connection herewith, as well as filing of suit (if permitted by law)
and diligence in collecting this Note or enforcing any of the security hereof,
and agrees to pay (if permitted by law) all expenses incurred in collection,
including Payee’s actual attorneys’ fees.

 

 

THE MAKER HEREBY UNCONDITIONALLY
WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS NOTE, ANY OF THE RELATED
DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE RELATING TO THE SUBJECT MATTER
OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT
IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE SCOPE OF THIS WAIVER IS INTENDED
TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT
(INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.) THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS
OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION. IN THE
EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY
THE COURT.

 

This Note and any Security Agreement constitute the
entire agreement of the Maker and Payee with respect to the subject matter
hereof and supersedes all prior understandings, agreements and representations,
express or implied.

 

No variation or modification of this Note, or any
waiver of any of its provisions or conditions, shall be valid unless in writing
and signed by an authorized representative of Maker and Payee. Any such waiver,
consent, modification or change shall be effective only in the specific
instance and for the specific purpose given.

 

Any provision in this Note or any Security Agreement
which is in conflict with any statute, law or applicable rule shall be deemed
omitted, modified or altered to conform thereto.

 

	
   

  	
   

  	
  Acorda Therapeutics, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ron Cohen

  
	
  (Witness)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Ron Cohen

  
	
  (Print name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President—CEO

  
	
  (Address)

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Federal Tax ID #:

  	
  13-3831168

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  15 Skyline Dr., Hawthorne,
  Westchester County, NY 10532<Page>

                                                                    CONFIDENTIAL

                                                                   EXHIBIT 10.46

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

                         RESEARCH AND LICENSE AGREEMENT

                                     BETWEEN

                         ANGIOTECH PHARMACEUTICALS, INC.

                                       AND

                            COMBINATORX, INCORPORATED

                              DATED OCTOBER 3, 2005

<Page>

                                                                    CONFIDENTIAL

                                TABLE OF CONTENTS
<Table>
<S>                                                                           <C>
ARTICLE 1 DEFINITIONS..........................................................1
ARTICLE 2 GRANT OF RIGHTS.....................................................19
ARTICLE 3 THE RESEARCH PROJECT................................................23
ARTICLE 4 MANAGEMENT OF THE RESEARCH PROJECT..................................25
ARTICLE 5 REPORTS.............................................................29
ARTICLE 6 COMBINATORX COMPOUNDS...............................................30
ARTICLE 7 LICENSED PRODUCT DEVELOPMENT........................................34
ARTICLE 8 CONSIDERATION.......................................................37
ARTICLE 9 OWNERSHIP OF INTELLECTUAL PROPERTY..................................44
ARTICLE 10 CONFIDENTIALITY AND NON-DISCLOSURE.................................45
ARTICLE 11 REPRESENTATIONS, WARRANTIES AND COVENANTS..........................49
ARTICLE 12 INDEMNITY..........................................................52
ARTICLE 13 MAINTENANCE AND PROSECUTION OF PATENTS.............................55
ARTICLE 14 ENFORCEMENT AND DEFENSE OF PATENTS.................................60
ARTICLE 15 TERM AND TERMINATION...............................................62
ARTICLE 16 DISPUTE RESOLUTION.................................................66
ARTICLE 17 MISCELLANEOUS......................................................67
</Table>

                                       (i)
<Page>

                                                                    CONFIDENTIAL

                         RESEARCH AND LICENSE AGREEMENT

     This Research and License Agreement (the "Agreement") is dated as of
October3, 2005 (the "Effective Date") and is between ANGIOTECH PHARMACEUTICALS,
INC., a company organized and existing under the laws of British Columbia,
Canada, with an office at 1618 Station Street, Vancouver, BC, Canada V6A 1B6
("Angiotech"), and COMBINATORX, INCORPORATED, a company organized and existing
under the laws of Delaware, with an office at 650 Albany Street, Boston, MA
02118 ("CombinatoRx"). Each of Angiotech and CombinatoRx are sometimes referred
to herein as a "Party" and together as the "Parties."

                                    RECITALS

  (A)CombinatoRx has specialized experience in screening known drugs and other
     compounds to identify those with desired attributes, either alone or in
     synergistic combination with one or more other known drugs or other
     compounds;

  (B)Angiotech desires to conduct a research project with CombinatoRx to attempt
     to identify drugs and/or drug combinations useful to Angiotech; and

  (C)Angiotech also desires to obtain a license to other drugs and/or drug
     combinations already known to CombinatoRx or subsequently discovered by
     CombinatoRx as a result of CombinatoRx's own internal programs, for use in
     certain of Angiotech's product development programs.

                                    AGREEMENT

     NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, hereby agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

Unless otherwise specifically provided herein, the following terms, when used
with a capital letter at the beginning, shall have the following meanings:

     1.1     "AAA" has the meaning set forth in Section 16.2.

     1.2     "ABDOMINAL CONDITIONS" means Conditions of the region between the
chest and pelvis bounded by and including the abdominal muscle, the bones of the
hip girdle, the sacrum, the diaphragm and the musculature of the lower back and
containing the digestive organs (including the stomach, liver, gallbladder,
small intestine, large intestine, kidneys, rectum, bladder), the spleen, and
female reproductive organs (including the ovaries, uterus, fallopian tubes, and
vagina).

     1.3     "ACCESS" means, with respect to the Chalice Database, that
Angiotech receives the following: (i) a list of all Combination High Throughput
Screens performed by CombinatoRx as a part of the Chalice Database with the CHTS
Parameters used in each such Combination High Throughput Screens, excluding
Combination High Throughput Screens performed by CombinatoRx in connection with
any Third Party Agreement except to the

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.
                                        1
<Page>

                                                                    CONFIDENTIAL

extent that the result of any such Combination High Throughput Screens are
included in the Chalice Database under the terms of this Agreement and (ii) the
results of such Combination High Throughput Screens. For the avoidance of doubt,
activities in connection with providing Angiotech with Access to the Chalice
Database shall not be considered activities comprising a part of the Research
Program, notwithstanding that these activities will be performed by members of
the CombinatoRx Project Team.

     1.4     "ACTIVE INGREDIENT" means any component of a drug product intended
to furnish pharmacological activity or other direct effect in the Treatment of
disease, or to affect the structure or any function of the body of humans or
other animals. Active ingredients include those components of the product that
may undergo chemical change during the manufacture of the drug product and be
present in the drug product in a modified form intended to furnish the specified
activity or effect.

     1.5     "AFFILIATE" means, with respect to a Person, any other Person that
controls, is controlled by or is under common control with, such first Person.
For purposes of this definition only, "control" means (a) to possess, directly
or indirectly, the power to direct the management or policies of a Person,
whether through ownership of voting securities, by contract relating to voting
rights or corporate governance or otherwise, or (b) to own, directly or
indirectly, more than fifty percent (50%) of the outstanding voting securities
or other voting ownership interest of such Person or such lesser maximum
ownership percentage permitted in those jurisdictions restricting foreign
ownership.

     1.6     "ALIMENTARY DEVICE" means a Therapeutic Device or Delivery Device
used for the Treatment of Conditions of the Alimentary Canal in humans or
animals, excluding Therapeutic Devices used as tissue bulking or filling agents
for (i) urinary and fecal incontinence and (ii) Treatments for gastric
esophogeal reflux disease, where the Alimentary Canal means the passage along
which food passes for digestion, also known as the gastrointestinal tract. The
Alimentary Canal begins immediately behind the lips and ends at the anus. It
includes the mouth (including all mucosal tissues in the oral cavity, the gums,
the teeth, the tongue and the salivary glands), throat, esophagus, stomach,
small intestine and large intestine. For the avoidance of doubt, the Alimentary
Canal does not include the urinary tract.

     1.7     "ALIMENTARY LOCAL THERAPY" means all uses or applications of a
Compound, where the Compound is applied inside the lumen of the Alimentary Canal
for the Treatment of a Condition of the Alimentary Canal or local manifestation
within the Alimentary Canal of a systemic Condition, where the Alimentary Canal
means the passage along which food passes for digestion, also known as the
gastrointestinal tract. The Alimentary Canal begins immediately behind the lips
and ends at the anus. It includes the mouth (including all mucosal tissues in
the oral cavity, the gums, the teeth, the tongue and the salivary glands),
throat, esophagus, stomach, small intestine and large intestine. For the
avoidance of doubt, the Alimentary Canal does not include the urinary tract. For
the avoidance of doubt, Alimentary Local Therapy includes [**].

     1.8     "APPLICABLE LAW" means the laws, rules and regulations, including
any rules, regulations, guidelines or other requirements of Regulatory
Authorities, in effect from time to time within the Territory, as applicable.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                        2
<Page>

                                                                    CONFIDENTIAL

     1.9     "ANGIOTECH BACKGROUND TECHNOLOGY" means (a) any Information,
discovery, invention, assay, products, polymers, drugs (alone or in combination
with other drugs or Active Ingredients), drug-loaded polymers, cultures,
biological materials, devices, drug-device combinations and other materials and
compositions (including Shared Materials provided by or on behalf of Angiotech
to CombinatoRx hereunder), Controlled by Angiotech or its Affiliates as of the
Effective Date or during the Research Period, (b) Improvements made to any of
the foregoing by or on behalf of Angiotech and its Affiliates and/or by or on
behalf of CombinatoRx and its Affiliates at any time, but excluding Angiotech
Research Project Technology; and (c) IP Protection Rights pertaining to any of
the foregoing.

     1.10    "ANGIOTECH COMPOUND" means any Compound Controlled by Angiotech or
its Affiliates as of the Effective Date or during the Research Period or one (1)
year following expiration of the Research Period that Angiotech requests to be
included in the activities under the Research Program and such activities are
commenced. For the avoidance of doubt, any Compound in-licensed or otherwise
acquired by Angiotech or its Affiliates after the Effective Date is not an
Angiotech Compound unless it becomes subject to activities under the Research
Program.

     1.11    "ANGIOTECH DRUG DEVICE FIELD" means the Drug-Device Field,
excluding the CombinatoRx Drug Device Field.

     1.12    "ANGIOTECH EVALUATION IMPROVEMENT" means any Improvement to a
CombinatoRx Compound that is conceived at any time during the Research Period or
for one year following the expiration or termination of the Research Period by
or on behalf of Angiotech or its Affiliate(s) or any Person or Sublicensee
acting on their behalf prior to such CombinatoRx Compound being selected as a
Selected Compound, as well as any Information arising out of Access to the
Chalice Database and related to a CombinatoRx Compound that is conceived or
discovered by or on behalf of Angiotech and its Affiliates prior to such
CombinatoRx Compound being selected as a Selected Compound to the extent that
such Information relates to combinations of Compounds for which Combination High
Throughput Screens had not already been performed and the results from such
screens had not been included in the Chalice Database.

     1.13    "ANGIOTECH FIELD" means the following:

             1.13.1  With respect to the Exploitation of Licensed Products in
which any Compound contained in such Licensed Product is a Selected Compound,
(i) the Angiotech Local Therapy Field and (ii) the Angiotech Drug Device Field,
and

             1.13.2  With respect to the Exploitation of all Licensed Products
not described in Section 1.13.1, (i) all Local Therapy, except for the
Alimentary Local Therapy, Dermatological Local Therapy and Respiratory Local
Therapy and (ii) the Drug-Device Field, except for Dermatological Devices.

             1.13.3  In addition to the foregoing, with respect to the
Exploitation of all Licensed Products, (i) Treatment of adhesions, fibrosis,
scarring and/or contractures, including encapsulation, with a biomaterial in
connection with a surgical procedure (whether open or minimally invasive)
wherever found in or on the body; (ii) Treatment of residual cancer cells
remaining following a surgical procedure (whether open or minimally invasive) to
remove a tumor or cancer wherever found in or on the body where such Treatment
is in

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                        3
<Page>

                                                                    CONFIDENTIAL

connection with and in proximity to the site of the surgical procedure; (iii)
hemostasis everywhere in or on the body where the Treatment is in proximity to
the site of the bleeding; and (iv) wound closure, wound healing, wound sealing
or dermal filling (which, in the case of Dermatological Conditions only, is
effected only through the use of a Therapeutic Device) in connection with any
Condition wherever found in or on the body.

     1.14    "ANGIOTECH LICENSED IMPROVEMENT" means any Improvement (i) to the
structure of a Licensed Compound, including modifications made through medicinal
chemistry, (ii) to the dosage, dose-ratio or temporal administration of a
Licensed Compound comprised of two or more Active Ingredients, (iii) consisting
of new indications or routes of administration for a Licensed Compound, (iv) to
the definition of the chemical class of the Licensed Compound through
structure-activity relationship analysis or mechanism-activity relationship
analysis, or (v) otherwise to a Licensed Compound that is disclosed by Angiotech
to CombinatoRx for the purpose of granting a license hereunder (which disclosure
includes the conditions of such license) and is accepted by CombinatoRx for such
license, in all of the foregoing cases that is conceived by or on behalf of
Angiotech or its Affiliate(s) during the Term, excluding Angiotech Evaluation
Improvements.

     1.15    "ANGIOTECH LOCAL THERAPY FIELD" means uses or applications of a
Compound, where the Compound is applied in proximity to the site of a local
Condition or to the site of a local manifestation of a systemic Condition for
the Treatment of a Condition in the following areas:

  1. Vasculature Conditions;
  2. Peripheral Nerve Conditions;
  3. Musculoskeletal Conditions;
  4. Abdominal Conditions; or
  5. Thoracic Conditions.

Clauses 1 - 5 above shall not include the CombinatoRx Local Field.

For the avoidance of doubt, the treatment by CombinatoRx of any Condition
included in the CombinatoRx Local Field in a manner that affects the
vasculature, but not intended to treat a Vasculature Condition, shall not be
prohibited by this Section.

     1.16    "ANGIOTECH PRINCIPAL SCIENTIST" means the principal scientist
designated by Angiotech from time to time to be responsible for all Research
Project activities undertaken by Angiotech and serving as the primary contact
for CombinatoRx on all matters related to the Research Project. The initial
Angiotech Principal Scientist is Philip Toleikis, VP Pharmacology and Drug
Screening.

     1.17    "ANGIOTECH RESEARCH PROJECT TECHNOLOGY" means any Improvement
(i) to the structure of an Angiotech Compound, including modifications made
through medicinal chemistry, (ii) to the dosage, dose-ratio or temporal
administration of an Angiotech Compound comprised of two or more Active
Ingredients, (iii) consisting of new indications or routes of administration for
an Angiotech Compound, (iv) to the definition of the chemical class of the
Angiotech Compound through structure-activity relationship analysis or
mechanism-activity relationship analysis, or (v) otherwise to an Angiotech
Compound , in each of the foregoing cases made, developed or conceived as a part
of the Research Project and (b) IP Protection Rights pertaining to any of the
foregoing.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                        4
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                                                                    CONFIDENTIAL

     1.18    "BACK-UP COMPOUND" means, with respect to a Licensed Compound that
is a combination of two or more different Compounds, a Compound that (i) is a
combination of two or more different Compounds, (ii) has one Compound as a
constituent component that is in the same Compound Class as one of the Compounds
in such Licensed Compound (such common Compound Class, the "ANCHOR CLASS") and
(iii) is reasonably intended by Angiotech for use as a back-up product to
replace a Licensed Product that may fail in development. In addition to the
foregoing, if the Licensed Compound to which the Back-Up Compound relates is a
CombinatoRx Compound for which CombinatoRx has initiated IN VIVO or clinical
development or is a Fast Track Compound, then the Licensed Compound and all
Back-Up Compounds to such Licensed Compound must share Compounds in the same
Anchor Class. In the event that a Licensed Compound consists of a single
Compound, then the Back-Up Compound may be a Compound that is not in the same
Compound Class as the Licensed Compound.

     1.19    "BASELINE CALENDAR QUARTER" means, with respect to a given country
in the Territory, the Calendar Quarter immediately prior to the Calendar Quarter
in which the first commercial sale of a Generic Competing Product occurs in such
country.

     1.20    "BREACHING PARTY" has the meaning set forth in Section 15.4.

     1.21    "CALENDAR QUARTER" means each successive period of three (3)
calendar months commencing on January 1, April 1, July 1 and October 1.

     1.22    "CALENDAR YEAR" means each successive period of twelve (12)
calendar months commencing on January 1.

     1.23    "CHALICE DATABASE" means CombinatoRx's proprietary database
containing data related to Compounds (including, without limitation, CombinatoRx
Compounds) screened by or on behalf of CombinatoRx, including the results of
such screens, as such database exists on the Effective Date and thereafter
during the Research Period, excluding any Information in such database resulting
from any Third Party Agreement. Notwithstanding the foregoing, Information in
such database resulting from Third Party Agreements shall be included in the
Chalice Database if the following conditions are met: (i) CombinatoRx Controls
the Information from any such Third Party Agreement, (ii) Angiotech notifies
CombinatoRx that it desires to have such Information from such Third Party
Agreement included in the Chalice Database and (iii) Angiotech agrees to comply
with all terms and assume all obligations of CombinatoRx related to such
Information.

     1.24    "CHALICE EVALUATION PERIOD" means the period commencing on the date
that Angiotech effectively obtains Access to the Chalice Database and ending six
(6) months thereafter.

     1.25    "CHANGE OF CONTROL" with respect to Angiotech or CombinatoRx (the
"SUBJECT PARTY") means:

             (a)     any Person, or any Persons acting jointly or in concert (as
                     determined in accordance with the SECURITIES ACT (British
                     Columbia) with respect to securities of Angiotech, or in
                     accordance with the securities laws of the United States
                     with respect to securities of CombinatoRx), whether
                     directly or indirectly, acquire voting securities of the
                     Subject Party

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                        5
<Page>

                                                                    CONFIDENTIAL

                     which, together with all other voting securities of the
                     Subject Party held by such Person or Persons, constitutes,
                     in the aggregate, more than 20% of all outstanding voting
                     securities of the Subject Party;

             (b)     an amalgamation, arrangement or other form of business
                     combination of the Subject Party with another corporation
                     or corporations is completed with the result that the
                     holders of voting securities of the Subject Party do not
                     beneficially own, in the aggregate, 50% or more of the
                     outstanding voting securities of the surviving or resulting
                     entity;

             (c)     a sale, disposition or other transfer by the Subject Party
                     of all or substantially all of its assets; or

             the Board of Directors of the Subject Party, in its discretion by
             resolution duly adopted by the affirmative vote of a simple
             majority of the votes cast by the Board of Directors of the Subject
             Party, determines that for purposes of this Agreement, a Change of
             Control has occurred or is about to occur.

     1.26    "COMBINATION HIGH THROUGHPUT SCREENS" means a screen performed by
CombinatoRx using an assay which includes the following elements: (i) a
specified cell type, (ii) a specified endpoint and (iii) specified
stimulus/conditions (such specific elements referred to herein as the "CHTS
PARAMETERS").

     1.27    "COMBINATORX BACKGROUND TECHNOLOGY" means (a) CombinatoRx's drug
discovery technology (including CombinatoRx's Combination High Throughput Screen
platform) and any Information related thereto Controlled by CombinatoRx or its
Affiliates as of the Effective Date or during the Research Period; (b)
Improvements made to CombinatoRx's drug discovery technology by or on behalf of
CombinatoRx and its Affiliates and/or by or on behalf of Angiotech and its
Affiliates; (c) the Chalice Database and any other discovery, invention, assay,
products, cultures, biological materials, drug-device combinations and other
materials and compositions (including Shared Materials provided by or on behalf
of CombinatoRx to Angiotech hereunder), Controlled by CombinatoRx or its
Affiliates as of the Effective Date or thereafter, (d) any Information related
to a CombinatoRx Compound that is conceived or developed by or on behalf of
CombinatoRx and its Affiliates outside of the Research Program; and (e) IP
Protection Rights pertaining to any of the foregoing. For the avoidance of
doubt, CombinatoRx Background Technology expressly includes Research Results to
the extent that such Research Results were a part of the CombinatoRx Background
Technology prior to the time that they are also arrived at through the Research
Project.

     1.28    "COMBINATORX COMPOUND" means any Compound Controlled by CombinatoRx
demonstrating activity in an assay conducted by or on behalf of CombinatoRx
prior to the Effective Date or during the Research Period outside the Research
Plan, excluding any such Compound for which such activity was demonstrated
pursuant to any Third Party Agreement other than such Compounds from Third Party
Agreements which are included in the Chalice Database pursuant to the terms
hereof, where "activity" means demonstrating a concentration-dependent level of
activity or level of activity that differs from untreated background activity.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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     1.29    "COMBINATORX DRUG DEVICE FIELD" means all uses of Alimentary
Devices (except Alimentary Devices that are stents, conduits, grommets and other
interchangeable implants used orimplanted inside the Alimentary Canal and any
Alimentary Device used for the treatment of diverticula or diverticulitis),
Respiratory Devices (except Respiratory Devices that are respiratory stents,
grommets, conduits and other interchangeable implants), Neurodegenerative
Devices, Ophthalmic Devices and Dermatological Devices.

     1.30    "COMBINATORX FIELD" means all fields except the Angiotech Field.

     1.31    "COMBINATORX LICENSED IMPROVEMENT" means any Improvement (i) to the
structure of a Licensed Compound, including modifications made through medicinal
chemistry, (ii) to the dosage, dose-ratio or temporal administration of a
Licensed Compound comprised of two or more Active Ingredients, (iii) consisting
of new indications or routes of administration for a Licensed Compound, (iv) to
the definition of the chemical class of the Licensed Compound through
structure-activity relationship analysis or mechanism-activity relationship
analysis, or (v) otherwise to a Licensed Compound that is disclosed by
CombinatoRx to Angiotech for the purpose of granting a license hereunder (which
disclosure includes the conditions of such license) and is accepted by Angiotech
for such license, in all of the foregoing cases that is conceived by or on
behalf of CombinatoRx or its Affiliate(s) during the Term.

     1.32    "COMBINATORX LOCAL FIELD" means Alimentary Local Therapy,
Respiratory Local Therapy, Neurodegenerative Local Therapy, Ophthalmic Local
Therapy and Dermatological Local Therapy.

     1.33    "COMBINATORX PRINCIPAL SCIENTIST" means the principal scientist
designated by CombinatoRx from time to time to be responsible for all Research
Project activities undertaken by CombinatoRx and serving as the primary contact
for Angiotech on all matters related to the Research Project. The initial
CombinatoRx Principal Scientist is Curtis Keith, SVP Research.

     1.34    "COMBINATORX PROJECT TEAM" means the team of ten (10) CombinatoRx
FTEs who shall perform the following activities: (i) performing CombinatoRx's
obligations under the Research Plan, (ii) facilitating Access to the Chalice
Database, (iii) coordinating intellectual property matters under this Agreement
and (iv) managing the business and scientific aspects of the overall alliance
between the Parties. All of CombinatoRx's activities under this Agreement shall
be performed by the CombinatoRx Project Team.

     1.35    "COMMERCIALLY REASONABLE EFFORTS" means, with respect to the
research, development, Manufacture or commercialization of a Licensed Product,
as the case may be, efforts and resources commonly used in the research-based
pharmaceutical industry for or products with similar commercial and scientific
potential at a similar stage in their lifecycle, taking into consideration their
safety and efficacy, their cost to develop, the competitiveness of alternative
products, the anticipated or actual nature and extent of their market
exclusivity (including Patent coverage and regulatory exclusivity), the
likelihood of regulatory approval, and their estimated profitability, including
the amounts of marketing and promotional expenditures and all other relevant
factors.

     1.36    "COMPLAINING PARTY" has the meaning set forth in Section 15.4.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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     1.37    "COMPOUND" means a single Active Ingredient or a combination of two
or more Active Ingredients together with pro-drugs, metabolites, racimers,
isomers, enantiomers, salts, esters, free-base, free-acid and optically active
forms of any of the foregoing.

     1.38    "COMPOUND CLASS" means the class of Compounds associated with a
particular CombinatoRx Compound selected by Angiotech pursuant to Section 6.4.1,
determined in accordance with Section 6.4.2.

     1.39    "CONDITION" shall mean any malady, disease, syndrome, trauma,
injury or condition.

     1.40    "CONFIDENTIAL INFORMATION" has the meaning set forth in Section
10.1.1.

     1.41    "CONTROL" means, with respect to any item, Compound, Information,
Patent or IP Protection Right, possession of the right, whether directly or
indirectly, and whether by ownership, license or otherwise, to assign, or grant
a license, sublicense or other right to or under, such item, Compound,
Information, Patent or IP Protection Right and has the right to disclose such
item, Compound, Information, Patent or IP Protection Right as provided for
herein without violating the terms of any agreement with a Third Party, except
to the extent that any of the foregoing rights arise by virtue of the grant of
rights under this Agreement.

     1.42    "CUMULATIVE REVENUE" means the cumulative Revenue during the term
of this Agreement attributable to Licensed Products containing a given Compound
in all countries of the Territory, except that in the event that Angiotech
develops a Licensed Product of which all Compounds included in such Licensed
Product are from the same Compound Class as the Compounds included in a Licensed
Product for which Angiotech had previously paid any milestones under Section
8.1.3, and the Licensed Product being developed by Angiotech is being developed
using substantially the same type of device, type of formulation or mode of
administration and is being developed for the same Condition as the prior
Licensed Product (E.G., where the previous Licensed Compound and the subsequent
Licensed Compound are both eluted from a stent to Treat restenosis), Revenue
attributable to such subsequent Licensed Product shall be cumulated with the
Revenue for the previous Licensed Product (along with all Revenue attributable
to Licensed Products containing the same Compound as the previous Licensed
Product).

     1.43    "DELIVERY DEVICE" means any object or material (including polymers)
that acts through mechanical, structural, electrical, ultrasonic, thermal or
radiological means, independent of any Compound and that is primarily used for
the administration of pharmaceuticals, blood, nutritional fluids or other
substances.

