Document:

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                                                                   Exhibit 10.38

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                     SUBSCRIPTION AND SHAREHOLDERS AGREEMENT

                                      AMONG

                         COMBINATORX (SINGAPORE) PTE LTD

                 BIOMEDICAL SCIENCES INVESTMENT FUND PTE LTD AND

                            COMBINATORX, INCORPORATED

                              DATED AUGUST __, 2005

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                                TABLE OF CONTENTS

<Table>
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CONTENTS                                                                        PAGE
<S>                                                                               <C>
1.    DEFINITIONS..................................................................3

2.    ALLOTMENT AND ISSUE OF PREFERENCE SHARES....................................10

3.    NOTES.......................................................................10

4.    GENERAL.....................................................................13

5.    SECURITY....................................................................13

6.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND OF THE PARENT.............14

7.    REPRESENTATIONS, WARRANTIES AND UNDERSTANDINGS OF THE INVESTOR..............20

8.    CLOSING CONDITIONS..........................................................21

9.    SUBSEQUENT NOTES CLOSINGS...................................................22

10.   APPLICABILITY OF PROVISIONS RELATING TO SHAREHOLDERS........................23

11.   GOVERNANCE OF THE COMPANY...................................................23

12.   RESTRICTIONS ON TRANSFERS OF SECURITIES.....................................28

13.   OPERATIONS OF THE COMPANY...................................................32

14.   NON COMPETE.................................................................35

15.   DEFAULT.....................................................................37

16.   TERMINATION.................................................................43

17.   MISCELLANEOUS PROVISIONS....................................................44
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                     SUBSCRIPTION AND SHAREHOLDERS AGREEMENT

This Subscription and Shareholders Agreement (the "AGREEMENT") is entered into
as of August [__], 2005 (the "EFFECTIVE DATE") by and among CombinatoRx
(Singapore) Pte. Ltd., a Singapore private limited company (the "COMPANY"),
BioMedical Sciences Investment Fund Pte Ltd, a Singapore private limited company
(the "INVESTOR"), and CombinatoRx, Incorporated, a Delaware corporation (the
"PARENT"). The Company, the Parent and the Investor are referred to collectively
herein as the "PARTIES".

                                   AGREEMENT:

WHEREAS, Parent has established a new company for the purpose of discovering,
developing and commercializing novel combination therapies for the treatment of
infectious disease;

WHEREAS, the Parent has formed the Company as a wholly-owned subsidiary with an
authorized, issued and paid up capital as shown in Schedule 1;

WHEREAS, the Parent and the Company wish to have the Investor invest by way of
subscribing for certain Preference Shares of the Company and certain secured
Notes of the Company, as set out in this Agreement and on the terms and
conditions of this Agreement;

WHEREAS, the Investor wishes to invest by way of subscribing for such Preference
Shares and such secured Notes of the Company, as set out in this Agreement and
on the terms and conditions of this Agreement;

WHEREAS, the Parent and the Company have entered into the Services Agreement,
providing for the Company to contract with the Parent for the Parent to provide
assay development, screening and evaluation services for the Company aimed at
the discovery and development of novel therapeutic combination therapies for
Infectious Disease, for the consideration specified therein, and with all
patent, copyright and other intellectual property rights in such combination
therapies to be owned by the Company; and

WHEREAS, the Investor, the Parent and the Company wish to provide for the
governance of the Company and for the operation and growth of the Company in
Singapore, as well as the relationship between the Investor and the Parent
interse as shareholders of the Company.

NOW, THEREFORE, in consideration of these premises, the benefits to be derived
by the Parties, and the terms, conditions, representations and covenants set
forth herein, the Parties hereby agree as follows:

This Agreement provides for:

(A)    certain definitions;

(B)    the issuance of the Preference Shares, and the rights, privileges,
       preferences and restrictions of the Preference Shares;

(C)    the commitment of the Investor to subscribe to the Notes;

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(D)    the governance of the Company, including provisions regarding the
       election of directors, matters requiring shareholder approval and stock
       transfer restrictions;

(E)    the operations of the Company, including the Parent's commitment to
       locate the Company in Singapore, the exclusive provision of drug
       discovery services in the field of Infectious Disease by the Parent to
       the Company pursuant to the Services Agreement, and certain further
       provisions regarding additional funding to be provided to the Company by
       the Parent under certain circumstances;

(F)    representations and warranties of the Company, the Parent and the
       Investor;

(G)    closing conditions and obligations of the Company, the Parent and the
       Investor;

(H)    default provisions applicable under this Agreement with respect to both
       the Notes and the Preference Shares as well as the Parties' obligations
       under the Transaction Documents; and

(I)    various miscellaneous provisions.

1.     DEFINITIONS

1.1    CERTAIN DEFINED TERMS. As used in this Agreement, the following terms
       shall have the following respective meanings:

       "AFFILIATE" shall mean, with respect to any Person, any other Person
       directly or indirectly controlling, controlled by, or under common
       control with, such Person. The expression "CONTROL" (including its
       correlative meanings, "CONTROLLED BY", "CONTROLLING" and "UNDER COMMON
       CONTROL WITH") shall mean, with respect to a corporation, the right to
       exercise, directly or indirectly, more than 50 per cent. of the voting
       rights attributable to the shares of the controlled corporation and, with
       respect to any Person other than a corporation, the possession, directly
       or indirectly, of the power to direct or cause the direction of the
       management or policies of such Person;

       "ANNUAL PERIOD" shall mean any one year period beginning on July 1st and
       ending on the subsequent June 30th with the first Annual Period
       commencing on the Initial Closing Date;

       "ARTICLES" shall mean the Articles of Association of the Company, as in
       effect at any time;

       "AUDITORS" shall mean the auditors of the Company as in effect at any
       time;

       "BUDGET" shall mean the annual cash flow budget of the Company forming
       part of the Business Plan;

       "BUSINESS PLAN" shall mean a formal written description of the business
       activities to be undertaken by the Company, including but not limited to
       the Budget and the services contracted for under the Services Agreement,
       for the period ending September 30, 2009,

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       or for such longer period as may be agreed to in writing by the Parties,
       as in effect from time to time. The initial Business Plan is attached
       hereto as Exhibit B;

       "COMPANIES ACT" means the Companies Act (Cap. 50) of Singapore or any
       statutory modification or re-enactment thereof as then in force;

       "COMPANY" shall mean CombinatoRx (Singapore) Pte Ltd, a Singapore private
       limited company;

       "CONNECTED PERSON" shall mean in relation to any entity, a director,
       officer or employee of such entity, or a spouse, parent, child or sibling
       of such director, officer or employee;

       "DEBENTURE" shall have the meaning set forth in Section 5, a form of
       which is attached hereto as Exhibit E;

       "DEED OF RATIFICATION AND ACCESSION" shall mean the deed of ratification
       and accession in the form attached hereto as Exhibit J;

       "DEFAULT DATE" shall have the meaning set forth in Section 15.2;

       "DESIGNATED OBSERVER" shall have the meaning set forth in Section 11.4;

       "DIRECTOR" shall have the meaning set forth in Section 11.1.1;

       "DOLLARS" or the sign "US$" shall mean the lawful currency of the United
       States of America;

       "ELIGIBLE EMPLOYEE" shall mean an employee of the Company who performs
       research, clinical, pre-clinical, development or other similar functions.
       For purposes of clarity, Eligible Employees shall not include any
       employee whose job description is primarily administrative or financial;

       "ENCUMBRANCES" shall mean any security interest of any kind including any
       charge, mortgage, security, lien, option, equity, power of sale,
       hypothecation, retention of title, right of pre-emption or right of first
       refusal;

       "EVENT OF DEFAULT" shall have the meaning set forth in Section 15.1;

       "IND" shall mean an Investigational New Drug Application, as defined in
       the United States Federal Food, Drug, and Cosmetics Act or an equivalent
       foreign filing;

       "INFECTIOUS DISEASE" shall mean any disease indication caused by a viral,
       bacterial or fungal infection, other than any disease indication which
       may be related to or caused by a viral, bacterial or fungal infection, or
       which may have a putative infectious component, but primary treatment for
       which, as of the initiation of research or development work on such
       indication by Parent, is not typically anti-infective in nature,
       including, without limitation and by way of example, such indications as
       cervical cancer (possibly caused by HPV) or Crohn's disease (putative
       cause infectious). Schedule 4 describes on a non-

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       exhaustive basis the Parties' current understanding as to the scope of
       the definition of Infectious Disease;

       "INITIAL CLOSING" shall have the meaning set forth in Section 2.2;

       "INITIAL CLOSING DATE" shall have the meaning set forth in Section 2.2;

       "INTELLECTUAL PROPERTY" shall mean the Company's ownership , license or
       other interest in trademark, tradename, copyright, patent, patent
       application, technology, know-how, trade secret, invention and/or process
       of the Company;

       "INVESTOR" shall mean BioMedical Sciences Investment Fund Pte Ltd, a
       Singapore private limited company;

       "IPO" shall mean an underwritten initial public offering of the Parent
       Common Stock pursuant to an effective registration statement filed with
       the SEC under the Securities Act or any other transaction by which the
       Parent Common Stock becomes registered on a United States national
       securities exchange or authorized for quotation on an automated quotation
       system sponsored by a United States registered securities association;

       "ISSUE PRICE" shall have the meaning set forth in Section 2.2;

       "ISSUE PRICE PER PREFERENCE SHARE" shall have the meaning set forth in
       Section 2.2;

       "MATERIAL ADVERSE EFFECT" shall mean a material adverse effect on the
       assets, condition or business of the Company;

       "MATURITY DATE" shall mean December 31, 2009;

       "MILESTONE" means a set of criteria to be fulfilled by the Company prior
       to the Investor subscribing for the relevant series of Notes, as
       described in Schedule 3;

       "MILESTONE CERTIFICATE" shall have the meaning set forth in Section
       3.3.1;

       "NEW ARTICLES" means the new set of Articles to be adopted in replacement
       of the existing Articles at Initial Closing in the form set out in
       Exhibit C;

       "NOTE CERTIFICATE" shall mean the Series 1 Note Certificate, the Series 2
       Note Certificate, the Series 3 Note Certificate, the Series 4 Note
       Certificate or the Series 5 Note Certificate, as the case may be;

       "NOTE CLOSING" shall mean the closing of any issuance of Notes.

       "NOTE CLOSING NOTICE" shall mean a notice delivered by the Company as
       provided in Section 3.5.

       "NOTE CONDITIONS" means the terms and conditions of the Notes as set out
       in Exhibit D to this Agreement (as from time to time amended, modified or
       supplemented) and any reference to a specified Note Condition shall be
       construed accordingly;

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       "NOTE CLOSING DATE" shall mean the Initial Closing Date, the Series 2
       Notes Closing Date, the Series 3 Notes Closing Date, Series 4 Notes
       Closing Date or the Series 5 Notes Closing Date, as the case may be;

       "NOTEHOLDER" means the Investor or such other party registered as holder
       of the Notes in the Register of Noteholders;

       "NOTES" shall mean collectively, the Series 1 Notes, the Series 2 Notes,
       the Series 3 Notes, the Series 4 Notes and the Series 5 Notes;

       "NOTES ISSUE PRICE" means:

       (i)         in respect of the Series 1 Notes, US$5,500,000 (the "SERIES 1
              NOTES ISSUE PRICE");

       (ii)        in respect of the Series 2 Notes, US$3,500,000 (the "SERIES 2
              NOTES ISSUE PRICE");

       (iii)       in respect of the Series 3 Notes, US$3,500,000 (the "SERIES 3
              NOTES ISSUE PRICE");

       (iv)        in respect of the Series 4 Notes, US$2,500,000 (the "SERIES 4
              NOTES ISSUE PRICE"); and

       (v)         in respect of the Series 5 Notes, US$2,500,000 (the "SERIES 5
              NOTES ISSUE PRICE");

       "ORDINARY SHARES" means the ordinary shares of US$0.001 each in the share
       capital of the Company;

       "OUTSTANDING BALANCE" shall mean, with respect to each outstanding Note,
       the unpaid principal amount (excluding interest) of such Note outstanding
       at any time;

       "PARENT" shall mean CombinatoRx, Incorporated, a Delaware corporation;

       "PARENT COMMON STOCK" shall mean the common stock, $0.001 par value per
       share, of the Parent;

       "PARENT NOTE" shall have the meaning set forth in Section 13.7;

       "PARENT PREFERRED STOCK" shall mean, with respect to any payment or
       conversion under this Agreement, the latest series or class of Preferred
       Stock of the Parent issued in a financing round by the Parent prior to
       such payment or conversion;

       "PARENT SUBSCRIPTION AGREEMENT" shall mean the Subscription Agreement
       dated August [__], 2005 between the Parent and the Company, a form of
       which is attached hereto as Exhibit M;

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       "PERSON" means any individual, partnership, corporation, unincorporated
       organization, limited liability company, trust or joint venture, or a
       governmental agency or political subdivision thereof;

       "PREFERENCE SHARES" shall have the meaning set forth in Section 2.1;

       "PREFERRED STOCK RIGHTS AGREEMENT" shall mean the Preferred Stock Rights
       Agreement dated as of August [__], 2005 by and among the Parent, the
       Investor and the stockholders of the Parent, a form of which is attached
       hereto as Exhibit I;

       "REGISTER OF MEMBERS" shall mean the register of members of the Company;

       "REGISTER OF NOTEHOLDERS" shall mean the register of Noteholders of the
       Company;

       "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
       Agreement dated of even date herewith between the Investor and the
       Parent, a form of which is attached hereto as Exhibit G;

       "SCHEDULE OF EXCEPTIONS" shall have the meaning set forth in Section 6;

       "SEC" shall mean the United States Securities and Exchange Commission;

       "SECURITIES" shall mean the Shares and the Notes;

       "SECURITIES ACT" means the United States Securities Act of 1933, as
       amended;

       "SERIES 1 NOTE CERTIFICATE" shall mean a certificate issued by the
       Company certifying that the person named in the certificate is the holder
       of the principal amount of Series 1 Notes referred to in the certificate;

       "SERIES 1 NOTES" means the US$5,500,000 in aggregate principle amount of
       5% notes due 2009, to be issued on the Initial Closing Date;

       "SERIES 2 NOTE CERTIFICATE" shall mean a certificate issued by the
       Company certifying that the person named in the certificate is the holder
       of the principal amount of Series 2 Notes referred to in the certificate;

       "SERIES 2 NOTES" means the US$3,500,000 in aggregate principle amount of
       5% notes due 2009, to be issued on the First Notes Closing Date;

       "SERIES 3 NOTE CERTIFICATE" shall mean a certificate issued by the
       Company certifying that the person named in the certificate is the holder
       of the principal amount of Series 3 Notes referred to in the certificate;

       "SERIES 3 NOTES" means the US$3,500,000 in aggregate principle amount of
       5% notes due 2009, to be issued on the Second Notes Closing Date;

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       "SERIES 4 NOTE CERTIFICATE" shall mean a certificate issued by the
       Company certifying that the person named in the certificate is the holder
       of the principal amount of Series 4 Notes referred to in the certificate;

       "SERIES 4 NOTES" means the US$2,500,000 in aggregate principle amount of
       5% notes due 2009, to be issued on the Third Notes Closing Date;

       "SERIES 5 NOTE CERTIFICATE" shall mean a certificate issued by the
       Company certifying that the person named in the certificate is the holder
       of the principal amount of Series 5 Notes referred to in the certificate;

       "SERIES 5 NOTES" means the US$2,500,000 in aggregate principle amount of
       5% notes due 2009, to be issued on the Third Notes Closing Date or the
       Fourth Notes Closing Date, as the case may be;

       "SERVICES AGREEMENT" shall mean the Services Agreement dated as of even
       date herewith, between the Company and the Parent, a form of which is
       attached hereto as Exhibit F;

       "SHARE CHARGE" shall mean the share charge to be executed by the Parent,
       a form of which is attached hereto as Exhibit L;

       "SHARES" shall mean the Preference Shares and/or the Ordinary Shares, as
       the case may be;

       "SHAREHOLDERS" shall mean the Parent and the Investor and any other
       Person in whose name any Shares are registered in the Register of Members
       pursuant to and in compliance with the provisions of this Agreement and
       who has executed a Deed of Ratification and Accession and "SHAREHOLDER"
       shall mean any one of them;

       "SHAREHOLDING PERCENTAGE" shall mean, in relation to any Shareholder and
       at any time, means the total number of Ordinary Shares held by such
       Shareholder at that time (with Preference Shares counted as Ordinary
       Shares on a fully diluted and as-converted basis) expressed as a
       percentage of all the issued Ordinary Shares as at that time (with issued
       Preference Shares counted as issued Ordinary Shares on a fully diluted
       and as-converted basis);

       "SUBSIDIARY" with respect to any Person, means (i) any corporation of
       which the outstanding capital stock having at least a majority of the
       votes entitled to be cast in the election of directors under ordinary
       circumstances shall at the time be owned or controlled, directly or
       indirectly, by such Person or (ii) any other Person of which at least a
       majority of the voting interest under ordinary circumstances is at the
       time owned or controlled, directly or indirectly, by such Person;

       "SWAP UP AGREEMENT" means the swap-up agreement to be entered into
       between the Parent, the Company and the Investor on the Initial Closing
       Date, a form of which is attached hereto as Exhibit H;

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       "TOPICAL" shall mean delivery to the skin in a vehicle such as a cream,
       an ointment, or equivalent vehicle, whereby the therapeutic action is via
       a local effect on the skin, and excluding (i) other local delivery
       modalities to the skin, such as transdermal, in which the primary
       therapeutic purpose is to have a systemic effect, (ii) other local
       delivery modalities such as ophthalmic, oral-local to the GI tract, or to
       tissues or organs other than the skin, and (iii) drug-device combinations
       that provide local delivery to tissues or organs other than the skin;

       "TRANSACTION DOCUMENTS" shall mean, collectively, this Agreement, the
       Swap Up Agreement, the Notes, the Note Conditions, the Services
       Agreement, the Debenture, the Share Charge, the Preferred Stock Rights
       Agreement and the Registration Rights Agreement; and

       "U.S. PERSON" shall have the meaning set forth in Section 7.1.3.

