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THE MEDICINES COMPANY ANNUAL REPORT ON FORM 10-K For the Fiscal Year Ended December 31, 2003 TABLE OF CONTENTS
INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS OF THE MEDICINES COMPANY

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-K

FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTIONS 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

(Mark One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2003
or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to                             to

Commission file number 000-31191

THE MEDICINES COMPANY
(Exact name of registrant as specified in its charter)

Delaware	04-3324394
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8 Campus Drive Parsippany, New Jersey (Address of principal executive offices)	07054 (Zip Code)
Registrant's telephone number, including area code: (973) 656-1616
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 Par Value (Title of each class)

        Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

        Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

        Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes ý    No o

        The aggregate market value of voting Common Stock held by non-affiliates of the registrant was approximately $681,078,238 based on the last reported sale price of the Common Stock on the Nasdaq National Market on June 30, 2003.

        Number of shares of the registrant's class of Common Stock outstanding as of February 25, 2004: 47,535,395.

THE MEDICINES COMPANY

ANNUAL REPORT ON FORM 10-K
For the Fiscal Year Ended December 31, 2003

TABLE OF CONTENTS

PART I			1
	ITEM 1.	BUSINESS	1
	ITEM 2.	PROPERTIES	23
	ITEM 3.	LEGAL PROCEEDINGS	23
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	23
PART II			24
	ITEM 5.	MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS	24
	ITEM 6.	SELECTED CONSOLIDATED FINANCIAL DATA	25
	ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
	ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	45
	ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	45
	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	45
	ITEM 9A.	CONTROLS AND PROCEDURES	45
PART III			46
	ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	46
	ITEM 11.	EXECUTIVE COMPENSATION	50
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	53
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS	57
	ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	58
PART IV			59
	ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K	59

PART I

Item 1. Business

Overview

        We are a pharmaceutical company that specializes in acute care hospital products. We acquire, develop and commercialize pharmaceutical products in late stages of their development. Our first acute care hospital product, Angiomax® (bivalirudin), is a direct thrombin inhibitor used as an anticoagulant in patients undergoing coronary angioplasty. We are currently developing two additional late development stage pharmaceutical products as potential acute care hospital products. The first of these, Clevelox™ (clevidipine), is an intravenous drug intended for the short-term control of blood pressure in patients undergoing cardiac surgery. The second potential product, cangrelor, is an anticoagulant that prevents platelet clotting factors from activating, which we believe has potential uses in coronary angioplasty and cardiac surgery. We focus our commercial sales and marketing resources on the U.S. hospital market, and our revenues to date have been generated almost entirely from sales of Angiomax in the United States. Our total net revenues were $14.2 million in 2001, $38.3 million in 2002 and $85.6 million in 2003.

        Our core strategy is to develop and commercialize products that we believe will help hospitals alleviate the growing pressure to treat patients more efficiently, including the need to improve the effectiveness and safety of treatment while minimizing cost. Cost of treatment in hospitals is predominantly driven by length of patient stay, while length of stay is often driven by the occurrence of treatment complications. Products that are effective, safe and predictable, or that require shorter periods of treatment or are easier to use than current products, may reduce the length of hospital stay and lower total costs. We believe that products with these attributes positively impact the care of patients and are attractive to hospital management, physicians, pharmacists and other care staff. We believe that the products we are developing will address these needs.

        As a result of our experience commercializing Angiomax, we have developed in-depth know-how related to the practice of acute hospital care and gained valuable insights into procurement processes, usage patterns, caregiver preferences and the evaluation of products by our hospital customers. Our current and potential hospital customers are technically proficient in specialized areas of acute patient care and demand a high level of technical service for the products they use. They practice in such areas of the hospital as the cardiac catheterization laboratory, where coronary angioplasties are performed, the emergency department, and the operating room. We believe we can successfully address acute care hospital markets without a large sales force and without an internal manufacturing infrastructure.

        The United States Food and Drug Administration, or FDA, approved Angiomax for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing coronary angioplasty in December 2000, and we began selling the product in the United States in January 2001. We believe that Angiomax has the potential to replace heparin, the anticoagulant that historically has been used in the United Stated in the treatment of arterial thrombosis, a condition involving the formation of blood clots in arteries. We believe that in each of the three years we have sold Angiomax, we have gained market share versus heparin in coronary angioplasty. We are evaluating Angiomax for additional uses in open vascular surgery such as coronary artery bypass graft, or CABG, surgery, in medical conditions that require urgent treatment such as unstable angina, in patients with heparin allergy, in children and in peripheral angioplasty.