     1.44    "DERMATOLOGICAL DEVICE" means a Therapeutic Device or Delivery
Device used for the Treatment of Conditions of the Skin in humans or animals,
where the Skin means the three layers of the skin: the epidermis, the dermis,
and the subcutaneous tissue (fat). For the avoidance of doubt, Conditions of the
Skin include but are not limited to [**].

     1.45    "DERMATOLOGICAL LOCAL THERAPY" means all uses or applications of a
Compound, where the Compound is applied in proximity to the site of a local
Conditions of the Skin or to the site of a local manifestation of a systemic
Condition of the Skin for the Treatment of such Condition but excluding uses and
applications for wound closure, wound

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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healing, wound sealing or dermal filling, where the Skin means the three layers
of the skin: the epidermis, the dermis, and the subcutaneous tissue (fat). For
the avoidance of doubt, Conditions of the Skin include but are not limited to
inflammatory Conditions, proliferative Conditions, infectious Conditions,
endocrine Conditions, metabolic Conditions, macrophage/monocyte disorders, and
diseases of the sub-cutaneous fat.

     1.46    "DEVICE" means all Therapeutic Devices and Delivery Devices.

     1.47    "DISCLOSING PARTY" has the meaning set forth in Section 10.1.1.

     1.48    "DISTRIBUTOR" has the meaning set forth in Section 2.4.

     1.49    "DOLLARS" means the lawful currency of the United States of
America.

     1.50    "DRUG-DEVICE FIELD" means any combination of a Device with one or
more Compounds, where, (i) if such Device is a Therapeutic Device, such
combination is designed to induce a Therapeutic and/or cosmetic effect, or
provides a Therapeutic and/or cosmetic benefit through providing an additional
or complementary Therapeutic and/or cosmetic benefit (in addition to the benefit
derived from placement of the Therapeutic Device) or, (ii) if such Device is a
Delivery Device, such combination is applied in proximity to the site of a local
Condition or in proximity to the site of a local manifestation of a systemic
Condition for the Treatment of such Condition, and (iii) for all Devices, such
combination provides a benefit through reducing or eliminating potential device
or procedure-related side effects, or reducing or eliminating device or
procedure failure rates local to the anatomical site of the device.

     1.51    "EXPLOIT," "EXPLOITING" or "EXPLOITATION" means to make, use, offer
for sale, sell and import, including, without limitation, to research, develop,
formulate, modify, enhance, improve, optimize, Manufacture, hold/keep for
inventory, formulate, lease, rent, distribute, promote, market, export, or
otherwise make available or deal in respect of, a product or process, or have an
Affiliate or Third Party do any of the foregoing on behalf of a Party.

     1.52    "FAST TRACK COMPOUND" means a CombinatoRx Compound designated for
expedited review and decision as to whether such CombinatoRx Compound will
become a Selected Compound pursuant to Article 6.

     1.53    "FAST TRACK EVALUATION PERIOD" has the meaning set forth in Section
6.2.2.

     1.54    "FDA" means the United States Food and Drug Administration and any
successor agency thereto.

     1.55    "FIRST COMMERCIAL SALE" means the first sale for monetary value for
use or consumption by a member of the general public of a Licensed Product in a
country in the Territory after receipt of all Regulatory Approvals for the sale
of such Licensed Product has been obtained in such country. For the avoidance of
doubt, sales prior to receipt of all Regulatory Approvals, such as so-called
"treatment IND sales," "named patient sales" and "compassionate use sales,"
shall not be construed as a First Commercial Sale.

     1.56    "FTE" means the equivalent of one (1) researcher holding at least a
relevant Bachelor of Science degree or a similarly qualified employee of
CombinatoRx having the

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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requisite skills to fulfill CombinatoRx's obligations under this Agreement and
devoting the equivalent hours of a full time employee. For purposes of this
Agreement, "full time" means one thousand eight hundred forty (1,840) hours per
Calendar Year.

     1.57    "GENERIC COMPETING PRODUCT" has the meaning set forth in Section
8.4.1.

     1.58    "HEADS" has the meaning set forth in Section 16.1.

     1.59    "HIT COMPOUND" means any Compound demonstrating activity in an
assay conducted by or on behalf of CombinatoRx pursuant to the Research Plan
where (i) such Compound has not prior to such time been identified as a
CombinatoRx Compound, and (ii) such activity meets any applicable minimum
threshold set therefor by Angiotech in the Research Plan, all of which Compounds
shall be presented to Angiotech along with all available data promptly after
identification, as well as all Compounds included in the Compound Class
determined for such Compound pursuant to Section 4.1.2.

     1.60    "IMPROVEMENTS" means patentable or material non-patentable
improvements, variations, updates, adaptations, modifications or upgrades or
enhancements.

     1.61    "INDEMNIFICATION CLAIM NOTICE" has the meaning set forth in Section
12.3.

     1.62    "INDEMNIFIED PARTY" means a Party seeking to recover a Loss under
Section 12.1 or 12.2.

     1.63    "INDEMNIFYING PARTY" means a Party from whom recovery of a Loss is
sought under Section 12.1 or 12.2.

     1.64    "INDEMNITEE" has the meaning set forth in Section 12.3.

     1.65    "INDIRECT TAXES" means value added taxes, sales taxes, consumption
taxes and other similar taxes.

     1.66    "INFORMATION" means all technical, scientific and other know-how
and information, trade secrets, knowledge, technology, means, methods,
processes, principles, practices, formulae, instructions, documentation, skills,
techniques, procedures, experiences, ideas, inventions, discoveries, technical
assistance, designs, drawings, reports, procedures, computer programs,
apparatuses, specifications, data, results and other information and material,
including without limitation: the process and results of high-throughput
screening and any other drug discovery and development technology; biological,
chemical, pharmacological, toxicological, pharmaceutical, physical and
analytical, pre-clinical, clinical, safety, manufacturing and quality control
data and information, including study designs and protocols; assays and
biological methodology; Manufacturing and quality control procedures and data,
including test procedures; and synthesis, purification and isolation techniques,
(whether or not confidential, proprietary, patented or patentable) in written,
electronic or any other form now known or hereafter developed.

     1.67    "IP PROTECTION RIGHTS" means any and all legal means of
establishing rights in and to ideas, inventions, discoveries, know-how, data,
databases, documentation, reports, materials, writings, designs, computer
software, processes, principles, methods, techniques and other information,
including, without limitation, Patents, trademarks, service marks, trade names,
registered designs, design rights, copyrights (including rights in computer
software

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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and database rights) and any rights or property similar to any of the foregoing
in any part of the world, whether registered or not, together with the right to
apply for the registration of any such rights.

     1.68    "JOINT PATENT RIGHTS" means those Patents covering inventions
described in U.S. patent applications prepared jointly by CombinatoRx and
Angiotech prior to the Effective Date in the form actually filed by the Parties.

     1.69    "KNOWLEDGE" means a Party's and its Affiliates' understanding in
good faith of the relevant facts and information resulting from the reasonable
conduct of its business affairs, but without the requirement of performing an
investigation with respect to any such facts and information.

     1.70    "LICENSED COMPOUNDS" means all Selected Compounds and all Hit
Compounds. In the event that a Compound is identified as a CombinatoRx Compound
at the time that Research Results regarding such Compound are made under the
Research Project, then such Compound shall be automatically considered a
Licensed Compound (and shall be deemed to be a Selected Compound for purposes of
Sections 7.2 and 6.1.3) without the need for Angiotech to select such Compound
under Section 6.4.1; provided that, if CombinatoRx is, at such time, conducting
(or has conducted) secondary screens with respect to such Compound or is at any
later stage of development following such secondary screens or such Compound is
novel and has been synthesized for further research or development, then such
Compound shall not be a Licensed Compound unless Angiotech selects such Compound
under Section 6.4.1.

     1.71    "LICENSED INFORMATION" means Information which is Controlled by
CombinatoRx or its Affiliates as of the Effective Date or thereafter during the
Research Period and which is necessary or useful for the evaluation of
CombinatoRx Compounds (including Fast Track Compounds and Protected Compounds)
or Exploitation of the Licensed Compounds or the Licensed Products, but
excluding any Information to the extent covered by a Valid Claim within the
Licensed Patents.

     1.72    "LICENSED PATENTS" means all Patents anywhere in the world covering
or directed to the composition, Manufacture, or use of CombinatoRx Compounds
(with respect only to Sections 2.1(a) and (b)), Licensed Compounds (alone or in
combination with other compounds or substances and/or in combination with
therapeutic devices) and/or Licensed Products, having any application within the
Angiotech Field, in all such cases Controlled by CombinatoRx and/or its
Affiliates as of or after the Effective Date, including, without limitation, any
Patents claiming any CombinatoRx Licensed Improvements.

     1.73    "LICENSED PRODUCTS" means products in final forms suitable for
human or veterinary uses that:

             (a)     contain (i) a Licensed Compound, or (ii) an Angiotech
                     Compound (in each such case, regardless of formulation,
                     mode of administration, concentration or ratio), and
                     either:

                     a.  Patent Coverage exists in the country where it is made,
                         used or sold; or

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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                     b.  such products incorporate or were developed or are
                         manufactured using Licensed Information and/or Research
                         Results and/or Angiotech Research Project Technology
                         and/or CombinatoRx Licensed Improvement and/or
                         Angiotech Evaluation Improvements and/or Angiotech
                         Licensed Improvements and/or Research Improvements to
                         the extent that such Angiotech Licensed Improvements or
                         Research Improvements are conceived or discovered
                         during the Research Period or for one (1) year
                         following the expiration or termination of the Research
                         Period (or, for CombinatoRx Compounds selected during
                         the last 12 months of the Research Period, Angiotech
                         Licensed Improvements conceived or discovered during
                         the Research Period or for two (2) years following the
                         expiration or termination of the Research Period); or

             (b)     contain a combination of two or more Compounds and such
                     combination was first conceived or discovered by Angiotech
                     and/or its Affiliates at any time during the Research
                     Period or for one (1) year following the expiration or
                     termination of the Research Period (excluding any such
                     Compounds that are in-licensed or acquired) that does not
                     become subject to activities under the Research Program
                     (such Licensed Product, an "DERIVATIVE LICENSED PRODUCT").

     1.74    "LOCAL THERAPY" means all uses or applications of a Compound,
except through a Delivery Device, where the Compound is applied in proximity to
the site of a local Condition or in proximity to the site of a local
manifestation of a systemic Condition for the Treatment of such Condition.

     1.75    "LOCAL THERAPEUTIC COMPANY" means a Person engaged in the business
of Exploiting products for human or veterinary uses for which all or a
substantial portion of the activities of such Person are within the Angiotech
Field.

     1.76    "LOSSES" means any and all direct liability, damage, loss or
expense, including interest, penalties and lawyers' fees and disbursements. In
calculating Losses, the duty to mitigate on the part of the Party suffering the
Loss shall be taken into account.

     1.77    "MAJOR MARKET" means (a) the United States, (b) any one of the
United Kingdom, France, Germany, Spain and Italy or (c) Japan.

     1.78    "MANUFACTURE" and "MANUFACTURING" means, with respect to a product
or compound, the synthesis, manufacturing, processing, formulating, compounding,
filling, finishing, packaging, labeling, holding and quality control testing of
such product or compound.

     1.79    "MUSCOLOSKELETAL CONDITIONS" means Conditions of the muscles,
bones, joints (including the intervertebral discs), ligaments, tendons,
cartilage and fascia of the body.

     1.80    "NET SALES" means the gross invoiced amount on sales of the
Licensed Compounds or Licensed Products by Angiotech and its Affiliates to Third
Parties (including

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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Distributors, but excluding Sublicensees) less the total of following deductions
to the extent actually incurred:

             (a)     normal and customary trade, quantity and prompt settlement
                     discounts (including chargebacks and allowances) actually
                     allowed and not otherwise deducted from the amount
                     invoiced;

             (b)     amounts repaid or credited by reason of rejection, returns
                     or recalls of goods, rebates, bona fide price reductions
                     and amounts written off by reason of uncollectible debt, in
                     all cases as determined by Angiotech or its Affiliates in
                     good faith;

             (c)     rebates and similar payments made with respect to sales
                     paid for by any governmental or Regulatory Authority such
                     as, by way of illustration and not in limitation of the
                     Parties' rights hereunder, federal or state Medicaid,
                     Medicare or similar state program in the United States or
                     equivalent governmental program in any other country;

             (d)     excise taxes, Indirect Taxes, customs duties, customs
                     levies and import fees imposed on the sale, importation,
                     use and/or distribution of the Licensed Compounds or
                     Licensed Products actually invoiced;

             (e)     reasonable and customary transportation costs, distribution
                     expenses, special packaging and related insurance charges
                     actually invoiced, excluding commissions and fees paid to
                     Third Party distributors; and

             (f)     any other similar deductions that are actually credited to
                     the customer and are consistent with generally accepted
                     accounting principles, or in the case of non-United States
                     sales, other applicable accounting standards.

         In the case of any other sale or other disposal for value, such as
         barter or counter-trade, of any Licensed Compound or Licensed Product,
         or part thereof, Net Sales shall be calculated as above on the fair
         market value of the consideration given. In the case of any sale which
         is not invoiced or is delivered before invoice, Net Sales shall be
         calculated as of time of shipment. Net Sales shall be calculated using
         Angiotech's internal systems used to report such sales, which reporting
         is done in accordance with GAAP consistently applied, as adjusted for
         any of items (a) to (f) above not taken into account in such systems.
         For the avoidance of doubt, Net Sales excludes Sublicense Income.

     1.81    "NEURODEGENERATIVE DEVICE" means a Therapeutic Device or Delivery
Device used for the Treatment of Neurodegenerative Conditions in humans or
animals, where a Neurodegenerative Condition means any Condition involving the
malfunctioning or loss of cells, including neurons, in the central nervous
system or peripheral nervous system, including, but not limited to, hereditary
and sporadic conditions which are characterized by progressive nervous system
dysfunction. For purposes of illustration, Neurodegenerative Conditions include
[**].

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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     1.82    "NEURODEGENERATIVE LOCAL THERAPY" means all uses or applications of
a Compound, where the Compound is applied in proximity to the site of a local
Neurodegenerative Condition or to the site of a local manifestation of a
systemic Neurodegenerative Condition for the Treatment of such Condition, where
a Neurodegenerative Condition means any Condition involving the malfunctioning
or loss of cells, including neurons, in the central nervous system or peripheral
nervous system, including, but not limited to, hereditary and sporadic
conditions which are characterized by progressive nervous system dysfunction.
For purposes of illustration, Neurodegenerative Conditions include [**].

     1.83    "NOTICE PERIOD" has the meaning set forth in Section 15.4.

     1.84    "OPHTHALMIC DEVICE" means a Therapeutic Device or Delivery Device
used for the Treatment of Conditions of the Eye in humans or animals, where the
Eye means the eyeball and surrounding structures including but not limited to
the sclera, the choroid, the retina, the optic nerve, the lens, the ciliary
body, the iris, the pupil, the posterior chamber, the anterior chamber, the back
cavity (containing the vitreous humor, the conjunctiva, the insertions of the
eye muscles, the nasolacrimal duct, and the lacrimal canal).

     1.85    "OPHTHALMIC FIELD" means the use of a Compound to treat, prevent,
palliate and/or diagnose any Condition of the Eye in humans or animals by all
modes of administration of that Compound including systemic delivery, local
delivery, and delivery by means of a combination drug-device.

     1.86    "OPHTHALMIC LOCAL THERAPY" means all uses or applications of a
Compound, where the Compound is applied in proximity to the site of a local
Conditions of the Eye or to the site of a local manifestation of a systemic
Condition of the Eye for the Treatment of such Condition, where the Eye means
the eyeball and surrounding structures including but not limited to the sclera,
the choroid, the retina, the optic nerve, the lens, the ciliary body, the iris,
the pupil, the posterior chamber, the anterior chamber, the back cavity
(containing the vitreous humor, the conjunctiva, the insertions of the eye
muscles, the nasolacrimal duct, and the lacrimal canal.

     1.87    "PATENT COVERAGE" means, for a particular Licensed Product in a
given country, there exists a Valid Claim within the Licensed Patents, Research
Patents or Patents covering CombinatoRx Licensed Improvements, Angiotech
Licensed Improvements, Angiotech Evaluation Improvements, Research Improvements
or Angiotech Research Project Technology in such country (assuming, with respect
to patent applications, that the Valid Claims included in such application are
issued as set forth in such patent applications) that, but for the license
granted to Angiotech under this Agreement (assuming for purposes of this
definition only that Research Patents and Patents covering Angiotech Research
Project Technology, Angiotech Evaluation Improvements, Angiotech Licensed
Improvements and Research Improvements are solely owned by CombinatoRx and
licensed to Angiotech to the same extent as the Licensed Patents hereunder),
would have been infringed by the Manufacture, use or sale of such Licensed
Product in such country.

     1.88    "PATENTS" means (a) all national, regional and international
patents and patent applications, including provisional patent applications, (b)
all patent applications filed either from such patents, patent applications or
provisional applications or from an application claiming priority from either of
these, including divisionals, continuations, continuations-in-

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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part, provisionals, converted provisionals, and continued prosecution
applications, (c) any and all patents that have issued or in the future issue
from the foregoing patent applications ((a) and (b)), including utility models,
petty patents and design patents and certificates of invention, (d) any and all
extensions or restorations by existing or future extension or restoration
mechanisms, including revalidations, reissues, re-examinations and extensions
(including any supplementary protection certificates and the like) of the
foregoing patents or patent applications ((a), (b) and (c)), and (e) any similar
rights, including so-called pipeline protection, or any importation,
revalidation, confirmation or introduction patent or registration patent or
patent of additions to any such foregoing patent applications and patents.

     1.89    "PAYMENTS" has the meaning set forth in Section 8.14.1.

     1.90    "PERIPHERAL NERVE CONDITIONS" means peripheral nerve pain and the
repair or regeneration of peripheral nerves.

     1.91    "PERSON" means an individual, sole proprietorship, partnership,
limited partnership, limited liability partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture or other similar entity or organization, including a
government or political subdivision, department or agency of a government.

     1.92    "PIVOTAL TRIAL" means a clinical trial conducted among the intended
patient population, of a size and rigor sufficient to support the filing of an
application for Regulatory Approval of a Licensed Product.

     1.93    "PRE-EXISTING AGREEMENT" means those license, research and/or other
agreements entered into by CombinatoRx prior to the Effective Date and in effect
at all relevant times as such exist on the Effective Date.

     1.94    "PRODUCT KITS" means a delivery medium (such as a biomaterial),
product or Device which incorporates a Licensed Compound and which is sold in a
kit or a single package together with a distinct product(s), active
ingredient(s) or stand-alone component(s), in all cases in final forms suitable
for human or veterinary uses. For example, where a Compound-eluting stent is
sold in a kit or single package together with a catheter, the Licensed Product
component of the kit or package is the Compound-eluting stent.

     1.95    "PROTECTED COMPOUND" means those Compounds designated by Angiotech
pursuant to Section 6.3.1.

     1.96    "RECEIVING PARTY" has the meaning set forth in Section 10.1.1.

     1.97    "REGULATORY APPROVAL" means, with respect to a country in the
Territory, any and all approvals, licenses, registrations or authorizations of
any Regulatory Authority necessary to commercially Manufacture, distribute, sell
or market a Licensed Product in such country, including, where reasonably
required to engage in such activities, (a) pricing or reimbursement approval in
such country, (b) pre- approval marketing authorizations (including any
prerequisite Manufacturing approval or authorization related thereto), and (c)
labeling approval.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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     1.98    "REGULATORY AUTHORITY" means any applicable supra-national,
federal, national, regional, state, provincial or local regulatory agency,
department, bureau, commission, council or other government entity regulating or
otherwise exercising authority with respect to the Exploitation of Licensed
Compounds and/or Licensed Products in the Territory. The term "Regulatory
Authority" includes, but is not limited to, the FDA, the European Agency for the
Evaluation of Medicinal Products, European Member State Competent Authorities
and the Ministry of Health, Labour and Welfare.

     1.99    "REGULATORY DOCUMENTATION" means all applications, registrations,
licenses, authorizations and approvals (including all Regulatory Approvals), all
correspondence submitted to or received from Regulatory Authorities (including
minutes and official contact reports relating to any communications with any
Regulatory Authority) and all supporting documents and all clinical studies and
tests, relating to any Licensed Compounds or Licensed Products, and all data
contained in any of the foregoing, including all applications related to
obtaining Regulatory Approval, Regulatory Approvals, regulatory drug lists,
advertising and promotion documents, adverse event files and complaint files.

     1.100   "RESEARCH COMMITTEE" has the meaning forth in Section 4.1.1.

     1.101   "RESEARCH IMPROVEMENT" means any Improvement (i) to the structure
of a Hit Compound, including modifications made through medicinal chemistry,
(ii) to the dosage, dose-ratio or temporal administration of a Hit Compound
comprised of two or more Active Ingredients, (iii) consisting of new indications
or routes of administration for a Hit Compound, (iv) to the definition of the
chemical class of the Hit Compound through structure-activity relationship
analysis or mechanism-activity relationship analysis, or (v) otherwise to a Hit
Compound that is disclosed by one Party to the other Party for the purpose of
granting a license hereunder (which disclosure includes the conditions of such
license) and is accepted by such other Party for such license, in all of the
foregoing cases that is conceived by or on behalf of CombinatoRx or its
Affiliates or by or on behalf of Angiotech or its Affiliate(s) during the
Research Period.

     1.102   "RESEARCH PATENTS" means Patents covering or claiming Research
Results.

     1.103   "RESEARCH PERIOD" has the meaning set forth in Section 15.2.

     1.104   "RESEARCH PLAN" means the research plan outlining the Research
Project and each Party's undertakings and obligations with specific timelines
and deliverables for each Party's activities under the Research Plan, as may be
amended from time to time in accordance with Section 4.1.3, including the
allocation of key personnel and other FTEs by CombinatoRx and consisting of the
following the activities: (i) development and/or optimization of assay tools for
use in the Research Project, (ii) the performance of specific Combination High
Throughput Screens by CombinatoRx and (iii) the analysis of the Research Results
by CombinatoRx.

     1.105   "RESEARCH PROJECT" means the research outlined in the Research Plan
to be carried out during the Research Period.

     1.106   "RESEARCH PROJECT COMBINATION HIGH THROUGHPUT SCREENS" means those
Combination High Throughput Screens that (i) have been performed by CombinatoRx
as a part of the Research Project or (ii) are listed in the Research Plan as
Combination High

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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Throughput Screens yet to be performed by CombinatoRx as a part of the Research
Project, which list shall not exceed the number of such screens that can
reasonably be performed by CombinatoRx within the scope of the Research Project.

     1.107   "RESEARCH RESULTS" means Information that is discovered or
conceived through work performed under this Agreement pursuant to the Research
Plan by or on behalf of CombinatoRx and/or its Affiliates, and any IP Protection
Rights pertaining to any of the foregoing. Research Results exclude Angiotech
Background Technology, Angiotech Evaluation Improvement, CombinatoRx Background
Technology.

     1.108   "RESEARCH YEAR" means the twelve-month period starting on the
Effective Date and any immediately subsequent twelve-month period.

     1.109   "RESPIRATORY DEVICE" means a Therapeutic Device or Delivery Device
used for the Treatment of Conditions of the Respiratory Tract in humans or
animals. The Respiratory Tract includes the nose, sinuses, pharynx, larynx,
trachea, bronchi, bronchioles, alveoli and lungs.

     1.110   "RESPIRATORY LOCAL THERAPY" means all uses or applications of a
Compound, where the Compound is applied inside the lumen of the Respiratory
Tract for the Treatment of a Condition of the Respiratory Tract or local
manifestation within the Respiratory Tract of a systemic Condition, where
Respiratory Tract means the organs that are involved in breathing. For the
avoidance of doubt, the Respiratory Tract begins at the nasal entrance and
continues through the thoracic cavity to the gas exchange regions of the lungs.
The Respiratory Tract includes the nose, sinuses, pharynx, larynx, trachea,
bronchi, bronchioles, alveoli and lungs. For the avoidance of doubt, Respiratory
Local Therapy includes [**].

     1.111   "REVENUE" means (a) Net Sales, plus (b) Sublicense Income, less in
all cases any royalties or other amounts that Angiotech or its Affiliates pays
to a Third Party with respect to amounts described in (a) and (b) above (except
as described in Section 8.2.3 and 8.4.3)

     1.112   "SELECTED COMPOUND" means those Compounds selected by Angiotech
pursuant to Section 6.4., as well as, subject to Section 6.4, all Compounds
included in the Compound Class determined for such Compounds pursuant to Section
4.1.2.

     1.113   "SELECTION PERIOD" has the meaning set forth in Section 6.4.

     1.114   "SHARED MATERIALS" means any compounds, assays, cells, cell lines,
DNA and RNA molecules, plasmids, proteins, crystals, coordinates, media,
antibodies, and other materials and any replications of any of the foregoing,
that one Party provides to the other Party to enable such Party to perform work
under the Research Project; provided, however, that "Shared Materials" excludes
all Research Results and the Chalice Database.

     1.115   "SIMILAR SCREEN SET" shall have the meaning set forth in the
initial Research Plan, as determined in accordance with the terms hereof.

     1.116   "SUBLICENSE INCOME" means payments that Angiotech receives from a
Third Party Sublicensee in consideration for the sublicense of any right granted
under Section 2.1 or other grant of any right with respect to any such right or
agreement not to assert any such right, including without limitation license
fees, milestone payments, license maintenance fees

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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and royalty payments based on net sales received by Angiotech for such a
sublicense, but specifically excluding bona fide payments for research and
development, marketing, sales and/or other services, bona fide reimbursement for
costs and expenses incurred by Angiotech (such as patent prosecution costs),
payments to the extent of fair market value for the issuance of equity or debt
(or for debt financing such as loans), and payments resulting from bona fide
arms length agreement for the supply to such Sublicensee of Licensed Compounds
and/or Licensed Products (and/or ingredients or components thereof) to the
extent that such payments do not exceed to fully burdened cost to Angiotech of
such supply.