1.2    OTHER DEFINED TERMS.

       1.2.1    Certain other words and phrases are defined or described
                elsewhere in this Agreement and/or the Schedules and Exhibits
                hereto.

       1.2.2    Wherever used in this Agreement:

                      (i)    the words "INCLUDE" or "INCLUDING" shall be
                             construed as incorporating, also, "BUT NOT LIMITED
                             TO" or "WITHOUT LIMITATION";

                      (ii)   the word "DAY" means a calendar day unless
                             otherwise specified;

                      (iii)  the word "LAW" (or "LAWS") means any federal or
                             state statute, ordinance, resolution, regulation,
                             code, rule, order, decree, judgment, writ,
                             injunction, mandate or other legally binding
                             requirements of a government entity;

                      (iv)   the word "NOTICE" shall mean notice in writing
                             (whether or not specifically stated) and shall
                             include notices, consents, approvals and any other
                             written communication contemplated under this
                             Agreement;

                      (v)    the word "OR" shall mean either or both; and

                (vi)  the words "BUSINESS DAY" shall mean any day other than
                      Saturday, Sunday or a day on which commercial banks
                      located in either Singapore or New York are authorized or
                      required to close under the laws of Singapore, the United
                      States or the State of New York.

1.2.3  Unless the context otherwise requires, words in the singular number
       include the plural and vice versa. All Schedules and Exhibits hereto are
       hereby incorporated herein and made a part hereof.

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2.     ALLOTMENT AND ISSUE OF PREFERENCE SHARES

2.1    AUTHORIZATION. The Company has duly authorized the allotment and issue,
       pursuant to the terms of this Agreement, of 2,500,000 Series A Redeemable
       Convertible Cumulative Preference Shares of US$0.001 par value per share
       (the "PREFERENCE SHARES"), having the rights, privileges, preferences and
       restrictions set forth in Exhibit A and in the Articles.

2.2    ISSUE PRICE AND CLOSING. On the Initial Closing Date and subject to the
       terms and conditions of this Agreement, the Company will allot and issue
       to the Investor the Preference Shares and the Investor will subscribe for
       the Preference Shares for the cash subscription price of US$1.00 per
       Preference Share (the "ISSUE PRICE PER PREFERENCE SHARE") for aggregate
       proceeds of two million five hundred thousand dollars (US$2,500,000.00)
       (the "ISSUE PRICE"). When issued, the Preference Shares shall represent,
       on an as-converted basis, forty-nine percent (49%) of the Company's
       outstanding issued share capital and aggregate voting rights. Subject to
       the terms and conditions of this Agreement, the closing of the allotment
       and issue of the Preference Shares to the Investor by the Company under
       this Agreement (the "INITIAL CLOSING") shall take place at the registered
       office of the Company on August [__], 2005 assuming that all of the
       conditions set forth in Section 8 have been satisfied or duly waived or
       at such other time and place as the Parties hereto may mutually agree in
       writing (the time and date on which the Initial Closing occurs, the
       "INITIAL CLOSING DATE").

3.     NOTES

3.1    COMMITMENT. Subject to the terms and conditions of this Agreement, the
       Company agrees to issue to the Investor, and the Investor agrees to
       subscribe for, the Notes. Notwithstanding anything in this Agreement to
       the contrary, the Investor's obligation to subscribe for any Notes shall
       terminate on the Maturity Date.

3.2    SCHEDULE FOR SUBSCRIPTION OF NOTES.

       Subject to the terms and conditions of this Agreement (including but not
       limited to Section 9), the Company agrees to issue, and the Investor
       agrees to subscribe for the Notes as follows:

       3.2.1    the Series 1 Notes on the Initial Closing Date, in accordance
                with Section 8 below;

       3.2.2    subject to the Company having fulfilled the Milestone set out in
                part 1 of Schedule 3; the Milestone Certificate having been
                issued to the Investor; and the Investor having agreed in
                writing that the Milestone has been fulfilled (such agreement
                not to be unreasonably withheld) on or before the deadline for
                the achievement of such Milestone specified in Schedule 3, the
                Series 2 Notes on the Closing Date for such Notes specified in
                accordance with Section 3.5, in accordance with Section 9 below;

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       3.2.3    subject to the Company having fulfilled the Milestone set out in
                part 2 of Schedule 3; the Milestone Certificate having been
                issued to the Investor; and the Investor having agreed in
                writing that the Milestone has been fulfilled (such agreement
                not to be unreasonably withheld) on or before the deadline for
                the achievement of such Milestone specified in Schedule 3, the
                Series 3 Notes on the Closing for such Notes specified in
                accordance with Section 3.5, in accordance with Section 9 below;
                and

       3.2.4    (a) subject to (i) the Board having determined that at least one
                    product candidate for the first therapeutic area should move
                    into clinical development (for human use) and (ii) the
                    Company having fulfilled the Milestone set out in part 3 of
                    Schedule 3; the Milestone Certificate having been issued to
                    the Investor; and the Investor having agreed in writing that
                    the Milestone has been fulfilled (such agreement not to be
                    unreasonably withheld) on or before the deadline for the
                    achievement of such Milestone specified in Schedule 3, the
                    Series 4 Notes and Series 5 Notes on the Closing Date for
                    such Notes specified in accordance with Section 3.5, in
                    accordance with Section 9 below; or

                (b) in the event that the Board determines that (i) no product
                    candidate from the first therapeutic area shall move into
                    clinical development (for human use) and; (ii) research and
                    investigation activities in a second therapeutic area should
                    be initiated:

                    (i)    subject to the Company having fulfilled the Milestone
                           set out in part 4a of Schedule 3; the Milestone
                           Certificate having been issued to the Investor; and
                           the Investor having agreed in writing that the
                           Milestone has been fulfilled (such agreement not to
                           be unreasonably withheld) on or before the deadline
                           for the achievement of such Milestone specified in
                           Schedule 3, the Series 4 Notes on the Closing Date
                           for such Notes specified in accordance with Section
                           3.5, in accordance with Section 9 below ; and

                    (ii)   subject to the Company having fulfilled the Milestone
                           set out in part 4b of Schedule 3; the Milestone
                           Certificate having been issued to the Investor; and
                           the Investor having agreed in writing that the
                           Milestone has been fulfilled (such agreement not to
                           be unreasonably withheld) on or before the deadline
                           for the achievement of such Milestone specified in
                           Schedule 3, the Series 5 Notes on the Closing Date
                           for such Notes specified in accordance with Section
                           3.5, in accordance with Section 9 below,

                Provided always that if the Investor does not deliver to the
                Company a notice in writing stating that it disagrees that the
                relevant Milestone has been fulfilled within 10 business days of
                the Investor's receipt of the relevant Milestone

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                Certificate, the Investor shall be deemed to have agreed in
                writing that the Milestone has been fulfilled pursuant to this
                Section 3.2.4.

3.3    CERTIFICATE OF FULFILMENT OF MILESTONE

       3.3.1    Upon the fulfilment by the Company of any Milestone, the Company
                shall, promptly issue and deliver to the Investor a certificate
                signed by a Parent Director, certifying that such Milestone has
                been fulfilled and setting out such evidence as may be necessary
                in support thereof ("MILESTONE CERTIFICATE").

       3.3.2    The Investor shall be entitled to require the Company to furnish
                the Investor with such additional information and documents
                which the Investor may reasonably require in connection with the
                fulfillment by the Company of the Milestones and the Company
                shall upon such request promptly furnish the Investor with such
                additional information and documents.

3.4    FAILURE TO SATISFY CONDITIONS.

       3.4.1    Notwithstanding anything to the contrary in Section 3.2 above,
                in the event that the Company does not satisfy any Milestone or
                if the Investor does not agree that any Milestone has been met,
                the Investor and the Parent shall enter into discussions for a
                period of 3 months ("EXTENSION PERIOD") from the relevant
                deadline established in Schedule 3 for the achievement of such
                Milestone, with regard to the implications of such failure to
                meet conditions and whether such conditions may be waived,
                extended or varied.

       3.4.2    In the event that the Company fulfils any Milestone within the
                Extension Period relating to such Milestone and the Investor
                agrees in writing that the Company has fulfilled such Milestone
                (such agreement not to be unreasonably withheld), the Investor
                shall, at the end of such Extension Period, subscribe for the
                relevant Notes and the Company shall, at the end of such
                Extension Period, issue to the Investor the relevant Notes.

       3.4.3    In the event that any Milestone is not satisfied by the Company
                within the Extension Period in relation to such Milestone, the
                Investor shall not be obliged to subscribe for the relevant
                Notes in respect of such Milestone and neither the Company nor
                the Parent shall have any claim against the Investor in this
                regard.

3.5    NOTICE. Upon satisfaction by the Company of any Milestone with respect to
       any Series of Notes as provided in Section 3.3 or 3.4 above, the delivery
       of the Milestone Certificate with respect thereto to the Investors, and
       the Investor's agreement in writing or deemed agreement that the relevant
       Milestone has been fulfilled, the Company shall forthwith issue to the
       Investor written notice (or telephonic notice followed by prompt
       confirmation in writing) (a "NOTE CLOSING NOTICE") specifying a business
       day at least five (5) business days after the date of such notice as the
       date for the Note Closing (the "NOTE CLOSING DATE") for such Series of
       Notes and confirming the principal amount of the Notes to be issued in
       such Series. Each such notice will constitute (i) an automatic warranty
       and

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       representation that there does not exist any Event of Default by the
       Company or the Parent, (ii) a confirmation that the Company is in
       compliance with all its obligations and requirements under this Agreement
       (other than obligations and requirements that are not material) including
       the employment requirements set forth in Section 13.4, and (iii) a
       reaffirmation as of the date thereof of all of the representations and
       warranties contained in Section 6.

4.     GENERAL

4.1    DISCLOSURE OF INFORMATION. The Investor believes that it has had an
       opportunity to ask questions and receive answers from the Company
       regarding the terms and conditions of this Agreement and the properties,
       prospects and financial condition of the Parent (the foregoing does not,
       however, limit the representations and warranties of the Company and the
       Parent in this Agreement or the right of the Investor to rely thereon).

4.2    EXEMPT FROM REGISTRATION; RESTRICTED SECURITIES. The Securities will be
       offered and sold to the Investor without being registered under the
       Securities Act in compliance with the exemption from registration
       provided by Section 4(2) of the Securities Act, and in offshore
       transactions in reliance on Regulation S under the Securities Act, and
       may not be offered or sold in the United States or to a U.S. Person (as
       defined in Regulation S under the Securities Act) absent registration
       under the Securities Act or an applicable exemption from registration
       requirements thereunder.

4.3    PREFERENCE SHARES LEGEND. The Parties agree that the certificate
       evidencing the Preference Shares may bear the following legend:

       "These securities may not be sold, offered for sale, pledged,
       hypothecated or otherwise transferred except in accordance with the
       provisions of Regulation S under the Securities Act of 1933, as amended,
       pursuant to registration under the Securities Act of 1933, as amended, or
       pursuant to an available exemption from registration. Sale or transfer of
       these securities may not be effected, and hedging transactions involving
       these securities may not be conducted, unless in compliance with the
       Securities Act of 1933, as amended, and the Subscription and Shareholders
       Agreement dated as of August [__], 2005 by and among CombinatoRx
       (Singapore) Pte Ltd, BioMedical Sciences Investment Fund Pte Ltd and
       CombinatoRx, Incorporated and the Transaction Documents as defined
       therein."

4.4    REGISTRATION RESTRICTIONS. The Parties agree that the Company may not
       register any resales or transfers of the Securities unless such resale or
       transfer is in accordance with Regulation S, the registration
       requirements of the Securities Act, or pursuant to an exemption
       therefrom.

5.     SECURITY

       DEBENTURE. As security for the Notes, the Company shall grant to the
       Investor a first fixed and floating charge in respect of all of its
       right, title and interest, whether now existing or hereafter arising or
       acquired, in and to any and all assets other than the Company's
       Intellectual Property and any of the Company's assets purchased or
       financed

                                       13
<Page>

       pursuant to a financing arrangement. The security interest granted to the
       Investor with respect to the Notes shall be as set forth in the
       Debenture.

6.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND OF THE PARENT

       The Company and the Parent hereby represent and warrant to the Investor
       that, except as set forth in the Schedule of Exceptions attached to this
       Agreement as Schedule 2 (the "Schedule of Exceptions") as of the Initial
       Closing Date and as of the date of each Note Closing Date:

6.1    DUE INCORPORATION OF THE COMPANY. The Company is a private limited
       company duly incorporated under the laws of Singapore and has all
       requisite corporate power and authority to carry on its business as now
       conducted and as proposed to be conducted by it. The Company is duly
       qualified to transact business and is in good standing in Singapore and
       in any and all other jurisdictions in which it is required to be so
       qualified except where the failure to so qualify would not have a
       Material Adverse Effect. The Company has furnished to the Investor
       complete and accurate copies of its Certificate of Incorporation and
       Articles, each as amended to date and presently in effect.

6.2    ORGANIZATION, GOOD STANDING AND QUALIFICATION OF THE PARENT. The Parent
       is a corporation duly organized, validly existing and in good standing
       under the laws of the State of Delaware and has all requisite corporate
       power and authority to carry on its business as now conducted and as
       proposed to be conducted by it. The Parent is duly qualified to transact
       business and is in good standing in Delaware and in any and all other
       jurisdictions in which it is required to be so qualified except where the
       failure to so qualify would not have a Material Adverse Effect. The
       Parent has furnished to the Investor complete and accurate copies of its
       Certificate of Incorporation and by-laws, each as amended to date and
       presently in effect.

6.3    CAPITALIZATION AND VOTING RIGHTS IN THE COMPANY. The authorized share
       capital of the Company is set forth in the Schedule of Exceptions. On the
       Initial Closing Date, after giving effect to the issuance of the
       Preference Shares, the issued share capital of the Company is owned
       beneficially and legally by the Persons listed in the Schedule of
       Exceptions. The issued share capital of the Company have been allotted
       and issued in compliance with the laws of Singapore. Other than as set
       forth in the Schedule of Exceptions, the Company does not have any
       outstanding (a) rights (either preemptive or otherwise) or options to
       subscribe for or purchase, or any warrants or other agreements providing
       for or requiring the issuance of, any Securities or any securities
       convertible into or exchangeable for its Securities, (b) obligation to
       repurchase or otherwise acquire or retire any of its Securities, any
       securities convertible into or exchangeable for its Securities or any
       rights, options or warrants with respect thereto, (c) rights that require
       it to register the offering of any of its securities under the Securities
       Act and any other relevant securities laws or (d) any restrictions on
       voting any of securities.

6.4    CAPITALIZATION OF THE PARENT. On the Initial Closing Date, the authorized
       and issued capital stock of the Parent consists of:

                                       14
<Page>

       6.4.1  503,400 shares of Series A Convertible Preferred Stock, 3,364,250
       shares of Series B Redeemable Convertible Preferred Stock, 10,746,666
       shares of Series C Redeemable Convertible Preferred Stock and 8,292,699
       shares of Series D Redeemable Convertible Preferred Stock; and

       6.4.2  32,000,000 shares of Parent Common Stock with 993,032 shares
       issued and outstanding.

6.5    AUTHORISED CAPITAL OF THE COMPANY. The enlarged issued ordinary share
       capital of the Company (taking into account any Preference Shares
       converted into Ordinary Shares in accordance with this Agreement and the
       rights, privileges, preferences and restrictions of the Preference
       Shares) shall not at any time exceed the authorised ordinary share
       capital of the Company.

6.6    OPTIONS AND WARRANTS OF THE PARENT. On the Initial Closing Date, except
       for (A) the conversion privileges of the Preference Shares and the Notes
       as set forth in this Agreement, (B) 503,400 shares of Parent Series A
       Convertible Preferred Stock, 3,364,250 shares of Parent Series B
       Redeemable Convertible Preferred Stock, 10,746,666 shares of Parent
       Series C Redeemable Convertible Preferred Stock and 8,292,699 shares of
       Parent Series D Redeemable Convertible Preferred Stock, (C) rights to
       purchase shares of the Parent Common Stock pursuant to the Parent's stock
       option plans and employee stock purchase plans and (D) warrants to
       purchase 220,089 shares of Parent Common Stock, there are no outstanding
       options, warrants, rights (including conversion or preemptive rights) or
       agreements for the purchase or acquisition from the Parent of any shares
       of its capital stock.