        For Clevelox, we and a contract manufacturer have completed manufacturing development work to produce a sufficient supply of the product for clinical development and, potentially, commercial supply. We commenced a Phase 3 clinical program for Clevelox in 2003, and we believe that we currently have the capability to have Clevelox manufactured and packaged on a commercial scale appropriate for launch of the drug. For cangrelor, which we acquired in December 2003, we have initiated technology transfer activities that should enable our contract manufacturer to produce a sufficient supply of the product for Phase 3 clinical trials.

        In markets outside of the United States, we intend to market Angiomax and, eventually, our other products, through distribution agreements. In order to market our products in the European Union and many other foreign jurisdictions, we or our third-party distributors must obtain separate regulatory approvals. Third-party distributors are currently selling Angiomax in Canada, Israel and New Zealand. In August 2003, we filed a market authorization application for approval to sell Angiomax in the European Union. The application is currently under review.

Product Acquisition and Development Strategy

        We intend to continue building our acute care franchise of hospital products by selectively acquiring and developing late-stage product candidates or products approved for marketing. We believe that products may be acquired from larger pharmaceutical companies in the process of refining their own product portfolios and from smaller companies seeking specialist development or commercial collaborations.

        In evaluating product acquisition candidates, we will continue to seek products that have the potential to alleviate the growing pressures on U.S. hospitals to treat patients more efficiently. We look for an anticipated time from acquisition to commercialization of four years or less and existing clinical data which provides reasonable evidence of safety and efficacy, together with the potential to reduce a patient's hospital stay. In addition, we may acquire approved products that can be marketed in hospitals by our commercial organization. In making our acquisition decisions, our approach is to:

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understand the market opportunity and potential cost savings for initially-targeted uses of the drug based on our knowledge of the acute care hospital markets and input from healthcare practitioners;



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assess the investment and development programs that will be necessary to achieve a marketable product profile in these initial uses;



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attempt to structure the design of our development programs to obtain critical information relating to the clinical and economic performance of the product early in the development process, so that we can make or adjust key development decisions; and



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assess the fit with our acute care franchise to enable commercial overlap and minimize the need for expansion of our commercial organization.

        We believe that Angiomax, Clevelox and cangrelor each fit the profile set forth above. For each of these products, we structured the license agreements to include an upfront payment, milestone payments upon marketing and regulatory achievements and royalties on eventual product sales. We acquired Angiomax from Biogen, Inc., a predecessor of Biogen Idec, Inc., a biotechnology company. We acquired both Clevelox and cangrelor from AstraZeneca AB, a large pharmaceutical company.

Angiomax

Overview

        Our first product acquisition was Angiomax, which we exclusively licensed from Biogen in 1997. Since acquiring Angiomax, we have invested in manufacturing, clinical and regulatory development. In December 2000, we received marketing approval from the FDA for Angiomax for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing coronary balloon angioplasty. We began selling Angiomax in the United States in January 2001. In May 2003, we received FDA approval for an improved process for manufacturing Angiomax, known as the Chemilog process, which has increased the efficiency of manufacturing the Angiomax active product ingredient.

        We believe that Angiomax, as a direct thrombin inhibitor, has the potential to become a broadly applied intravenous anticoagulant in the treatment of coronary and other arterial thrombosis. Arterial

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thrombosis is associated with life-threatening conditions such as ischemic heart disease, peripheral vascular disease and stroke, all of which result from decreased blood flow and diminished supply of oxygen to vital organs. We believe that Angiomax can replace heparin, a generic product manufactured from by-products of cow lungs or pig intestines, that has been the anticoagulant used historically in angioplasty procedures, in most major cardiac and vascular surgical procedures and in the treatment of acute coronary syndromes, including heart attack.

        There are three main areas of the hospital where heparin is used for acute treatment of arterial thrombosis: the cardiac catheterization laboratory, where angioplasties are performed; the emergency department, where patients with acute coronary syndromes, including chest pain and heart attacks, are initially treated; and the operating room, where CABG surgery is performed.

        We are concentrating our commercial efforts on replacing heparin in the cardiac catheterization laboratory, where the procedure for which Angiomax is approved are performed. We have conducted several clinical trials in angioplasty to evaluate the use of Angiomax compared to heparin in this setting. In these trials, Angiomax use has resulted in fewer ischemic complications and fewer bleeding events, including a reduction in the need for blood transfusion. In addition, Angiomax demonstrated in these trials that its therapeutic effect is more predictable than heparin, which enables simplified dosing.