     1.117   "SUBLICENSEE" has the meaning set forth in Section 2.3.1.

     1.118   "TERM" has the meaning set forth in Section 15.1.

     1.119   "TERRITORY" means all countries in the world.

     1.120   "THERAPEUTIC" means the Treatment of Conditions in humans or
animals.

     1.121   "THERAPEUTIC DEVICE" means any object, material or chemical that
has Therapeutic and/or cosmetic benefit through mechanical, structural,
electrical, ultrasonic, thermal or radiological means, independent of any
Compound, whether used or implanted inside or outside of the body, but excluding
Delivery Devices.

     1.122   "THIRD PARTY" means any Person not including the Parties or the
Parties' respective Affiliates.

     1.123   "THIRD PARTY AGREEMENT" means all Pre-Existing Agreements and those
license, research and/or other agreements entered into by CombinatoRx following
the Effective Date.

     1.124   "THIRD PARTY CLAIM" has the meaning set forth in Section 15.1.

     1.125   "THORACIC CONDITIONS" means conditions of the region bounded by and
including the diaphragm and the ribcage and its associated musculature and
containing the heart and lungs.

     1.126   "TRADEMARK" means any word, name, symbol, color, designation or
device or any combination thereof, including any trademark, trade dress, brand
mark, trade name, brand name, logo or business symbol used by Angiotech in
connection with the Licensed Compounds or Licensed Products.

     1.127   "TREATMENT" or "TREAT" means diagnosis, palliation, monitoring,
cure, mitigation, treatment or prevention.

     1.128   "UNITED STATES" or "U.S." means the United States of America,
including its territories, possessions and Puerto Rico.

     1.129   "VALID CLAIM" means a claim in a pending patent application or an
issued and unexpired patent that (a) has not been finally cancelled, withdrawn,
abandoned or rejected by any administrative agency or other body of competent
jurisdiction not subject to further appeal, (b) has not been revoked, held
invalid, or declared unpatentable or unenforceable in a decision of a court or
other body of competent jurisdiction that is unappealable or unappealed

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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within the time allowed for appeal, (c) has not been rendered unenforceable
through disclaimer, abandonment, withdrawal or otherwise, and (d) with respect
to a claim in a pending patent application, such claim is being actively
prosecuted in good faith and is believed in good faith to meet the requirements
of patentability in the relevant jurisdiction.

     1.130   "VASCULATURE CONDITION" means a Condition of the walls of the blood
vessels including arteries, arterioles, veins and venules. The walls of the
blood vessels consist of multiple tissue layers including the inner layer of the
tunica intima, the outer layer of the tunica intima, the elastic layer, the
tunica media, and the tunica externa. The vasculature does not include the
blood.

                                    ARTICLE 2
                                 GRANT OF RIGHTS

     2.1  LICENSE GRANTS TO ANGIOTECH. Subject to the terms and conditions of
this Agreement and all Pre-Existing Agreements, CombinatoRx hereby grants to
Angiotech:

             (a)     a royalty-free, non-exclusive right and license, without
                     the right to grant sublicenses, under the CombinatoRx
                     Background Technology, Licensed Information and Licensed
                     Patents solely for the purpose of conducting Angiotech's
                     activities related to the Research Program during the
                     Research Period and, for purposes of making selections of
                     Selected Compounds, during the Selection Period, including,
                     for the avoidance of doubt, a right and license to make and
                     use CombinatoRx Compounds for such limited purpose;

             (b)     subject to Section 2.5.2, a royalty-free, non-exclusive
                     right and license, with the right to grant sublicenses
                     solely in connection with the performance of work on behalf
                     of Angiotech, under the CombinatoRx Background Technology,
                     Licensed Information and Licensed Patents to Access the
                     Chalice Database and to test, manipulate and otherwise use
                     all CombinatoRx Compounds, Protected Compounds, Fast Track
                     Compounds and data related to the foregoing solely during
                     the Research Period and Selection Period and solely for the
                     purpose of evaluation of any such Compounds in the
                     Angiotech Field;

             (c)     a royalty-bearing, exclusive (even with regard to
                     CombinatoRx and its Affiliates) right and license in the
                     Territory, with the right to grant sublicenses pursuant to
                     Section 2.3, under the Licensed Patents, Licensed
                     Information, CombinatoRx Licensed Improvements (to the
                     extent not rejected by Angiotech pursuant to Section 9.6)
                     and under CombinatoRx's undivided interest in the Angiotech
                     Evaluation Improvements, Research Results, Research
                     Patents, Research Improvements and Joint Patent Rights to
                     Exploit Licensed Compounds and Licensed Products in the
                     Angiotech Field; and

             (d)     a royalty-free, non-exclusive right and license in the
                     Territory, with the right to grant sublicenses pursuant to
                     Section 2.3, under the Licensed Patents, Licensed
                     Information, CombinatoRx Licensed Improvements (to the
                     extent not rejected by Angiotech pursuant to Section 9.6)
                     and

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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                     under CombinatoRx's undivided interest in the Angiotech
                     Evaluation Improvement, Research Results, Research Patents,
                     Research Improvements and Joint Patent Rights in the
                     CombinatoRx Field solely for purposes of pre-clinical
                     research and development of Licensed Compounds and Licensed
                     Products for Exploitation in the Angiotech Field.

     2.2     LICENSE GRANTS TO COMBINATORX.  Subject to the terms and conditions
of this Agreement and all pre-existing agreements, Angiotech hereby grants to
CombinatoRx:

             (a)     a royalty-free, non-exclusive right and license, without
                     the right to grant sublicenses, under the Angiotech
                     Background Technology solely for the purpose of conducting
                     the Research Program during the Research Period;

             (b)     a royalty-free, paid-up, exclusive (even with regard to
                     Angiotech and its Affiliates) right and license in the
                     Territory, with the right to grant sublicenses pursuant to
                     Section 2.3, under Angiotech's undivided interest in the
                     Angiotech Evaluation Improvement, Research Results,
                     Research Patents, Research Improvements and Joint Patent
                     Rights and to Angiotech's interest in the Angiotech
                     Research Project Technology to Exploit Licensed Compounds
                     and Licensed Products in the CombinatoRx Field;

             (c)     a royalty-free, non-exclusive right and license in the
                     Territory, with the right to grant sublicenses pursuant to
                     Section 2.3, under Angiotech's undivided interest in the
                     Angiotech Evaluation Improvement, Research Results,
                     Research Patents, Research Improvements and Joint Patent
                     Rights in the Angiotech Field solely for purposes of
                     pre-clinical research and development of Licensed Compounds
                     and Licensed Products in the CombinatoRx Field; and

             (d)     to the extent not rejected by CombinatoRx pursuant to
                     Section 9.6, a royalty-free, non-exclusive right and
                     license in the Territory, with the right to grant
                     sublicenses pursuant to Section 2.3, under Angiotech
                     Licensed Improvements Controlled by Angiotech to Exploit
                     Licensed Compounds and Licensed Products in the CombinatoRx
                     Field.

     2.3     SUBLICENSES.

             2.3.1   BY ANGIOTECH. Angiotech has the right to grant sublicenses,
through multiple tiers of sublicensees, under the licenses granted in Section
2.1(b), (c) and (d), to its Affiliates and to any other Persons in the Territory
or in any country of the Territory. An agreement by Angiotech not to assert any
rights granted to it under Section 2.1 shall be considered a sublicense of such
right for the purposes of this Agreement, including the definition of Sublicense
Income. Where Angiotech grants a sublicense to a Person that is not an Affiliate
of Angiotech, and such Person is not a Distributor, such Person shall be a
"SUBLICENSEE" for purposes of this Agreement. Angiotech shall ensure that all
Persons to which it grants sublicenses will comply with all terms and conditions
of this Agreement and be bound by indemnification obligations to CombinatoRx of
a scope not less than the

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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indemnification obligations of Angiotech contained herein, and Angiotech shall
remain liable for any breach of this Agreement by a Sublicensee. Angiotech shall
provide notice of the granting of any sublicense hereunder promptly following
the making of such grant. Such notice shall identify the Sublicensee and the
territory of the sublicense.

             2.3.2   BY COMBINATORX. CombinatoRx has the right to grant
sublicenses, through multiple tiers of sublicensees, under the licenses granted
in Section 2.2(b), (c) and (d), to its Affiliates and to any other Persons in
the Territory or in any country of the Territory. An agreement by CombinatoRx
not to assert any rights granted to it under Section 2.2 shall be considered a
sublicense of such right for the purposes of this Agreement. CombinatoRx shall
ensure that all Persons to which it grants sublicenses will comply with all
terms and conditions of this Agreement and be bound by indemnification
obligations to Angiotech of a scope not less than the indemnification
obligations of CombinatoRx contained herein, and CombinatoRx shall remain liable
for any breach of this Agreement by a sublicensee. CombinatoRx shall provide
notice of the granting of any sublicense hereunder promptly following the making
of such grant. Such notice shall identify the sublicensee and the territory of
the sublicense.

     2.4     DISTRIBUTORSHIPS. Angiotech has the right, in its sole discretion,
to appoint its Affiliates, and Angiotech and its Affiliates shall have the
right, in their sole, respective discretion, to appoint any other Persons, in
the Territory or in any country of the Territory, to distribute, market and sell
the Licensed Products. Such right includes circumstances where the Person
purchases its requirements of Licensed Products from Angiotech or its Affiliates
but does not otherwise make any royalty or other payment to Angiotech or its
Affiliates with respect to IP Protection Rights licensed by Angiotech hereunder
or otherwise Controlled by Angiotech or its Affiliates. Where Angiotech or its
Affiliates appoints such a Person that is not an Affiliate of Angiotech, that
Person shall be a "DISTRIBUTOR" for purposes of this Agreement.

     2.5     NO CONFLICTS.

             2.5.1   Subject to the terms of this Agreement, within the scope of
the Research Project, and to the extent Applicable Law and the terms of this
Agreement permit CombinatoRx to conduct research and development activities with
respect to Licensed Compounds or Licensed Products notwithstanding the exclusive
license grants to Angiotech under Section 2.1, CombinatoRx agrees that neither
it nor its Affiliates will publish or present any material or file any Patent
applications in the Angiotech Field with respect to such activities except in
accordance with the provisions of this Agreement and with the prior written
consent of Angiotech.

             2.5.2   Subject to CombinatoRx's rights and obligations under the
Research Project and the restrictions set forth in Article 6, during the
Research Period and for one (1) year after its expiration or termination, or, if
this Agreement is earlier terminated by Angiotech pursuant to Section 15.4, 15.6
or 15.7 for a period of one (1) year after such termination, CombinatoRx
covenants that it and its Affiliates shall not:

     (a) license, sublicense or otherwise grant any rights to any Compound to
any Person (other than Angiotech), regardless of whether such Compound is
discovered by CombinatoRx through its internal research and development programs
or in connection with a Person (other than Angiotech), for Exploitation in any
or all of the following areas of the Angiotech Field:

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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         (i)   in combination with, or for release or elution from or delivery
     through, stents, [**];

         (ii)  in combination with, or for release or elution from or delivery
     through, minimally invasive therapies such as degradable or non-degradable
     vascular wraps, [**] or other such Devices, biomaterials or implants for
     the [**], or for use with certain vascular surgery procedures, including,
     but not limited to, [**], stenosis, restenosis or other similar disease, or
     in [**];

         (iii) in connection with injectible or implantable materials, or in
     any injectible or implantable form, for the Treatment of Musculoskeletal
     Conditions, or for the intra-articular Treatment of [**]or related
     musculoskeletal or [**];

         (iv)  in combination with, or for release or elution from or delivery
     through, biomaterial treatments, implants or barriers, including, but not
     limited to, biomaterial treatments, implants or barriers delivered or
     placed endoscopically or during open surgery for the Treatment of
     adhesions, scar, encapsulation or local cancerous tumors or tumor cells;

         (v)   in combination with, or for release or elution from or delivery
     through, Therapeutic Devices used as tissue bulking or filling agents,
     including, but not limited to, [**], aneuyrism fillers, [**]; or

         (vi)  in combination with, or for release or elution from or delivery
     through, sealing and wound closure or healing devices or biomaterials,
     including devices and biomaterials designed to Treat surgical bleeding,
     [**] or dysfunctional uterine bleeding, or for use in wound closure,
     sealing or healing;

         provided that, notwithstanding the foregoing, CombinatoRx may license,
     sublicense or otherwise grant rights to any Compound to any Person in a
     manner which is in compliance with paragraphs (b), (c) and (d) of this
     Section, whether such Compound is discovered by CombinatoRx through its
     internal research and development programs or in connection with a Person
     if such Person has agreed in writing that neither such Person nor any
     Affiliate, licensee or sublicensee of such Person will Exploit such
     Compound in the areas identified in clauses (i) through (vi) above, and the
     agreement between CombinatoRx and such Person explicitly names Angiotech as
     a third party beneficiary of such agreement solely for the purposes of
     enforcing the restrictions described in this paragraph,

     (b) conduct Combination High Throughput Screens on its own behalf or for
any Person other than Angiotech, or grant to any such Person any rights in the
Angiotech Field to the results of any Combination High Throughput Screen or
series of Combination High Throughput Screens, that (i) have the same CHTS
Parameters as any Research Project Combination High Throughput Screen(s), or
(ii) are a Similar Screen Set,

     (c) grant, or enter into any agreement or other arrangement with a Person
that involves the grant of or agreement to grant in the future, any license or
other rights to a Local Therapeutic Company to use any IP Protection Rights
Controlled by CombinatoRx or its

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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Affiliates as of the Effective Date or during the period specified above
(including, for the avoidance of doubt, any Licensed Patents, Licensed
Information, Research Patents or Research Results) in any field that includes
the Angiotech Field or

     (d) in addition to the restrictions set forth in clauses (a) through (c)
above, enter into any agreement with a Person where CombinatoRx grants rights
that comprise all or a portion of the Angiotech Field, but, assuming CombinatoRx
has complied with clauses (a) through (c) above, CombinatoRx shall not be
restricted from granting rights that are materially broader than or different
from the Angiotech Field but may include the Angiotech Field if the inclusion of
the Angiotech Field in any such agreement is not a significant purpose of such
agreement; provided that, in no event will CombinatoRx enter into any agreement
for the purpose of evading the restrictions of clauses (a) through (c) above or
this clause (d).

     The Parties acknowledge that all restrictions contained in this Section
2.5.2 are reasonable, valid and necessary for the adequate protection of the
Licensed Product business, given the disclosure of confidential information by
Angiotech and that Angiotech would not have entered into this Agreement without
the protection afforded it by this Section 2.5.2. Notwithstanding the foregoing,
this Section 2.5.2 shall not apply to the Pre-Existing Agreements to the extent
that CombinatoRx's activities are within the scope of and in conformance with
the terms of such agreements, as such agreements exist on the Effective Date.

             2.5.3   During the Research Period and for one (1) year after its
expiration or termination, Angiotech shall not contract or collaborate with or
engage any Third Party to perform screens for any product consisting of two or
more compounds which include existing small molecule pharmaceutical compounds
approved for marketing. The Parties acknowledge that all restrictions contained
in this Section 2.5.3 are reasonable, valid and necessary for the adequate
protection of the CombinatoRx's business, given the disclosure of confidential
information by CombinatoRx and that CombinatoRx would not have entered into this
Agreement without the protection afforded it by this Section 2.5.3.

                                    ARTICLE 3
                              THE RESEARCH PROJECT

     3.1     CONDUCT OF RESEARCH PROJECT. During the Research Period and under
the direction and supervision of the Research Committee, each Party shall (a)
perform its obligations under the Research Plan in compliance with good
scientific manner and in compliance in all material aspects with all Applicable
Law, including, unless otherwise set forth in the Research Plan, good laboratory
practices, where applicable, and (b) allocate the time, effort, equipment and
skilled personnel reasonably necessary to complete such activities as set forth
in the Research Plan. Following the Effective Date, the Parties shall promptly
commence the Research Project. The Research Committee shall be entitled to
modify the Research Plan from time to time in accordance with Section 4.1.4, and
shall re-visit the content and scope of the Research Plan at least once each
Research Year for the purpose of determining and making such changes thereto as
it, in its judgment may deem necessary or appropriate.

     3.2     FACILITIES . CombinatoRx shall commit to the Research Project ten
(10) FTEs during each Research Year of the Research Period. In addition,
CombinatoRx shall provide facilities and equipment that are reasonably necessary
to carry out the work undertaken by

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CombinatoRx under the Research Project at CombinatoRx's facilities at 650 Albany
Street, Boston, MA 02118, and/or at such other facilities in the United States
which CombinatoRx may come to occupy of an appropriate standard for performing
research in accordance with Good Laboratory Practices and otherwise in
accordance with the Research Plan. The CombinatoRx Principal Scientist shall be
responsible for all Research Project activities undertaken by CombinatoRx and
shall supervise the work of all personnel engaged by CombinatoRx in the Research
Project. The CombinatoRx Principal Scientist shall serve as the primary contact
for Angiotech on all matters related to the Research Project.

     3.3     COSTS AND EXPENSES. Each Party is responsible for its own costs and
expenses for the Research Project, including without limitation all costs and
expenses associated with FTEs committed to the Research Project.

     3.4     SUBCONTRACTING. CombinatoRx is solely responsible for successfully
completing its activities set forth in the Research Plan. CombinatoRx shall
conduct and carry out the activities provided for under the Research Project
through its employees at the site identified under Section 3.2.

     3.5     SHARED MATERIALS, INFORMATION TRANSFER AND HIT COMPOUNDS.

             3.5.1   BACKGROUND INFORMATION. CombinatoRx shall from time to
time, and shall cause its Affiliates to, provide to Angiotech copies of any
Licensed Information, Licensed Patents and CombinatoRx Background Technology to
the extent necessary or reasonably useful for Angiotech to exercise its rights
under the Research Project. Upon Angiotech's request to CombinatoRx, CombinatoRx
shall promptly provide to Angiotech any copies of additional Licensed
Information and CombinatoRx Background Technology and originals of Licensed
Information and CombinatoRx Background Technology in those cases where Angiotech
has a need for the same in connection with the filing and prosecution of
patents. CombinatoRx's obligations under this Section shall be performed by the
CombinatoRx Project Team.

             3.5.2   SHARED MATERIALS. Each Party shall, and shall cause its
Affiliates to, in accordance with the criteria and mechanisms established by the
Research Committee, disclose and make available to the other Party, in whatever
form such Party may reasonably request all Shared Material promptly upon the
Effective Date or upon the earlier of the conception or reduction to practice,
discovery, development or making of such Shared Material; provided, however,
that, notwithstanding the foregoing, Angiotech shall only be required to provide
or disclose to CombinatoRx such Shared Materials and other information as it
determines, in its sole discretion, is reasonably necessary for CombinatoRx to
perform its activities under the Research Project and Angiotech retains the
right, in its reasonable discretion, to withdraw any such Shared Material from
the Research Project upon written notice to CombinatoRx; provided that,
CombinatoRx shall be excused from any failure to perform its obligations under
the Research Plan to the extent that it can reasonably demonstrate that such
failure is attributable to Angiotech's withdrawal of, or failure to supply,
Shared Materials.

             3.5.3   RESEARCH RESULTS; HIT COMPOUNDS. During the Research
Project CombinatoRx shall, and shall cause its Affiliates to, in accordance with
the criteria and mechanisms established by the Research Committee, disclose and
make available to Angiotech, in whatever form Angiotech may reasonably request
all Research Results

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promptly upon the earlier of the conception or reduction to practice, discovery,
development or making of such Research Results, including without limitation a
list of all Compounds screened by CombinatoRx, the results of each assay with
respect to each screened Compound, and all Compounds which are Hit Compounds.

     3.6     COOPERATION. Each Party shall cooperate with any and all reasonable
requests for assistance from the other Party with respect to the activities
under the Research Project, including by making its employees, consultants and
other scientific staff available upon reasonable notice during normal business
hours at their respective places of employment to consult with such other Party
on issues arising in connection with the Research Project.

     3.7     REGULATORY RECORDS. CombinatoRx and Angiotech each shall maintain,
or cause to be maintained, records of its respective activities under the
Research Project in sufficient detail and in good scientific manner appropriate
for patent and regulatory purposes, which shall be complete and accurate and
shall fully and properly reflect all work done and results achieved in the
performance of its respective activities under the Research Project, and which
shall be retained by such Party for at least five (5) years after the
termination of the Research Period, or for such longer period as may be required
by Applicable Law; provided always that before destroying any such record upon
expiration of such period CombinatoRx shall offer Angiotech in writing to
transfer such record to Angiotech and shall, should Angiotech declare that it
wishes to have such record transferred, transfer it to Angiotech, at Angiotech's
cost, without unreasonable delay. Each Party shall have the right, during normal
business hours and upon reasonable notice, to inspect and copy any such records
contemplated by this Section 3.7.

                                    ARTICLE 4
                       MANAGEMENT OF THE RESEARCH PROJECT

     4.1     RESEARCH COMMITTEE.

             4.1.1   FORMATION. Within fifteen (15) days after the Effective
Date, the Parties shall form a Research Committee (the "RESEARCH COMMITTEE").
The Research Committee shall consist of six (6) members with the requisite
experience and seniority to enable them to make decisions on behalf of the
Parties with respect to the initiation, planning and performance of the
activities of the Research Project, with equal numbers appointed by each
respective Party, which shall include the CombinatoRx Principal Scientist and
the Angiotech Principal Scientist acting as Co-Chairs. Each Party shall have the
right to replace its respective Research Committee representatives upon written
notice to the other Party, provided that any such substitute representative
shall have substantially the equivalent experience and seniority as the
representative that such person replaces. Each Party shall be entitled to bring
for an agenda item at a meeting of the Research Committee such minimum numbers
of nonvoting advisors, consultants and other visitors which such Party considers
in good faith necessary or useful to such Party to protect its interest
regarding the business to be dealt with under such agenda item. If such visitors
are not employees of a Party, their attendance at the Research Committee meeting
shall be further conditioned upon agreement with the inviting Party over
confidentiality and non-use obligations no less burdensome than those set forth
herein.

             4.1.2   RESPONSIBILITIES. The Research Committee shall oversee the
initiation, planning and performance of the activities under the Research
Project. In particular, the

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responsibilities of the Research Committee shall include: (a) establishing
reporting criteria and mechanisms for making Research Results available to
Angiotech; (b) establishing criteria and mechanisms for disclosing and making
available to the other Party Shared Materials; (c) establishing prioritization
criteria for specific components under the Research Project, including setting
dates for experimental initiation and completion of each stage of the Research
Project; (d) monitoring and overseeing workflow, including experimental sample
transfer, sample analysis and data quality control, data analysis and
summarization, software installation (access), training and maintenance; (e)
monitoring of sample throughput, and overall Research Project progress; (f)
monitoring timely execution of the Research Project, including compliance with
timelines and deliverable requirements; (g) sharing information regarding Third
Party Agreements of CombinatoRx for potential inclusion of Information from such
Agreement in the Chalice Database as provided in Section 1.23; (h) reviewing and
approving any amendments to the Research Plan and (i) determining the Compound
Class for each CombinatoRx Compound (including CombinatoRx Compound selected as
Back-up Compounds) and Hit Compounds using the following parameters: (i)
similarity in terms of chemical structure, (ii) similarity in terms of mechanism
of action (relating to both known mechanisms and/or newly discovered mechanisms)
and (iii) such other parameters as the Research Committee shall determine
relevant. If the Research Committee is not able to determine the Compound Class
for such CombinatoRx Compound or Hit Compound, then the matter shall be settled
in accordance with the first sentence of Section 4.1.4. The Research Committee
shall determine the Compound Class for a Hit Compound at the next meeting of the
Research Committee following identification of the Hit Compound.

             4.1.3   RESEARCH PLAN. The Parties acknowledge and agree that the
Research Plan shall set forth the goals and objectives of the Research Project
and the broad terms of the Parties' respective undertakings to achieve those
goals and objectives, and the consideration provided for under Article 8 and
elsewhere in this Agreement represents Angiotech's total financial obligation
for all services to be rendered and expenses to be incurred by or on behalf of
CombinatoRx as necessary to achieve the goals and objectives of the Research
Project. The Research Committee shall finalize and approve the initial Research
Plan within sixty (60) days of the Effective Date. The Parties further
acknowledge and agree that the Research Plan will be amended by the Research
Committee from time to time during the Research Period for each stage of the
Research Project to identify and define the specific undertakings of the Parties
required to implement the Research Project and as otherwise required.

             4.1.4   DISPUTES. The Research Committee shall endeavor to reach
consensus on all matters brought before it with each Party having a single vote,
irrespective of the number of representatives actually in attendance at a
meeting; provided, however, that in the event the Research Committee is unable
to resolve an outstanding matter before it within fifteen (15) days of the time
that it first considers such matter, such matter shall be resolved in accordance
with Article 16. Notwithstanding the foregoing, Angiotech shall make the final
determination as to whether a Compound is a Hit Compound and approval of any
amendments to the Research Plan; provided that, no amendment to the Research
Plan shall change the scope of the Research Plan in a manner that would require
CombinatoRx without its express written approval to devote more than the
CombinatoRx Project Team in the performance of all of its obligations under this
Agreement or materially increase the materials and capital equipment required
for CombinatoRx to perform its activities under the Research Plan.