6.7    COMPANY AUTHORIZATION. All corporate action on the part of the Company
       and its officers and directors necessary for the authorization, execution
       and delivery of this Agreement, the performance of all obligations of the
       Company under this Agreement and the authorization, allotment and issue
       (or reservation for issuance) of all of the Securities has been taken.

6.8    VALID ISSUANCE OF THE NOTES. Each Note, when issued, will constitute a
       valid and binding obligation of the Company enforceable against the
       Company in accordance with its respective terms, subject to applicable
       bankruptcy, insolvency and similar laws reflecting creditors' rights and
       remedies generally and equitable principles of general applicability. The
       Notes, when issued in accordance with the terms of this Agreement for the
       consideration expressed herein, will be duly and validly issued, fully
       paid, and will be free from restrictions on transfer and Encumbrances
       other than restrictions under the Transaction Documents or applicable
       securities laws.

6.9    VALID ISSUANCE OF PREFERENCE SHARES. The allotment and issue of the
       Preference Shares in accordance with this Agreement, has been, or will
       prior to the Initial Closing Date, be duly authorized by all necessary
       corporate action on the part of the Company. The Preference Shares, when
       allotted and issued in accordance with the terms of this Agreement for
       the consideration expressed herein, will be duly and validly issued and
       fully paid up and will be free of restrictions on transfer and
       Encumbrances other than

                                       15
<Page>

       restrictions on transfer under this Agreement or applicable securities
       laws. The allotment and issue of the Preference Shares is not and will
       not be subject to any preemptive rights that have not been properly
       waived or complied with.

6.10   VALID ISSUANCE OF ORDINARY SHARES. The allotment and issue of the
       Ordinary Shares upon any conversion of the Preference Shares in
       accordance with the Articles shall, at the relevant time, be duly
       authorized by all necessary corporate action on the part of the Company.
       The Ordinary Shares, when allotted and issued, will be duly and validly
       issued and fully paid up and will be free of restrictions on transfer and
       Encumbrances other than restrictions on transfer under this Agreement or
       applicable securities laws. The allotment and issue of such Ordinary
       Shares is not and will not be subject to any preemptive rights that have
       not been properly waived or complied with.

6.11   SUBSIDIARIES. Each Subsidiary of the Parent has been duly organized, is
       validly existing as a corporation, limited liability company, or limited
       partnership, as the case may be, in good standing under the laws of the
       jurisdiction of its organization, has the requisite corporate, limited
       liability company, or limited partnership power and authority, as the
       case may be, to own its property and to conduct its business as now
       conducted and as proposed to be conducted by it and is duly qualified to
       transact business and is in good standing as a foreign entity in each
       jurisdiction in which the conduct of its business or its ownership or
       leasing of property requires such qualification, except to the extent
       that the failure to be so qualified or be in good standing would not have
       a Material Adverse Effect; on the Initial Closing Date, except as
       disclosed in the Schedule of Exceptions, all of the issued shares of
       capital stock, membership interests or partnership interests, as the case
       may be, of each Subsidiary of the Parent have been duly and validly
       authorized and issued, are fully paid and non-assessable and are owned
       directly or indirectly by the Parent, free and clear of all liens,
       encumbrances, equities or claims. Schedule 6 hereto sets forth the name
       and jurisdiction of organization of each Subsidiary of the Parent as of
       the Initial Closing Date.

6.12   PARENT AUTHORIZATION. The Parent has the requisite power and authority to
       execute and deliver this Agreement and perform its obligations hereunder.
       All corporate action on the part of the Parent and its officers and
       directors necessary for the authorization, execution and delivery of this
       Agreement and the performance of all obligations of the Parent under this
       Agreement has been duly and validly taken.

6.13   PARENT STOCK. The Parent Preferred Stock, when issued, sold and delivered
       in accordance with the terms of this Agreement and/or the Swap Up
       Agreement upon the terms expressed herein and/or therein, will be duly
       and validly issued, fully paid, and non-assessable, and will be free of
       restrictions on transfer other than restrictions on transfer under this
       Agreement, including, without limitation, restrictions on transfer
       applicable to such stock pursuant to the terms of such stock or
       agreements regarding such stock to which the Investor may become a party,
       and under applicable state and federal securities laws. The Parent Common
       Stock issuable upon conversion of the Parent Preferred Stock that may be
       acquired by the Investor under this Agreement and/or the Swap Up
       Agreement has been duly and validly reserved for issuance and, upon
       issuance will be duly and validly issued, fully paid, and non-assessable
       and will be free of

                                       16
<Page>

       restrictions on transfer other than restrictions on transfer under this
       Agreement, including, without limitation, restrictions on transfer
       applicable to such stock pursuant to the terms of such stock or
       agreements regarding such stock to which the Investor may become a party,
       and under applicable state and federal securities laws and regulations.

6.14   FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT. On the Initial Closing
       Date, the financial statements, together with the related schedules and
       notes, all of which are attached hereto as Schedule 7, present fairly the
       financial position of the Parent and its consolidated Subsidiaries at the
       dates indicated and their results of operations, stockholders' equity and
       cash flows for the periods specified, and such financial statements have
       been audited by Ernst & Young LLP and prepared in conformity with the
       generally accepted accounting principles in the United States ("GAAP")
       applied on a consistent basis throughout the periods involved. On the
       Initial Closing Date, there has not occurred any change, or any
       development involving a prospective change, in the condition, financial
       or otherwise, or in the earnings, business or operations of the Parent
       and its Subsidiaries, taken as a whole, since December 31, 2004, except
       as would not have a Material Adverse Effect.

6.15   PROCEEDINGS. There are no legal or governmental proceedings or
       investigations pending or, to the Parent's knowledge, threatened to which
       the Parent or any of its Subsidiaries is or may reasonably expect to be a
       party or to which any of the properties of the Parent or any of its
       Subsidiaries is or may reasonable be expected to be subject other than
       proceedings that would not reasonably be expected to have a Material
       Adverse Effect or to materially impair the power or ability of the Parent
       to perform its obligations under this Agreement and any other Transaction
       Document.

6.16   LICENSES AND PERMITS. The Parent and each of its Subsidiaries possess all
       material licenses, certificates, authorizations and permits
       (collectively, "GOVERNMENTAL LICENSES") issued by, and have made all
       declarations and filings with, the appropriate federal, state or foreign
       regulatory agencies or bodies, including, without limitation, the United
       States Food and Drug Administration and Department of Health and Human
       Services, which are necessary or desirable for the ownership of their
       respective properties or the conduct of their respective businesses now
       operated by them, except where the failure to possess or make the same
       would not, singularly or in the aggregate, reasonably be expected to have
       a Material Adverse Effect; all of the Governmental Licenses are valid and
       in full force and effect, except where the invalidity of such
       Governmental Licenses or the failure of such Governmental Licenses to be
       in full force and effect would not, singularly or in the aggregate,
       reasonably be expected to have a Material Adverse Effect; and none of the
       Parent or any of its Subsidiaries has received notification of any
       revocation or modification of any such Governmental Licenses or has any
       reason to believe that any such Governmental Licenses will not be renewed
       in the ordinary course, except where such revocation, modification or
       nonrenewal, would not singularly or in the aggregate, reasonably be
       expected to have a Material Adverse Effect.

6.17   TAX MATTERS. The Parent and each of its Subsidiaries have filed all
       material federal, state, local and foreign income and franchise tax
       returns required to be filed through the date hereof and have paid all
       material taxes due thereon, and no tax deficiency has been

                                       17
<Page>

       determined adversely to the Parent or any of its Subsidiaries which has
       had (nor does the Parent or any of its Subsidiaries have any knowledge of
       any tax deficiency which, if determined adversely to the Parent or any of
       its Subsidiaries, would reasonably be expected to have) a Material
       Adverse Effect.

6.18   INSURANCE. The Parent and each of its Subsidiaries carry, or are covered
       by, insurance covering their respective properties, operations, personnel
       and businesses, which insurance is in such amounts and insures against
       such losses and risks as are adequate to protect the Parent and its
       Subsidiaries and their respective businesses. None of the Parent or any
       of its Subsidiaries has received notice of default under any such
       insurance policy, nor has a written notice been received of any pending
       or threatened termination or cancellation, coverage limitation or
       reduction, or material premium increase with respect to any such
       insurance policy.

6.19   INTELLECTUAL PROPERTY. The Parent and each of its Subsidiaries own or
       possess adequate rights under all patents, trademarks, service marks,
       trade names, copyrights, and know-how (including trade secrets and other
       unpatented and/or unpatentable proprietary or confidential information,
       systems or procedures) (collectively, "INTELLECTUAL PROPERTY RIGHTS")
       known by the Parent to be necessary for the conduct of their respective
       businesses, except where the failure to possess such rights would not
       have a Material Adverse Effect. To the Parent's knowledge, the conduct of
       business by the Parent and each of its Subsidiaries does not infringe or
       conflict with any Intellectual Property Rights of others, except where
       any such infringement or conflict would not have a Material Adverse
       Effect. Except as described in the Schedule of Exceptions, the Parent and
       its Subsidiaries have not received any written notice of any claim of
       infringement or conflict with, any Intellectual Property Rights of others
       that, if determined adversely to the Parent or any of its Subsidiaries,
       would, individually or in the aggregate, have a Material Adverse Effect.

6.20   PROPERTY. The Parent and each of its Subsidiaries have good and
       marketable title in fee simple to, or have valid rights to lease or
       otherwise use, all items of real and personal property which are material
       to the business of the Parent and its Subsidiaries, in each case free and
       clear of all liens, encumbrances, claims and defects and imperfections of
       title except those that do not materially interfere with the use made and
       proposed to be made of such property by the Parent and its Subsidiaries
       or that would not be reasonably expected to have a Material Adverse
       Effect.

6.21   NO INTEGRATION. None of the Parent, any of its Subsidiaries or any
       affiliate (as defined in Rule 501(b) of Regulation D under the Securities
       Act, an "AFFILIATE") of the Parent or any of its Subsidiaries has
       directly, or through any agent, (A) sold, offered for sale, solicited
       offers to buy or otherwise negotiated in respect of, any security (as
       defined in the Securities Act) which is or will be integrated with the
       issuance of any security pursuant to this Agreement in a manner that
       would require the registration under the Securities Act of the such
       security or (B) offered, solicited offers to buy or sold any security
       that is being or may be offered for sale, sold or issued pursuant to this
       Agreement by any form of general solicitation or general advertising (as
       those terms are used in Regulation D under

                                       18
<Page>

       the Securities Act) or in any manner involving a public offering within
       the meaning of Section 4(2) of the Securities Act.

6.22   NO REGISTRATION REQUIRED. Assuming that the representations and
       warranties of the Investor set forth in Section 7 hereof are true and
       correct, it is not necessary in connection with the offer, sale and
       delivery of the Parent Preferred Stock to the Investor, or the issuance
       of the Parent Preferred Stock or Parent Common Stock to the Investor,
       each in the manner contemplated by this Agreement, to register the
       offering of any such security pursuant to this Agreement under the
       Securities Act.

6.23   GOVERNMENTAL CONSENTS. No consent, approval, order or authorization of,
       or registration, qualification, designation, declaration or filing with,
       any federal, state or local governmental authority on the part of the
       Company is required in connection with the consummation of the
       transactions contemplated by this Agreement.

6.24   OFFERING. Subject to the truth and accuracy of the Investor's
       representations set forth in Section 7 of this Agreement, the allotment
       and issue of the Securities as contemplated by this Agreement will be in
       compliance with applicable securities laws.

6.25   COMPLIANCE WITH OTHER INSTRUMENTS. Neither the Company, its Parent nor
       any Subsidiary of the Parent is in violation or default of any provision
       of its Certificate of Incorporation, as amended, or Articles, nor is the
       Company, its Parent nor any Subsidiary of the Parent in violation or
       default under and no event has occurred which, with notice or lapse of
       time or both, would constitute such a default under, any judgment, order,
       writ or decree to which it is a party or by which it is bound, or, to the
       best of its knowledge, of any provision of any law, rule or regulation
       applicable to the Company or the Parent or any provision or any contract,
       mortgage, deed of trust, loan or other agreement to which the Company or
       the Parent is a party or to which any of its assets or property is
       subject, the violation of which, in the aggregate, would have a Material
       Adverse Effect. The execution, delivery and performance of the
       Transaction Documents will not result in any such violation or be in
       conflict with or constitute, with or without the passage of time and
       giving of notice, either a default under any such provision, instrument,
       judgment, order, writ, decree or contract, or an event that results in
       the creation of any lien, charge or encumbrance upon any assets of either
       the Company or the Parent or the suspension, revocation, impairment,
       forfeiture, or non-renewal of any material permit, license,
       authorization, or approval applicable to either of the Company or the
       Parent.

6.26   COMPLIANCE WITH LAW. Neither the Company nor the Parent is in violation
       or default of any provision of any applicable laws, rules, ordinances,
       and regulations thereunder, the violation of which would have a Material
       Adverse Effect.

6.27   DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND WARRANTIES. Except as
       expressly set forth in this Section 6 of this Agreement, neither the
       Company nor the Parent makes any representation or warranty, express or
       implied, at law or in equity, in respect of the Company or any of its
       assets, liabilities, operations or prospects or the Parent or any of its
       assets, liabilities, operations or prospects.

                                       19
<Page>

6.28   DORMANT COMPANY. Other than pursuant to the Parent Subscription Agreement
       and the Services Agreement, the Company does not, and will not as at the
       Initial Closing Date, own any assets, and there are no liabilities,
       whether actual or contingent, of the Company other than expenses incurred
       in respect of the transactions contemplated under this Agreement nor has
       the Company undertaken any trading activity or entered into any
       contracts, deeds, guarantees or indemnities.

       The term "KNOWLEDGE" as used with respect to any person in this
       Agreement, shall mean the knowledge of such person and if such person is
       not a natural person, shall also mean the knowledge of each of such
       person's directors and key management and officers (or similar persons)
       who shall be deemed to have knowledge of all such matters as they would
       have discovered, had any of them made reasonable enquiries.

7.     REPRESENTATIONS, WARRANTIES AND UNDERSTANDINGS OF THE INVESTOR

7.1    The Investor represents and warrants to the Company and the Parent that,
       as of the Initial Closing Date and each Note Closing Date:

       7.1.1    AUTHORIZATION. The Investor has full power and authority to
                enter into this Agreement, and this Agreement constitutes the
                Investor's valid and legally binding obligation, enforceable
                against the Investor in accordance with its terms except (a) as
                limited by applicable bankruptcy, insolvency, reorganization,
                moratorium and other laws of general application affecting
                enforcement of creditors' rights generally, and (b) as limited
                by laws relating to the availability of specific performance,
                injunctive relief or other equitable remedies.

       7.1.2    PURCHASE ENTIRELY FOR OWN ACCOUNT. Each of the transactions
                contemplated by this Agreement is made with the Investor in
                reliance upon the Investor's representations to the Company and
                the Parent, which by the Investor's execution of this Agreement,
                the Investor hereby confirms that the Securities to be acquired
                by the Investor hereunder will be acquired for investment for
                the Investor's own account, not as a nominee or agent, and not
                with a view to the resale or distribution of any part thereof
                and that the Investor has no present intention of selling,
                granting any participation in, or otherwise distributing the
                same except to or for the account of affiliated entities that
                are not U.S. Persons.

       7.1.3    NON-U.S. INVESTOR. As of the Initial Closing Date and each Note
                Closing Date, the Investor is not a "U.S. PERSON" within the
                meaning of Rule 901 under the Securities Act ("U.S. PERSON") and
                is not acquiring the Securities for the account or benefit of
                any U.S. Person.

       7.1.4    RESALE; HEDGING. The Investor will resell the Securities only in
                accordance with the provisions of Regulation S under the
                Securities Act, pursuant to registration under the Securities
                Act, or pursuant to an available exemption from registration
                under the Securities Act, and the Investor will not engage in
                hedging transactions

                                       20
<Page>

                involving the Securities unless in compliance with the
                Securities Act and this Agreement.

       7.1.5    DISCLAIMER OF ADDITIONAL REPRESENTATIONS AND WARRANTIES. Except
                as expressly set forth in this Section 7 of this Agreement, the
                Investor makes no other representation or warranty, express or
                implied, at law or in equity.

8.     CLOSING CONDITIONS

8.1    CONDITIONS OF INVESTOR'S OBLIGATIONS AT THE CLOSING.

       The Investor's obligation to subscribe for the Preference Shares and the
       Series 1 Notes under this Agreement at the Initial Closing Date is
       subject to the fulfillment on or prior to the Initial Closing Date of
       each of the following conditions:

       8.1.1    REPRESENTATIONS AND WARRANTIES. The representations and
                warranties of the Company and the Parent contained in Section 6
                shall be true and correct in all material respects on and as of
                the Closing.

       8.1.2    PERFORMANCE. Subject to Section 8.2, (i) the Company shall have
                performed and complied with all obligations and conditions
                contained in this Agreement that are required to be performed or
                complied with by it on or before the Closing and (ii) there
                shall not have been an Event of Default by the Company or the
                Parent.