        We are currently conducting Phase 3 clinical trials of Angiomax in the emergency department and the operating room, as we are pursuing regulatory approval to market Angiomax for acute coronary syndromes and for CABG surgery. We are also evaluating Angiomax in clinical trials for use in patients with heparin allergy, in children and in peripheral angioplasty.

Scientific Background

        Clotting.    Normally, blood loss at the site of an injury is limited by the formation of blood clots, in a process called coagulation. A blood clot is a collection of cross-linked strands of the protein fibrin, which is made as a result of coagulation and forms a mesh around activated platelets and red blood cells. Blood clots are formed through precisely regulated interactions among the blood vessel wall, plasma clotting factors (including thrombin and fibrinogen) and platelets. Current literature suggests that the clotting process is a series of overlapping phases in which groups of clotting factors are intertwined with platelets, red blood cells and endothelial cells that line the blood vessels. In general, clotting serves a life-saving function by reducing bleeding; however, unwanted clots in arteries can lead to heart attack, stroke or organ failure.

        The trigger for the clotting process in an artery is typically a tearing or spontaneous rupture of plaque (deposits of cholesterol, fat and dead cells that build up under a protective layer of cells, known as endothelial cells, on a blood vessel wall). Rupturing may occur without an apparent cause or may be the result of, for example, the use of catheters and other devices in connection with an angioplasty procedure. When the plaque ruptures, substances released from cells and plaque that are not normally exposed to the bloodstream come into contact with the bloodstream. This contact triggers the clotting process. In parallel inter-dependent processes, a small amount of the clotting factor thrombin is produced and a thin protective layer of platelets is deposited at the rupture site.

        Thrombin has long been recognized as a key factor in the clotting process. Thrombin, like several other clotting factors, is technically a type of enzyme called a protease. Thrombin not only converts fibrinogen into the fibrin strands that hold a clot together, but it also helps to amplify its own production by activating other clotting factors. Thrombin also provides signals, like a hormone does, to various cell types such as platelets and endothelial cells to initiate responses in coagulation, inflammation and, possibly, other important physiological processes. Thrombin directly activates platelets, by producing effects through means of surface receptors on the platelets called protease-activated receptors, or PARs, that provide binding sites for the effector molecule. PARs carry a hidden

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message that is unmasked by the action of the protease, for example, thrombin. Activation of the PAR then transmits the signal to the platelet, which becomes activated.

        In addition to being a powerful platelet activator through its action on platelets, thrombin can also recruit more platelets to the site of injury. Activated platelets not only help close the rupture, but the activated platelet's membrane becomes a docking site for other clotting factors. The clotting factors can assemble and much more efficiently produce very large amounts of thrombin. The thrombin produces fibrin, strands of protein that interweave and enmesh the platelets into a thrombus, or clot. The clotting factors on the platelets within the clot continue to produce large amounts of thrombin after the clot is formed, causing the clot to continue to grow.

        As a clot blocks the blood vessel, it may then cut off blood supply to the heart muscle, the brain or other organs. A heart attack, also known as a myocardial infarction, or MI, occurs if a clot blocks blood supply to the heart muscle, and the muscle stops working either in part or completely. This may result in irreversible damage to the heart or death.

        During medical procedures such as coronary angioplasty, the blood clotting process must be slowed to avoid unwanted clotting in the coronary artery and the potential growth of clots or the movement of a clot or portions of it downstream in the blood vessels to new sites.

        Anticoagulation Therapy.    Anticoagulation therapy attempts to modify actions of the components in the blood system that activate clot-forming factors leading to blood clots. Anticoagulation therapy is warranted when the risks of clot formation cannot be avoided, or when medical procedures such as angioplasty give rise to an increased risk of clot formation. Anticoagulation therapy has typically involved the use of drugs to inhibit one or more components of the clotting process, thereby reducing the risk of clot formation. Anticoagulation therapy is usually started immediately after a diagnosis of blood clots, or after risk factors for clotting are identified. Because anticoagulation therapy reduces clotting, it also may cause excessive bleeding.

        Current anticoagulation therapy focuses on the principal components of the clotting process: thrombin, platelets and fibrin.