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             4.1.5   MEETINGS. The Research Committee shall meet at least once
each Calendar Quarter. Regular quarterly meetings shall be scheduled on a
recurring schedule to be established by the Research Committee (e.g. the first
Tuesday of January, April, July and October at 9:30 a.m. at the place of
meeting, if held in person), or at such other times mutually agreed to no less
than three (3) months in advance, except for the initial meeting of the Research
Committee, which shall be at a mutually agreeable time and place and shall take
place no later than sixty (30) days after the Effective Date. In person meetings
of the Research Committee will be held at alternating locations of the
respective Co-Chair's choosing, or by teleconference or videoconference at the
respective Co-Chair's discretion. Subject to Section 4.1.6, a quorum of the
Research Committee exists whenever there is present at a meeting each of the
Co-Chairs or their respective designees. In addition, the Research Committee may
act without a formal meeting by a written memorandum signed by the Co-Chairs of
the Research Committee. Whenever any action by the Research Committee is
required hereunder during a time period in which the Research Committee is not
scheduled to meet, either Co-Chair shall have the right to call a special
meeting or the Co-Chairs may cause the Research Committee to take the action
without a meeting in the applicable time period. Any such additional meetings
shall be held at places and on dates selected by mutual agreement of the
Co-Chairs.

             4.1.6   SPECIAL MEETING. Notwithstanding Section 4.1.5, either
Co-Chair may call for a meeting to be held on a business day by notifying the
other Party no later than thirty (30) days in advance of a meeting of the
Research Committee of the exact date, time and location for the meeting;
provided, that (a) if such notice has been timely issued and the meeting is held
on the date, time and place so indicated, or (b) if the other Party confirms
that it has been properly notified about the meeting, then a quorum shall be
considered constituted at that meeting unless all members of one Party fail to
attend the meeting because of illness, where no substitution could be reasonably
arranged, general breakdown in the instrumentalities of communication, travel
difficulties beyond the reasonable control of such Party, or any other
reasonable reason. For the purpose of agreeing that a Party has been properly
notified of the meeting in the case under (b), attendance to a meeting without
express objection thereto shall be sufficient.

             4.1.7   EXPENSES. CombinatoRx and Angiotech each shall bear all
expenses of its Research Committee members related to such members'
participation on the Research Committee and attendance at Research Committee
meetings.

             4.1.8   MINUTES. The Research Committee shall keep accurate minutes
of its deliberations, which minutes shall record all proposed decisions and all
actions recommended or taken, Research Project progress reports provided to the
Research Committee pursuant to Section 5.1 and Research Results generated of
interest in the Research Project. Furthermore, all Licensed Compounds (including
all Hit Compounds) disclosed to Angiotech during the Research Period shall be
recorded in the minutes of the Research Committee. Drafts of minutes shall be
delivered to the Co-Chairs of the Research Committee within twenty (20) days
after the respective meeting. The Parties, on an alternating basis, shall
prepare and circulate the draft minutes. Draft minutes shall be edited by the
Co-Chairs and shall be issued in final form only with the approval and agreement
of the Co-Chairs.

     4.2     UPON EXPIRATION OR TERMINATION OF THE RESEARCH PERIOD.  Upon
expiration or termination of the Research Period the following shall apply:

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             4.2.1   DISSOLUTION OF THE RESEARCH COMMITTEE. Upon expiration or
termination of the Research Period, the Research Committee shall be dissolved
and both Parties shall provide the other with consultation services, including
reviewing and contributing to proposed publications concerning the Licensed
Compounds or Licensed Products, in the case of Angiotech, and any products
developed by CombinatoRx as a result of the licenses granted to CombinatoRx
hereunder, in the case of CombinatoRx, as either Party may reasonably request
for further development of Licensed Compounds or Licensed Products, as
applicable, including by making such Party's employees, consultants and other
scientific staff available upon reasonable notice during normal business hours
at their respective places of employment to consult with the other Party on
issues arising during product development, or in connection with Exploitation of
Licensed Compounds or Licensed Products. A Party making such request shall
reimburse the other Party for reasonable and verifiable out-of-pocket costs
incurred in connection with such consultation services.

             4.2.2   TERMINATION OF RIGHTS. All rights granted to Angiotech and
CombinatoRx pursuant to Section 2.1(a) and Section 2.2(a), respectively,
automatically terminate and Angiotech and CombinatoRx shall cease any and all
use of the items licensed to it therein for the purposes specified.

             4.2.3   RETURN OF ITEMS. CombinatoRx shall deliver or return, as
applicable, all data, files, records and other materials in its possession or
control containing or comprising solely Angiotech Background Technology and
Angiotech's Confidential Information (except one copy of Angiotech's
Confidential Information which may be retained by CombinatoRx in its legal files
solely for archival purposes to ensure its continuing compliance with this
Agreement). Angiotech shall deliver or return, as applicable, all data, files,
records and other materials in its possession or control containing or
comprising solely CombinatoRx Background Technology and CombinatoRx's
Confidential Information (except one copy of CombinatoRx's Confidential
Information which may be retained by Angiotech in its legal files solely for
archival purposes to ensure its continuing compliance with this Agreement),
except to the extent that any of the foregoing relate to Licensed Compounds,
Licensed Products or CombinatoRx Licensed Improvements.

     4.3     TRANSFER UPON TERMINATION OF THE RESEARCH PERIOD. Upon expiration
or termination of the Research Period the following shall apply:

             4.3.1   INFORMATION DISCLOSURE. CombinatoRx shall, and shall cause
its Affiliates, without additional compensation, to disclose and make available
to Angiotech, to the extent not done so already, in whatever form Angiotech may
reasonably request, Regulatory Documentation, copies of Licensed Information,
Research Results and any other Information claimed or covered by any Licensed
Patent or Research Patent or otherwise relating, directly or indirectly, to any
Licensed Compound, Licensed Product or CombinatoRx Licensed Improvement, and
thereafter and throughout the term of the Agreement immediately upon the
earliest of the development, making, conception or reduction to practice of each
such Regulatory Documentation, Licensed Information.

             4.3.2   APPLICATION TO EACH COMPOUND AND COMBINATORX LICENSED
IMPROVEMENT. CombinatoRx's obligation under Section 4.3 in its entirety shall,
in addition to, and without limiting what is stated therein, apply to each
separate Licensed Compound or CombinatoRx Licensed Improvement in which
situation such obligations shall refer to such

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Regulatory Documentation, Licensed Information, Research Results and Information
relating directly or indirectly to that particular Licensed Compound or
CombinatoRx Licensed Improvement thereon.

             4.3.3   SEARCH FOR INFORMATION. CombinatoRx warrants that it will
perform a reasonably diligent search within its own internal records for
Licensed Information and Regulatory Documentation relevant to the safety,
efficacy and Exploitation of Licensed Compounds and Licensed Products in
existence as of the termination or expiration of the Research Period and that
all such located Licensed Information and Regulatory Documentation will be
disclosed to Angiotech upon termination or expiration of the Research Period.

             4.3.4   TRANSFER OF INFORMATION. CombinatoRx, at its sole cost and
expense, during the three years following the Effective Date, will provide
Angiotech with all reasonable assistance required in order to transfer the
Licensed Information to Angiotech in a timely manner following termination or
expiration of the Research Period. Without prejudice to the generality of the
foregoing, if visits of CombinatoRx's representatives to Angiotech's facilities
are reasonably requested by Angiotech for purposes of transferring the Licensed
Information to Angiotech or for purposes of Angiotech acquiring expertise on the
practical application of the Licensed Information or assisting on issues arising
during such Exploitation, CombinatoRx will send appropriate representatives to
Angiotech's facilities, provided that Angiotech shall reimburse CombinatoRx for
its reasonable and verifiable out of pocket expenses of travel and
accommodations for such representatives. Any such assistance shall be limited to
not more than one FTE for five (5) days per year at mutually agreed upon times.

                                    ARTICLE 5
                                     REPORTS

     5.1     REPORTS.

             5.1.1   COMBINATORX REPORTS. No later than five (5) business days
prior to each quarterly Research Committee meeting, CombinatoRx shall provide
the Research Committee with a reasonably detailed written report containing
specifications and other information on all Research Results generated by
CombinatoRx under the Research Project and all information related to Licensed
Information, Licensed Patents and CombinatoRx Licensed Improvements not
previously reported to the Research Committee, including without limitation,
reasonably detailed information on all assays and other studies performed with
respect to Compounds under the Research Plan and the results thereof, the
identity of any Hit Compounds and information related thereto, as well as a list
of the names and titles of the CombinatoRx employees comprising the CombinatoRx
Project Team and a brief description of the activities of such employees.
CombinatoRx shall also provide in conjunction with such reports as long as there
exists a Research Committee, a report detailing the discovery of any new
CombinatoRx Compounds, information and data related thereto and any new
information and data related to existing CombinatoRx Compounds insofar as the
same may be relevant to potential uses in the Angiotech Field. CombinatoRx's
obligations under this Section shall be performed by the CombinatoRx Project
Team. Following the Research Period, no later than March 1st of each year,
CombinatoRx shall provide Angiotech with a summary written report describing any
CombinatoRx Licensed Improvements conceived or discovered during the prior year
and accompanied by the data which is

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necessary for the preparation and filing of patent applications covering such
CombinatoRx Improvements.

             5.1.2   ANGIOTECH REPORTS. No later than March 1st of each year ,
Angiotech shall provide CombinatoRx with a summary written report containing a
description of the activities undertaken by Angiotech with respect to the
Research Plan and with respect to all CombinatoRx Compounds and Licensed
Compounds and describing any Research Improvements, Angiotech Evaluation
Improvements and Angiotech Licensed Improvements conceived or discovered during
the prior year and accompanied by the data which is necessary for the
preparation and filing of patent applications covering such Research
Improvements, Angiotech Evaluation Improvements and Angiotech Licensed
Improvements, and following selection of a CombinatoRx Compound under this
Agreement, a description of the development and commercialization activities
undertaken by Angiotech with respect to all Selected Compounds.

             5.1.3   COORDINATION OF DEVELOPMENT ACTIVITIES. If both Parties are
developing a product that contains the same Compound, then the Parties shall
establish appropriate communication processes to share information as is
reasonably needed for regulatory purposes and key development decisions.

                                    ARTICLE 6
                              COMBINATORX COMPOUNDS

     6.1     CHALICE DATABASE.

             6.1.1   ACCESS TO THE CHALICE DATABASE. Promptly after the
Effective Date and during the Research Period, CombinatoRx shall provide
Angiotech with non-exclusive Access to the Chalice Database to allow Angiotech
to review all CombinatoRx Compounds and associated data and information
contained therein and shall provide any other assistance related thereto
reasonably requested by Angiotech. It is understood that CombinatoRx's
activities in providing Angiotech with Access to the Chalice Database is a part
of the activities of the CombinatoRx Project Team. During the Research Period,
CombinatoRx shall keep Angiotech reasonably informed of, and shall provide to
Angiotech, updates, modification and/or additions of data and information to the
Chalice Database.

             6.1.2   EXCLUSIVE RIGHTS DURING CHALICE EVALUATION PERIOD. During
the Chalice Evaluation Period, CombinatoRx shall not grant to any Third Party
any right or license to a CombinatoRx Compound in the Angiotech Field except
pursuant to any Pre-Existing Agreement and shall not permit any Third Party to
review the Chalice Database or any data or information contained therein for use
within the Angiotech Field.

             6.1.3   EXCLUSIVE RIGHTS FOLLOWING CHALICE EVALUATION PERIOD.
Following the time period specified in Section 6.1.2 and until expiration of the
Research Period, CombinatoRx shall only be permitted to license a CombinatoRx
Compound to a Third Party in the Angiotech Field in the following limited
circumstances:

             (a)     The CombinatoRx Compound is licensed by a Third Party
                     collaborator of CombinatoRx under a Pre-Existing Agreement;

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             (b)     The CombinatoRx Compound is licensed by a Third Party under
                     an agreement entered into by CombinatoRx after the
                     Effective Date in compliance with Section 2.5.2; or

             (c)     The CombinatoRx Compound was a Fast Track Compound which
                     was rejected by Angiotech as described in Section 6.2.2 and
                     is licensed by a Third Party under an agreement entered
                     into by CombinatoRx after the Effective Date in compliance
                     with Section 2.5.2;

         provided, however, that (b)-(c) above shall not apply with respect to a
         Fast Track Compound during its Fast Track Evaluation Period, or with
         respect to any Compound during the period in which it is a Protected
         Compound or Selected Compound.

     6.2     FAST TRACK COMPOUNDS.

             6.2.1   DESIGNATION OF COMBINATORX COMPOUNDS AS FAST TRACK
COMPOUNDS. Beginning on the Effective Date, CombinatoRx may designate up to five
(5) CombinatoRx Compounds as Fast Track Compounds, and on each anniversary of
the Effective Date during the Research Period, CombinatoRx may designate up to
three (3) additional CombinatoRx Compounds as Fast Track Compounds. CombinatoRx
may, with Angiotech's consent not to be unreasonably withheld, designate up to
two (2) additional CombinatoRx Compounds as Fast Track Compounds during each
12-month period in which CombinatoRx is permitted to designate Fast Track
Compounds commencing on the first anniversary of the Effective Date. CombinatoRx
shall provide to Angiotech (a) a written notice listing the Fast Track
Compounds; (b) a detailed written report on all material assays, pre-clinical
studies, clinical studies and other studies performed by CombinatoRx with
respect to each Fast Track Compound and the results thereof; and (c) either (i)
sufficient quantities of each Fast Track Compound for use by Angiotech to
evaluate the Fast Track Compound or (ii) if CombinatoRx does not have such
quantities of such Fast Track Compound on hand, CombinatoRx shall identify the
source of the active pharmaceutical ingredients for Angiotech to purchase such
Fast Track Compound at its own expense. CombinatoRx shall also provide Angiotech
with any new material information or data related to a Fast Track Compound that
is created or obtained by CombinatoRx during the relevant Fast Track Evaluation
Period.

             6.2.2   FAST TRACK EVALUATION PERIOD. Angiotech shall have twelve
(12) months following receipt of the complete information and materials
described in Section 6.2.1 to evaluate the Fast Track Compounds. Angiotech can
request up to an additional six (6) months to evaluate any particular Fast Track
Compound in addition to the 12-month period described in the preceding sentence,
with CombinatoRx's consent to such request not to be unreasonably withheld (such
12-month period, together with any applicable 6-month period, the "FAST TRACK
EVALUATION PERIOD"). At any time prior to the end of the applicable Fast Track
Evaluation Period, Angiotech may designate one or more Fast Track Compounds as
Selected Compounds by written notice to CombinatoRx of such designation. All
Fast Track Compounds not selected by Angiotech are deemed rejected and Angiotech
shall have no rights with respect to rejected Fast Track Compounds and shall
promptly return to CombinatoRx all Information and materials related to such
Fast Track Compounds that were provided to Angiotech by CombinatoRx (except one
copy of which may be retained by Angiotech solely in its legal files for
archival purposes to ensure its continuing compliance with this Agreement).

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             6.2.3   EXCLUSIVE RIGHTS DURING FAST TRACK EVALUATION PERIOD.
During the Fast Track Evaluation Period, CombinatoRx shall not grant to any
Third Party a right or license to a Fast Track Compound in the Angiotech Field.
Following such period, CombinatoRx may grant a right or license to a rejected
Fast Track Compound in the Angiotech Field to a Third Party under an agreement
entered into by CombinatoRx after the Effective Date in compliance with Section
2.5.2.

             6.2.4   SUBSEQUENT DESIRE TO SELECT A FAST TRACK COMPOUND. If
Angiotech subsequently determines during the Research Period or Selection Period
that it desires to select a previously rejected Fast Track Compound, Angiotech
shall submit a written request to CombinatoRx, with consent to such request not
to be unreasonably withheld or delayed or conditioned upon further sums.

     6.3     PROTECTED COMPOUNDS.

             6.3.1   DESIGNATION OF COMBINATORX COMPOUNDS AS PROTECTED
COMPOUNDS. No later than ten (10) days following the six (6) month anniversary
of the Effective Date and thereafter within ten (10) days following (but not
earlier than) the subsequent six (6) month anniversaries of the Effective Date
ending on the fifty four (54) month anniversary of the Effective Date, Angiotech
may designate CombinatoRx Compounds which are, at the time of such designation
Controlled by CombinatoRx, for protection in the Angiotech Field during the
Research Period and the Selection Period. Notwithstanding the foregoing,
Angiotech shall have up to six (6) months to designate for protection Compounds
that become CombinatoRx Compounds prior to the fifth anniversary of the
Effective Date, so that, for such Compounds, Angiotech shall have until the
first anniversary described above that is not less than six months from the date
such Compound became a CombinatoRx Compound to designate such Compound for
protection. Each such compound selected pursuant to this Section 6.3 shall be
deemed a "PROTECTED COMPOUND." Angiotech may add or remove Compounds from the
list of Protected Compounds on each 6-month anniversary described above at its
discretion, but no more than a total of one hundred (100) Compounds may be
designated as Protected Compounds at any one time.

             6.3.2   EXCLUSIVE RIGHTS TO PROTECTED COMPOUNDS. Subject to the
rights of Third Parties under Pre-Existing Agreements that may cause a
CombinatoRx Compound to cease to be a CombinatoRx Compound, during the time that
a CombinatoRx Compound is designated by Angiotech as a Protected Compound,
CombinatoRx shall not grant to any Third Party a right or license to such
Protected Compound or its uses in the Angiotech Field. For the avoidance of
doubt, the rights of CombinatoRx set forth in Section 6.1.3 shall not apply at
any time with respect to a Compound which is a Protected Compound.

     6.4     SELECTED COMPOUNDS.

             6.4.1   COMPOUND SELECTION. Angiotech, in its sole discretion, may
select up to ten (10) CombinatoRx Compounds, including Protected Compounds and
Fast Track Compounds, to be licensed from CombinatoRx under this Agreement at
any time prior to the expiration or termination of the Research Period except
with respect to Compounds which become CombinatoRx Compounds within the last six
(6) months of the Research Period which may be selected at any time during the
six (6) months following the expiration of the Research Period (the Research
Period as so extended with respect to such CombinatoRx Compounds being referred
to herein as the "SELECTION PERIOD"). Notwithstanding the

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foregoing, Angiotech may select up to five (5) additional CombinatoRx Compounds
in addition to the ten (10) CombinatoRx Compounds described in the first
sentence of this Section upon payment by Angiotech to CombinatoRx of two million
dollars ($2,000,000) for each such additional CombinatoRx Compound. For the
avoidance of doubt, where a Compound is comprised of two or more Active
Ingredients, such Compounds if selected shall nevertheless be considered to be
one Selected Compound. A selection used for a CombinatoRx Compound may not be
re-used even if such CombinatoRx Compound is subsequently returned to
CombinatoRx under Article 15 of this Agreement or otherwise. Following the
determination of the Compound Class pursuant to Section 6.4.2 for a Compound
selected by Angiotech, Angiotech may also select up to two (2) Back-Up Compounds
for each CombinatoRx Compound selected for a license pursuant to this Section or
Section 6.2.2. Each such Compound selected pursuant to this Section 6.4,
including the Back-Up Compounds so selected, together with all other Compounds
included in the Compound Class related to such Compounds (as determined pursuant
to Section 6.4.2 below) shall be deemed a "SELECTED COMPOUND." A Selected
Compound shall not include any other Compounds in the Compound Class (other than
the Compound specifically selected by Angiotech) which, at the time of such
selection, CombinatoRx has undertaken any IN VIVO pre-clinical or clinical
studies or such Compound is novel and has been synthesized for further research
or development prior to such selection unless Angiotech makes a separate
selection under this Section 6.4.1 regarding such other Compound, and no
separate Compound Class will be determined and there will be no Back-Ups for
such separately selected Compound. Within thirty (30) days following selection
of a particular Compound and determination of the Compound Class for such
Compound by the Research Committee, CombinatoRx shall inform Angiotech as to
whether it has conducted or is conducting any activity of the type described in
the preceding sentence in respect of any member of such Compound Class. Within
sixty (60) days after receipt of the information described in the preceding
sentence, Angiotech shall be entitled to decline its previously selected
Compound, which shall not be counted against the permitted number of Selected
Compounds, on the basis of such activity or the scope of Compounds included
within the Compound Class, and to select a replacement Selected Compound (and
the Back-Up Compounds for such Selected Compound) with such selection to take
place within such sixty (60) day period, if at all. Any Compound rejected by
Angiotech pursuant to the preceding two sentences shall no longer be available
for selection by Angiotech without the consent of CombinatoRx. If Angiotech does
not elect to separately select such Compound, then CombinatoRx shall not grant a
license to such Compound in the Angiotech Field to any Third Party during the
Research Period and for one (1) year after its expiration, or, if this Agreement
is earlier terminated by Angiotech pursuant to Section 15.4, 15.5 or 15.6 for a
period of one (1) year after such termination. Angiotech shall notify
CombinatoRx in writing as to which Selected Compounds it has selected at any
time prior to the expiration or termination of the Selection Period.

             6.4.2   DETERMINATION OF COMPOUND CLASS. Within thirty (30) days of
the selection of a CombinatoRx Compound as a Selected Compound, the Research
Committee shall meet to determine the Compound Class for such CombinatoRx
Compound as set forth in Section 4.1.2(h).

             6.4.3   MATTERS CONCERNING SELECTED COMPOUNDS. Angiotech shall not
initiate human clinical trials for a product incorporating a Compound until such
time as the Compound has been designated a Selected Compound. During the
Selection Period, CombinatoRx shall provide Angiotech with any information and
data (including without limitation CombinatoRx's activities regarding seeking or
maintaining IP Protection Rights

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with regard to a CombinatoRx Compound) known to CombinatoRx and reasonably
requested by Angiotech in connection with Angiotech's internal Compound
selection process. Subject to Section 2.5.2, for any CombinatoRx Compound or
Protected Compound not selected by Angiotech as a Selected Compound at or before
the end of the Selection Period, all right, title and interest in and to such
CombinatoRx Compound or Protected Compound shall revert to CombinatoRx, and
Angiotech shall no longer have any right or license to make or use such
CombinatoRx Compound or Protected Compound. CombinatoRx's obligations under this
Section shall be performed by the CombinatoRx Project Team.

                                    ARTICLE 7
                          LICENSED PRODUCT DEVELOPMENT

     7.1     USE OF ALTERNATE COMPOUNDS. In the event that either Party (the
"FOLLOWING PARTY") intends to develop a product during the Term containing a
Selected Compound that is the same Compound(s) (the "DEVELOPED COMPOUND")
contained in a product that is, at the time, in IN VIVO or clinical development
by the other Party (the "DEVELOPING PARTY"), then the Following Party shall use
reasonable efforts under the specific situation, including appropriate pre
clinical tests if time permits, to determine if another Compound in the same
Compound Class as the Developed Compound is Equivalent (as defined below) to the
Developed Compound. If an Equivalent Compound is found, then the Following Party
shall use the Equivalent Compound instead of the Developed Compound in its
product to be developed. For purposes of this Section, an "Equivalent" Compound
is a Compound that may be reasonably substituted for the Developed Compound in
the Following Party's product, taking into account (i) the anticipated
effectiveness of the Equivalent Compound as compared to the Developed Compound
for the anticipated indication, (ii) the competitive position of the Equivalent
Compound to the Developed Compound in the relevant market, (iii) the relative
strength of the intellectual property around the Equivalent Compound as compared
to the Developed Compound, (iv) the formulation characteristics and components
and delivery profile of the Equivalent Compound as compared to the Developed
Compound, and (v) such other factors as the Following Party deems relevant, in
its sole discretion, which factors shall be disclosed to the Developing Party.

     7.2     DILIGENCE OBLIGATIONS. There shall be no diligence obligations
regarding the development and commercialization of Licensed Products that do not
contain Selected Compounds. Angiotech (itself or through its Affiliates or a
Sublicensee) shall use Commercially Reasonable Efforts to develop, and if
appropriate Regulatory Approvals are obtained, commercialize Selected Compounds
and Licensed Products containing Selected Compounds (together, "SELECTED
COMPOUND LICENSED PRODUCTS") in all Major Markets in the Angiotech Field.

             7.2.1   SPECIFIC OBLIGATIONS FOR ALL SELECTED COMPOUNDS. In
addition to the obligations set forth in Section 7.2, Angiotech (itself or
through its Affiliates or a Sublicensee) shall meet the following obligations
(each such deadline, a "DILIGENCE DATE"):

             (a)     Within twenty four (24) months after the date of selection
                     of the first CombinatoRx Compound pursuant to Section 6.4.1
                     (the "First Selected Compound"), initiate the first human
                     clinical trial for a Selected Compound Licensed Product;

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             (b)     Within thirty six (36) months after the date of selection
                     of the second CombinatoRx Compound pursuant to Section
                     6.4.1, initiate the second human clinical trial for a
                     second Selected Compound Licensed Product;

             (c)     Within sixty (60) months after the selection of the First
                     Selected Compound pursuant to Section 6.4.1, initiate the
                     first Pivotal Trial for a Selected Compound Licensed
                     Product;

             (d)     Within two (2) years after the expiration of the Research
                     Period initiate the first human trial for a Selected
                     Compound Licensed Product for which human trials had not
                     been previously initiated; provided that, Angiotech has
                     selected more than two CombinatoRx Compounds pursuant to
                     Section 6.4.1; and

             (e)     Within four (4) years after the expiration of the Research
                     Period, initiate the first human trial for a Selected
                     Compound Licensed Product for which human trials had not
                     been previously initiated; provided that, Angiotech has
                     selected at least four CombinatoRx Compounds pursuant to
                     Section 6.4.1.