       8.1.3    CLOSING DELIVERABLES. Subject to the terms and conditions of
                this Agreement the Company shall deliver to the Investor on
                Initial Closing:

                (A) the Services Agreement executed by the Parent and the
                    Company;

                (B) the adoption of the New Articles in replacement of the
                    existing Articles;

                (C) the Debenture executed by the Company;

                (D) the Swap-up Agreement executed by the Parent and the
                    Company;

                (E) certificates, as of the most recent practicable dates, (i)
                    as to the corporate good standing of the Parent issued by
                    the Secretary of State of the State of Delaware and (ii) due
                    qualification of the Parent as a foreign corporation issued
                    by the Secretary of State of The Commonwealth of
                    Massachusetts;

                (F) resolutions of the Board of Directors and shareholders of
                    the Company, authorizing and approving all matters in
                    connection with this Agreement and the transactions
                    contemplated hereby;

                (G) the share certificates with respect to the Preference
                    Shares;

                (H) the Series 1 Note Certificate;

                                       21
<Page>

                (I) the waiver of the Parent of all rights of pre-emption under
                    any shareholders agreement, the Articles or otherwise in
                    respect of the issue of the Preference Shares and the Notes;

                (J) the Share Charge executed by the Parent, in respect of which
                    the Parent shall also deliver to the Investor duly executed
                    blank instruments of transfer and share certificates with
                    respect to the Ordinary Shares it holds in the Company,
                    representing 51 per cent. of the issued share capital of the
                    Company (taking into account the issue of the Preference
                    Shares to the Investor);

                (K) the Registration Rights Agreement executed by the Investor
                    and the Parent;

                (L) the Preferred Stock Rights Agreement executed by the Parent,
                    the Investor and each of the persons listed on Schedule A
                    thereof; and

                (M) the legal opinion from Ropes & Gray LLP, U.S. counsel to the
                    Parent, in substantially the form attached as Exhibit N.

8.2    CONDITIONS OF THE COMPANY'S AND THE PARENT'S OBLIGATIONS AT THE INITIAL
       CLOSING.

       The obligations of the Company and the Parent to proceed with the Initial
       Closing is subject to the fulfillment on or before the Initial Closing
       Date of the following conditions by the Investor:

       8.2.1    REPRESENTATIONS AND WARRANTIES. The representations and
                warranties of the Investor contained in Section 7 shall be true
                and correct in all material respects on and as of the date of
                the First Closing.

       8.2.2    PAYMENT. At Initial Closing, against the fulfillment of the
                conditions and delivery of the items set out in Section 8.1.3 by
                the Parent and the Company, the Investor shall pay the Issue
                Price and the Series 1 Notes Issue Price to the Company by way
                of a cashier's order or bankers' draft drawn on a licensed bank
                in Singapore or by wire transfer.

9.     SUBSEQUENT NOTES CLOSINGS

9.1    CONDITIONS OF INVESTOR'S OBLIGATIONS AT THE CLOSING.

       The Investor's obligation to subscribe for relevant Notes under this
       Agreement at each Note Closing Date is subject to the fulfillment on or
       prior to such Note Closing Date of each of the following conditions:

       9.1.1    REPRESENTATIONS AND WARRANTIES. The representations and
                warranties of the Company and the Parent contained in Section 6
                shall be true and correct in all material respects on and as of
                the relevant Note Closing.

                                       22
<Page>

       9.1.2    PERFORMANCE. Subject to Section 9.2.1, (i) the Company shall
                have performed and complied with all obligations and conditions
                contained in this Agreement that are required to be performed or
                complied with by it on or before such Note Closing Date
                (including the employment requirements set forth in Section
                13.4) and (ii) there shall not have been an Event of Default by
                the Company or the Parent.

       9.1.3    CLOSING DELIVERABLES. Subject to the terms and conditions of
                this Agreement the Company shall deliver to the Investor on each
                Note Closing the relevant Note Certificate.

9.2    CONDITIONS OF THE COMPANY'S AND THE PARENT'S AT EACH NOTE CLOSING.

       The obligations of the Company and the Parent to proceed with each Note
       Closing is subject to the fulfillment on or before the relevant Note
       Closing Date of the following conditions by the Investor:

       9.2.1    REPRESENTATIONS AND WARRANTIES. The representations and
                warranties of the Investor contained in Section 7 shall be true
                and correct in all material respects on and as of the date of
                the relevant Note Closing.

       9.2.2    PAYMENT. At the relevant Note Closing, against the fulfillment
                of the conditions and delivery of the items set out in Section
                9.1.3 by the Parent and the Company, the Investor shall pay the
                relevant Notes Issue Price to the Company.

9.3    SURVIVAL. The Warranties and all other provisions of this Agreement
       insofar as the same shall not have been performed at the Initial Closing
       or any subsequent Note Closing shall not be extinguished or affected by
       Initial Closing or any subsequent Note Closing, or by any other event or
       matter whatsoever, except by prior specific and duly authorised written
       waiver or release by the Investor.

10.    APPLICABILITY OF PROVISIONS RELATING TO SHAREHOLDERS

       Subject to and conditional upon Initial Closing in compliance with the
       provisions of Section 8, the Parties shall be bound by the provisions of
       Sections 11 to 14.

11.    GOVERNANCE OF THE COMPANY

11.1   BOARD OF DIRECTORS.

       11.1.1   The Board shall consist of five Directors, comprising:

                (A)  two persons appointed by the Investor (each, an "INVESTOR
                     DIRECTOR");

                (B)  two persons appointed by the Parent (each, a "PARENT
                     DIRECTOR"); and

                (C)  one person appointed by mutual agreement of the Investor
                     and the Parent (the "INDEPENDENT DIRECTOR").

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<Page>

       11.1.2   The Parent hereby undertakes to procure that there remains on
                the Board at all times, at least one Director (who is not an
                Investor Director) who is ordinarily resident in Singapore.

       11.1.3   The Investor and the Parent each shall furnish written notice of
                any change in either of its appointees to the other Party at
                least five days prior to any proposed appointment of such
                Director and may provide in such notice that the Board shall
                take no action until such appointment is effective, provided,
                however, that the period during which the Board may not take
                action shall not exceed ten days.

       11.1.4   The right of appointment conferred on either or both parties
                under Section 11.1.1 above shall include the right of the
                relevant Party or Parties to remove at any time from office the
                person so appointed and the right of the said Party or Parties
                at any time and from time to time to determine the period during
                which such person shall hold the office of Director and to
                replace any such Director who ceases to be a Director for any
                reason.

       11.1.5   In the event that any Shareholder ceases to be a holder of
                Shares in the Company, all Directors appointed by such
                Shareholder shall automatically be deemed to have vacated office
                forthwith.

       11.1.6   A Director shall be entitled at any time and from time to time
                to appoint any person to act as his alternate and to terminate
                the appointment of such person and in that connection the
                provisions of the Articles shall be complied with. Such
                alternate director shall be entitled while holding office as
                such to receive notices of meetings of the Board and to attend
                any such meeting whether or not the Director who is his
                appointor is present and generally to exercise all the powers,
                rights, duties and authorities and to perform all functions of
                the Director who is his appointor except that he shall not be
                entitled to vote at any meeting at which the Director who is his
                appointor is present. In the event that the Director who is his
                appointor is not present at any meeting of the Board, such
                alternate director shall be entitled to exercise the vote of the
                Director who is his appointor at that meeting and if such
                alternate director is an appointee of more than one Director,
                such alternate director shall be entitled to one vote for every
                Director who appointed him who is not present at such meeting.

       11.1.7   Meetings of the Board shall be held no less frequently than
                quarterly at such places as the Board shall determine. Not less
                than 14 business days' prior written notice (or such shorter
                period of notice in respect of any particular meeting as may be
                agreed unanimously by all Directors) specifying the date, place
                and time, of the meeting and the business to be transacted
                thereat and including any materials, documents or resolutions to
                be discussed at the meeting shall be given to all Directors.

       11.1.8   All or any of the Directors may participate in a meeting of the
                Board by means of a conference telephone or any communication
                equipment which allows all

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<Page>

                persons participating in the meeting to hear each other. A
                person so participating shall be deemed to be present in person
                at the meeting and shall be entitled to vote or be counted in a
                quorum accordingly.

       11.1.9   The quorum at a meeting of Directors necessary for the
                transaction of any business of the Company shall be two
                Directors including an Investor Director and a Parent Director.
                In the event that a meeting of Directors duly convened cannot be
                held for lack of a quorum, the meeting shall be adjourned to the
                same time and day two weeks following the original meeting date
                and at the same place. Written notice specifying the date, place
                and time of the adjourned meeting shall be given to each
                Director not less than five business days prior to such
                adjourned meeting. The quorum at such adjourned meeting shall be
                any two Directors.

       11.1.10  Subject to Sections 11.3 and 11.5.4 below:

                (A)  all resolutions of the Directors at a meeting or adjourned
                     meeting of the Directors shall be adopted by a simple
                     majority vote of the Directors present, such majority to
                     include at least (i) one Investor Director and one Parent
                     Director, or (ii) one Investor Director and the
                     Independent Director, or (iii) the Independent Director
                     and one Parent Director; and

                (B)  a resolution in writing of the Directors shall be as valid
                     and effectual as if it had been a resolution passed at a
                     meeting of the Board duly convened and held if the
                     resolution is signed in support thereof by a majority of
                     the Directors as in effect at the time, including a Parent
                     Director and an Investor Director. Any such resolution may
                     consist of several documents in the like form each signed
                     by one or more of the Directors and any resolution bearing
                     the signature of any Director dispatched by facsimile
                     transmission shall constitute a document for this purpose.

11.2   SHAREHOLDERS' MEETINGS

       11.2.1   The number of Shareholders necessary to form a quorum for the
                transaction of business at a meeting of the Shareholders shall
                be two Shareholders (including the Investor and the Parent)
                present personally or by representative, attorney or proxy. All
                matters raised at a meeting of the Shareholders shall, unless
                otherwise required by the Companies Act or Section 11.3, be
                decided by ordinary resolution of the Shareholders present at
                the meeting.

       11.2.2   If within half an hour from the time appointed for holding the
                meeting a quorum is not present, the meeting shall be adjourned
                to 14 days thereafter at the same time and place with the same
                agenda. Written notice specifying the date, place and time of
                the adjourned meeting shall be given to each Shareholder not
                less than five business days prior to such adjourned meeting. If
                at such adjourned meeting a quorum is not present within half an
                hour from

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<Page>

                the time appointed for holding the meeting, any two Shareholders
                present at such adjourned meeting shall be the quorum.

       11.2.3   Matters arising at any general meeting of Shareholders shall be
                decided by a simple majority of votes cast, save as may
                otherwise be required under the Companies Act or Sections 11.3
                and 11.5.4. The number of votes of each Shareholder shall be
                computed based on its Shareholding Percentage 48 hours before
                the date of the relevant general meeting of the Company.

       11.2.4   Subject to the Articles, the Companies Act and Sections 11.3 and
                11.5.4, a resolution in writing signed by all Shareholders shall
                be as valid and effectual as if it had been a resolution passed
                at a general meeting of the Shareholders duly convened and held,
                and may consist of several documents in the like form each
                signed by one or more Shareholders. For the purposes of this
                Section, "IN-WRITING" and "SIGNED" shall include approval by
                telex, cable, telegram, electronic mail, wireless or facsimile
                transmission. Any such resolution sent by facsimile or
                electronic mail transmission shall be valid and deemed to have
                been duly sent on the date of transmission provided that the
                original signed copy thereof is sent by courier or by pre-paid
                registered post to the Company at its registered address within
                24 hours of transmission.

11.3   MATTERS REQUIRING SHAREHOLDER APPROVAL. Notwithstanding anything to the
       contrary in any of the Transaction Documents, the Company shall not,
       without the prior written approval of the Parent and the Investor, do any
       of the matters set out in Schedule 5.

11.4   OBSERVATION RIGHTS. The Parent shall permit one representative of the
       Investor (the "DESIGNATED OBSERVER") to attend (in person or by
       telephone) all meetings of the Parent's board of directors as an
       observer.

       11.4.1   The Investor shall provide the Parent with written notice of the
                identity of the Designated Observer, together with such person's
                address and other contact information. The Parent shall be
                entitled to rely on such notice until the Investor gives a
                subsequent notice changing the identity of the Designated
                Observer, and any communication sent to such Designated Observer
                by the Parent shall be deemed to satisfy the requirements of
                this Section 11.4.

       11.4.2   The Parent shall give such Designated Observer copies of all
                notices, consents, minutes and other materials, financial or
                otherwise, which the Parent provides to its board of directors.
                The Investor shall cause the Designated Observer to keep
                confidential and not disclose or divulge any confidential,
                proprietary or secret information which the Designated Observer
                may obtain from the Parent pursuant to the rights conferred by
                this Section 11.4 other than to the Investor, unless such
                information is or becomes known to the Designated Observer from
                a source other than the Parent or the holders of the Parent's
                capital stock, or is or becomes publicly known, or unless the
                Parent gives its written consent to the Designated Observer's
                release of such information.

                                       26
<Page>

       11.4.3   The Designated Observer may be excluded from access to any
                material or meeting or portion thereof if the majority of the
                members of the Parent's board of directors reasonably believes
                in good faith (i) upon advice of counsel, that such exclusion is
                reasonably necessary to preserve the attorney-client privilege,
                (ii) upon advice of counsel, that such exclusion is reasonably
                necessary to protect confidential information of any third party
                to the extent required by agreement between the Parent and such
                third party, or (iii) there exists a conflict of interest with
                respect to the Designated Observer and a particular matter or
                transaction under consideration by the board of directors, which
                may include matters related to this Agreement, the Services
                Agreement or any of the transactions contemplated under such
                agreements.

       11.4.4   The observation rights granted in this Section 11.4 shall
                terminate upon the earlier of (i) an IPO by the Parent or (ii)
                such time as the Investor no longer holds a majority of the
                Notes and a majority of the Preference Shares.

11.5   CONFLICTS PROVISION.

       11.5.1   If at any time the Company (1) wishes to enforce or exercise any
                right of the Company against any Shareholder under or (2) has
                any claim against or is the subject of a claim by any
                Shareholder in respect of or (3) proposes to take any action or
                withhold from taking any action with respect to any Shareholder
                in respect of:

                (a)  this Agreement;

                (b)  the Services Agreement;

                (c)  the Notes;

                (d)  the Debenture;

                (e)  any other agreement or deed to which that Shareholder is
                     also a party; or

                (f)  any obligation owed to the Company by any Shareholder or
                     owed to any Shareholder by the Company,

                (each, a "CLAIM") that matter shall be dealt with on
                behalf of the Company by a committee of the Directors
                appointed by the other Shareholder(s) not involved in the
                claim. The provisions of this Section do not prejudice to
                the right of any party to dispute any claim to which it
                relates.

       11.5.2   The committee of Directors appointed under this Section has full
                authority to exercise all of the Company's rights on behalf of
                the Company with respect to any such Claim.

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<Page>

       11.5.3   The Shareholder involved in any such Claim shall be entitled to
                attend and speak at any general meeting of the Company in
                relation to such claim but shall not vote at such meeting.

       11.5.4   The Directors appointed by the Shareholder involved in any such
                Claim shall be entitled to attend and speak at any Board meeting
                or any Board committee meeting in relation to such Claim but
                shall not vote at such meeting.

       11.5.5   No general meeting of the Company or Board meeting at which a
                resolution in relation to such a claim proposed shall be
                inquorate by virtue of the absence of the Shareholder involved
                in any such Claim or of the Director(s) appointed by it.

12.    RESTRICTIONS ON TRANSFERS OF SECURITIES

12.1   MORATORIUM. Notwithstanding anything contrary in this Agreement or the
       Note Conditions:

       12.1.1   No Shareholder may pledge, charge, mortgage or otherwise create
                an encumbrance or security interest on or over any or all of its
                Shares without the prior written consent of the other
                Shareholder.

       12.1.2   No Shareholder shall be entitled to transfer any Securities
                (except for a transfer pursuant to Section 12.2.1 or Section
                15), for the period commencing on the Initial Closing Date and
                ending on the fourth anniversary thereof; and

       12.1.3   Subject to Section 12.1.1, no Shareholder shall transfer any
                Securities held by it in the capital of the Company or otherwise
                sell, dispose of or deal with all or any part of its interest in
                such Securities unless and until the rights conferred by Section
                12.2 shall have been exhausted.

12.2   TRANSFER OF SHARES.

       12.2.1   PERMITTED TRANSFER. Any Shareholder may transfer Securities to
                an Affiliate, provided that where any Person who has purchased
                Securities pursuant to this Section 12.2.1 ceases to be an
                Affiliate of the original Shareholder who has effected such
                transfer, that Affiliate shall forthwith transfer the relevant
                Securities back to the said Shareholder or another of that
                Shareholder's Affiliates, who shall be bound to accept such
                transfer, and further provided that every Shareholder who has
                transferred Securities to its Affiliates shall, notwithstanding
                such transfer, continue to be liable jointly and severally with
                its Affiliate for the performance of its Affiliate's obligations
                under this Agreement;

       12.2.2   PRE-EMPTION AND TRANSFER.

                (A)   Except in the case of a transfer permitted under Section
                      12.2.1 every Shareholder who desires to sell and transfer
                      any Securities (the "TRANSFEROR") shall give to the
                      Company notice in writing of such desire (a "TRANSFER
                      NOTICE"), which notice shall specify:

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<Page>

                      (I)     the number, type and class of Securities proposed
                              to be sold and transferred (the "SALE
                              SECURITIES");

                      (II)    the price fixed by the Transferor for the sale of
                              each such Security (the "TRANSFEROR'S PRICE"); and

                      (III)   the other terms and conditions of such sale (if
                              any) (the "PRESCRIBED TERMS").