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The actions of thrombin in the clotting process may be inhibited by direct thrombin inhibitors, such as Angiomax, which act directly on thrombin. Because thrombin activates platelets, direct thrombin inhibitors also prevent platelet clumping. The actions of thrombin in the clotting process may also be inhibited by indirect thrombin inhibitors, such as heparin, which act to turn off clotting factors and turn on natural anti-clotting factors such as antithrombin, or AT.



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The aggregation of platelets in the clotting process may be inhibited by products called platelet inhibitors, which act on different pathways leading to platelet activation, including specific enzyme pathways like the cyclo-oxygenase and the adenosine diphosphate, or ADP, pathways. Two important approved products that prevent platelet activation are aspirin and a class of platelet inhibitors that can be administered orally and are referred to as thienopyridines, such as clopidogrel. The use of platelet inhibitors that block activation is considered important therapy.



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Other types of platelet inhibitors attempt to block the clumping, or aggregation, of platelets by blocking surface sites, like the glycoprotein IIb/IIIa, or GP IIb/IIIa, receptor, on the platelets that allow them to attach to fibrin and each other. The GP IIb/IIIa inhibitors, although effective at inhibiting platelet aggregation, do not prevent platelet activation. In fact, many studies have found that use of these agents, especially at low levels, is associated with an increase in markers of platelet activation.



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Fibrin may be dissolved after clotting has occurred by products called fibrinolytics.

        Drugs are currently used alone or in combination with other anticoagulant therapies to target one or more components of the clotting process. Because of the interdependence of clotting factors and

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platelets, drugs that target one may have effects on the other. For example, a drug that targets thrombin may have an antiplatelet effect. However, possibly due to the critical, central role of thrombin, while anti-thrombin drugs have been used alone in angioplasty, the use of antiplatelet drugs without thrombin inhibitors generally has not been successful.

Disadvantages of Heparin Therapies

        In the hospital environment, most patients undergoing anticoagulation therapy for the prevention and treatment of arterial and venous thrombosis receive unfractionated heparin or low molecular weight heparin. In the United States, over 12 million hospitalized patients annually receive heparin therapy. Heparin is a standard component of acute anticoagulation therapy because of the central role of thrombin in the clotting process and heparin's rapid anticoagulant effect.

        Heparin's properties as an anticoagulant were discovered in 1916. It is prepared from the intestines of pigs or lungs of cows. Heparin is a complex mixture of animal-derived proteins with variable anticoagulant potencies. The anticoagulant effects of heparin on any given patient are difficult to predict because heparin binds non-specifically to human cells and circulating substances in the blood. For these and other reasons, heparin, as a non-specific, indirect thrombin inhibitor, presents a variety of clinical challenges including:

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Weak effect in clots. Because it is an indirect thrombin inhibitor, heparin is variably effective on thrombin that is bound to clots. In addition, large amounts of thrombin continue to be produced from within the clot after clot formation.



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Activation of platelets. Studies have shown that heparin enhances the clumping of platelets in unstable angina patients. Heparin activates platelets by binding to the GP IIb/IIIa receptor on the platelet surface, and has been shown to decrease the platelet inhibitory effects of GP IIb/IIIa platelet inhibitors.



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Increased risk of bleeding. Patients who receive heparin have a high incidence of bleeding. This is particularly the case with patients who are elderly, female or have low body weight. Recent clinical trials have shown that bleeding risk may also be increased when heparin is used in combination with intravenous platelet inhibitors.



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Unpredictability. A specified dose of heparin provides an unpredictable level of anticoagulation. As a result of this unpredictability, use of heparin requires close monitoring.



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Risk of clinical immune reaction. Heparin may cause the formation of antibodies, which antibodies may be associated with a clinical condition known as heparin-induced thrombocytopenia and thrombosis syndrome, or HIT/HITTS, which is characterized by reduced platelet counts and potentially by widespread, life-threatening blood clots.



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Diminished effect in high-risk patients. Heparin's effect may be reduced in patients who have suffered a prior heart attack and in patients with unstable angina.



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Indirect thrombin inhibition. Heparin can only bind to thrombin by first binding to AT which may be absent or present in insufficient amounts in some patients. AT deficiency can be severe and unpredictable in infants and children.