             7.2.2   SPECIFIC OBLIGATIONS FOR FAST TRACK COMPOUNDS. In addition
to the obligations set forth in Section 7.2, Angiotech (itself or through its
Affiliates or a Sublicensee) shall actively develop all Licensed Products that
contain Fast Track Compounds ("FAST TRACK LICENSED PRODUCTS"), which shall
include active pre-clinical testing, clinical development, working to obtain
Regulatory Approval and commercialization of such Licensed Products; provided
that, Angiotech shall be excused from its obligations under this Section for any
period of up to twenty four (24) months with respect to any Fast Track Licensed
Product for which Angiotech has initiated a human clinical trial. The
obligations under this Section shall be deemed to be satisfied with respect to
any particular Fast Track Licensed Product if Angiotech is spending at least One
Million Dollars ($1,000,000) per twelve month period on development or
commercialization efforts for each such Fast Track Licensed Product (except for
twelve month periods in which Angiotech is excused from its obligations under
the preceding sentence).. Notwithstanding the foregoing, if Angiotech is not
actively developing or commercializing a particular Fast Track Licensed Product
or spending the amount per Fast Track Licensed Product as required by this
Section, then Angiotech shall be deemed to have satisfied its obligations under
this Section by paying to CombinatoRx, not later than January 31st of each year
during the Term of this Agreement, Two Million Dollars ($2,000,000) per Fast
Track Licensed Product.

             7.2.3   EXTENSION OF DILIGENCE DATES. In the event that Angiotech
desires an extension to any of the Diligence Dates set forth in Section 7.2.1,
Angiotech shall notify CombinatoRx at least thirty (30) days prior to the next
unmet Diligence Date. Promptly thereafter, the Chief Executive Officers of both
Angiotech and CombinatoRx shall meet and confer regarding such extension,
Angiotech's product development efforts and the reasons for Angiotech's request
for the extension, with CombinatoRx's consent to such extension not to be
unreasonably withheld or delayed.

             7.2.4   EXCUSE OF DILIGENCE OBLIGATIONS. Any failure by Angiotech
in the performance of Angiotech's diligence obligations under Section 7.2 shall
be excused to the

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extent that and only for so long as such failure is the caused by a failure of
CombinatoRx and its Affiliates in the performance of their respective
obligations hereunder, including their obligations in performing under the
Research Plan, providing Angiotech Access to the Chalice Database as described
in Section 6.1.1 and fulfillment of information disclosure requirements
contained herein.

     7.3     BREACH OF DILIGENCE OBLIGATIONS.

             7.3.1   NOTIFICATION AND MEETING. If at any time CombinatoRx has a
reasonable basis to believe that Angiotech is in breach of its material
obligations under Section 7.2, then CombinatoRx shall so notify Angiotech in
writing, specifying the basis for its belief, and the Parties shall meet within
thirty (30) days after such written notice to discuss in good faith for a period
of not more than twenty-one (21) days CombinatoRx's concerns and Angiotech's
development and commercialization plans with respect to the Licensed Compound
and Licensed Product.

             7.3.2   RIGHT OF TERMINATION. If, after such good faith discussions
described in Section 7.3.1, (a) Angiotech is in breach of its obligations under
Section 7.2, and (b) Angiotech has not rectified such breach within one hundred
eighty (180) days of meeting with CombinatoRx pursuant to Section 7.3.1 (or, if
such failure cannot be rectified within such one hundred eighty 180-day period,
if Angiotech does not commence reasonable actions to rectify such breach within
such period and thereafter diligently pursues such actions), CombinatoRx may
exercise its right of termination provided under Section 15.5.

     7.4     SERVICES IN RELATION TO THE LICENSED COMPOUNDS. CombinatoRx shall
provide Angiotech with consultation services, including reviewing and
contributing to proposed publications concerning the Licensed Compounds, as
Angiotech may reasonably request, including by making CombinatoRx's employees,
consultants and other scientific staff available to consult with Angiotech on
issues arising during the pre-clinical or clinical development of the Licensed
Compounds and/or Licensed Products, or in connection with Exploitation of the
Licensed Compounds and/or the Licensed Products. For this purpose Angiotech may
use during the Research Period the FTEs that CombinatoRx is required to commit
to the Research Project in accordance with Section 3.2 and thus no additional
funding shall be provided by Angiotech to CombinatoRx to obtain the consultation
services provided for in this Section 7.3; unless the delivery of such services
rises to a level that makes it impracticable for CombinatoRx to fulfill its
responsibilities under the Research Plan. After termination or expiration of the
Research Period, Angiotech shall reimburse CombinatoRx for reasonable and
verifiable out-of-pocket costs incurred in connection with such consultation
services.

     7.5     REGULATORY FILINGS. In order to facilitate the development of
Licensed Products by Angiotech and the development of products pursuant to the
grant of rights to CombinatoRx, each Party hereby grants to the other the right
to cross-reference to Regulatory Documentation and Regulatory Approvals
controlled by such Party that are related to the Manufacture, use and/or sale of
Licensed Products.

     7.6     TRADEMARKS. During the Term, Angiotech shall have the right to
market and advertise Licensed Products under their respective names, trademarks,
trade names, labels, or other designations, provided, however, that all
packaging of Licensed Products shall be marked (and Angiotech and its Affiliates
and Sublicensees shall have the right to mark

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Licensed Products) with a trademark representing the CombinatoRx name (in a form
to be provided by CombinatoRx, and with placement and size to be reasonably
mutually agreed to by the Parties). All respective names, trademarks, trade
names, labels, or other designations used shall be, and shall remain, the
property of their respective owners.

                                    ARTICLE 8
                                  CONSIDERATION

     8.1     TOTAL OBLIGATION. The amount payable by Angiotech to CombinatoRx
pursuant to this Article 8 represent all of Angiotech's financial obligations to
CombinatoRx hereunder and CombinatoRx shall not be entitled to any additional
compensation or remuneration from Angiotech under this Agreement, except to the
extent otherwise expressly set forth in this Agreement. In consideration of the
licenses and other rights granted by CombinatoRx to Angiotech herein and subject
to the terms and conditions of this Agreement, Angiotech shall make the
following non-refundable payments to CombinatoRx:

             8.1.1   LICENSE EXECUTION FEE; EQUITY INVESTMENT. Angiotech shall
pay to CombinatoRx Twenty-Seven Million Dollars ($27,000,000) within five (5)
days after the Effective Date. In addition to the fee described in the preceding
sentence, Angiotech and CombinatoRx have, as of the date hereof, entered into a
Series E Convertible Preferred Stock Purchase Agreement pursuant to which
Angiotech will purchase from CombinatoRx an aggregate of 1,363,636 shares of
CombinatoRx Series E Preferred Stock for a total purchase price of Fifteen
Million Dollars ($15,000,000).

             8.1.2   EXTENSION OF RESEARCH PERIOD. Angiotech may extend the
Research Period past the thirty (30) month anniversary of the Effective Date by
notifying CombinatoRx of its desire to do so, which notice must be received by
CombinatoRx not later than the twenty four (24) month anniversary of the
Effective Date and which must be accompanied by a payment to CombinatoRx of
Seven Million Dollars ($7,000,000), in which case, the Research Period shall be
extended until the end of the fifth Research Year.

             8.1.3   DEVELOPMENT MILESTONES.  Angiotech shall pay to
CombinatoRx a total of Thirty Million Dollars ($30,000,000) on a Compound by
Compound basis, as follows:

             (a)     Five Million Dollars ($5,000,000) upon the first completion
                     for each Licensed Product containing such Compound of a
                     Pivotal Trial that is designed to test efficacy of the
                     Licensed Product, where the results of such study
                     demonstrate a statistically significant efficacy in the
                     primary endpoint, but not later than the filing of the
                     first application for Regulatory Approval for such Licensed
                     Product;

             (b)     Ten Million Dollars ($10,000,000) following the date of
                     first approval by the Regulatory Authority in the United
                     States of an application for Regulatory Approval for a
                     Licensed Product containing such Compound;

             (c)     Seven Million Five Hundred Thousand Dollars ($7,500,000)
                     following the earlier of (i) the date of first
                     reimbursement approval by the Regulatory Authority or any
                     Person with jurisdiction over such decisions in the United
                     Kingdom, Germany and France, for a Licensed

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                     Product containing each such Compound or (ii) the
                     achievement of Ten Million Dollars ($10,000,000) in Revenue
                     in the European Union for such Licensed Product; and

             (d)     Seven Million Five Hundred Thousand Dollars ($7,500,000)
                     following the date of first approval by the Regulatory
                     Authority in Japan of an application for Regulatory
                     Approval for a Licensed Product containing such Compound.

             Within forty-five (45) days of achievement of each respective
             milestone by Angiotech or its Affiliate or Sublicensee as described
             in this Section 8.1.3, Angiotech shall make the corresponding
             payment to CombinatoRx.

             For the avoidance of doubt, the milestone payments set forth in
             this Section shall only be paid upon the first achievement of each
             such milestone for multiple Licensed Products based on the same
             Compound, and no additional milestone payments shall be due based
             on the achievement of the same milestones for additional Licensed
             Products containing the same Compound as a Licensed Product for
             which such milestones have already been paid..

             Notwithstanding the foregoing, (i) in the event that Angiotech
             commences development of a Licensed Product that contains a
             Licensed Compound that is in the same Compound Class as a Licensed
             Compound contained in a Licensed Product for which not all
             milestones above have been paid (a "FAILED LICENSED PRODUCT") or
             commences development of a Licensed Product that contains a Back-Up
             Compound that is a back-up to a Licensed Compound contained in a
             Failed Licensed Product, then Angiotech shall only owe payments
             related to such subsequent Licensed Product that had not been paid
             for the Failed Licensed Product, (ii) in the event that Angiotech
             develops a Licensed Product of which all Compounds included in such
             Licensed Product are from the same Compound Class as the Compounds
             included in a Licensed Product for which Angiotech had previously
             paid any milestones under this Section, and the Licensed Product
             being developed by Angiotech is being developed using substantially
             the same type of device, type of formulation or mode of
             administration and is being developed for the same Condition as the
             prior Licensed Product (E.G., where the previous Licensed Compound
             and the subsequent Licensed Compound are both eluted from a stent
             to Treat restenosis), then no new milestones shall be owed to
             CombinatoRx based on the development of such Licensed Product, but
             Angiotech shall be obligated to pay any milestones with respect to
             such new Licensed Product that were not paid with respect to such
             prior Licensed Product, and (iii) Angiotech shall pay to
             CombinatoRx fifty percent (50%) of the milestone payments set forth
             above with respect to the achievement of such milestones with a
             Derivative Licensed Product.

     8.2     ROYALTIES. In addition to the payments under Section 8.1, and
subject to Section 8.2.3, Angiotech shall pay CombinatoRx, with respect to each
Licensed Product, the following royalties on the Cumulative Revenue of Licensed
Products in the Territory (provided that calculations for the Product Kits are
to be made in accordance with the formula set forth in Section 8.3):

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             8.2.1   ROYALTY WHEN PATENT COVERAGE EXISTS. In countries where
Patent Coverage exists with respect to the Licensed Product sold in such
country, on a Compound by Compound basis:

             (a)     five percent (5%) of Revenue for that portion of Cumulative
                     Revenue attributable to a given Licensed Product in the
                     Territory that is less than One Hundred Fifty Million
                     Dollars ($150,000,000);

             (e)     seven percent (7%) of Revenue for that portion of
                     Cumulative Revenue attributable to such Licensed Product in
                     the Territory that is equal to or exceeds One Hundred Fifty
                     Million Dollars ($150,000,000) but is less than Five
                     Hundred Million Dollars ($500,000,000); and

             (f)     ten percent (10%) of Revenue for that portion of Cumulative
                     Revenue attributable to such Licensed Product in the
                     Territory that is equal to or exceeds Five Hundred Million
                     Dollars ($500,000,000).

             Revenue for which a royalty is payable under Section 8.2.2 shall
             not be included in the Cumulative Revenue for the applicable
             Licensed Product.

             8.2.2   ROYALTY WHEN NO PATENT COVERAGE EXISTS. In countries where
no Patent Coverage exists with respect to the Licensed Product sold in such
country in the Territory, three (3) percent of all Revenue.

             8.2.3   OFFSET OF RESEARCH AND DEVELOPMENT COSTS. Revenue received
by Angiotech or its Affiliates that is attributable to Sublicensee license fees,
milestone payments and/or license maintenance fees related to a Licensed
Compound and/or Licensed Product shall be reduced by the amount of research and
development expenses incurred by Angiotech that is attributable to the
applicable Licensed Compound and/or Licensed Product. Research and development
expenses shall be calculated using Angiotech's internal systems used to track
research and development expenses consistent with generally acceptable
accounting principles and subject to CombinatoRx's right to audit such expenses
under Section 8.10.

     8.3     PRODUCT KITS. With respect to Product Kits, the Net Sales component
used for the calculation of Revenue for purposes of determining royalties under
Section 8.2 shall be determined by the gross invoiced amount on sales of Product
Kits by Angiotech and its Affiliate to Third Parties, less the deductions
described in Section 1.81(a)-(f), and multiplied by a proration factor that is
determined as follows;

             (a)     If all components of the Product Kit were sold separately
                     during the same or immediately preceding Calendar Quarter,
                     the proration factor for each different Product Kit shall
                     be determined by the formula [A / (A+B)], where A is the
                     sum of the average sale prices of each of the Licensed
                     Product components in that Product Kit during such period
                     when sold separately from the other essential functional
                     components in that Product Kit, and B is the sum of the
                     average sale prices of each of the other essential
                     functional components in that Product Kit during such
                     period when sold separately from the Licensed Product
                     components; or

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             (b)     If such average sale price cannot be determined in
                     accordance with Section 8.3(a) for the Licensed Product
                     components of a Product Kit, and for each of the other
                     essential functional component(s) of such a Product Kit,
                     then the proration factor shall be determined by the
                     formula [C/(C+D)], where C is the fair market value of the
                     Licensed Product and D is the fair market value of all
                     other essential functional component(s) included in the
                     Product Kit. Prior to the First Commercial Sale of a
                     Product Kit, Angiotech shall in good faith make a
                     determination of the respective fair market values of the
                     Licensed Product and the other essential functional
                     component(s) included in the Product Kit, and shall notify
                     CombinatoRx of such determination and provide CombinatoRx
                     with data to support such determination. CombinatoRx shall
                     have the right to review and approve such calculation, such
                     approval not to be unreasonably withheld or delayed. If
                     CombinatoRx does not agree with such determination,
                     CombinatoRx shall inform Angiotech within thirty (30) days
                     of receiving Angiotech's determination and data, and the
                     Parties shall meet promptly to discuss the basis of the
                     calculations; if CombinatoRx and Angiotech are still unable
                     to agree in good faith as to such respective fair market
                     values, then the Parties shall attempt to resolve the
                     dispute in accordance with the provisions of Article 16.

     8.4     REDUCTION OF ROYALTY.

             8.4.1   GENERIC COMPETITION WHEN PATENT COVERAGE EXISTS. Generic
competition with respect to a Licensed Product exists in a country in the
Territory when products (a) have the same Active Ingredients as the Licensed
Compound included in such Licensed Product in jurisdictions where no Regulatory
Approval is required, or (b) receive Regulatory Approval (treating such
definition, for this purpose, as if it applied to such other products) through
an Abbreviated New Drug Application process, 510(k) process, or similar process
in which approval is obtained by a demonstration of equivalence to a previously
approved product (each such product, a "GENERIC COMPETING PRODUCT"), and the
following two conditions are met:

             (a)     One of the following applies: (i) the Generic Competing
                     Product has been found by a court of competent jurisdiction
                     not to infringe a claim of a Licensed Patent and/or
                     Research Patent; (ii) the Parties have mutually agreed that
                     it is in their best interests to not initiate litigation
                     against the Third Party manufacturing, marketing or selling
                     the Generic Competing Product; or (iii) the Generic
                     Competing Product is the subject of a compulsory license
                     that a court or a governmental agency of competent
                     jurisdiction has required CombinatoRx, Angiotech or an
                     Angiotech Affiliate or Sublicensee to grant to a Third
                     Party permitting such Third Party to make and sell the
                     Licensed Product in a country in the Territory; and

             (b)     Revenue attributable to such Licensed Product in such
                     country drops in excess of thirty-three percent (33%) in a
                     given Calendar Quarter compared to the Revenue attributable
                     to such Licensed Product for the Baseline Calendar Quarter
                     for such country.

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             8.4.2   WHEN PATENT COVERAGE EXISTS BASED IN ISSUED VALID CLAIMS.
Should the situation contemplated in Section 8.4.1 occur in a country where the
royalty rate for the applicable Licensed Product in such county is that set
forth in Section 8.2.1 and the Patent Coverage for such Licensed Product is
based on issued Valid Claims, then for purposes of calculating the royalties of
such Licensed Product under Section 8.2 the Revenue and Cumulative Revenue
attributable to such Licensed Product in such country for each such quarter that
condition 8.4.1(b) applies shall be deemed Revenue with respect to a Licensed
Product where no Patent Coverage exists and Angiotech shall pay the royalty rate
specified in Section 8.2.2

             8.4.3   WHEN PATENT COVERAGE EXISTS BASED IN PENDING VALID CLAIMS.
Should a Third Party commence marketing a product in a country containing a
Compound that is covered by a pending Valid Claim which provides Patent Coverage
for a Licensed Product and the Patent Coverage for such Licensed Product is
based only on pending Valid Claims in such country, then for the purposes of
calculating the royalties of such Licensed Product under Section 8.2, one
hundred percent (100%) of the Revenue and Cumulative Revenue attributable to
such Licensed Product in such country shall be disregarded and no royalty shall
be paid with respect to such Revenue.

             8.4.4   WHEN NO PATENT COVERAGE EXISTS. Should the situation
contemplated in Section 8.4.1 occur in a country where the royalty rate for the
applicable Licensed Product in such country is that set forth in section 8.2.2,
then for the purposes of calculating the royalties of such Licensed Product
under Section 8.2, one hundred percent (100%) of the Revenue and Cumulative
Revenue attributable to such Licensed Product in such country shall be
disregarded and no royalty shall be paid with respect to such Revenue.

             8.4.5   SEPARATE CALCULATION. The calculation of the royalty
reduction under Section 8.4 shall be conducted separately for each Licensed
Product. Multiple products are deemed to be one and the same Licensed Product if
such products are based upon the same Licensed Compound.

     8.5     ROYALTY STACKING. In the event that after the Effective Date (a) a
Licensed Product is deemed by a court of competent jurisdiction to infringe a
valid claim of a patent owned or controlled by a Third Party in any given
country of the Territory, or (b) Angiotech, its Affiliates or Sublicensees
determine, following consultation with counsel, that it is necessary to pay
royalties or other fees to any Third Party to obtain a license to practice any
Third Party's rights in order to market or develop a Licensed Product in any
given country, in both cases with respect to rights that relate directly to the
composition, its formulation, or method of use thereof licensed by Angiotech
from CombinatoRx, then in such event, Angiotech and its Affiliates may deduct
such royalties and other fees due to such Third Parties (or such amounts
expended in settlement of such claim, or for securing such rights) from the
royalties otherwise due to CombinatoRx under this Agreement.

     8.6     MINIMUM ROYALTY. Any reductions set forth in Sections 8.4 and 8.5
shall be applied to the royalty rate payable to CombinatoRx under Section 8.2 in
the order in which the event triggering such reduction occurs. Notwithstanding
the foregoing, in no event shall the royalty rate payable to CombinatoRx under
Section 8.2 be reduced by more than fifty percent (50%) in any Calendar Quarter
as a result of the cumulative reductions set forth in Sections 8.4 and 8.5,
provided, however, that in the event of a royalty reduction under Section 8.4.2,
the royalty rate payable to CombinatoRx under Section 8.2 may be reduced by

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up to one-hundred percent (100%). Amounts not exhausted in any Calendar Quarter
may be carried into future Calendar Quarters.

     8.7     ROYALTY TERM. Angiotech's obligation to pay royalties shall
commence, on a country-by-country basis, with respect to each separate Licensed
Product, on the date of First Commercial Sale of such Licensed Product in such
country. The obligation shall expire, on a country-by-country basis, with
respect to each separate Licensed Product, on the later to occur of (a) the
tenth (10th) anniversary of the First Commercial Sale of such Licensed Product,
and (b) the expiration date in such country of the last to expire of all Valid
Claims providing Patent Coverage for the use or sale or Manufacturing (if in the
case of Manufacturing such Valid Claims provide market exclusivity of such
Licensed Product in such country). At the end of the period for which any
royalties are due with respect to a Licensed Product in a given country of the
Territory pursuant to this Agreement, Angiotech shall have a fully paid,
exclusive, royalty free license, with the right to sublicense, under the
Licensed Patents Licensed Information, CombinatoRx Licensed Improvements and
CombinatoRx's undivided interest in the Research Results, Research Patents and
Research Improvements with respect to such Licensed Product in such country of
the Territory in the in the Angiotech Field, with respect to Licensed Products
that contain Selected Compounds, and in the Angiotech Reserch Field, with
respect to Licensed Products that contain Hit Compounds.

     8.8     SALES SUBJECT TO ROYALTIES. Sales between Angiotech, its Affiliates
and Sublicensees shall not be considered Net Sales. Royalties shall be
calculated on Angiotech's and its Affiliates' sale of the Licensed Products to a
Third Party (including Distributors). Royalties shall be payable only once for
any given batch of the Licensed Products. For purposes of determining Net Sales,
the Licensed Product shall be deemed to be sold when invoiced and a "sale" shall
not include, and no royalties shall be payable on, transfers by Angiotech, its
Affiliates or Sublicensees of free samples of Licensed Products or clinical
trial materials containing Licensed Compound, or transfers of Licensed Products
to patients on a compassionate use basis or other transfers or dispositions for
charitable, promotional, pre-clinical, clinical, manufacturing, testing or
qualification, regulatory or governmental purposes, or any other use other than
as therapeutic pharmaceutical product in humans where Angiotech receives no
compensation or identifiable benefit therefrom.

     8.9     ROYALTY PAYMENTS. The royalties shall be calculated quarterly as of
the last day of March, June, September and December respectively, for the
Calendar Quarter ending on that date. Angiotech shall pay the royalties in
conjunction with the delivery of a written report to CombinatoRx within ninety
(90) days after the end of each Calendar Quarter that shows, with respect to
each country and each Licensed Product, the sales volume, Net Sales of the
Licensed Products and Revenue received by Angiotech during such Calendar
Quarter.

     8.10    RECORDS RETENTION; AUDIT.

             8.10.1  Until the third (3) anniversary of the Calendar Year in
which Revenue is received or generated by Angiotech, Angiotech shall keep or
require to be kept by its Sublicensees and Affiliates accurate records or books
of account in accordance with applicable generally accepted accounting
principles showing the information that is necessary for the accurate
determination of the royalties due hereunder with respect to such Revenue.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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             8.10.2  Upon the written request of CombinatoRx, Angiotech shall
permit and shall require its Sublicensees and Affiliates to permit a certified
public accountant or a person possessing similar professional status and
associated with an independent accounting firm acceptable to the Parties to
inspect during regular business hours and no more than once a year and no more
than once with respect to any such year and going back no more than three (3)
years preceding the current year, all or any part of the records and books of
Angiotech or its Sublicensees and Affiliates, as applicable, as are necessary to
check the accuracy of the royalties paid. The accounting firm shall enter into
appropriate obligations with Angiotech or its Sublicensees or Affiliates to
treat all information it receives during its inspection in confidence. The
accounting firm shall disclose to CombinatoRx and Angiotech only whether the
royalty reports are correct and details concerning any discrepancies, but no
other information shall be disclosed to CombinatoRx. The charges of the
accounting firm shall be paid by CombinatoRx, except that if the royalties have
been understated by more than ten percent (10%), the charges shall be paid by
Angiotech. Angiotech shall promptly pay any shortages in royalty payments
regardless of amount. Any failure by CombinatoRx to exercise its right under
this Section 8.10.2 with respect to a Calendar Year within the time period for
which records must be maintained shall constitute a waiver by CombinatoRx of its
right to later object to any payments made by Angiotech under this Agreement
during such Calendar Year.

     8.11    MODE OF PAYMENT. All payments set forth in this Article 8 shall be
remitted by wire transfer to the following bank account of CombinatoRx or such
other account as CombinatoRx may designate in writing to Angiotech:

Account Name: CombinatoRx, Inc.
Account No: 009429399019
ABA Routing No: 026009593
Swift No: BOFAUS3N
Bank of America
100 Federal Street
Boston, MA 02110

     8.12    CURRENCY. All payments required under this Agreement shall be made
in Dollars. For the purpose of computing the Net Sales of Licensed Products sold
in a currency other than Dollars, such currency shall be converted from local
currency to Dollars by Angiotech in accordance with the rates of exchange for
the relevant month for converting such other currency into Dollars used by
Angiotech's internal accounting systems on a consistent company-wide basis,
which are independently audited on an annual basis.

     8.13    INTEREST ON LATE PAYMENTS. Any amount not paid timely under this
Agreement shall bear interest from its due date through the date of effective
receipt of payment at the rate equal to the lesser of the maximum rate allowable
under applicable law or three percent (3%) over LIBOR on the date such payment
was due or the prime rate reported by the Bank of America.

     8.14    TAXES.

             8.14.1  GENERAL. The royalties, milestones and other amounts
payable by Angiotech to CombinatoRx pursuant to this Agreement ("PAYMENTS")
shall not be reduced

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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on account of any taxes unless required by Applicable Law. CombinatoRx alone
shall be responsible for paying any and all taxes (other than withholding taxes
or deduction of tax at source required by Applicable Law to be paid by
Angiotech) levied on it by account of its receipt of any Payments it receives
under this Agreement. Angiotech shall deduct or withhold from the Payments any
taxes that it is required by Applicable Law to deduct or withhold.
Notwithstanding the foregoing, if CombinatoRx is entitled under any applicable
tax treaty to a reduction of the rate of, or the elimination of, applicable
withholding tax, it may deliver to Angiotech or the appropriate governmental
authority (with the assistance of Angiotech to the extent that this is
reasonably required and is expressly requested in writing) the prescribed forms
necessary to reduce the applicable rate of withholding tax or to relieve
Angiotech of its obligation to withhold tax, and Angiotech shall apply the
reduced rate of withholding tax, or dispense with withholding tax, as the case
may be, provided that Angiotech has received evidence, in a form satisfactory to
Angiotech, of CombinatoRx's delivery of all applicable forms (and, if necessary,
its receipt of appropriate governmental authorization) at least fifteen (15)
days prior to the time that the Payments are due. If, in accordance with the
foregoing, Angiotech withholds any amount, it shall pay to CombinatoRx the
balance when due, make timely payment to the proper taxing authority of the
withheld amount, and send to CombinatoRx proof of such payment within thirty
(30) days following that payment. For the purposes of this Agreement, the stated
amount of the Payments payable by Angiotech shall include any sales tax that
CombinatoRx may be required to collect.