                      The Transferor may, if it so chooses, stipulate in the
                      Transfer Notice that all and not some of the Sale
                      Securities must be purchased.

                (B)   Subject as hereinafter mentioned and to Singapore law, a
                      Transfer Notice shall constitute an offer by the
                      Transferor for the sale of the Sale Securities first to
                      the Company and, if the Company does not purchase such
                      shares, to the Shareholders other than the Transferor (the
                      "OTHER SHAREHOLDERS") at the Transferor's Price and on the
                      Prescribed Terms (if any). Subject to paragraph (g) below,
                      a Transfer Notice shall not be revocable except with the
                      sanction of all the members of the Board.

                (C)   Subject to Singapore law, the Company may exercise its
                      right to purchase such Sale Securities under this Section
                      12.2.2 by giving a notice in writing to the Transferor
                      within ten (10) business days after receipt of the
                      Transfer Notice, such notice to specify the place and time
                      (being not earlier than 14 and not later than 28 days
                      after the date of the such notice) at which the purchase
                      of the Sale Securities so allocated shall be completed.
                      Subject to Singapore law, the Transferor shall be bound to
                      transfer the Sale Securities to the Company at the time
                      and place specified such notice by the delivery of such
                      documents as may be prescribed by Singapore law and, if it
                      shall fail to do so, any Director shall be deemed to have
                      been appointed attorney of the Transferor with full power
                      to execute, complete and deliver, in the name and on
                      behalf of the Transferor, all such documents as are
                      necessary to effect the transfers of the Sale Securities
                      to the Company against payment of the price to the
                      Transferor.

                (D)   If the Company chooses not to exercise its rights under
                      paragraph (c) above, it shall forthwith serve a copy of
                      the Transfer Notice on each of the Other Shareholders
                      together with a notice to the Other Shareholders
                      specifying a date (the "SUBMISSION DATE") by which they
                      must submit their application to the Company for the
                      purchase of the Sale Securities, such date being the 21st
                      business day after the date of dispatch by the Company of
                      a copy of the Transfer Notice to the Other Shareholders.
                      Each of the Other Shareholders shall be entitled to apply
                      in writing for such maximum number of the Sale Securities
                      (being all or any thereof) as it shall specify in such
                      application which must be served on the Company by the
                      Submission Date.

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<Page>

                (E)   If by the Submission Date, the Other Shareholders shall
                      have applied for all or (except where the Transfer Notice
                      stipulates that all and not some of the Sale Securities
                      must be purchased) any of the Sale Securities, the Board
                      shall allocate the Sale Securities (or so many of them as
                      shall be applied for as aforesaid) to or amongst the
                      applicants in accordance with the amount applied for and
                      where the total quantity of Sale Securities applied for by
                      the Other Shareholders exceed the total quantity of the
                      Sale Securities pro-rata (as nearly as possible) according
                      to the number of Shares in the Company of which they are
                      registered or unconditionally entitled to be registered as
                      holders provided that no applicant shall be obliged to
                      take more than the maximum number of Sale Securities
                      specified by it as aforesaid; and the Company shall
                      forthwith give notice of such allocations (an "ALLOCATION
                      NOTICE") to the Transferor and to the Shareholders to whom
                      the Sale Securities have been allocated and shall specify
                      in such Allocation Notice the place and time (being not
                      earlier than 14 and not later than 28 days after the date
                      of the Allocation Notice) at which the sale and purchase
                      of the Sale Securities so allocated shall be completed.

                (F)   If the Transfer Notice stipulates that all and not some of
                      the Sale Securities must be purchased and if the total
                      quantity of the Sale Securities applied for by the Other
                      Shareholders by the Submission Date does not equal or
                      exceed the total quantity of the Sale Securities, the
                      Transferor shall, subject to paragraph (h) below, be
                      entitled to sell all (but not some only) of the Sale
                      Securities, in accordance with, and within the 90-day
                      period specified in, paragraph (h) below.

                (G)   Subject to paragraph (f) above, the Transferor shall be
                      bound to transfer the Sale Securities comprised in an
                      Allocation Notice to the purchasers named therein at the
                      time and place therein specified by the delivery of duly
                      executed transfer forms together with the share
                      certificates in respect of such Sale Securities and the
                      Stamp Duty Documents in relation thereto and, if it shall
                      fail to do so, any Director shall be deemed to have been
                      appointed attorney of the Transferor with full power to
                      execute, complete and deliver, in the name and on behalf
                      of the Transferor, transfers of the Sale Securities to the
                      purchaser thereof and the Stamp Duty Documents against
                      payment of the price to the Company. On payment of the
                      price to the Company the purchaser shall be deemed to have
                      obtained a good quittance for such payment and on
                      execution and delivery of the transfer the purchaser shall
                      be entitled to insist upon its name being entered in the
                      Register of Members as the holder by transfer of the Sale
                      Securities. The Company shall forthwith pay the price into
                      a separate bank account in the Company's name and shall
                      hold such price in trust for the Transferor.

                (H)   During the 90 days following the Submission Date, and
                      subject to compliance with the provisions of Sections
                      12.2.3 and 12.2.4 below, the Transferor shall be at
                      liberty to transfer any Sale Share not purchased by

                                       30
<Page>

                      the Other Shareholders (or where paragraph (f) applies,
                      all of the Sale Securities) to any Person (the "BUYER")
                      and at any price (not being less than the Transferor's
                      Price) and on terms not less favourable to the Transferor
                      than the Prescribed Terms (if any) except that the
                      Transferor may provide representations, warranties,
                      covenants and indemnities customary for such transfer to
                      the Buyer.

       12.2.3   TAG-ALONG RIGHT.

                (A)   In the event the Transferor, after having first complied
                      with the provisions of Section 12.2.2(a) to 12.2.2(g)
                      above, desires to transfer to the Buyer any Shares
                      pursuant to Section 12.2.2(h), the Transferor shall give
                      notice in writing (the "TAG-ALONG NOTICE") to the other
                      Shareholders (the "OTHER TAG-ALONG SHAREHOLDERS") of such
                      desire. The Tag-Along Notice shall specify the name of the
                      Buyer, the number and class of Shares proposed to be
                      transferred (the "TAG-ALONG SHARES"), the price and other
                      terms and conditions of such transfer and enclose an offer
                      (the "TAG-ALONG OFFER") dated the date of the Tag-Along
                      Notice made by the Buyer to the Other Tag-Along
                      Shareholders to purchase the Shares then held by the Other
                      Tag-Along Shareholders notwithstanding that the Other Tag
                      Along-Shareholders may hold a class of Shares different
                      from that of the Transferor, on the basis that the number
                      of Tag-Along Shares which the Transferor and the Other
                      Tag-Along Shareholders who accept the Tag-Along Offer (the
                      Transferor and such Other Tag-Along Shareholders hereafter
                      collectively called the "TAG-ALONG SELLERS") shall each
                      sell shall be pro-rated according to the relevant
                      Shareholding Percentages of the Tag-Along Sellers and on
                      terms and conditions (including price per Share (on an
                      as-converted basis)) no less favourable than those
                      available to the Transferor as set out in such Tag-Along
                      Notice. Each of the Other Shareholders (if it so desires)
                      may accept the Tag-Along Offer made to it by serving on
                      the Buyer (with a copy to the Transferor) notice in
                      writing of its acceptance within 30 days of the date of
                      the Tag-Along Offer.

                (B)   If any of the Other Tag-Along Shareholders accepts the
                      Tag-Along Offer within the said 30-day period, completion
                      of the sale and purchase of the relevant number of Shares
                      held by such Other Tag-Along Shareholders and completion
                      of the sale and purchase of the relevant number of Shares
                      held by the Transferor shall take place within 14 days
                      following the expiry of the said 30-day period at the
                      registered office of the Company and on such date as the
                      Transferor and the Buyer shall agree and notify in writing
                      to the other Tag-Along Sellers.

       12.2.4   REGISTRATION OF TRANSFERS.

                Any transfer of Securities in accordance with the provisions of
                Sections 12.1 and 12.2 above shall be registered by the Company
                Provided that the Company shall not register any transfer of any
                Securities unless and until:

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<Page>

                (A)   all stamp duties or other transfer taxes payable in
                      respect of the transfer of the Securities have been paid;
                      and

                (B)   the purchaser (if not already a party to this Agreement)
                      executes and delivers to each of the Company and all other
                      Shareholders a Deed of Ratification and Accession. Upon
                      the delivery to the Company of such Deed of Ratification
                      and Accession executed by the purchaser and the
                      registration of the Securities in the name of the
                      purchaser, the purchaser shall be bound by and shall be
                      entitled to the rights and benefits of this Agreement, in
                      place of the Transferor or in the case of a transfer
                      pursuant to Section 12.2.1 in addition to the Transferor.

13.    OPERATIONS OF THE COMPANY

13.1   BUSINESS PLAN AND BUDGET.  The operations and expenditures of the Company
       shall be as set forth in the Business Plan, including the Budget
       contained therein.

       13.1.1   ANNUAL REVIEW OF BUSINESS PLAN AND BUDGET. The Business Plan,
                including the Budget contained therein, shall be reviewed by the
                Directors on an annual basis on or before July 1 of each year
                and may be amended or updated by the adoption by such date (with
                approval in writing by at least one Investor Director and one
                Parent Director) of an updated and revised Business Plan and/or
                Budget including, in particular, appropriately detailed
                information on the tasks to be performed in the subsequent
                Annual Period and the anticipated costs associated therewith.

       13.1.2   AMENDMENT OF BUSINESS PLAN. In addition to the annual review of
                the Business Plan, including the Budget contained therein,
                described in Section 13.1.1, the Business Plan and/or the Budget
                may be amended at any time by the written consent of at least
                one Investor Director and one Parent Director.

13.2   SHAREHOLDERS' OBLIGATIONS: In consideration of the mutual obligations of
       the Shareholders herein contained, and except as the Shareholders may
       otherwise agree in writing or save as otherwise provided or contemplated
       in this Agreement, each of the Shareholders shall exercise its voting
       rights and powers available to it to ensure that:

       13.2.1   the Company carries on its business and conducts its affairs in
                accordance with applicable law;

       13.2.2   the Company, and the Directors appointed by that Shareholder
                under Section 11.1.1, will comply with the provisions of this
                Agreement and the Articles and will act in such manner and
                achieve the full intent and purpose of this Agreement;

       13.2.3   the Company shall keep full and proper accounting records in
                accordance with generally accepted accounting principles
                relating to its business, undertakings and affairs, which
                records shall be made available at all reasonable times for
                inspection by the Directors and/or the Shareholders by prior
                appointment during office hours;

                                       32
<Page>

       13.2.4   the Company shall prepare annual accounts, in each case in
                accordance with generally accepted accounting principles and in
                compliance with all applicable legislation in respect of each
                accounting reference period, and shall procure that such
                accounts are audited as soon as practicable and shall supply
                copies of the same, both in draft and final form, to each of the
                Shareholders immediately upon their issue;

       13.2.5   the Company shall in good faith implement any suggestions made
                by the Auditors with respect to the keeping of records and
                accounts which the Company determines to be desirable or
                necessary and shall provide the Auditors with all such
                information and explanation that may reasonably assist the
                Auditors in the performance of their auditing duties;

       13.2.6   the Company shall prepare and provide to each of the Directors
                monthly management accounts within 30 days after the end of each
                month and operating statistics and such other trading and
                financial information in such form as the Board may agree to
                keep each of the Shareholders properly informed about the
                business and financial services of the Company and generally to
                protect their interest;

       13.2.7   if the Company requires any approval, consent or license for the
                carrying on of its business in the places and in the manner in
                which it is then carried on or proposed to be carried on, the
                Company will use its commercially reasonable efforts to maintain
                the same in full force and effect;

       13.2.8   the Company shall (i) maintain appropriate directors' and
                officers' liability insurance for each Director; and (ii)
                without prejudice to the foregoing but subject to the Companies
                Act, indemnify each such Director in full for any losses,
                damages, costs and expenses suffered as a result of any
                liabilities (civil or criminal) incurred by such Director as a
                director of such Company, whether in respect of negligence,
                default, breach of duty or otherwise; and

       13.2.9   the Company shall permit each Shareholder and its professional
                advisors, upon the giving of reasonable notice, to visit,
                inspect, examine and conduct an audit of the Company's
                properties and records (including its financial records), and to
                discuss the affairs of the Company with its management during
                reasonable hours, provided that each Shareholder shall be
                entitled to exercise this audit right not more than four times
                in each financial year of the Company.

13.3   PRESENCE IN SINGAPORE. The Parent hereby commits and undertakes to remain
       the holder of all the Ordinary Shares held by the Parent as of the
       Initial Closing Date and to procure the continued operations of the
       Company in Singapore for at least four (4) years after the Initial
       Closing.

13.4   EMPLOYMENT REQUIREMENTS. The Company shall employ the following numbers
       of Eligible Employees by the end of each Annual Period:

                                       33
<Page>

<Table>
<Caption>
                ANNUAL PERIOD ENDING                ELIGIBLE EMPLOYEES
                 <S>                                        <C>
                 September 30, 2006                          3
                 September 30, 2007                          6
                 September 30, 2008                          9
                 September 30, 2009                         12
</Table>

       Provided that any employment of any Eligible Employee necessary to
       satisfy the minimum employee requirements of this Section 13.4 shall be
       effected by the Company in consultation with the Investor Directors and
       that any employment or termination of employment with respect to senior
       executive officers of the Company shall be determined by the Board.

       The Investor and the Parent shall review these employment requirements as
       part of their annual review of the Business Plan and may, by mutual
       written agreement of the Investor and the Parent, modify or amend these
       requirements.

13.5   SERVICES AGREEMENT. Simultaneously with the execution and deliver of this
       agreement, the Company and the Parent have entered into the Services
       Agreement.

13.6   EXCLUSIVITY. During the term of the Services Agreement, the Parent shall
       provide assay development, screening and evaluation services aimed at the
       discovery and development of novel therapeutic products for the treatment
       of Infectious Disease in humans exclusively to the Company, except in
       connection with Biodefence Applications or Permitted Topical
       Applications, where:

       13.6.1   Biodefence Applications means the discovery, development or
                commercialization of any product(s) developed or to be developed
                for biodefence application(s) pursuant to contracts between the
                U.S. government and agencies thereof and the Parent engaging the
                Parent to perform research directed at biological understanding
                of, or the diagnosis, prevention or treatment of diseases or
                conditions caused by, bio-agents, disease organisms, or
                organism-produced toxins used as weapons or for other military
                or terrorist purposes, including, without limitation, the
                services to be performed by Parent under the Parent's current
                NIAID contract or any extension of such NIAID contract; and

       13.6.2   Permitted Topical Applications means the discovery, development
                or commercialization of any product(s) developed or to be
                developed for the treatment of acne and impetigo through Topical
                application of one or more therapeutic products; provided,
                however, that all of the Parent's interest in any patents,
                copyright and other intellectual property rights in any systemic
                application of any such therapeutic product shall be assigned or
                exclusively licensed to the Company at no cost to the Company.

13.7   CONTINGENT FUNDING TO BE PROVIDED BY PARENT FOR SECOND THERAPEUTIC AREA.
       In the event that the Board shall have determined that (i) no product
       candidate from the Company's research and investigation activities in the
       first therapeutic area should

                                       34
<Page>

       proceed to clinical developments; and (ii) research and investigation
       activities should be initiated in a second therapeutic area, the Parent
       shall provide the Company with sufficient funding for the payment of 50
       per cent of all costs of screening services that may be reasonably
       necessary to be carried out in connection with such research and
       investigation at the same time(s) as the Investor subscribes for the
       Series 4 and /or the Series 5 Notes. Such funding, if required, shall be
       provided by the Parent in the form of a loan (the "PARENT NOTE"). The
       Parent Note shall be fully subordinated to the Notes on terms and
       conditions reasonably acceptable to the Investor. The principal amount of
       the Parent Note shall be payable after the maturity date of the Notes,
       and the Parent Note shall bear interest at the same interest rate as the
       Notes, which interest shall also be accrued and paid on maturity of the
       Parent Note, and shall contain such other terms and conditions consistent
       with the provisions of this Section as may be agreed to by the Parent,
       the Company and the Investor.

13.8   ADDITIONAL FUNDING. The Parent shall further undertake that, in the event
       that the proceeds from the Securities issued pursuant to this Agreement,
       together with any other funds raised or generated by the Company itself,
       are insufficient to fund the Company's operations in accordance with its
       Business Plan and Budget for a period of four (4) years following the
       Initial Closing, the Parent shall use commercially reasonable efforts to
       assist the Company in raising on commercially reasonable terms the
       additional funds so required, without affecting adversely the seniority
       of the Notes or the security created by the Debenture.

13.9   USE OF PROCEEDS. The proceeds of the sale by the Company of the Shares
       and the Notes will be used solely for the business of the Company in
       accordance with the Business Plan.

14.    NON COMPETE

14.1   As a further consideration for the Investor agreeing to invest in the
       Company on the terms of this Agreement, the Parent hereby covenants that,
       for so long as the Investor continues to hold the Preference Shares or
       the Notes, the Parent shall not, without the prior written consent of the
       Investor, whether directly or indirectly and whether alone or in
       conjunction with, or on behalf of, any other Person and whether as
       principal, shareholder, director, employee, service provider, agent,
       consultant, partner or otherwise:

       14.1.1   during the Non-Competition Period, compete with the Company by
                carrying on the business of discovering, developing or
                commercializing novel combination therapies for the treatment of
                Infectious Disease anywhere in the Restricted Territory other
                than pursuant to the Services Agreement or in connection with
                Biodefence Applications or Permitted Topical Applications (as
                defined in Section 13.6) (a "Competing Business");

       14.1.2   during the Relevant Period canvass, solicit or approach, or
                cause to be canvassed, solicited or approached, for orders any
                person who at any time during the 12 months preceding the
                Relevant Date is or was negotiating or in discussions with the
                Company for the supply of any goods, rights or services or is or
                was a client

                                       35
<Page>

                or customer of the Company, where the orders relate to the
                conduct of a Competing Business;

       14.1.3   during the Relevant Period, solicit or entice, or endeavour to
                solicit or entire, away from the Company or employ any person
                employed in a managerial, research, pre-clinical, clinical,
                technical, sales or development capacity at the Relevant Date or
                at any time during the period of six months immediately
                preceding the Relevant Date.

       For the purposes of this Section 14:

       "NON-COMPETITION PERIOD" means the period commencing on the Effective
       Date and ending twelve (12) months after the Relevant Date.

       "RELEVANT PERIOD" means the period of 12 months immediately following the
       Relevant Date;

       "RESTRICTED TERRITORY" means Singapore, Australia, Malaysia, Hong Kong,
       Indonesia, the People's Republic of China, the United States of America,
       the European Union, Switzerland, New Zealand, Philippines, Taiwan, India,
       Pakistan, Sri Lanka and Africa;

       "RELEVANT DATE" means the earlier of (i) four years after the Effective
       Date; or (ii) the date on which the Parent ceases to hold any Shares or
       any interest in any Shares.

14.2   The Parent agrees that the undertakings in this Section 14 are reasonable
       and are entered into for the purpose of protecting the goodwill and
       legitimate interests of the Company.

14.3   Each of the undertakings contained in this Section 14 shall be, and is, a
       separate undertaking by the Parent and will be enforceable by the Company
       and the Investor. If one or more of the undertakings contained in this
       Section 14 is held to be against the public interest or unlawful or in
       any way an unreasonable restraint of trade, the remaining undertakings
       shall continue to bind the Parent.

14.4   If any of the provisions in this Section 14 should be deemed to exceed
       the time or geographic limits or any other limitations permitted by
       applicable law in any jurisdiction or to be void, invalid or otherwise
       unenforceable, in whole or in part, then such part of the provision shall
       be deemed to have been severed from this Section 14 but the remainder of
       the Section shall remain in full force and effect. The Parent hereby
       acknowledges that competition can be conducted across geographical
       boundaries and that the foregoing restrictions are reasonable and
       necessary to protect the legitimate interests of the Company and the
       Investor.

14.5   The Parent acknowledges that any violation of the provisions of this
       Section 14 shall result in injury to the Company and the Investor and
       that damages would be an inadequate remedy and that in the event of any
       such breach, the Company and the Investor shall, in addition to any other
       relief available to them, be entitled to injunctive relief.

                                       36
<Page>

15.    DEFAULT

15.1   Upon the occurrence of any of the following events:

       15.1.1   MATERIAL BREACH. If a Party breaches a material provision of any
                of the Transaction Documents or fails to perform a material
                obligation of such Party under any of the Transaction Documents.

       15.1.2   MISREPRESENTATIONS. If any warranty, representation, statement,
                or report made to the Investor by the Company and/or the Parent
                or made to the Company and the Parent by the Investor in or in
                connection with any of the Transaction Documents shall have been
                materially false or materially misleading when made or deemed
                made.

       15.1.3   PAYMENT DEFAULT. If the Company fails to pay when due and
                payable or when declared due and payable in accordance with the
                Notes and the Note Conditions, any portion of the obligations
                under the Notes and the Note Conditions or if the Parent fails
                to issue to the Investor the Parent Preferred Stock and/or the
                Parent Common Stock or any portion thereof in accordance with
                the Swap Up Agreement.

       15.1.4   CROSS DEFAULT. If an event of default occurs with respect to the
                Parent in the Services Agreement.

       15.1.5   BANKRUPTCY OR INSOLVENCY. In the event of (i) the appointment of
                a trustee, receiver or custodian for all or substantially all of
                the property of the Company, the Parent or the Investor, or for
                any lesser portion of such property, if the result materially
                and adversely affects the ability of the Company or Parent or
                the Investor (as the case may be) to fulfill its obligations
                hereunder, (ii) the determination by a court or tribunal of
                competent jurisdiction that the Company or the Parent or the
                Investor is insolvent such that the Company's or the Investor's
                or the Parent's liabilities (as the case may be) exceed the fair
                market value of its assets, (iii) the filing of a petition for
                relief in bankruptcy by the Company or the Parent or the
                Investor on its own behalf, or the filing of any such petition
                against the Company or the Parent or the Investor, (iv) an
                assignment by the Company or the Parent or the Investor for the
                benefit of creditors, or (v) the dissolution or liquidation of
                the Company or the Investor or the Parent,

       an "EVENT OF DEFAULT" shall be deemed to have occurred upon (a) in the
       case of the events set out in Sections 15.1.1 to 15.1.5 (other than
       Section 15.1.5(v)), notice in writing having been delivered by a
       non-defaulting Party of such event having taken place and the expiration
       of a one hundred eighty (180) day opportunity to cure period; or (b) in
       the case of an event referred to in Section 15.1.5(v), the non-defaulting
       Party first becoming aware of such event, and each non-defaulting Party
       shall be entitled to the remedies set out in Section 15.2 (where the
       Investor is the non-defaulting party) or Section 15.3 (where the Parent
       is the non-defaulting party) with respect to such Event of Default.

15.2   INVESTOR'S RIGHTS AND REMEDIES.

                                       37
<Page>

       Without prejudice to the Investor's rights to claim for damages, upon the
       occurrence of an Event of Default by the Company (save in relation to any
       Event of Default by the Company arising solely as a result of any matter
       dealt with on behalf of the Company by a committee of Directors appointed
       by the Investor pursuant to Section 11.5.1) or by the Parent (with the
       date of such occurrence being designated a "DEFAULT DATE"):

       15.2.1   where the Company is, as at the Default Date, not in compliance
                with its obligations under Section 13.4, the Investor shall be
                entitled to immediately terminate this Agreement and
                additionally:

                (A)  the Investor shall have the option, exercisable in writing
                     within 30 days of the Default Date to require the Parent to
                     purchase all or part of the Preference Shares held by the
                     Investor as at the Default Date and to allot and issue to
                     the Investor such number of shares in the issued and
                     outstanding capital of the Parent, in the manner and on the
                     terms and conditions set out in Section 4.2.1 of the
                     Swap-up Agreement;

                (B)  the Investor shall be immediately entitled to its rights
                     under Condition 9 of the Note Conditions and Section 4.2.2
                     of the Swap-up Agreement; and

                (C)  the Investor shall be entitled to exercise the Default Call
                     Option in the manner set out in Section 15.7, to acquire
                     for cash the Parent's Shares and any other securities of
                     the Company owned by the Parent at such time at a price per
                     share equal to the fair market value of such Shares or
                     securities.

       15.2.2   where the Company is, as at the Default Date, in compliance with
                its obligations under Section 13.4, the Investor shall be
                entitled to the following:

                (A)  at the Investor's option, exercisable in writing within
                     thirty days of the Default Date, to acquire for cash, such
                     number of the Ordinary Shares held by the Parent as at the
                     Default Date as would be sufficient to enable the Investor
                     to control up to 76 per cent. of the voting rights in the
                     Company, at a price per share equal to the fair market
                     value of such Ordinary Shares or securities and in the
                     manner set out in Section 15.7, and upon the completion of
                     such acquisition:

                     (i)   all of the Parent Directors shall be deemed to have
                           resigned from their office as directors;

                     (ii)  the Parent shall no longer have the right to appoint
                           any Director or to approve the appointment of the
                           Independent Director;

                     (iii) the presence of the Parent Director shall not be
                           required to form a quorum at any Board Meeting;

                     (iv)  the presence of the Parent or its duly appointed
                           corporate representative or proxy shall not be
                           required to form a quorum at any general meeting;

                                       38
<Page>

                     (v)   the provisions of Section 15.2.1, together with all
                           references thereto in this Agreement, shall be deemed
                           to be deleted from this Agreement;

                     (vi)  the approval of the Parent Director shall no longer
                           be required for the adoption, amendment or update of
                           the Business Plan and/or Budget; and

                     (vii) the provisions of Section 11.3 and Schedule 5
                           (Reserved Matters), together with all references
                           thereto in this Agreement, shall be deemed to be
                           deleted from this Agreement; or

                (B)  if the Investor chooses not to exercise its option provided
                     in Section 15.2.2(a) and, subsequent to the Default Date,
                     the Event of Default continues but the Company is no longer
                     in compliance with its obligations under Section 13.4,
                     then:

                           (i)   the Investor shall be entitled to the remedies
                                 provided for in Section 15.2.1; and

                           (ii)  the Default Date for purposes of Section 15.2.1
                                 shall be the date on which the Investor was
                                 first aware that the Company was no longer in
                                 compliance with its obligations under Section
                                 13.4.

15.3   PARENT PUT OPTION. Upon the exercise by the Investor of the option to
       acquire such number of the Parent's shares that would be sufficient to
       enable the Investor to control 76 per cent. of the voting rights in the
       Company pursuant to Section 15.2.2 above, the Parent shall be entitled
       to, at its option, exercisable in writing within 10 business days of the
       date of the Investor's notice in writing pursuant to Section 15.2.2, to
       require the Investor to purchase from the Parent the remainder of the
       shares held by the Parent not forming part of the said proposed
       acquisition (the "REMAINDER SHARES") at a price per share equal to the
       fair market value of such shares. The completion of the sale and purchase
       of such shares shall take place at the same time as the relevant Default
       Option Completion. On the Default Option Completion, the Parent shall
       deliver to the Investor a duly executed transfer form in favour of the
       Investor together with the share certificates in respect of the Remainder
       Shares and the Investor shall pay the purchase price for the Remainder
       Shares by way of a cashier's order or banker's draft drawn on a licensed
       bank in Singapore and made out in favour of the Parent or by wire
       transfer.

15.4   COMPANY'S RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default
       by the Parent (and for such purpose, an Event of Default by the Company
       shall be deemed to be an Event of Default by the Parent unless the Event
       of Default arises solely as a result of any matter dealt with on behalf
       of the Company by a committee of Directors appointed by the Investor
       pursuant to Section 11.5.1), the Company shall be automatically released
       and discharged from all its repayment obligations under the Parent Note.

                                       39
<Page>

15.5   PARENT'S RIGHTS AND REMEDIES. Upon the occurrence of an Event of Default
       (i) by the Company arising solely as a result of any matter dealt with on
       behalf of the Company by a committee of Directors appointed by the
       Investor pursuant to Section 11.5.1 or (ii) by the Investor, and without
       prejudice to the Parent's rights to claim for damages, the Parent shall
       be entitled to exercise the Default Call Option in accordance with
       Section 15.7 below, to acquire for cash the Investor's Preference Shares
       and any other securities of the Company owned by the Investor at such
       time at a price per share equal to the fair market value of such Shares
       or securities, and upon the completion of such acquisition:

                     (i)   all of the Investor Directors shall be deemed to have
                           resigned from their office as directors;

                     (ii)  the Investor shall no longer have the right to
                           appoint any Director or to approve the appointment of
                           the Independent Director;

                     (iii) the presence of the Investor Director shall not be
                           required to form a quorum at any Board Meeting;

                     (iv)  the presence of the Investor or its duly appointed
                           corporate representative or proxy shall not be
                           required to form a quorum at any general meeting;

                     (v)   the provisions of Section 11.3 and Schedule 5
                           (Reserved Matters), together with all references
                           thereto in this Agreement, shall be deemed to be
                           deleted from this Agreement;

                     (vi)  the observation rights granted to the Investor under
                           Section 11.4 shall immediately terminate; and

                     (vii) the approval of the Investor Director shall no longer
                           be required for the adoption, amendment or update of
                           the Business Plan and/or Budget.

15.6   VALUATION. For purposes of Sections 15.2, 15.3, 15.5 and 15.7, fair
       market value shall be determined as mutually agreed by the Parent and the
       Investor or, in the event that no agreement can be reached, by a third
       party valuer agreed between each of the Parent and the Investor within 14
       days of the exercise of the Default Call Option, or failing which, a
       third party valuer appointed by the President of the Singapore
       International Arbitration Centre (the "VALUER").

       15.6.1   The Valuer shall make their determination of the fair market
                value of the Shares pursuant to this Section 15 on the following
                assumptions and bases:

                (A)  valuing the shares to be sold as on an arms length sale
                     between a willing seller and a willing buyer;

                (B)  if the Company is then carrying on business as a going
                     concern, on the assumption that it will continue to do so;

                                       40
<Page>

                (C)  that the shares to be sold are capable of being transferred
                     without restriction; and

                (D)  that the fair market value of the Shares shall not take
                     into account all or any funds provided to the Company
                     pursuant to the Parent Note or the debt comprised
                     thereunder, whether as an asset or a liability.

       15.6.2   The Valuer shall determine the fair market value to reflect any
                other factors which the Valuer reasonably believe should be
                taken into account. If any difficulty arises in applying any of
                these assumptions or bases then the Valuer shall resolve that
                difficulty in such manner as they shall in their absolute
                discretion think fit.

       15.6.3   Whether or not the Company is, as at the Default Date, in
                compliance with its obligations under Section 13.4, upon the
                occurrence of an Event of Default by the Company or the Parent,
                the Investor shall have the first right to negotiate with the
                Company for the sale, transfer, license or assignment by the
                Company to the Investor or its nominee of the Company's products
                and commercial rights, including all Intellectual Property of
                the Company. In the event that the Investor and the Company are
                unable to agree on the terms of any such sale, transfer, licence
                or assignment ("PROPOSED CONVEYANCE"), the Company shall be free
                to sell, transfer, license or assign such products and
                commercial rights to any party (the "THIRD PARTY BUYER") at a
                price and otherwise on terms and conditions which are no less
                favourable to the Company than what was offered by the Investor
                or its nominee.

       15.6.4   Notwithstanding anything to the contrary in Section 15.6.3, in
                the event that the Third Party Buyer is the Parent or its
                Affiliate, the Company shall, prior to any such Proposed
                Conveyance to the Third Party Buyer, deliver to the Investor a
                notice setting out the terms and the price with respect to the
                Proposed Conveyance (the "CONVEYANCE NOTICE"). Within 30 days
                after the receipt of the Conveyance Notice, the Investor shall
                have the first right of refusal to acquire such products and
                commercial rights of the Company by way of a sale, transfer,
                licence or assignment (as the case may be) on the same terms and
                at the same price as those set out in the Conveyance Notice, by
                delivering to the Company a notice stating such intention (the
                "CONVEYANCE ACCEPTANCE NOTICE"). Upon receipt of the Conveyance
                Acceptance Notice, the Company shall be obliged to complete the
                Proposed Conveyance with the Investor or its nominee within 30
                days of the date of receipt of the Conveyance Acceptance Notice.
                In this connection, any Investor Director shall be deemed to
                have been appointed attorney of the Company with full power to
                execute, complete and deliver, in the name and on behalf of the
                Company, transfers or assignments of the said products and
                commercial rights to the Investor or its nominee against payment
                by the Investor or its nominee of the price to the Company.

15.7   DEFAULT PROCEDURE:

                                       41
<Page>

       15.7.1   Where any Event of Default occurs in relation to the Investor or
                the Parent pursuant to Section 15.1 (the "DEFAULTING
                SHAREHOLDER") or the Company pursuant to Section 15.1 (in which
                case, the Parent shall be deemed to be the Defaulting
                Shareholder for the purposes of this Section 15.7, unless the
                Event of Default arises solely as a result of any matter dealt
                with on behalf of the Company by a committee of Directors
                appointed by the Investor pursuant to Section 11.5.1, in which
                case the Investor shall be deemed to be the Defaulting
                Shareholder for the purposes of this Section 15.7), the other
                Shareholder (the "NON-DEFAULTING SHAREHOLDER"), shall, without
                prejudice to any other rights and remedies it may have, be
                entitled to a call option (the "DEFAULT CALL OPTION"), being the
                right of the Non-Defaulting Shareholder to require the
                Defaulting Shareholder to sell to the Non-Defaulting
                Shareholder, at a price per share equal to the fair market value
                of such Shares or securities, free from all liens, charges and
                other encumbrances and with all rights and advantages attaching
                thereto:

                (i)   with respect to an Event of Default of the Investor, all
                      or part of the shares held by the Defaulting Shareholder
                      for the time being in the Company;

                (ii)  with respect to an Event of Default of the Parent or the
                      Company, where the Company is not in compliance with its
                      obligations under Section 13.4 all or part of the shares
                      held by the Defaulting Shareholder, for the time being in
                      the capital of the Company; or

                (iii) with respect to an Event of Default of the Parent or the
                      Company, where the Company is in compliance with its
                      obligations under Section 13.4, such number of shares held
                      by the Parent as at the Default Date as would be
                      sufficient to enable the Investor to control up to 76 per
                      cent. of the voting rights in the Company

                (in each case, the "DEFAULT OPTION SHARES").