             8.14.2  INDIRECT TAXES. Notwithstanding anything contained in
Section 8.14.1, this Section 8.14.2 shall apply with respect to Indirect Taxes.
Each of the Parties shall be responsible for the payment of Indirect Taxes
assessed against it by law.

                                    ARTICLE 9
                       OWNERSHIP OF INTELLECTUAL PROPERTY

     9.1     OWNERSHIP OF RESEARCH RESULTS, RESEARCH PATENTS AND ANGIOTECH
EVALUATION IMPROVEMENT.

             9.1.1   IN GENERAL. The Parties shall each own an equal, undivided
interest in any and all Angiotech Evaluation Improvements, Research Results,
Research Patents and Research Improvements.

             9.1.2   SOLE OWNERSHIP. Notwithstanding Section 9.1.1, the Parties
may agree from time to time that one Party should solely own all interest in
certain Angiotech Evaluation Improvement, Research Results, Research Patents
and/or Research Improvements, provided that no such agreement will have any
effect on Angiotech's obligations under Articles 7 and 8 or any effect on the
Parties obligations under Articles 2, 12 and 13 with respect to such Angiotech
Evaluation Improvements, Research Results, Research Patents and/or Research
Improvements.

     9.2     OWNERSHIP OF ANGIOTECH RESEARCH PROJECT TECHNOLOGY AND ANGIOTECH
BACKGROUND TECHNOLOGY.  Angiotech shall exclusively own all Angiotech Research
Project Technology and Angiotech Background Technology.

     9.3     OWNERSHIP OF COMBINATORX BACKGROUND TECHNOLOGY.  CombinatoRx shall
exclusively own all CombinatoRx Background Technology.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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     9.4     ANGIOTECH LICENSED IMPROVEMENTS. Angiotech shall own any and all
Angiotech Licensed Improvements.

     9.5     COMBINATORX LICENSED IMPROVEMENTS. CombinatoRx shall own any and
all CombinatoRx Licensed Improvements.

     9.6     OBLIGATIONS WITH RESPECT TO IMPROVEMENTS. Each Party shall pursuant
to Article 5 notify the other Party of any Angiotech Licensed Improvements,
CombinatoRx Licensed Improvements, Angiotech Evaluation Improvements and
Research Improvements (as applicable) that are Controlled by the disclosing
Party or its Affiliates at any time during the Term and, if requested by such
other Party, provide such other Party with all relevant Information and
materials with respect to such Improvements. The written notice given by the
Party Controlling an Improvement shall include a high-level description of the
Improvement and any financial and other obligations under any license from a
Third Party applicable to such Improvement. Notwithstanding the foregoing,
neither Party shall be obligated to disclose or grant rights to the other Party
to an Improvement which is acquired or in-licensed by a Party without the
exercise of rights granted to such Party under this Agreement. All such
obligations (e.g., royalty, performance, minimum sales) shall be binding upon
the other Party as mutually agreed by the Parties in good faith; provided,
however that the other Party may, at any time, reject an Improvement on written
notice to the Party Controlling the Improvement, in which event, any license
granted to the rejecting Party to such Improvement shall cease to apply to such
Improvement and the rejecting Party shall have no right or license to the
Improvement.

     9.7     OWNERSHIP OF JOINT PATENT RIGHTS. The Parties shall initially each
own an equal, undivided interest in any and all Joint Patent Rights. In
addition, subject to the license grants under Section 2.1(c) and 2.2(b), each
Party hereby grants to the other Party the unconditional right to Exploit the
Joint Patent Rights anywhere in the world or to grant a license under such Joint
Patent Rights to any Third Party anywhere in the world without accounting to the
other Party.

     9.8     Assignment of Intellectual Property. Each Party shall, and does
hereby, assign, and shall cause its Affiliates and its and their employees and
agents, as applicable to so assign, to such other Party, without additional
compensation, such right, title and interest in and to any applicable
intellectual property as is necessary to fully effect the intended ownership
provided for in this Article 9. Assignment and transfer of all such intellectual
property contemplated by this Article 9 shall occur instantly and automatically
upon the development, making, conception or reduction to practice of such
intellectual property, as the case may be, and shall not require any further
deeds or documents to be exchanged between the Parties.

                                   ARTICLE 10
                       CONFIDENTIALITY AND NON-DISCLOSURE

     10.1    GENERAL OBLIGATIONS.

             10.1.1  In this Agreement, "CONFIDENTIAL INFORMATION" shall,
subject to Section 10.3, mean any and all data, results, know-how, plans,
business information and other

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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Information, whether oral or in writing or in any other form, disclosed before,
on or after the Effective Date by one Party to the other Party, including the
terms of this Agreement. For the avoidance of doubt, the Angiotech Background
Technology and reports delivered by Angiotech to CombinatoRx hereunder are
hereby deemed to constitute Confidential Information of Angiotech, CombinatoRx
Background Technology and reports delivered by CombinatoRx to Angiotech
hereunder are hereby deemed to constitute Confidential Information of
CombinatoRx and Research Results and Research Improvements are hereby deemed to
constitute Confidential Information of both Parties. At all times during the
term of this Agreement and for a period of ten (10) years following termination
or expiration hereof, each Party (the "RECEIVING PARTY") shall, and shall cause
its officers, directors, employees, agents and Affiliates and shall require its
Sublicensees to, keep confidential and not publish or otherwise disclose and not
use, directly or indirectly, for any purpose, any Confidential Information
provided to it by the other Party (the "DISCLOSING PARTY"), except to the extent
such disclosure or use is expressly permitted by the terms of this Agreement or
is reasonably necessary for the performance of this Agreement.

     10.2    PERMITTED DISCLOSURES.

             10.2.1  Each Party may disclose Confidential Information to the
extent that such disclosure is:

             (a)     made in response to a valid order of a court of competent
                     jurisdiction or other competent authority; provided,
                     however, that the Receiving Party has first given notice to
                     the Disclosing Party and given the Disclosing Party a
                     reasonable opportunity to quash any such order or obtain a
                     protective order requiring that the Confidential
                     Information and documents that are the subject of such
                     order be held in confidence by such court or authority or,
                     if disclosed, be used only for the purpose for which the
                     order was issued; and provided further that if such order
                     is not quashed or a protective order is not obtained, the
                     Confidential Information disclosed in response to such
                     court or governmental order shall be limited to that
                     information that is legally required to be disclosed in
                     response to such court or governmental order;

             (b)     made by the Receiving Party to a Regulatory Authority as
                     may be necessary or useful in connection with any filing,
                     application or request for a Regulatory Approval; provided,
                     however, that reasonable measures shall be taken to assure
                     confidential treatment of such information, to the extent
                     such protection is available;

             (c)     made by the Receiving Party to a patent authority as may be
                     necessary or useful for purposes of obtaining or enforcing
                     a Patent (consistent with the terms and conditions of
                     Articles 13 and 14); provided, however, that reasonable
                     measures shall be taken to assure confidential treatment of
                     such information, to the extent such protection is
                     available;

             (d)     otherwise required by law; provided, however, that the
                     Receiving Party shall (i) provide the Disclosing Party with
                     reasonable advance notice of and an opportunity to comment
                     on any such required disclosure to the

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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                     extent practicable, (ii) if requested by the Disclosing
                     Party, seek confidential treatment with respect to any such
                     disclosure to the extent reasonably available, and
                     (iii) use good faith efforts to incorporate the comments of
                     the Disclosing Party in any such disclosure or request for
                     confidential treatment;

             (e)     made by Angiotech or its Affiliates, Distributors or
                     Sublicensees to Third Parties as may be necessary or useful
                     in connection with the Exploitation of the Licensed
                     Compounds, the Licensed Products or Improvements in the
                     Angiotech Field as contemplated by this Agreement,
                     including subcontracting or sublicensing transactions in
                     connection therewith or made by CombinatoRx or its
                     Affiliates, Distributors or Sublicensees outside of the
                     Angiotech Field; or

             (f)     made by CombinatoRx or its Affiliates to Third Parties
                     under obligations of confidentiality as may be necessary or
                     useful in connection with commercial activities of
                     CombinatoRx.

             10.2.2  Notwithstanding Section 10.2.1, in the event that either
Party is required by Applicable Law or the requirements of a national securities
exchange or another similar regulatory body to disclose this Agreement, in whole
or in part, the Parties shall reasonably agree on a redacted version of this
Agreement as necessary to protect the Confidential Information of the Parties
prior to making such disclosure.

     10.3    EXCLUSIONS.

             10.3.1  Notwithstanding the foregoing, Confidential Information
shall not include any information that:

             (a)     is or hereafter becomes part of the public domain by public
                     use, publication, general knowledge or the like through no
                     wrongful act, fault or negligence on the part of the
                     Receiving Party;

             (b)     can be demonstrated by documentation or other competent
                     proof to have been in the Receiving Party's or its
                     Affiliates' possession prior to disclosure by the
                     Disclosing Party;

             (c)     is subsequently received by the Receiving Party or its
                     Affiliates without any obligations from a Third Party who
                     is not bound by any obligation of confidentiality with
                     respect to said information;

             (d)     is generally made available to Third Parties by the
                     Disclosing Party without restriction on disclosure; or

             (e)     is independently developed by or for the Receiving Party or
                     its Affiliates without reference to the Disclosing Party's
                     Confidential Information.

             10.3.2  Specific aspects or details of Confidential Information
shall not be deemed to be within the public domain or in the possession of the
Receiving Party merely because the Confidential Information is embraced by more
general information in the public

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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domain or in the possession of the Receiving Party. Further, any combination of
Confidential Information shall not be considered in the public domain or in the
possession of the Receiving Party merely because individual elements of such
Confidential Information are in the public domain or in the possession of the
Receiving Party unless the combination and its principles are in the public
domain or in the possession of the Receiving Party.

     10.4    PUBLICATIONS AND PRESENTATIONS. The Parties acknowledge that
scientific publications must be strictly monitored to prevent any adverse effect
from premature publication of Research Results. Accordingly, CombinatoRx shall
not publish, present or otherwise disclose any material related to the
Exploitation of the Licensed Compounds, the Licensed Products or Improvements in
the Angiotech Field without the prior written consent of Angiotech.

     10.5    PRESS RELEASE. The Parties shall agree upon the content of a press
release promptly upon execution and delivery of this Agreement, the release of
which the Parties will coordinate in order to accomplish the same promptly upon
execution and delivery of this Agreement. Except to the extent already disclosed
in a press release or other public communication or as permitted by this
Agreement, no public announcement concerning this Agreement, its subject matter
or the transactions described herein shall be made, either directly or
indirectly, by CombinatoRx or Angiotech or their respective Affiliates, except
as may be legally required by applicable laws, regulations, judicial order, or
required by stock exchange or quotation system rule without first obtaining the
approval of the other Party and agreement upon the nature, text, and timing of
such announcement, which approval and agreement shall not be unreasonably
withheld or delayed. The Party desiring to make any such voluntary public
announcement shall provide the other Party with a written copy of the proposed
announcement in reasonably sufficient time prior to public release to allow such
other Party to comment upon such announcement, prior to public release. In the
case of press releases or other public communications required to be made by
Applicable Law or by stock exchange or quotation system rule, to be made, the
Party making such press release or public announcement shall provide to the
other Party a copy of the proposed press release or public announcement in
written or electronic form upon such advance notice as is practicable under the
circumstances for the purpose of allowing the notified Party to review and
comment upon such press release or public announcement. Under such
circumstances, the releasing Party shall not be obligated to delay making any
such press release or public communication beyond the time when the same is
required to be made in order to facilitate review and comment by the receiving
Party.

     10.6    USE OF NAME.

             10.6.1  Neither Party shall mention or otherwise use the name,
insignia, symbol, trademark, trade name or logotype of the other Party or its
Affiliates in any publication, press release, promotional material or other form
of publicity without the prior written consent of the other Party (which shall
not be unreasonably withheld or delayed), except for those uses for which
consent has previously been obtained. The restrictions imposed by this Section
10.6 shall not prohibit either Party from making any disclosure identifying the
other Party that is required by Applicable Law or the requirements of a national
securities exchange or another similar regulatory body, provided that any such
disclosure shall be governed by this Article 10. Further, the restrictions
imposed on each Party under this Section 10.6 are not intended, and shall not be
construed, to prohibit a Party

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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from identifying the other Party in its internal business communications,
provided that any Confidential Information in such communications remains
subject to this Article 10.

             10.6.2  Notwithstanding the foregoing, Angiotech and its Affiliates
and Sublicensees shall have the right to use the name of CombinatoRx and its
Affiliates to the extent necessary or useful in connection with the Exploitation
of the Licensed Compounds, Licensed Products and Improvements as contemplated by
this Agreement, including subcontracting and sublicensing transactions in
connection therewith.

                                   ARTICLE 11
                    REPRESENTATIONS, WARRANTIES AND COVENANTS

     11.1    REPRESENTATIONS AND WARRANTIES BY COMBINATORX. CombinatoRx
represents, warrants to Angiotech as follows, with the representations and
warranties set forth in Sections 11.1.1 through 11.1.4 to be made as of the
Effective Date and the representations and warranties set forth in Section
11.1.5 through 11.1.11 to be deemed made as of the date that the CombinatoRx
Compounds to which the particular Licensed Patents and Licensed Information
referred to in such Sections become Selected Compounds pursuant to the terms
hereof and shall be modified by any disclosure schedule delivered by CombinatoRx
to Angiotech:

             11.1.1  CombinatoRx is duly organized, validly existing and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder

             11.1.2  This Agreement has been duly executed and delivered by
CombinatoRx and constitutes the valid and binding obligation of CombinatoRx,
enforceable against CombinatoRx in accordance with its terms, subject to
bankruptcy, insolvency or similar laws of general application affecting the
rights of creditors, and subject to equitable principles limiting rights to
specific performance or other equitable remedies. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of CombinatoRx, its officers and directors on behalf of CombinatoRx
and no other corporate proceedings on the part of CombinatoRx are necessary to
authorize such execution, delivery and performance.

             11.1.3  Execution of this Agreement and consummation of the
transactions contemplated hereby and thereby will not: (i) result in the
violation of or conflict with any of the terms and provisions of the articles of
incorporation or by-laws of CombinatoRx; (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, modification, cancellation or
acceleration or loss of material benefits) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, contract, agreement,
permit, license, lease, purchase order, sales order, arrangement or other
commitment or obligation to which CombinatoRx is a Party; or (iii) violate any
order, writ, injunction, decree, statute, treaty, rule or regulation applicable
to CombinatoRx, except such violations, breaches or defaults with respect to
clauses (ii) and (iii) above which would not have a material adverse effect,
either alone or in the aggregate.

             11.1.4  CombinatoRx has not been debarred and is not subject to
debarment pursuant to Section 306 of the United States Federal Food, Drug, and
Cosmetic Act.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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             11.1.5  CombinatoRx, is the sole and exclusive owner of the entire
right, title and interest in the Licensed Patents and to its Knowledge the
Licensed Information, and is entitled to grant the licenses herein. CombinatoRx
has not placed, and to its Knowledge there does not exist, upon the Licensed
Patents and Licensed Information any encumbrance or lien in the Angiotech Field
other than pursuant to the terms of any Pre-Existing Agreement. No claim has
been made to CombinatoRx of ownership by any Third Party of any right or
interest in or to the Licensed Patents and/or Licensed Information. The granting
of the licenses to Angiotech hereunder does not violate any right known to
CombinatoRx of any Third Party and, and to its Knowledge, CombinatoRx has
obtained all necessary consents from Third Parties in order to allow it to enter
into its obligations under this Agreement.

             11.1.6  The Licensed Patents have been filed and maintained
properly and correctly and all applicable fees have been paid on or before the
due date for payment. In respect of the pending United States patent
applications included in the Licensed Patents, CombinatoRx has presented all
relevant prior art of which it and the inventors are aware to the United States
Patent and Trademark Office.

             11.1.7  To the Knowledge of CombinatoRx and its Affiliates, the
Licensed Patents and the Licensed Information existing as of the Effective Date
are subsisting and are not invalid or unenforceable, in whole or in part.

             11.1.8  To the Knowledge of CombinatoRx and its Affiliates, the
disclosing, copying, making, assigning, licensing or the Exploitation pursuant
to this Agreement of the Licensed Patents or Licensed Information hereunder will
not infringe or conflict with any Patent or other IP Protection Right of any
Person. To the Knowledge of CombinatoRx and its Affiliates, the conception,
development and reduction to practice of the Licensed Patents and Licensed
Information existing as of the Effective Date have not constituted or involved
the misappropriation of trade secrets or other rights or property of any Person.

             11.1.9  As of the Effective Date, to the Knowledge of CombinatoRx
and its Affiliates, there is no actual infringement or threatened infringement
of the Licensed Patents by any Person. Furthermore, there is no claim,
litigation, action, suit, proceeding investigation, arbitration proceedings or
other proceedings pending or, to the Knowledge of CombinatoRx and its
Affiliates, threatened affecting, in whole or in part, the Licensed Patents or
Licensed Information at law, in equity or otherwise, in, before, or by, any
court, arbitration tribunal, or governmental authority, and there is not
currently outstanding any unsatisfied judgment or outstanding order, injunction,
decree, stipulation or award (whether rendered by a court, an administrative
agency or by an arbitrator) domestic or foreign, or arbitrator relating, in
whole or in part, against any of the Licensed Patents or the Licensed
Information.

             11.1.10 To the Knowledge of CombinatoRx and its Affiliates, the
Licensed Information has been kept confidential or has been disclosed to Third
Parties only under terms of confidentiality. To the Knowledge of CombinatoRx and
its Affiliates no breach of such confidentiality has been committed by any Third
Party. For the avoidance of doubt, the chemical structures under the Licensed
Patents have not, other than to the extent they have been part of a patent
application that is in the public domain, been disclosed to any Third Party.

             11.1.11 CombinatoRx shall obtain from each of its Affiliates,
licensors (if applicable), employees and agents rights to any and all
Information that relate to the

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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Licensed Compounds or Licensed Products, such that Angiotech shall, by virtue of
this Agreement, receive from CombinatoRx, without payments beyond those required
by Article 7, the licenses and other rights granted to Angiotech hereunder.

     11.2    REPRESENTATIONS AND WARRANTIES BY ANGIOTECH.  Angiotech represents,
warrants to CombinatoRx as of the Effective Date as follows:

             11.2.1  Angiotech is duly organized, validly existing and in good
standing under the laws of the province of British Columbia with full power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder.

             11.2.2  This Agreement has been duly executed and delivered by
Angiotech and constitutes the valid and binding obligation of Angiotech,
enforceable against Angiotech in accordance with its terms, subject to
bankruptcy, insolvency or similar laws of general application affecting the
rights of creditors, and subject to equitable principles limiting rights to
specific performance or other equitable remedies. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of Angiotech, its officers and directors on behalf of Angiotech and
no other corporate proceedings on the part of Angiotech are necessary to
authorize such execution, delivery and performance.

             11.2.3  Execution of this Agreement and consummation of the
transactions contemplated hereby and thereby will not: (i) result in the
violation of or conflict with any of the terms and provisions of the articles of
incorporation or by-laws of Angiotech; (ii) result in a violation or breach of,
or constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, modification, cancellation or
acceleration or loss of material benefits) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, contract, agreement,
permit, license, lease, purchase order, sales order, arrangement or other
commitment or obligation to which Angiotech is a Party; or (iii) violate any
order, writ, injunction, decree, statute, treaty, rule or regulation applicable
to Angiotech, except such violations, breaches or defaults with respect to
clauses (ii) and (iii) above which would not have a material adverse effect,
either alone or in the aggregate.

             11.2.4  Angiotech has not been debarred and is not subject to
debarment pursuant to Section 306 of the United States Federal Food, Drug, and
Cosmetic Act.

     11.3    COVENANTS BY COMBINATORX. CombinatoRx hereby covenants to Angiotech
that (i) it will not enter into any agreement, whether written or oral,
inconsistent with the rights and licenses granted hereunder, and (ii) to its
Knowledge it will not use in any capacity, in connection with the services to be
performed under this Agreement, any Person who has been debarred pursuant to
Section 306 of the United States Federal Food, Drug, and Cosmetic Act, or who is
the subject of a conviction described in such section. CombinatoRx agrees to
inform Angiotech in writing promptly if it or any Person who is performing
services hereunder is debarred or is the subject of a conviction described in
Section 306, or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to the best of CombinatoRx's or its
Affiliates' Knowledge, is threatened, relating to the debarment or conviction of
CombinatoRx or any Person performing services hereunder.

     11.4    COVENANTS BY ANGIOTECH. Angiotech hereby covenants to CombinatoRx
that to its Knowledge it will not use in any capacity, in connection with the
services to be

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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performed under this Agreement, any Person who has been debarred pursuant to
Section 306 of the United States Federal Food, Drug, and Cosmetic Act, or who is
the subject of a conviction described in such section. Angiotech agrees to
inform CombinatoRx in writing promptly if it or any Person who is performing
services hereunder is debarred or is the subject of a conviction described in
Section 306, or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to Angiotech's or its Affiliates'
Knowledge, is threatened, relating to the debarment or conviction of Angiotech
or any Person performing services hereunder.

                                   ARTICLE 12
                                    INDEMNITY

     12.1    INDEMNIFICATION OF COMBINATORX. In addition to any other remedy
available to CombinatoRx, Angiotech shall indemnify, defend and hold harmless
CombinatoRx, its Affiliates and its and their respective former and current
directors, officers and employees in full and on demand, from and against any
and all Losses to the extent resulting from or arising out of or in connection
with any claims made or suits brought by a Third Party (collectively, "THIRD
PARTY CLAIMS") against CombinatoRx, its Affiliates or its or their respective
former and current directors, officers or employees that arise out of or result
from:

             (a)     negligence or willful misconduct by Angiotech or its
                     Affiliates concerning their participation in the Research
                     Project;

             (b)     the breach by Angiotech or its Affiliates of any of their
                     material obligations, covenants, representations or
                     warranties set forth in this Agreement;

             (c)     the Exploitation of a Licensed Compound or Licensed Product
                     by Angiotech or its Affiliates, or any actual or alleged
                     violation of Applicable Law resulting therefrom (with the
                     exception of Losses based on infringement or
                     misappropriation of intellectual property rights other than
                     Angiotech Licensed Improvements and Research Improvements);
                     or

             (d)     the use, storage or handling by any Third Party of a
                     Licensed Compound or a Licensed Product, the direct or
                     indirect source of which is Angiotech or its Affiliates;

     provided that the foregoing indemnification shall not apply to any Loss to
     the extent such Loss is caused by the breach of this Agreement or the
     negligence or willful misconduct of CombinatoRx or its Affiliates and their
     current or former employees, officers and directors.

     12.2    INDEMNIFICATION OF ANGIOTECH. In addition to any other remedy
available to Angiotech, CombinatoRx shall indemnify, defend and hold harmless
Angiotech, its Affiliates, and Sublicensees and its and their respective former
and current directors, officers and employees in full and on demand, from and
against any and all Losses to the extent resulting from or arising out of or in
connection with any Third Party Claims against Angiotech, its Affiliates or its
or their respective former or current directors, officers or employees that
arise out of or result from:

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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             (a)     negligence or willful misconduct by CombinatoRx or its
                     Affiliates concerning their participation in the Research
                     Project or in performing consulting services or conducting
                     studies under this Agreement;

             (b)     the breach by CombinatoRx of any of its material
                     obligations, covenants, representations or warranties set
                     forth in this Agreement;

             (c)     the Exploitation of a Licensed Compound or Licensed Product
                     by CombinatoRx or its Affiliates, or any actual or alleged
                     violation of Applicable Law resulting therefrom (with the
                     exception of Losses based on infringement or
                     misappropriation of intellectual property rights); or

             (d)     the use, storage or handling by any Third Party of a
                     Licensed Compound or a Licensed Product, the direct or
                     indirect source of which is CombinatoRx or its Affiliates;

     provided that the foregoing indemnification shall not apply to any Loss to
     the extent such Loss is caused by the breach of this Agreement or the
     negligence or willful misconduct of Angiotech or its Affiliates and their
     current or former employees, officers and directors.

     12.3    NOTICE OF CLAIM. An Indemnified Party shall give the Indemnifying
Party prompt written notice of any Loss or discovery of fact upon which such
Indemnified Party intends to base a request for indemnification under Section
12.1 or 12.2 (an "INDEMNIFICATION CLAIM NOTICE"). In no event shall the
Indemnifying Party be liable for any Loss that results from any delay in
providing the Indemnification Claim Notice. Each Indemnification Claim Notice
shall contain a description of the claim and the nature and amount of the Loss
claimed (to the extent that the nature and amount of such Loss is known at such
time). The Indemnified Party shall furnish promptly to the Indemnifying Party
copies of all papers and official documents received in respect of any such
Loss. For the avoidance of doubt, all indemnification claims in respect of a
Party, its Affiliates or their respective current or former directors, officers,
employees and agents (each, an "INDEMNITEE") shall be made solely by such Party
to this Agreement.

     12.4    INDEMNIFICATION PROCEDURES.  The obligations of an Indemnifying
Party under this Article 11 shall be governed by and contingent upon the
following:

             12.4.1  ASSUMPTION OF DEFENSE. At its option, the Indemnifying
Party may assume the defense of any Third Party Claim by giving written notice
to the Indemnified Party within fourteen (14) days after the Indemnifying
Party's receipt of an Indemnification Claim Notice. The assumption of the
defense of a Third Party Claim by the Indemnifying Party shall not be construed
as an acknowledgement that the Indemnifying Party is liable to indemnify any
Indemnitee in respect of the Third Party Claim, nor shall it constitute a waiver
by the Indemnifying Party of any defenses it may assert against any Indemnified
Party's claim for indemnification.

             12.4.2  CONTROL OF DEFENSE. Upon the assumption of the defense of a
Third Party Claim by the Indemnifying Party:

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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             (a)     the Indemnifying Party may appoint as lead counsel in the
                     defense of the Third Party Claim any legal counsel selected
                     by the Indemnifying Party, which shall be reasonably
                     acceptable to the Indemnified Party, and

             (b)     the Indemnifying Party shall not be liable to the
                     Indemnified Party for any legal expenses subsequently
                     incurred by such Indemnified Party or any Indemnitee in
                     connection with the analysis, defense or settlement of the
                     Third Party Claim, except as expressly provided in Section
                     12.4.3. In the event that it is ultimately determined that
                     the Indemnifying Party is not obligated to indemnify,
                     defend or hold harmless an Indemnitee from and against the
                     Third Party Claim, the Indemnified Party shall reimburse
                     the Indemnifying Party for any and all costs and expenses
                     (including lawyers' fees and costs of suit) and any Loss
                     incurred by the Indemnifying Party in its defense of the
                     Third Party Claim with respect to such Indemnified Party or
                     Indemnitee.

             12.4.3  RIGHT TO PARTICIPATE IN DEFENSE. Without limiting Section
12.4, any Indemnitee shall be entitled to participate in, but not control, the
defense of a Third Party Claim and to retain counsel of its choice for such
purpose; provided, however, that such retention shall be at the Indemnitee's own
expense unless, (a) the Indemnifying Party has failed to assume the defense and
retain counsel in accordance with Section 12.4.1 (in which case the Indemnified
Party shall control the defense), or (b) the interests of the Indemnitee and the
Indemnifying Party with respect to such Third Party Claim are sufficiently
adverse to prohibit the representation by the same counsel of both parties under
Applicable Law, ethical rules or equitable principles.

             12.4.4  SETTLEMENT. With respect to Losses in connection with Third
Party Claims, where the Indemnifying Party has assumed the defense of a Third
Party Claim in accordance with Section 12.4.1, (i) the Indemnifying Party shall
have authority to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Losses, provided that it obtains the
prior written consent of the Indemnified Party which consent shall not be
unreasonably withheld or delayed and (ii) no Indemnified Party or Indemnitee
shall admit any liability with respect to, or settle, compromise or discharge,
any Third Party Claim without the prior written consent of the Indemnifying
Party, which consent shall not be unreasonably withheld or delayed.

             12.4.5  COOPERATION. If the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party shall, and shall cause
each other Indemnitee to, cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony, provide such witnesses
and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested in connection therewith. Such cooperation shall
include access during normal business hours by the Indemnifying Party to, and
reasonable retention by the Indemnified Party of, records and information that
are reasonably relevant to such Third Party Claim, and making the Indemnified
Party, the Indemnitees and its and their employees and agents available on a
mutually convenient basis to provide additional information and explanation of
any records or information provided, and the Indemnifying Party shall reimburse
the Indemnified Party for all of its related reasonable out-of-pocket expenses.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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             12.4.6  EXPENSES. Except as expressly provided above, the
reasonable and verifiable costs and expenses, including fees and disbursements
of counsel, incurred by the Indemnified Party in connection with any claim shall
be reimbursed on a Calendar Quarter basis by the Indemnifying Party, without
prejudice to the Indemnifying Party's right to contest the Indemnified Party's
right to indemnification and subject to refund in the event the Indemnifying
Party is ultimately held not to be obligated to indemnify the Indemnified Party.

     12.5    LIMITATION OF LIABILITY. Neither Party shall be liable to the other
for consequential, indirect or punitive damages. The foregoing limitation is not
intended to limit a Party's obligations under Section 12.1 or Section 12.2. For
the avoidance of doubt, no Party can recover from the other Party more than once
for a single cause of action under an indemnity granted by an indemnifying Party
pursuant to this Agreement. The foregoing sentence shall not be construed to
preclude recovery in respect of multiple claims arising from a single event or
series of events. Neither Party shall have liability with respect to any breach
of any of such Party's representations and warranties under this Agreement for
any individual item where the Loss relating thereto is less than ten-thousand
Dollars ($10,000) but when a Loss exceeds such amount then the liable Party
shall be liable for the entire amount of the Losses. The foregoing shall not be
construed to limit liability pursuant to Section 12.1 or Section 12.2. Each
Party shall take and shall cause its Affiliates to take all reasonable steps to
mitigate any Loss upon becoming aware of any event which would reasonably be
expected to, or does, give rise thereto, including incurring costs only to the
minimum extent necessary to remedy a breach that gives rise to the Loss. EXCEPT
AS EXPRESSLY SET FORTH IN THIS AGREEMENT, EACH PARTY HEREBY EXPRESSLY DISCLAIMS
ANY AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, AND FURTHER DISCLAIMS ANY
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE OF ANY ITEM LICENSED TO THE OTHER PARTY PURSUANT TO THIS AGREEMENT.

                                   ARTICLE 13
                     MAINTENANCE AND PROSECUTION OF PATENTS

     13.1    ANGIOTECH BACKGROUND TECHNOLOGY AND ANGIOTECH RESEARCH PROJECT
TECHNOLOGY. Angiotech will be solely responsible for, and shall bear all
expenses incurred in, preparing, filing, prosecuting and maintaining all Patents
covering Angiotech Background Technology and Angiotech Research Project
Technology, without obligation to inform or consult with CombinatoRx.

     13.2    COMBINATORX BACKGROUND TECHNOLOGY. CombinatoRx will be solely
responsible for, and shall bear all expenses incurred in, preparing, filing,
prosecuting and maintaining all Patents covering CombinatoRx Background
Technology, without obligation to inform or consult with Angiotech.

     13.3    ANGIOTECH PATENTS.

             13.3.1  Angiotech will be responsible for, and shall bear all
expenses incurred in, preparing, filing, prosecuting and maintaining (including,
for the avoidance of doubt, interference and opposition proceedings) all
Research Patents and Patents covering Angiotech Licensed Improvements, or
Research Improvements (the "Angiotech Patents"); provided, however, CombinatoRx
shall reimburse to Angiotech an amount equal to fifty percent (50%) of all such
reasonable expenses upon presentation of written receipts therefore.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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Angiotech shall inform Angiotech promptly upon becoming aware of any
extraordinary costs to be spent in patent prosecution or patent maintenance in
any country, including but not limited to costs in appeal proceedings,
opposition proceedings, costs for the filing of divisional applications, claim
fees, and the like. Notwithstanding the foregoing, CombinatoRx may, at any time,
notify Angiotech that it no longer desires to reimburse Angiotech for expenses
incurred in connection with the prosecution or maintenance of an Angiotech
Patent, in which event CombinatoRx shall be relieved of such reimbursement
obligation and all licenses to CombinatoRx with respect to such Angiotech Patent
shall immediately terminate and, if such Angiotech Patent is jointly owned,
CombinatoRx shall promptly assign all of its interest in such Angiotech Patent
to Angiotech.

             13.3.2  CombinatoRx undertakes at the reasonable request and the
expense (subject to the expense sharing provisions set forth above) of Angiotech
or its Affiliates to sign, or have signed, any and all documents necessary in
connection with the filing, prosecution, maintenance, extension and enforcement
of the Angiotech Patents and to take such other necessary actions as Angiotech
or its Affiliates may reasonably request from CombinatoRx in connection with the
Angiotech Patents.

             13.3.3  Angiotech shall keep CombinatoRx apprised of any activities
related to the Angiotech Patents by using reasonable efforts to provide
CombinatoRx: (i) with a draft of new applications and foreign filing texts at
least ten (10) business days before the intended filing; (ii) promptly with
copies of all official actions, amendments and responses, which affect the scope
of any claims; and (iii) with foreseen amendments and responses to official
actions which affect the scope of any claim at least five (5) business days
before the action due date. Angiotech shall reasonably consider CombinatoRx's or
its Affiliates' comments with respect to such activities but shall otherwise
have sole discretion with respect to the preparation, filing, prosecution and
maintenance of the Angiotech Patents. Notwithstanding the foregoing, the
prosecuting Party shall accept the suggestions of the other Party except to the
extent such suggestions are in direct conflict with the prosecuting Party's
strategy.

             13.3.4  On each six-month anniversary of the Effective Date,
Angiotech shall update CombinatoRx on the status of all Angiotech Patent
filings, including information on the country particulars (filing date, filing
number) of each Patent, each foreign filing equivalent, and the corresponding
Patent status (pending, granted, opposed, under appeal, intentionally abandoned,
and the like). Additionally, Angiotech shall notify CombinatoRx of any new
Angiotech Patent applications filed in any country promptly after such Patent
application is filed.

             13.3.5  In the event that Angiotech desires to finally abandon any
application or patent within the Angiotech Patents, it shall notify promptly
CombinatoRx (and in any event not less than sixty (60) calendar days prior to
the deadline for taking appropriate action with respect to application or
patent). CombinatoRx shall then have the right to continue the prosecution of
any such application or patent and to maintain the same, all at CombinatoRx's
sole expense. Angiotech agrees to cooperate in such activities, but shall have
no obligation to incur any expense in connection therewith. If CombinatoRx
exercised such right to continue the prosecution of any such application or
patent relinquished by Angiotech, Angiotech hereby assigns and transfers all
legal rights and title of such application or patent to CombinatoRx and agrees
to execute and deliver to CombinatoRx such other documents and instruments,
provide such materials and information and take such other actions as
CombinatoRx may reasonably request to assign to CombinatoRx such application or
patent.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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If claims ultimately issue on a relinquished application or patent in a
jurisdiction other than the United States, Europe and Japan, CombinatoRx shall
notify Angiotech of such issuance and provide a copy of the issued patent, and
Angiotech shall have thirty (30) days from receipt of such notice to elect to
receive an exclusive license in the Angiotech Field of the same scope as
Sections 2.1(c) and (d) under such issued patents. If Angiotech elects to
receive a license pursuant to the preceding sentence, then Angiotech shall pay
to CombinatoRx an amount equal to its share of the expenses in connection with
the prosecution of such application or patent that Angiotech would have paid
under this Agreement had it not relinquished such patent application.

     13.4    COMBINATORX PATENTS

             13.4.1  CombinatoRx will be responsible for, and shall bear all
expenses incurred in, preparing, filing, prosecuting and maintaining (including,
for the avoidance of doubt, interference and opposition proceedings) all
Licensed Patents and Patents covering CombinatoRx Licensed Improvements and
Angiotech Evaluation Improvements (the "CombinatoRx Patents"); provided,
however, Angiotech shall reimburse to CombinatoRx an amount equal to fifteen
percent (15%) of all such reasonable expenses upon presentation of written
receipts therefor. CombinatoRx shall inform Angiotech promptly upon becoming
aware of any extraordinary costs to be spent in patent prosecution or patent
maintenance in any country, including but not limited to costs in appeal
proceedings, opposition proceedings, costs for the filing of divisional
applications, claim fees, and the like. Notwithstanding the foregoing, Angiotech
may, at any time, notify CombinatoRx that it no longer desires to reimburse
CombinatoRx for expenses incurred in connection with the prosecution or
maintenance of a CombinatoRx Patent, in which event Angiotech shall be relieved
of such reimbursement obligation and all licenses to Angiotech with respect to
such CombinatoRx Patent shall immediately terminate and, if such CombinatoRx
Patent is jointly owned, Angiotech shall promptly assign all of its interest in
such CombinatoRx Patent to CombinatoRx.

             13.4.2  Angiotech and its Affiliates undertake at the reasonable
request and expense (subject to the expense sharing provisions set forth above)
of CombinatoRx to sign, or have signed, any and all documents necessary in
connection with the filing, prosecution, maintenance, extension and enforcement
of the CombinatoRx Patents and to take such other necessary actions as
CombinatoRx may reasonably request from Angiotech or its Affiliates in
connection with the CombinatoRx Patents.

             13.4.3  CombinatoRx shall keep Angiotech apprised of any activities
related to the CombinatoRx Patent Rights by using best efforts to provide
Angiotech: (i) with a draft of new applications and foreign filing texts at
least ten (10) business days before the intended filing; (ii) promptly with
copies of all official actions, amendments and responses, which affect the scope
of any claims; (iii) with foreseen amendments and responses to official actions
which affect the scope of any claim at least five (5) business days before the
action due date. CombinatoRx shall reasonably consider Angiotech's or its
Affiliates' comments with respect to such activities but shall otherwise have
sole discretion with respect to the preparation, filing, prosecution and
maintenance of the CombinatoRx Patents. Notwithstanding the foregoing, the
prosecuting Party shall accept the suggestions of the other Party except to the
extent such suggestions are in direct conflict with the prosecuting Party's
strategy.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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             13.4.4  On each six-month anniversary of the Effective Date,
CombinatoRx shall update Angiotech on the status of all CombinatoRx Patent
filings under its control, including information on the country particulars
(filing date, filing number) of each Patent, each foreign filing equivalent, and
the corresponding Patent status (pending, granted, opposed, under appeal,
intentionally abandoned, etc.). Additionally, CombinatoRx shall notify Angiotech
of any new CombinatoRx Patent applications filed in any country promptly after
such Patent application is filed.

             13.4.5  In the event that CombinatoRx desires to finally abandon
any application or patent within the CombinatoRx Patents, it shall notify
promptly Angiotech (and in any event not less than sixty (60) calendar days
prior to the deadline for taking appropriate action with respect to application
or patent). Angiotech shall then have the right to continue the prosecution of
any such application or patent and to maintain the same, all at Angiotech's sole
expense. CombinatoRx agrees to cooperate in such activities, but shall have no
obligation to incur any expense in connection therewith. If Angiotech exercised
such right to continue the prosecution of any such application or patent
relinquished by CombinatoRx, CombinatoRx hereby assigns and transfers all legal
rights and title of such application or patent to Angiotech and agrees to
execute and deliver to Angiotech such other documents and instruments, provide
such materials and information and take such other actions as Angiotech may
reasonably request to assign to Angiotech such application or patent. If claims
ultimately issue on a relinquished application or patent in a jurisdiction other
than the United States, Europe and Japan, Angiotech shall notify CombinatoRx of
such issuance and provide a copy of the issued patent, and CombinatoRx shall
have thirty (30) days from receipt of such notice to elect to receive an
exclusive license in the CombinatoRx Field of the same scope as Sections 2.2(c)
and (d) under such issued patents. If CombinatoRx elects to receive a license
pursuant to the preceding sentence, then CombinatoRx shall pay to Angiotech an
amount equal to its share of the expenses in connection with the prosecution of
such application or patent that CombinatoRx would have paid under this Agreement
had it not relinquished such patent application.

     13.5    JOINT PATENT RIGHTS

             13.5.1  CombinatoRx will be responsible for, and shall bear all
expenses incurred in, preparing, filing, prosecuting and maintaining (including,
for the avoidance of doubt, interference and opposition proceedings) all Joint
Patent Rights; provided, however, Angiotech shall reimburse to CombinatoRx an
amount equal to fifty percent (50%) of all such reasonable costs expenses upon
presentation of written receipts therefor. CombinatoRx shall inform Angiotech
promptly upon becoming aware of any extraordinary costs to be spent in patent
prosecution or patent maintenance in any country, including but not limited to
costs in appeal proceedings, opposition proceedings, costs for the filing of
divisional applications, claim fees, and the like. Notwithstanding the
foregoing, either Party may, at any time, notify the other Party that it no
longer desires to reimburse the other Party for expenses incurred in connection
with the prosecution or maintenance of a Joint Patent Right, in which event the
Party no longer reimbursing the other Party shall be relieved of such
reimbursement obligation and all rights granted to such Party with respect to
such Joint Patent Right under Section 9.7 shall immediately terminate, and the
Party no longer reimbursing the other Party shall promptly assign all of its
interest in such Joint Patent Right to the other Party.

             13.5.2  Angiotech and its Affiliates undertake at the reasonable
request and expense (subject to the expense sharing provisions set forth above)
of CombinatoRx to sign,

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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or have signed, any and all documents necessary in connection with the filing,
prosecution, maintenance, extension and enforcement of the CombinatoRx Patents
and to take such other necessary actions as CombinatoRx may reasonably request
from Angiotech or its Affiliates in connection with the CombinatoRx Patents.

             13.5.3  If one Party believes that a Joint Patent Right should be
filed, prosecuted and/or maintained, in respect of a jointly owned invention, it
shall inform the other Party of its belief and the Parties will negotiate in
good faith to find a mutually acceptable course of action. If the Parties decide
to proceed with a filing, CombinatoRx shall keep Angiotech apprised of any
activities related to the Joint Patent Rights by providing Angiotech: (i) with a
draft of new applications and foreign filing texts at least ten (10) business
days before the intended filing; (ii) promptly with copies of all official
actions, amendments and responses, which affect the scope of any claims; (iii)
with foreseen amendments and responses to official actions which affect the
scope of any claim at least five (5) business days before the action due date.
CombinatoRx shall reasonably consider Angiotech's or its Affiliates' comments
with respect to such activities. Notwithstanding the foregoing, the prosecuting
Party shall accept the suggestions of the other Party except to the extent such
suggestions are in direct conflict with the prosecuting Party's strategy.

             13.5.4  On each six-month anniversary of the Effective Date,
CombinatoRx shall update Angiotech on the status of all Joint Patent Right
filings, including information on the country particulars (filing date, filing
number) of each Joint Patent Right, each foreign filing equivalent, and the
corresponding Joint Patent Right status (pending, granted, opposed, under
appeal, intentionally abandoned, etc.). Additionally, CombinatoRx shall notify
Angiotech of any new Joint Patent Right applications filed in any country
promptly after such Patent application is filed.

             13.5.5  In the event that CombinatoRx desires to finally abandon
any application or patent within the Joint Patent Rights, it shall notify
promptly Angiotech (and in any event not less than sixty (60) calendar days
prior to the deadline for taking appropriate action with respect to application
or patent). Angiotech shall then have the right to continue the prosecution of
any such abandoned application or patent and to maintain the same, all at
Angiotech's sole expense. CombinatoRx agrees to cooperate in such activities,
but shall have no obligation to incur any expense in connection therewith. If
Angiotech exercised such right to continue the prosecution of any such
application or patent abandoned by CombinatoRx, CombinatoRx hereby assigns and
transfers all legal rights and title of such abandoned application or patent to
Angiotech and agrees to execute and deliver to Angiotech such other documents
and instruments, provide such materials and information and take such other
actions as Angiotech may reasonably request to assign to Angiotech such
abandoned application or patent. If claims ultimately issue on a relinquished
application or patent in a jurisdiction other than the United States, Europe and
Japan, CombinatoRx shall notify Angiotech of such issuance and provide a copy of
the issued patent, and Angiotech shall have thirty (30) days from receipt of
such notice to elect to receive an exclusive license in the Angiotech Field of
the same scope as Sections 2.2(c) and (d) under such issued patents. If
Angiotech elects to receive a license pursuant to the preceding sentence, then
Angiotech shall pay to CombinatoRx an amount equal to its share of the expenses
in connection with the prosecution of such application or patent that Angiotech
would have paid under this Agreement had it not relinquished such patent
application.

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TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

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                                   ARTICLE 14
                       ENFORCEMENT AND DEFENSE OF PATENTS

     14.1    DECLARATORY JUDGMENT ACTION. In the event of an assertion of
invalidity or unenforceability of the CombinatoRx Patents, Angiotech Patents, or
Joint Patent Rights, the Party receiving notice of such assertion shall promptly
advise the other Party in writing of such assetion and of all relevant facts and
circumstances known to such Party pertaining to the such assertion. Angiotech
and CombinatoRx shall thereafter consult and cooperate fully to determine a
course of action, with the Party controlling prosecution pursuant to Article 13
controlling the defense of such assertion; provided, however, in the event that
the Party so designated is not actively Exploiting any Licensed Compound covered
by the family of Patents containing the claims asserted to be invalid or
unenforceable, the right to defend such assertion shall shift to the other Party
if it is actively Exploiting such a Licensed Compound.

     14.2    INFRINGEMENT

             14.2.1  If either Party becomes aware of any activity that such
Party believes represents an infringement of the claims of the CombinatoRx
Patents, Angiotech Patents, or Joint Patent Rights, the Party obtaining such
knowledge shall promptly advise the other in writing of the potential
infringement and of all relevant facts and circumstances known to such Party
pertaining to the potential infringement. Angiotech and CombinatoRx shall
thereafter consult and cooperate fully to determine a course of action,
including but not limited to, the commencement of legal action to terminate any
infringement of the CombinatoRx Patents, Angiotech Patents, or Joint Patent
Rights, with the Party controlling prosecution pursuant to Article 13
controlling the pursuit of an infringer; provided, however, in the event that
the Party so designated is not actively Exploiting any Licensed Compound covered
by the family of Patents containing the infringed claims, the right to pursue
such infringer shall shift to the other Party if it is actively Exploiting such
a Licensed Compound.

             14.2.2  The Party possessing the right to initiate and prosecute
such legal proceedings related to infringement shall have the right to initiate
and prosecute such legal proceedings each at its own expense and in its own
name, and to control the defense of any declaratory judgment action relating to
its Intellectual Property; provided that no settlement shall be entered into by
such Party without the written consent of the other Party if such settlement
would materially affect the other Party's interests. Each Party shall reasonably
cooperate with the other Party in such effort, including being joined as a party
to an action related to jointly owned Patents if necessary, with the reasonable
out of pocket expenses of such joining Party to be paid by the other Party.

             14.2.3  In addition, each Party shall have the right to join in any
action against infringement brought in accordance with this Article 14 if
necessary in order to assert the damages incurred by such Party as a result of
the alleged infringement; provided that: (i) the foregoing shall not limit or
restrict in any way the rights of the Party controlling such action as
determined in accordance with this Article 14 from exercising such control in
its discretion; (ii) in the event one Party joins the other Party in the defense
of an infringement action, such Party may elect to participate in up to fifty
percent (50%) of the total out-of-pocket cost and expense of such action and
consequently share to the same proportion in any award. In the event that
CombinatoRx decides not to join Angiotech by way of participating in paying for
out-of-pocket costs and expenses, any recovery by Angiotech (after reimbursement
of its out-of-pocket costs and expenses), which is intended as a

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reimbursement for sales lost as a result of such infringement shall be treated
as Net Sales for purposes of this Agreement.

             14.2.4  The costs and expenses (including attorneys' fees) of any
action against an infringement brought in accordance with this Section shall be
borne by the Party controlling the infringement action, unless stated otherwise
in this Article 14.

     14.3    UPDATING Each Party shall keep the other reasonably informed of
developments in any action or proceeding relating to the potential infringement
of the claims of a Patent relating to the Licensed Compounds or Licensed
Products including, to the extent permissible by law, the state of any
settlement negotiations and the terms of any offer related thereto.

     14.4    DEFENSE AND SETTLEMENT OF THIRD PARTY CLAIMS

             14.4.1  If a Third Party asserts that IP Right owned by it is
infringed by the importation, manufacture, use or sale of any Licensed Compound
or Licensed Product by Angiotec, or if either Party learns of a claim or
assertion that the development, manufacture, use, marketing, promotion,
importation, exportation, offer for sale, sale or distribution of the Licensed
Compounds or the Licensed Products infringes or otherwise violates the
intellectual property rights of any Third Party, then such Party will promptly
notify the other Party in writing. Angiotech will have the sole right, but not
the obligation, to control such defense at its own expense. If Angiotech does
not assume control of such defense, then CombinatoRx shall have the right to
control such defense at its own expense. In any event, the Party not controlling
such defense will have the right to be represented in any such action at its own
expense. The Party controlling such defense shall keep the other Party advised
of the status of such action and shall consider recommendations made by the
other Party in respect thereto. The Party not controlling such defense will
assist and cooperate in any such infringement litigation at the defending
Party's reasonable request. If the Party controlling such defense is not the
Party against whom such action was originally brought, then the Party
controlling such defense will not agree to the settlement of any such action
without the prior written consent of the other Party.

             14.4.2  If Angiotech conducts the defense, Angiotech will use
Commercially Reasonable Efforts to determine how and whether to defend against
such charge of infringement.

             14.4.3  During the period in which such litigation is pending and
following the resolution thereof, Angiotech shall bear all other costs incurred
in connection therewith (including litigation costs, attorneys fees, costs of
settlement) including damage awards and any other payment resulting therefrom in
the event Angiotech is barred as a result of such litigation from further sales
in the country concerned.

             14.4.4  Such application and deduction shall not apply to
infringement caused by Angiotech' or its Affiliates' use of their respective
name, trade name, logo or the Angiotech Patents or Angiotech Know-How.

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                                   ARTICLE 15
                              TERM AND TERMINATION

     15.1    TERM. This Agreement shall become effective on the Effective Date
and shall continue in full force and effect, unless earlier terminated in
accordance with this Article 15, during the Research Period and thereafter for
as long as Angiotech is pursuing pre-clinical research or other activities or
clinical development of one or more Licensed Compounds or commercializing
Licensed Products for which royalties are owed to CombinatoRx pursuant to
Article 8 (the "TERM").