       15.7.2   The Default Call Option may be exercised by the Non-Defaulting
                Shareholder by serving a notice in the form of Exhibit K (the
                "DEFAULT OPTION NOTICE") on the Defaulting Shareholder within a
                period of 30 days from the date on which the Non-Defaulting
                Shareholder first becomes aware of the Event of Default.

       15.7.3   The Defaulting Shareholder shall, upon receiving a Default
                Option Notice from the Non-Defaulting Shareholder, sell to the
                Non-Defaulting Shareholder free from all liens, charges and
                other encumbrances and with all rights and advantages attaching
                thereto, the Default Option Shares.

       15.7.4   Completion of the sale and purchase of the Default Option Shares
                (the "DEFAULT OPTION COMPLETION") pursuant to the exercise of a
                Default Call Option shall take place at the then registered
                office of the Company (or such other place as the transferor and
                transferee may agree in writing) on the date falling 15 days
                from the date of the Default Option Notice.

                                       42
<Page>

       15.7.5   On the Default Option Completion, the Transferor shall deliver
                to the Transferee a duly executed transfer form in favour of the
                Transferee together with the share certificates in respect of
                the Default Call Option Shares.

       15.7.6   On the Default Option Completion, the Transferee shall pay the
                purchase price for the Default Option Shares in US Dollars by
                way of a cashier's order or bankers' draft drawn on a licensed
                bank in Singapore and made out in favour of the Transferor.

       15.7.7   If the Defaulting Shareholder fails to transfer the Defaulting
                Shareholder's Shares to the Non-Defaulting Shareholder on the
                Default Option Completion in accordance with Section 15.7.4
                above, any director of the Non-Defaulting Shareholder shall be
                deemed to have been appointed attorney of the Defaulting
                Shareholder with full power to execute, complete and deliver, in
                the name and on behalf of the Defaulting Shareholder, transfers
                of the Defaulting Shareholder's Shares to the Non-Defaulting
                Shareholder against payment of the purchase price for the
                Default Option Shares to the Company. On payment of the purchase
                price to the Company, the Non-Defaulting Shareholder shall be
                deemed to have obtained a good quittance for such payment and on
                execution and delivery of the transfer of the Default Option
                Shares the Non-Defaulting Shareholder shall be entitled to
                insist upon its name and/or its nominees' names being entered in
                the Register of Members as the holder by transfer of the Default
                Option Shares. The Non-Defaulting Shareholder shall procure that
                the Company shall forthwith pay the purchase price into a
                separate bank account in the Company's name and shall hold such
                price in trust for the Defaulting Shareholder.

       15.7.8   The restrictions on transfer of shares contained in Section 12.2
                and the Articles shall not apply to the sale and transfer of the
                Default Option Shares pursuant to any exercise of a Default Call
                Option.

16.    TERMINATION

16.1   Subject to Sections 10, 16.3 and 16.4, this Agreement shall take effect
       from the date hereof and continue thereafter without limit in point of
       time.

16.2   Upon the termination of this Agreement by the Investor pursuant to
       Section 15.2.1, this Agreement shall forthwith terminate and cease to be
       of any effect (save for Sections 14 (unless the Investor has, at the
       relevant time, ceased to be a shareholder of the Company), 15, 16 and
       17).

16.3   Upon any Shareholder and its Affiliates ceasing to hold any Shares in the
       capital of the Company, such Shareholder shall be released from all its
       obligations hereunder (other than under Sections 3 (in the case of the
       Investor), 14 (in the case of the Parent), 15, 16 and 17.

16.4   The termination of this Agreement from any cause shall not release any
       Party from any liability which at the time of termination has already
       accrued, or which thereafter may accrue.

                                       43
<Page>

17.    MISCELLANEOUS PROVISIONS

17.1   GOVERNING LAW. This Agreement shall be governed in all respects by and
       construed in accordance with the laws of Singapore without regard to
       provisions regarding choice of laws.

17.2   CONFLICTS. In the event of a conflict between this Agreement and any of
       the other Transaction Documents, this Agreement shall prevail except in
       the case in which such other Transaction Document specifically states
       otherwise.

17.3   DISPUTE RESOLUTION. In the event of any dispute between the parties to
       this Agreement or the Transaction Documents, the following procedures
       shall apply:

       17.3.1 MEDIATION. Prior to any party invoking the arbitration procedures
       specified in Section 17.3.2 with respect to any matter relating to this
       Agreement, the matter shall be referred to the chief executive officers
       of the Investor and Parent, who shall meet in person to attempt to
       resolve the dispute for at least one-half (1/2) of a day in London,
       England, or at such other location or by such other means and for such
       other period of time as the chief executive officers may agree to in
       writing. If the parties are unable to resolve the dispute within 10 days
       after the chief executive officers have met, either party may then invoke
       the arbitration procedure specified in Section 17.3.2.

       17.3.2 ARBITRATION. Any dispute arising out of or in connection with this
       Agreement, including any question regarding its existence, validity or
       termination, shall be referred to and finally resolved by binding
       arbitration under the Rules (the "LCIA RULES") of the London Court of
       International Arbitration (the "LCIA COURT"), which LCIA Rules are deemed
       to be incorporated by reference into this clause. The parties also agree
       that the arbitration shall be conducted in according to the 1999
       International Bar Association Rules on the Taking of Evidence in
       International Commercial Arbitration. The arbitration panel shall consist
       of three members. Except where otherwise agreed by the parties or
       determined by the LCIA Court, for the purposes of Article 8.1 of the LCIA
       Rules the Parties agree that in the case of any dispute (i) between the
       Investor and the Parent, (ii) between the Company and the Investor or
       (iii) between the Company and the Parent, each of the two parties to such
       a dispute shall represent separate sides for the formation of the
       arbitral tribunal as claimant and respondent respectively (or vice
       versa). Accordingly, each of such parties shall nominate one member of
       the panel. The two members shall agree on the third member within thirty
       (30) days. If the two members of the panel are unable to agree on the
       third, the LCIA Court shall appoint the third member. The language to be
       used in the arbitral proceeding shall be English and all arbitral
       proceedings shall be conducted in London, England, which shall be the
       seat of arbitration. Each party shall bear its own costs associated with
       the arbitration of any dispute, and all fees and other costs of the
       arbitration proceeding shall be shared equally between the parties.
       Nothing in this arbitration clause shall prevent either party from
       seeking a pre-award attachment of assets or preliminary relief to enforce
       intellectual property rights or confidentiality obligations in a court of
       competent jurisdiction prior to an award on the merits by the arbitration
       panel. The award shall be final and binding on the parties and may be
       entered and enforced in any court having jurisdiction.

                                       44
<Page>

17.4   RIGHTS OF THIRD PARTIES. A Person who is not a party to this Agreement
       has no right under the Contracts (Rights of Third Parties) Act, Chapter
       53B to enforce or enjoy the benefit of any term of this Agreement.

17.5   TRANSFER. Neither this Agreement nor any interest, benefit or obligation
       in or under this Agreement may be transferred (whether by way of security
       or otherwise) by any Party without the prior written consent of the other
       Parties, save that the Investor shall be entitled to assign the benefit
       of the warranties and representations given by the Company and the Parent
       hereunder to any Affiliate to which it has transferred its Securities in
       compliance with the provisions hereunder.

17.6   SURVIVAL. The representations, warranties, covenants and agreements made
       herein shall survive any investigation made by any party hereto and the
       closing of the transactions contemplated hereby.

17.7   ENTIRE AGREEMENT. This Agreement, the Shareholders' Agreement, the
       Swap-Up Agreement, the Services Agreement and the Exhibits and the
       Securities hereto and thereto constitute the entire understanding and
       agreement between the Parties with regard to the subjects hereof and
       thereof and supersede all prior and contemporaneous agreements, whether
       written or oral.

17.8   NOTICES. All notices, requests, consents and other communications under
       this Agreement shall be in writing and shall be deemed effectively given:
       (a) upon personal delivery; (b) when sent by confirmed facsimile if sent
       during normal business hours of the recipient, if not, then on the next
       business day; (c) five days after having been sent by registered or
       certified mail, return receipt requested, postage prepaid; or (d) one day
       after deposit with a nationally recognized overnight courier, special
       next day delivery, with verification of receipt, at the address(es) set
       forth or specified below, or at such other address or addresses as may
       have been furnished in writing by the Company to the Investor, or by the
       Investor to the Company, as applicable:

If to the Company, at:
CombinatoRx, Incorporated
650 Albany Street
Boston, Massachusetts 02118
Attn: Chief Financial Officer

With a copy (which shall
Not constitute notice) to:
Ropes & Gray LLP
One International Place
Boston, Massachusetts 02110
Attn: Geoffrey Davis

If to the Investor, at:
BioMedical Sciences Investment Fund Pte Ltd

                                       45
<Page>

20 Biopolis Way
#09-01 Centros
Singapore 138668
Attn: Chief Executive Officer

With a copy (which shall
not constitute notice) to:
Allen & Gledhill
One Marina Boulevard #28-00
Singapore 018989
Attn: Tan Su May

17.9   AMENDMENTS. Any term of this Agreement may be amended only with the
       written consent of the Company, the Parent and the Investor.

17.10  DELAYS OR OMISSIONS; WAIVERS. No delay or omission to exercise any right,
       power or remedy accruing to the Company, the Parent or to the Investor,
       upon any breach or default of any party hereto under this Agreement,
       shall impair any such right, power or remedy of the Company, the Parent
       or the Investor, nor shall it be construed to be a waiver of any such
       breach or default, or an acquiescence therein, or of any similar breach
       of default thereafter occurring; nor shall any waiver of any other breach
       or default theretofore or thereafter occurring. No waiver of any of the
       provisions contained in this Agreement shall be valid unless made in
       writing and executed by the Company (if it is the waiving party), the
       Parent (if it is the waiving party) or by the Investor (if it is the
       waiving party).

17.11  TITLES AND SUBTITLES. The titles of the paragraphs and subparagraphs of
       this Agreement are for convenience of reference only and are not to be
       considered in construing this Agreement.

17.12  COUNTERPARTS. This Agreement may be executed in any number of
       counterparts (including by facsimile), each of which shall be an
       original, but all of which together shall constitute one instrument. Any
       party may enter into this Agreement by signing any such counterpart.
       Signatures may be exchanged by facsimile, with original signatures to
       follow. Each party agrees that it will be bound by its own facsimile
       signature and that it accepts the facsimile signature of the other party.

17.13  SEVERABILITY. Should any provision of this Agreement be determined to be
       illegal or unenforceable, such determination shall not affect the
       remaining provisions of this Agreement.

17.14  EXPENSES. The Company shall bear all costs and expenses incurred by the
       Company, the Parent and the Investor in connection with the drafting,
       negotiation and finalisation of this Agreement and the Transaction
       Documents and the closing of the transactions contemplated hereby,
       subject to a limit of $100,000 for each of (i) the Parent's and the
       Company's expenses and (ii) the Investor's expenses.

                                       46
<Page>

17.15  CONSTRUCTION. This Agreement is the result of negotiations among, and has
       been reviewed by the Company and the Investor and their respective
       counsel. Accordingly, this Agreement shall be deemed to be the product of
       all Parties hereto, and no ambiguity shall be construed in favor of or
       against the Company or the Investor.

                            [SIGNATURE PAGES FOLLOW]

                                       47
<Page>

IN WITNESS WHEREOF, the Parties have executed this Agreement to be effective as
of the date first above written.

THE COMPANY:                                 THE INVESTOR:

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

THE PARENT:

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

                                       48<Page>

                                                                   Exhibit 10.39

                        TERMS AND CONDITIONS OF THE NOTES

The issue of US$[5,500,000/3,500,000/3,500,000/2,500,000/2,500,000] in aggregate
principal amount of 5 per cent. series [1/2/3/4/5] notes due 2009 (the "SERIES
[1/2/3/4/5] NOTES") of COMBINATORX (SINGAPORE) PTE LTD (the "ISSUER") was
authorised by a resolution of the Board of Directors of the Issuer passed on [ ]
and approved by the shareholders of the Issuer by way of shareholders'
resolutions in written form dated [ ]. The Series [1/2/3/4/5] Notes are issued
pursuant to a Subscription and Shareholders Agreement (the "SSA") dated August
[__], 2005 made between the Issuer, CombinatoRx Incorporated ("CRX US") and
BIOMEDICAL SCIENCES INVESTMENT FUND PTE LTD ("BMSIF") as subscriber.

1.     STATUS

       The Series [1/2/3/4/5] Notes constitute direct, unsubordinated and
       unconditional obligations of the Issuer and the Series [1/2/3/4/5] Notes,
       together with the US$[3,500,000/3,500,000/2,500,000/2,500,000/5,500,000]
       5 per cent. series [2/3/4/5/1] notes due 2009 ("SERIES 2/3/4/5/1 NOTES"),
       the US$[3,500,000/2,500,000/2,500,000/5,500,000/3,500,000] 5 per cent.
       series [3/4/5/1/2] notes due 2009 ("SERIES 3/4/5/1/2 NOTES"), the
       US$[2,500,000/2,500,000/5,500,000/3,500,000/3,500,000] 5 per cent. series
       [4/5/1/2/3] notes due 2009 ("SERIES 4/5/1/2/3 NOTES") and the
       US$[2,500,000/5,500,000/3,500,000/3,500,000/2,500,000] 5 per cent. series
       [5/1/2/3/4] notes due 2009 ("SERIES 5/1/2/3/4 NOTES") [OF THE ISSUER]/[TO
       BE ISSUED BY ISSUER], are or will be secured by a debenture creating a
       first fixed and first floating charge over certain assets of the Issuer
       (the "DEBENTURE") executed by the Issuer in favour of BMSIF as subscriber
       and shall at all times rank PARI PASSU and without any preference or
       priority among themselves. The payment obligations of the Issuer under
       the Series [1/2/3/4/5] Notes shall, save for such exceptions as may be
       provided by mandatory provisions of applicable law, at all times rank at
       least equally with all of its other present and future direct,
       unsubordinated, unconditional and unsecured obligations. The Issuer shall
       not issue any future debt with a higher preference or priority to that of
       the Series [1/2/3/4/5] Notes.

2.     FORM AND TITLE

       2.1    FORM

              The Series [1/2/3/4/5] Notes are issued in registered form. A Note
              certificate (a "CERTIFICATE") will be issued to the holder of the
              Series [1/2/3/4/5] Notes. Each Certificate will be numbered
              serially with an identifying number which will be recorded on the
              relevant Certificate and in the register of Noteholders which will
              be kept by the Issuer.

       2.2    TITLE

              Title to the Series [1/2/3/4/5] Notes passes only by transfer and
              registration in the register of Noteholders as described in
              Condition 3. The holder of the Series [1/2/3/4/5] Notes will
              (except as otherwise required by law) be treated as its

<Page>

              absolute owner for all purposes (whether or not it is overdue and
              regardless of any notice of ownership, trust or any interest in it
              or any writing on, or the theft or loss of, the Certificate issued
              in respect of it) and no person will be liable for so treating the
              holder. In these Terms and Conditions (these "CONDITIONS")
              "NOTEHOLDER" and (in relation to a Note) "HOLDER" mean the person
              in whose name the Series [1/2/3/4/5] Notes are registered.

3.     TRANSFERS OF SERIES [1/2/3/4/5] NOTES; ISSUE OF CERTIFICATES

       3.1    REGISTER

              The Issuer will cause to be kept at its registered office a
              register on which shall be entered the names and addresses of the
              holders of the Series [1/2/3/4/5] Notes and the particulars of the
              Series [1/2/3/4/5] Notes held by each Noteholder and of all
              transfers of the Series [1/2/3/4/5] Notes (the "REGISTER"). Each
              Noteholder shall be entitled to receive only one Certificate in
              respect of its entire holding.

       3.2    TRANSFERS

              No Noteholder shall transfer all or any part of the Series
              [1/2/3/4/5] Notes held by it, save in accordance with the
              provisions of Section 12 of the SSA.

              Any transfer of the Series [1/2/3/4/5] Notes (or part thereof) in
              compliance with Section 12 of the SSA shall be effected by
              delivery of the Certificate, with the form of transfer attached
              thereto duly completed and signed by the holder or its attorney
              duly authorised in writing, to the registered office of the Issuer
              Provided Always that (i) no transfer of title to the Series
              [1/2/3/4/5] Notes will be valid unless and until entered on the
              Register; and (ii) no transfer of title to the Series [1/2/3/4/5]
              Notes shall be made pursuant to any circumstances in which an
              offer or sale, or invitation for purchase, of the Series
              [1/2/3/4/5] Notes is made to the public in Singapore. Upon the
              transfer of the Series [1/2/3/4/5] Notes, the Issuer shall execute
              all documents and do all things necessary to extend the benefit of
              the Debenture to the transferee of such Series [1/2/3/4/5] Notes.

       3.3    DELIVERY OF NEW CERTIFICATES

              3.3.1  Each new Certificate to be issued upon a transfer of the
                     Series [1/2/3/4/5] Notes will, within seven business days
                     of receipt by the Issuer of the form of transfer duly
                     completed and signed, be made available for collection at
                     the registered office of the Issuer or, if so requested in
                     the form of transfer, be mailed by uninsured mail at the
                     risk of the holder entitled to the Series [1/2/3/4/5] Notes
                     (but free of charge to the holder) to the address specified
                     in the form of transfer.