     15.2    RESEARCH PERIOD. The "RESEARCH PERIOD" shall commence on the
Effective Date and, unless this Agreement is terminated pursuant to Sections
15.3, 15.4, 15.5 or 15.6 or the Research Project is terminated by Angiotech
pursuant to Section 15.4 or 15.6 or 15.7continue until the later of (a) the
expiration of the thirty (30) month anniversary of the Effective Date, unless
extended to the expiration of the fifth Research Year pursuant to Section 8.1.2,
and (b) such later date as mutually agreed to by the Parties in writing.

     15.3    TERMINATION BY ANGIOTECH. Angiotech has the right, in its sole
discretion, after the first anniversary of the Effective Date, to terminate this
Agreement in its entirety or with respect to one or more countries in the
Territory upon forty-five (45) days' prior written notice; provided, however,
that during the Research Period such termination shall not take effect until six
(6) months after the date of such notice or upon the date when the Research
Period expires (provided always that such termination does never take effect
prior to the expiration of the forty-five day notice period), whichever is the
earlier. In the event that Angiotech discretionarily terminates this Agreement
pursuant to this Section 15.3 before the end of the Research Period, no refund
of amounts paid hereunder shall be due to Angiotech.

     15.4    TERMINATION FOR MATERIAL BREACH. In the event that either Party
(the "BREACHING PARTY") materially defaults in the performance of any of its
material obligations under this Agreement other than the obligations set forth
in Section 7.2 hereof, in addition to any other right and remedy the other Party
(the "COMPLAINING PARTY") may have, the Complaining Party may terminate this
Agreement in its entirety or the Research Period by ninety (90) days prior
written notice in the event of a breach relating to matters other than payment
of amounts due hereunder or twenty (20) days prior written notice in the event
of a breach relating to payment matters (the "NOTICE PERIOD") to the Breaching
Party, specifying the breach and its claim of right to terminate, provided
always that the termination shall not become effective at the end of the Notice
Period if the Breaching Party cures the breach complained about during the
Notice Period (or, if such default cannot be cured within such ninety (90) day
period, if the Breaching Party commences actions to cure such default within the
Notice Period and thereafter diligently continues such actions). If either Party
initiates a dispute resolution procedure as permitted under this Agreement
within thirty (30) days following the end of the Notice Period to resolve the
dispute for which termination is being sought and is diligently pursuing such
procedure, including any litigation following therefrom, the termination shall
become effective only if and when allowed through such dispute resolution
procedure finally resolved. This Section 15.4 defines exclusively the Parties'
right to terminate in case of any material breach of contract other than a
breach of Section 7.2 hereof.

     15.5    TERMINATION FOR MATERIAL BREACH OF DILIGENCE OBLIGATIONS. In the
event that Angiotech materially defaults in the performance of any of its
obligations under Section

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7.2 hereof, CombinatoRx may, immediately upon notice to Angiotech, terminate
this Agreement following the 180-day period described in Section 7.3.2 in the
manner described in this Section if Angiotech has not cured such breach or taken
steps to rectify such breach as required by Section 7.3.2 within such 180-day
period. CombinatoRx shall have the right to terminate this Agreement with
respect to any Selected Compound Licensed Product, as determined by CombinatoRx
in its sole discretion for each uncured event of a breach of Section 7.2.1;
provided that, CombinatoRx may not terminate this Agreement with respect to any
Selected Compound Licensed Product for which any Compound in the Compound Class
for such Licensed Product has been, at the time, administered to humans in a
clinical trial), and CombinatoRx shall have the right to terminate this
Agreement only with respect to the particular Fast Track Licensed Compound for
which Angiotech has breached its obligation in the event of a breach of Section
7.2.2. If Angiotech initiates a dispute resolution procedure as permitted under
this Agreement within thirty (30) days following the delivery of the termination
notice by CombinatoRx as described in this Section to resolve the dispute for
which termination is being sought and is diligently pursuing such procedure,
including any litigation following therefrom, the termination shall become
effective only if and when allowed through such dispute resolution procedure
finally resolved. This Section 15.5 defines exclusively CombinatoRx's right to
terminate in case of any material breach of the provisions of Section 7.2
hereof. For the avoidance of doubt, in no event shall CombinatoRx have the right
to terminate this Agreement with respect to any Hit Compound as a result of a
breach by Angiotech of the provisions of Section 7.2.

     15.6    TERMINATION UPON INSOLVENCY. Either Party may terminate this
Agreement and Angiotech may terminate only the Research Project, thereby ending
the Research Period, if, at any time, the other Party shall file in any court or
agency pursuant to any statute or regulation of any state, country or
jurisdiction, a petition in bankruptcy or insolvency or for reorganization or
for an arrangement or for the appointment of a receiver or trustee of that Party
or of its assets, or if the other Party proposes a written agreement of
composition or extension of its debts, or if the other Party shall be served
with an involuntary petition against it, filed in any insolvency proceeding, and
such petition shall not be dismissed within sixty (60) days after the filing
thereof, or if the other Party shall propose or be a party to any dissolution or
liquidation, or if the other Party shall make an assignment for the benefit of
its creditors. In case Angiotech elects to terminate the Research Project only
Angiotech shall be under no obligation to provide CombinatoRx with any further
compensation pursuant to Article 8.

     15.7    TERMINATION UPON COMBINATORX CHANGE OF CONTROL. Upon a Change of
Control (for purposes of this Section 15.7 only, the percentage set forth in the
definition of Change of Control shall be 50% instead of 20%) of CombinatoRx at
any time during the Research Period, by which CombinatoRx becomes controlled by
a Local Therapeutic Company, Angiotech shall have the right with immediate
effect, by delivering written notice of termination to CombinatoRx at any time
within six (6) months after the date of such Change of Control, to (a) terminate
this Agreement in its entirety; or (b) terminate only the Research Project
thereby ending the Research Period. In the event Angiotech exercises the option
under (b), (y) Section 8.1.3 shall immediately cease to be in effect, and (z)
CombinatoRx or its successor shall promptly provide Angiotech with all Research
Results generated by it under the Research Project and not previously provided
to Angiotech and shall promptly return to Angiotech all Angiotech Information
and all other Confidential Information of Angiotech, including any and all
copies thereof, and those portions of any documents, memoranda, notes, studies,
analyses or other material prepared by or on behalf of

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CombinatoRx that incorporate or are derived from such Confidential Information.
For the avoidance of doubt, in the event of such termination, CombinatoRx shall
have no further rights to use any Angiotech Information or other Confidential
Information of Angiotech for any purpose. The Agreement shall remain valid and
in full force and effect in all other respects.

     15.8    RIGHTS UPON CHANGE OF CONTROL OF ANGIOTECH

             (a)     In the event of a Change of Control with respect to
                     Angiotech prior to the expiration of this Agreement or any
                     modification or extension of this Agreement, except with
                     the prior written consent of CombinatoRx, Angiotech shall,
                     subject to Section 15.8.1(b), pay to CombinatoRx the amount
                     of Two Hundred Million Dollars ($200,000,000) (the
                     "CombinatoRx Protection Payment"), which payment shall be
                     made within 90 days of the later of (i) the date of such
                     Change of Control of Angiotech or (ii) the date upon which
                     CombinatoRx first becomes aware of such Change of Control.

             (b)     Notwithstanding Section 15.8.1(a), the CombinatoRx
                     Protection Payment shall only be required to be made by
                     Angiotech to CombinatoRx upon a determination by the
                     Angiotech Board of Directors (which determination shall be
                     made (i) at the Board of Directors' sole discretion and
                     (ii) prior to consummation of the Change of Control, as
                     applicable) that the Financial Protection Payment is
                     appropriate in the circumstances of such Change of Control.

     15.9    CONSEQUENCES OF TERMINATION.

             15.9.1  RETURN OF MATERIAL; TERMINATION OF RIGHTS.

             (a)     In the event of termination of this Agreement in its
                     entirety by Angiotech pursuant to Section 15.3, or by
                     CombinatoRx pursuant to Section 15.4 or Section 15.5: (i)
                     all rights and licenses granted to Angiotech under this
                     Agreement shall terminate, (ii) all rights and licenses
                     granted to CombinatoRx pursuant to clauses (b), (c) and (d)
                     of Section 2.2 shall survive, and (iii) each Party shall
                     return all data, files, records and other materials in its
                     possession or control containing or comprising the other
                     Party's Information, or other Confidential Information to
                     which such first Party does not retain rights hereunder
                     (except one copy of which may be retained by the returning
                     Party solely for archival purposes).

             (b)     In the event of termination of this Agreement with respect
                     to one or more Fast Track Licensed Products by CombinatoRx
                     pursuant to Section 15.5: (i) all rights and licenses
                     granted to Angiotech under this Agreement with respect to
                     such Fast Track Licensed Product shall terminate, and (ii)
                     all rights and licenses granted to CombinatoRx pursuant to
                     clauses (b), (c) and (d) of Section 2.2 shall survive such
                     termination, and (iii) Angiotech shall return all data,
                     files, records and other materials in its possession or
                     control containing or comprising

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                     CombinatoRx's Information or other Confidential Information
                     with respect to such Fast Track Licensed Product (except
                     one copy of which may be retained by Angiotech solely for
                     archival purposes). For the avoidance of doubt, Angiotech
                     shall have the right to retain all such Information,
                     including Confidential Information, that is necessary or
                     useful for Angiotech to Exploit Licensed Products and
                     Improvements for remaining Licensed Products.

             (c)     In the event of termination of this Agreement with respect
                     to one or more countries by Angiotech pursuant to Section
                     15.3: (i) all rights and licenses granted to Angiotech
                     under this Agreement shall terminate with respect to such
                     country or countries, and (ii) all rights and licenses
                     granted to CombinatoRx pursuant to clauses (b), (c) and (d)
                     of Section 2.2 shall survive such termination, and (iii)
                     each Party shall return all data, files, records and other
                     materials in its possession or control containing or
                     comprising the other Party's Information or other
                     Confidential Information with respect to such country or
                     countries to which such first Party does not retain rights
                     hereunder (except one copy of which may be retained by the
                     returning Party solely for archival purposes). For the
                     avoidance of doubt, Angiotech shall have the right to
                     retain all such Information, including Confidential
                     Information, that is necessary or useful for Angiotech to
                     Exploit Licensed Products and Improvements in the remaining
                     countries in the Territory.

             (d)     In the event of termination of this Agreement in its
                     entirety by Angiotech pursuant to Section 15.4, 15.6 or
                     15.7, (i) CombinatoRx shall deliver or otherwise return to
                     Angiotech all data, files, records and other materials in
                     its possession or control relating to the Licensed
                     Compounds and Licensed Product or containing or comprising
                     Angiotech's Information or other Confidential Information
                     (except one copy of which may be retained by CombinatoRx
                     solely in its legal files for archival purposes to ensure
                     its continuing compliance with this Agreement), and, if
                     this Agreement is terminated by Angiotech pursuant to
                     Section 15.4 prior to the first anniversary of the
                     Effective Date, then CombinatoRx shall assign to Angiotech
                     all of its right, title and interest in and to the Research
                     Results; (ii) all licenses and other rights granted by each
                     Party to the other Party under this Agreement shall
                     terminate; and (iii) all licenses and other rights granted
                     by CombinatoRx to Angiotech under this Agreement shall
                     continue in perpetuity and all applicable obligations of
                     Angiotech under Article 8 shall continue in accordance with
                     their terms, except that, in the event of a termination of
                     this Agreement pursuant to Section 15.4, Angiotech shall be
                     entitled to reduce each milestone and royalty payment that
                     would otherwise be due under Article 8 by thirty percent
                     (30%) until such cumulative reductions equal the total
                     amount of Losses incurred by Angiotech resulting from such
                     breach by CombinatoRx. The provisions of this Section shall
                     be Angiotech's sole and exclusive remedy in the event of a
                     material breach of this Agreement by CombinatoRx; provided,
                     however, that, if, by the fifth anniversary

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                     following termination of this Agreement by Angiotech
                     pursuant to Section 15.4, Angiotech has not recovered the
                     full amount of Losses resulting from CombinatoRx's breach
                     through such reductions as permitted by this Section, then
                     Angiotech shall be entitled to any other right or remedy
                     availabile to it with respect to such portion of Losses
                     that have not be so recovered.

             15.9.2  WORK-IN-PROGRESS. Upon termination of this Agreement in its
entirety or with respect to one or more countries, Angiotech is entitled during
the following one hundred and eighty (180) days, to finish any work-in-progress
and to sell any inventory of the Licensed Product that remains on hand as of the
date of the termination, so long as Angiotech pays CombinatoRx the royalties
applicable to said subsequent sales in accordance with the terms and conditions
set forth in Section 8.2.

             15.9.3  REMEDIES. Early termination of this Agreement, other than
pursuant to Section 15.5, or the Research Project by a Party shall in no way
affect or limit such Party's right to claim against the other Party for any
damages arising out of the breach of this Agreement.

     15.10   ACCRUED RIGHTS; SURVIVING OBLIGATIONS. The termination of this
Agreement shall not relieve the Parties from performing any obligations accrued
prior to the date this Agreement terminates. All provisions of this Agreement
which by their terms are intended to survive shall survive as the context
requires.

                                   ARTICLE 16
                               DISPUTE RESOLUTION

     16.1    NEGOTIATION OF PARTIES. In the event of any dispute, claim or
controversy arising out of, relating to or in any way connected to the
interpretation of any provision of this Agreement, the performance of either
Party under this Agreement or any other matter under this Agreement, including
any action in tort, contract or otherwise, at equity or law (a "DISPUTE"),
either Party may at any time provide the other Party written notice specifying
the terms of such Dispute in reasonable detail. As soon as practicable after
receipt of such notice, the Chief Executive Officers of both Angiotech and
CombinatoRx ("HEADS") shall meet at a mutually agreed upon time and location for
the purpose of resolving such Dispute. The Heads shall engage in good faith
discussions and/or negotiations for a period of up to thirty (30) days to
resolve the Dispute or negotiate an interpretation or revision of the applicable
portion of this Agreement which is mutually agreeable to both Parties, without
the necessity of formal procedures relating thereto. During the course of such
discussion and/or negotiation, the Parties shall reasonably cooperate and
provide information that is not materially confidential in order so that each of
the Heads may be fully informed with respect to the issues in the Dispute.

     16.2    ARBITRATION. In the event any Dispute is not resolved by the Heads
pursuant to Section 16.1, then the Parties shall resolve such Dispute by final
and binding arbitration. Whenever a Party decides to institute arbitration
proceedings, it shall give written notice to that effect to the other Party.
Arbitration shall be held in the metropolitan area of Seattle, Washington, USA,
according to the then-current commercial arbitration rules of the American
Arbitration Association ("AAA"), except to the extent such rules are
inconsistent with this Article 16. The arbitration will be conducted by a panel
of three (3) arbitrators

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appointed in accordance with AAA rules; provided that each Party shall within
thirty (30) days after the institution of the arbitration proceedings appoint
one arbitrator each, and such arbitrators shall select, if available, a third
arbitrator within thirty (30) days thereafter. If the two first arbitrators are
unable to select a third arbitrator within such period, the third arbitrator
shall be appointed in accordance with AAA rules. Any arbitrator chosen hereunder
shall have educational training and industry experience sufficient to
demonstrate a reasonable level of relevant scientific, financial, medical and
industry knowledge. All arbitrators eligible to conduct the arbitration must
agree to render their opinion(s) within thirty (30) days of the final
arbitration hearing. No arbitrator (nor the panel of arbitrators) shall have the
power to award punitive damages under this Agreement regardless of whether any
such damages are contained in a Proposal, and such award is expressly
prohibited. The proceedings and decisions of the arbitrators shall be
confidential, final and binding on all of the Parties. Judgment on the award so
rendered may be entered in a court having jurisdiction thereof. The Parties
shall share equally the costs of arbitration. Nothing in this Section 16.2 will
preclude either Party from seeking equitable relief in accordance with Section
17.1 or interim or provisional relief from a court of competent jurisdiction,
including a temporary restraining order, preliminary injunction or other interim
equitable relief, concerning a Dispute either prior to or during any arbitration
if necessary to protect the interests of such Party or to preserve the status
quo pending the arbitration proceeding. Notwithstanding the foregoing, the
Parties are not required to resolve Disputes related to ownership, filing,
prosecution, maintenance, defense or enforcement of Patents pursuant to this
Section 16.2.

                                   ARTICLE 17
                                  MISCELLANEOUS

     17.1    REMEDIES. The Parties acknowledge and agree that, in the event of a
breach or a threatened breach by either Party of this Agreement for which it
will have no adequate remedy at law, the other Party may suffer irreparable
damage and, accordingly, shall be entitled to seek injunctive and other
equitable remedies to prevent or restrain such breach or threatened breach, in
addition to any other remedy they might have at law or at equity. CombinatoRx
acknowledges and agrees that the restrictions set forth in Section 2.5 and
Article 9 of this Agreement are reasonable and necessary to protect the
legitimate interests of Angiotech and that Angiotech would not have entered into
this Agreement in the absence of such restrictions, and that any breach or
threatened breach of any provision of Section 2.5 and Article 9 will result in
irreparable injury to Angiotech for which there will be no adequate remedy at
law. In the event of a breach or threatened breach of any provision of Section
2.5 and Article 9, Angiotech shall be authorized and entitled to obtain from any
court of competent jurisdiction injunctive relief, whether preliminary or
permanent, specific performance and an equitable accounting of all earnings,
profits and other benefits arising from such breach, which rights shall be
cumulative and in addition to any other rights or remedies to which Angiotech
may be entitled in law or equity. CombinatoRx agrees to waive any requirement
that Angiotech (a) post a bond or other security as a condition for obtaining
any such relief, and (b) show irreparable harm, balancing of harms,
consideration of the public interest or inadequacy of monetary damages as a
remedy.

     17.2    GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of New York in force therein without regard to its
conflict of law rules or principles.

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     17.3    TRADEMARKS. Angiotech shall have the sole right to select
Trademarks for the marketing and sale of the Licensed Products in the Territory.
Angiotech shall own such Trademarks and all rights and goodwill with respect
thereto. CombinatoRx shall not, and shall cause its Affiliates to not, use any
trademark that is the same as or confusingly similar to, misleading or deceptive
with respect to or that dilutes the Trademarks.

     17.4    AMENDMENT AND WAIVER. This Agreement may not be modified or amended
except in a writing signed by both Parties. No provision of or right under this
Agreement shall be deemed to have been waived by any act or acquiescence on the
part of any Party, its agents or employees, but only by an instrument in writing
signed by an authorized officer of such Party. No waiver by either Party of any
breach of this Agreement by the other Party shall be effective as to any other
breach, whether of the same or any other term or condition and whether occurring
before or after the date of such waiver.

     17.5    INDEPENDENT CONTRACTORS. Each Party represents that it is acting on
its own behalf as an independent contractor and is not acting as an agent for or
on behalf of the other Party, its Affiliates or any other Third Party (with
respect to this Agreement). This Agreement and the relations hereby established
by and between Angiotech and CombinatoRx do not constitute a partnership, joint
venture, agency or contract of employment between them.

     17.6    ASSIGNMENT. Neither Party may assign its rights or, except as
provided in Sections 2.3 or 2.4, delegate its obligations under this Agreement,
whether by operation of law or otherwise, in whole or in part without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld, except that Angiotech shall always have the right, without such
consent to perform any or all of its obligations and exercise any or all of its
rights under this Agreement through any of its Affiliates or Sublicensees, and
may assign any or all of its rights and delegate any or all of its obligations
hereunder to any of its Affiliates. Either Party may assign any or all of its
rights and delegate any or all of its obligations hereunder, subject to Section
15.6 in the case of an assignment by CombinatoRx, to any successor in interest
(whether by merger, acquisition, asset purchase or otherwise) to all or
substantially all of the business to which this Agreement relates provided that
the assigning Party shall provide written notice to the other within thirty (30)
days after such assignment or delegation; provided, however, in the event that
any such transaction results in a Change of Control of CombinatoRx, Angiotech
shall be entitled to request (at any time during the one hundred eighty (180)
day period following completion of the subject transaction) further written
assurances from the resulting entity re-affirming the commitment of the
resulting entity to comply with the terms and conditions of this Agreement, and
such further written assurances shall be delivered within ninety (90) days of
request by Angiotech.

     17.7    SUCCESSORS AND ASSIGNS.  This Agreement shall bind and inure to the
benefit of the Parties and their respective successors and permitted assigns.

     17.8    NOTICES. All communications hereunder shall be in writing and shall
be sent (a) by prepaid registered or certified mail, return receipt requested,
(b) by overnight express delivery service by a nationally recognized courier, or
(c) via confirmed facsimile or telecopy, followed within five (5) days by a copy
mailed in the preceding manner, addressed to the other party at the address
shown below or at such other address for which such party gives notice
hereunder. Such notice will be deemed to have been given when delivered or, if
delivery is not accomplished by some fault of the addressee, when tendered.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                       68
<Page>

                                                                    CONFIDENTIAL

         If to CombinatoRx:    CombinatoRx, Incorporated
                               650 Albany Street
                               Boston, MA 02118
                               Attention: Vice President Commercial Operations

             With a copy to:   Ropes & Gray LLP
                               One International Place
                               Boston, MA 02110
                               Attention: Marc A. Rubenstein, Esq.

         If to Angiotech:      Angiotech Pharmaceuticals, Inc.
                               1618 Station Street
                               Vancouver, BC, Canada V6A 1B6
                               Attention: Vice President Business Development

             With a copy to:   Angiotech Pharmaceuticals, Inc.
                               1618 Station Street
                               Vancouver, BC, Canada V6A 1B6
                               Attention: General Counsel

     17.9    SEVERABILITY. In the event any provision of this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other term
or provision hereof. The Parties agree that they will negotiate in good faith or
will permit a court or arbitrator to replace any provision hereof so held
invalid, illegal or unenforceable with a valid provision which is as similar as
possible in substance to the invalid, illegal or unenforceable provision.

     17.10   CAPTIONS. Captions of the Sections and subsections of this
Agreement are for reference purposes only and do not constitute terms or
conditions of this Agreement and shall not limit or affect the terms and
conditions hereof,

     17.11   WORD MEANINGS. Words such as HEREIN, HEREINAFTER, HEREOF and
HEREUNDER refer to this Agreement as a whole and not merely to a Section or
paragraph in which such words appear, unless the context otherwise requires. The
singular shall include the plural, and each masculine, feminine and neuter
reference shall include and refer also to the others, unless the context
otherwise requires.

     17.12   ENTIRE AGREEMENT. This Agreement and the Warrant Agreement contain
the entire understanding of the Parties with respect to the transactions and
matters contemplated hereby, including without limitation any licensing of the
Licensed Technology, supersedes all prior agreements and understandings relating
to the subject matter hereof, and no representations, inducements, promises or
agreements relating to the subject matter hereof, whether oral or otherwise,
between the Parties not contained herein or incorporated herein by reference
shall be of any force or affect.

     17.13   RULES OF CONSTRUCTION. The Parties agree that they have
participated equally in the formation of this Agreement and that the language
and terms of this Agreement shall not be presumptively construed against any of
them.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                       69
<Page>

                                                                    CONFIDENTIAL

     17.14   COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Facsimile signatures of
the Parties will have the same effect as original signatures. In making proof of
this Agreement, it shall not be necessary to produce or account for more than
one such counterpart.

     17.15   COMPLIANCE. The Parties shall comply fully with all applicable laws
and regulations in connection with their respective activities under this
Agreement.

     17.16   FORCE MAJEURE. Neither party shall be held responsible for any
delay or failure in performance (with the exception of the payment of money)
hereunder to the extent caused by strikes, embargoes, laws, regulations and
governmental requirements, civil or military authorities, acts of God,
earthquake, or by the public enemy or other causes reasonably beyond such
party's control and without such party's fault or negligence; provided that the
affected party notifies the unaffected party as soon as reasonably possible, and
resumes performance hereunder as soon as reasonably possible following cessation
of such force majeure event. Notwithstanding the foregoing, if a force majeure
event declared by CombinatoRx persists for a continuous period of nine (9)
months (and CombinatoRx does not resume performance in accordance with this
Agreement prior to such time despite such persistence), Angiotech shall have the
right to terminate this Agreement without further cost or liability.

     17.17   RIGHTS IN BANKRUPTCY. All rights and licenses granted by Angiotech
to CombinatoRx under or pursuant to this Agreement, including amendments hereto,
are, for all purposes of Section 365(n) of Title 11 of the U.S. Code ("TITLE
11"), licenses of rights to "intellectual property" as defined in Title 11. In
the event of the commencement of a bankruptcy or insolvency proceeding by or
against Angiotech, CombinatoRx shall be entitled to a complete duplicate of (and
complete access to) any such intellectual property and embodiments thereof. If
not already in CombinatoRx' possession, CombinatoRx shall have the right to
immediate delivery of such intellectual property and embodiments upon written
request.

     17.18   FURTHER ASSURANCES. Each Party shall perform all further acts and
things and execute and deliver such further documents as may be necessary or as
the other Party may reasonably require to implement or give effect to this
Agreement.

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                       70
<Page>

                                                                    CONFIDENTIAL

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

ANGIOTECH PHARMACEUTICALS,                 COMBINATORX, INCORPORATED
INC.

/s/ K. Thomas Bailey                       /s/ Alexis Borisy
----------------------------------         ----------------------------------
Signature                                  Signature

Name:   K. Thomas Bailey                   Name:   Alexis Borisy
                                                  ------------------------------
Title:  Vice President, Business           Title:  President and Chief Executive
        Development                                Officer
                                                  ------------------------------

[**] PORTIONS OF THIS EXHIBIT HAVE BEEN OMITTED PURSUANT TO A CONFIDENTIAL
TREATMENT REQUEST. AN UNREDACTED VERSION OF THIS EXHIBIT HAS BEEN FILED WITH THE
COMMISSION.

                                       71

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