              3.3.2  For the purposes of these Conditions, "BUSINESS DAY" shall
                     mean a day other than Saturdays, Sundays or public holidays
                     on which commercial banks are open for business in
                     Singapore.

       3.4    FORMALITIES FREE OF CHARGE

<Page>

              Registration of a transfer of Series [1/2/3/4/5] Notes will be
              effected without charge by or on behalf of the Issuer.

4.     NEGATIVE PLEDGE

       So long as any of the Series [1/2/3/4/5] Notes has not been redeemed in
       accordance with these Conditions, the Issuer shall not create or permit
       to subsist any mortgage, charge, pledge, lien or other form of
       encumbrance or security interest upon the Issuer's Intellectual Property
       Rights save for the security created by or permitted by the Debenture,
       without the prior written consent of the Noteholder, which consent shall
       not be unreasonably withheld.

       For the purposes of these Conditions, "INTELLECTUAL PROPERTY RIGHTS"
       shall mean:

       1)       Any and all copyrights, copyright applications, copyright
                registration and like protection in each work or authorship and
                derivative work thereof, whether published or unpublished and
                whether or not the same also constitutes a trade secret, now or
                hereafter existing, created, acquired or held by the Issuer);

       2)       Any and all trade secrets and any and all intellectual property
                rights in computer software and computer software products now
                or hereafter existing, created, acquired or held by the Issuer;

       3)       Any and all design rights that may be available to the Issuer
                now or hereafter existing, created, acquired or held;

       4)       All patents, patent applications and like protections,
                including, without limitation, improvements, divisions,
                continuations, renewals, reissues, extensions and
                continuations-in-part of the same, including the patents and
                patent applications of the Issuer; and

       5)       Any trademark and servicemark rights, whether registered or not,
                applications to register and registrations of the same and like
                protections, and the entire goodwill of the business of the
                Issuer connected with and symbolized by such trademarks.

5.     INTEREST

       5.1    The Series [1/2/3/4/5] Notes shall bear interest at a PER ANNUM
              rate (based on a year of twelve 30 day months) of 5 per cent. on
              the principal amount of the Series [1/2/3/4/5] Notes, from the
              Issue Date up to and including the Maturity Date, which shall be
              compounded and accumulated and payable on the Maturity Date,
              unless the Series [1/2/3/4/5] Notes are redeemed by the Issuer
              before the Maturity Date pursuant to Condition 7.3.
              Notwithstanding the foregoing, such interest rate shall not exceed
              the highest rate permitted by applicable law to be charged on
              commercial loans. For the purposes of these Conditions, "ISSUE
              DATE" shall mean the relevant Note Closing Date in respect of the
              Series [1/2/3/4/5] Notes, as defined in the SSA.

<Page>

       5.2    Commencing upon the occurrence of an Event of Default (as defined
              in the SSA) of CRx US or the Issuer pursuant to Section 15.2.1 of
              the SSA, the PER ANNUM rate of interest (based on a year of twelve
              30 day months) applicable to each Series [1/2/3/4/5] Note shall be
              ten per cent. (the "DEFAULT INTEREST RATE"), which shall accrue
              from the date of issuance for each Series [1/2/3/4/5] Note until
              payment is made in full and shall be compounded annually.
              Notwithstanding the foregoing, the Default Interest Rate shall not
              exceed the highest rate permitted by applicable law to be charged
              on commercial loans.

6.     PAYMENTS

       6.1    PRINCIPAL AND INTEREST

              Subject to the provisions of Condition 7.2, payment of principal
              and interest will be made by transfer to the registered account of
              the Noteholder. Payment of principal is only required to be made
              after surrender of the relevant Certificate at the registered
              office of the Issuer.

       6.2    REGISTERED ACCOUNTS

              For the purposes of this Condition 6, a Noteholder's registered
              account means the Singapore dollar account maintained by or on
              behalf of it, details of which shall be furnished to the Issuer by
              the Noteholder on or before the close of business on the second
              business day before the due date for payment.

       6.3    FISCAL LAWS

              All payments are subject in all cases to any applicable laws and
              regulations. No commissions or expenses shall be charged to the
              Noteholder in respect of such payments.

       6.4    PAYMENT INITIATION

              Where payment is to be made by transfer to a registered account,
              payment instructions (for value on the due date or, if that is not
              a business day, for value on the first following day which is a
              business day) will be initiated on the due date for payment (or,
              if it is not a business day, the immediately following business
              day).

       6.5    ANNOTATION OF REGISTER

              If an amount which is due on the Series [1/2/3/4/5] Notes is not
              paid in full, the Issuer will annotate the Register with a record
              of the amount (if any) in fact paid.

7.     REDEMPTION, PURCHASE AND CANCELLATION

       7.1    MATURITY

              Unless previously redeemed as provided herein and subject to these
              Conditions, the Issuer will redeem each Series [1/2/3/4/5] Note at
              100 per cent. of its principal amount together with interest
              accrued thereon on the Maturity Date. The Noteholder is therefore
              entitled to receive from the Issuer on the Maturity Date, the
              unpaid principal amount (excluding interest) of the Series
              [1/2/3/4/5] Notes

<Page>

              outstanding as at the Maturity Date (the "OUTSTANDING PRINCIPAL
              BALANCE") in cash, together with all interest accrued thereon.

              For the purposes of these Conditions, the term "MATURITY DATE"
              shall mean 31 December 2009.

       7.2    PAYMENT ON MATURITY / REDEMPTION

              7.2.1  The Issuer shall discharge its payment obligations pursuant
                     to Condition 7.1 wholly in cash, provided however that if
                     the Noteholder is BMSIF or its Affiliate (as defined in the
                     SSA), the Noteholder may elect for the Issuer to discharge
                     its obligations to pay to the Noteholder the Outstanding
                     Principal Balance either:

                     (i)       wholly in cash, together with all interest
                               accrued thereon; or

                     (ii)      by such other mode of payment which the
                               Noteholder may elect pursuant to its rights under
                               Clause 3.1 of the Swap-Up Agreement dated August
                               [__], 2005 made between the Issuer, CRx US and
                               BMSIF (the "SUA"); or

                     (iii)     partly in cash (together with all interests
                               accrued on the relevant portion of the
                               Outstanding Principle Balance that the Noteholder
                               elects to be paid in cash), with the remainder of
                               the Outstanding Principle Balance to be satisfied
                               by such other mode of payment referred to in
                               paragraph (ii) above.

                     For the avoidance of doubt, where the Noteholder has given
                     a notice to the Issuer declaring the Series [1/2/3/4/5]
                     Notes to be immediately due and payable pursuant to
                     Condition 8, the provisions of this Condition 7 shall not
                     apply to any payment due to the Noteholder on the Series
                     [1/2/3/4/5] Notes.

              7.2.2  Six months prior to the Maturity Date, the Noteholder
                     (being BMSIF or its Affiliate) shall communicate to the
                     Issuer its projected intent regarding the manner in which
                     the Issuer shall discharge its payment obligations pursuant
                     to Condition 7.1, such expression to be a non-binding, good
                     faith estimate of the method of discharging such payment.
                     The Issuer and the Noteholder shall then maintain
                     communications during the following 120 days, during which
                     the Noteholder agrees to notify the Issuer of any material
                     changes to its projected intent. No later than 60 days
                     prior to the Maturity Date, the Noteholder shall exercise
                     its election as to the manner in which the Issuer shall
                     discharge its payment obligations to the Noteholder
                     pursuant to Condition 7.1 by way of the giving to the
                     Issuer of a notice in writing (the "FIRST ELECTION NOTICE")
                     in substantially the form set out in Schedule 1.

                     The First Election Notice shall set out the amount of the
                     Outstanding Principal Balance payable to the Noteholder and
                     the manner in which

<Page>

                     such amount is to be paid in accordance with Condition
                     7.2.1. In the event that the Noteholder wishes to elect for
                     the Issuer to discharge its payment obligations in the
                     manner set out in Condition 7.2.1(iii), the First Election
                     Notice shall also specify the mode of payment with respect
                     to the relevant portion of the Outstanding Principle
                     Balance which the Noteholder elects pursuant to its rights
                     under Clause 3.1 of the SUA.

              7.2.3  If the Issuer discharges its payment obligations pursuant
                     to Condition 7.1 in the manner set out in Condition
                     7.2.1(ii) or (iii), the Issuer and the Noteholder agree
                     that upon the due performance by the Issuer of its
                     obligations under the SUA pursuant to the exercise by the
                     Noteholder of its rights under Clause 3.1 of the SUA, such
                     performance shall constitute full satisfaction of the
                     relevant proportion of the Issuer's payment obligations to
                     the Noteholder under this Condition 7.2 with respect to the
                     relevant proportion of the Outstanding Principle Balance.

              7.2.4  In the event the Noteholder does not exercise a First
                     Election Notice to the Issuer pursuant to Condition 7.2.2
                     above, the Noteholder shall be deemed to have elected for
                     the Issuer to pay to the Noteholder the Outstanding
                     Principle Balance wholly in cash.

       7.3    EARLY REDEMPTION/PREPAYMENT

              7.3.1  The Issuer shall have the right to redeem in cash (or such
                     other consideration as the Issuer and the Noteholder may,
                     in their sole respective discretion, agree) the Series
                     [1/2/3/4/5] Notes in full or in part during the period
                     after the Initial Closing (as defined in the SSA) and
                     before the Maturity Date, provided an irrevocable notice in
                     writing (the "PREPAYMENT NOTICE") is delivered by the
                     Issuer to the Noteholder no later than 40 days, and no
                     earlier than 180 days prior to the proposed date of
                     pre-payment (the "PREPAYMENT DATE").

              7.3.2  The Prepayment Notice shall specify:

                     (i)       the Note(s) to be prepaid;

                     (ii)      the portion of the Outstanding Principal Balance
                               of such Notes to be prepaid (the "OUTSTANDING
                               PRINCIPAL BALANCE TO BE PREPAID");

<Page>

                     (iii)     the resulting amount which shall equal, with
                               respect to any Outstanding Principal Balance To
                               Be Prepaid, the sum of (i) such Outstanding
                               Principal Balance To Be Prepaid multiplied by
                               1.25 and (ii) the accrued interest with respect
                               to such Outstanding Principal Balance To Be
                               Prepaid); and

                     (iv)      the Prepayment Date.

              7.3.3  The Issuer shall discharge its payment obligations pursuant
                     to Condition 7.3.1 by paying the Noteholder the amount
                     specified in Condition 7.3.2(iii) wholly in cash (or such
                     other consideration as the Issuer and the Noteholder may,
                     in their sole discretion, agree), unless, provided the
                     Noteholder is BMSIF or its Affiliate, the Noteholder elects
                     for the Issuer to discharge such payment obligations
                     either:

                     (i)       by such other mode of payment which the
                               Noteholder may elect pursuant to its rights under
                               Clause 3.2 of the SUA; or

                     (ii)      partly in cash (in which case the Issuer shall
                               pay to the Noteholder 125% of such portion of the
                               principal amount of the Outstanding Principle
                               Balance To Be Prepaid together with accrued but
                               unpaid interest on such principal amount) and the
                               remainder of the Outstanding Principle Balance To
                               Be Prepaid by such other mode of payment referred
                               to in paragraph (i) above.

              7.3.4  Upon the receipt by the Noteholder of a Prepayment Notice
                     and if the Noteholder (being BMSIF or its Affiliate) wishes
                     to elect for the Issuer to discharge its payment
                     obligations pursuant to Condition 7.3.1 in the manner set
                     out in Condition 7.3.3(i) or 7.3.3(ii), the Noteholder
                     shall be entitled, on any day at least 20 days before the
                     Prepayment Date, to so elect by giving the First Election
                     Notice to the Issuer.

                     The First Election Notice shall set out the amount of the
                     Outstanding Principal Balance To Be Prepaid payable to the
                     Noteholder and the manner in which such amount is to be
                     paid in accordance with Condition 7.3.3. In the event that
                     the Noteholder wishes to elect for the Issuer to discharge
                     its payment obligations in the manner set out in Condition
                     7.3.3(ii), the First Election Notice shall also specify the
                     mode of payment with respect to the relevant portion of the
                     Outstanding Principal Balance To Be Prepaid which the
                     Noteholder elects pursuant to its rights under Clause 3.2
                     of the SUA.

              7.3.5  If the Issuer discharges its payment obligations pursuant
                     to Condition 7.3.1 in the manner set out in Condition
                     7.3.3(i) or 7.3.3(ii), the Issuer and the Noteholder agree
                     that upon the due performance by

<Page>

                     the Issuer of its obligations under the SUA pursuant to the
                     exercise by the Noteholder of its rights under Clause 3.2
                     of the SUA, such performance shall constitute full
                     satisfaction of the relevant proportion of the Issuer's
                     payment obligations to the Noteholder under this Condition
                     7.3 with respect to the relevant proportion of the
                     Outstanding Principle Balance To Be Prepaid.

       7.4    CANCELLATION

              All Series [1/2/3/4/5] Notes which are redeemed by the Issuer or
              exchanged into shares in CRx US pursuant to the SUA, will
              forthwith be cancelled. Certificates in respect of all Series
              [1/2/3/4/5] Notes cancelled shall be destroyed by the Issuer and
              such Series [1/2/3/4/5] Notes may not be reissued or resold.

8.     EVENTS OF DEFAULT

       8.1    In the event of an Event of Default of CRx US or the Issuer
              pursuant to Section 15.2.1 of the SSA, then the outstanding
              balance on the Series [1/2/3/4/5] Notes (together with any accrued
              and unpaid interest on such Notes from the date of issuance to the
              relevant Default Date, such interest accruing at the Default
              Interest Rate) (the "DEFAULT AMOUNT") shall, at the option of the
              Noteholder, become immediately due and payable to the Noteholder
              in full in cash, subject to Condition 8.2.

       8.2    If the Noteholder is BMSIF or its Affiliate, the Noteholder may,
              in lieu of receiving payment of the Default Amount wholly in cash,
              elect for the Issuer to discharge its obligations to pay the
              Default Amount:

              8.2.1  by such other mode of payment which the Noteholder may
                     elect pursuant to its rights under Clause 4.2.2 of the SUA;
                     or

              8.2.2  partly in cash and the remainder by such other mode of
                     payment referred to in paragraph 8.2.1 above.

       8.3    Any election by the Noteholder (being BMSIF or its Affiliate) as
              to the manner in which the Issuer discharges its payment
              obligations to the Noteholder pursuant to Condition 8.2 above
              shall be exercised by way of the giving by the Noteholder of a
              notice in writing (the "SECOND ELECTION NOTICE") in substantially
              the form set out in Schedule 2 to the Issuer not later than 30
              days after the Default Date.

              The Second Election Notice shall set out the amount of the Default
              Amount payable to the Noteholder and the manner in which such
              amount is to be paid in accordance with Condition 8.2. In the
              event that the Noteholder wishes to elect for the Issuer to
              discharge its payment obligations in the manner set out in
              Condition 8.2.2, the Second Election Notice shall also specify the
              mode of payment with respect to the relevant portion of the
              Default Amount which the Noteholder elects pursuant to its rights
              under Clause 4.2.2 of the SUA.

       8.4    If the Issuer discharges its payment obligations pursuant to
              Condition 8.1 in the manner set out in Condition 8.2.1 or 8.2.2,
              the Issuer and the Noteholder agree

<Page>

              that upon the due performance by the Issuer of its obligations
              under the SUA pursuant to the exercise by the Noteholder of its
              rights under Clause 4.2.2 of the SUA, such performance shall
              constitute full satisfaction of the relevant proportion of the
              Issuer's payment obligations to the Noteholder under this
              Condition 8 with respect to the relevant proportion of the Default
              Amount.

9.     ENFORCEMENT

       At any time after the Series [1/2/3/4/5] Notes have become due and
       repayable pursuant to these Conditions and the Issuer has failed to
       comply with its obligations under these Conditions, each Noteholder may,
       at its discretion and without further notice, take such proceedings
       against the Issuer as it may think fit to enforce repayment of the Series
       [1/2/3/4/5] Notes and to enforce the provisions of these Conditions and
       the Debenture.

10.    REPLACEMENT OF CERTIFICATES

       If any Certificate is mutilated, defaced, destroyed, stolen or lost, it
       may be replaced at the registered office of the Issuer upon payment by
       the claimant of such costs as may be incurred in connection therewith and
       on such terms as to evidence and indemnity as the Issuer may reasonably
       require. Mutilated or defaced Certificates must be surrendered before
       replacements will be issued.

11.    NOTICES

       All notices to Noteholders shall be validly given if mailed to them at
       their respective addresses in the register of Noteholders maintained by
       the Issuer. Any such notice shall be deemed to have been given on the
       second day after being so mailed.

12.    CONTRACTS (RIGHTS OF THIRD PARTIES), CHAPTER 53B

       No person other than a Noteholder shall have any right to enforce any
       term or condition of the Series [1/2/3/4/5] Notes or these Conditions
       under the Contracts (Rights of Third Parties) Act Chapter 53B.

13.    GOVERNING LAW

       The Series [1/2/3/4/5] Notes are governed by, and shall be construed in
       accordance with, the laws of Singapore.

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