        Heparin derivatives, including low molecular weight heparins such as enoxapirin, were developed to attempt to diminish some of these disadvantages. Low molecular weight heparins are administered once or twice daily by subcutaneous injection. Although they tend to be more predictable than heparin in their effect, low molecular weight heparins exhibit similar clinical challenges to those of heparin, including a weak effect on thrombin in a clot that has already formed and a comparable risk of bleeding. The effects of low molecular weight heparins are only partially reversible, making their use in surgery or in patients that may be candidates for surgery impractical. Low molecular weight heparins

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also have a longer half-life than unfractionated heparin, meaning it takes the body longer to clear the drug and void its effects. This may adversely affect the ability of hospitals to move patients between acute cardiology departments such as the emergency department and cardiac catheterization laboratory or to discharge patients from the hospital.

Angiomax Advantages

        Angiomax is a synthetic peptide of 20 amino acids that is a rapid-acting, direct and specific inhibitor of thrombin and is administered by intravenous injection. Angiomax is specific in that it only binds to thrombin and does not bind to or activate any other blood factors or cells.

        Angiomax was engineered based on the biochemical structure of hirudin, a natural 65-amino acid protein anticoagulant. However, the binding of Angiomax to thrombin is "naturally" reversible because thrombin slowly breaks down the Angiomax molecule, releasing it from binding, while hirudin remains intact and tightly bound to thrombin. This natural reversibility is associated with a reduced risk of bleeding.

        Angiomax has numerous pharmacological and clinical advantages over heparin including:

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Effective in clot-bound thrombin. Angiomax, as a direct thrombin inhibitor, is equally effective on thrombin in the clot as well as thrombin circulating in the blood.



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Inhibition of platelets. Angiomax directly inhibits thrombin which also inhibits platelet activation through inhibition of platelet activating receptors, such as the PAR receptors, on the surface of platelets.



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Reduced bleeding risk. As a reversible thrombin inhibitor, Angiomax has consistently shown clinically meaningful reductions in bleeding compared to heparin in percutaneous coronary intervention trials.



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Predictability. As a synthetic peptide, a specified dose of Angiomax results in a predictable level of anticoagulation.



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Effective in high-risk patients. Angiomax has been shown to be effective in patients having suffered prior heart attacks and patients with acute coronary syndromes.



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Reduced incidence of thrombocytopenia. Angiomax has been shown to result in a significant reduction in thrombocytopenia, or lower platelet counts, an immunogenic disorder associated with heparin.

Coronary Angioplasty

        Coronary angioplasty has transformed the management of symptomatic arterial disease in the last 10 years. The procedure is used to restore normal blood flow in arteries that supply blood to the heart. In the year 2002, more than one million coronary angioplasty procedures with or without stenting were performed in the United States. The coronary angioplasty procedure itself increases the risk of coronary clotting, potentially leading to heart attacks also known as a myocardial infarction or MI, CABG surgery, or death.

        Accordingly, anticoagulation therapy is routinely administered to patients undergoing angioplasty to prevent clotting. Heparin has historically been used as an anticoagulant in virtually all patients undergoing angioplasty. In addition, platelet inhibitors such as aspirin, ADP inhibitors or GP IIb/IIIa inhibitors are often administered to augment heparin.

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Clinical Trials in Coronary Angioplasty

        We invest significantly in the development of clinical data on the mode of action and clinical effects of Angiomax in procedures including coronary angioplasty and stenting.

        In almost all of our investigations to date, we have compared Angiomax to heparin, which until relatively recently was the only injectable anticoagulant for use in coronary angioplasty, or combinations of drugs including heparin. Angiomax has been tested against heparin in eight comparative trials and found to reduce significantly the risk of arterial thrombosis and of bleeding. Most of these data formed the basis for FDA approval in late 2000 and of our marketing programs in 2001 and 2002. Our marketing programs in 2003 were based largely on the results of our REPLACE-2 clinical trial, results for which were initially reported in November 2002.

        We conducted the REPLACE-2 clinical trial in 2001 and 2002 to evaluate Angiomax as the foundation anticoagulant for angioplasty within the context of modern therapeutic products and technologies, including coronary stents. The trial, which involved 6,002 patients in 233 clinical sites, was designed to evaluate whether the use of Angiomax with provisional use of GP IIb/IIIa inhibitors provides clinical outcomes relating to rates of ischemic and bleeding events that are superior to heparin alone and the same as, or non-inferior to, the current standard of low-dose weight-adjusted heparin plus GP IIb/IIIa inhibitors. These outcomes were designed to be assessed using formal statistical tests for superiority and non-inferiority.

        REPLACE-2 employed two randomized arms:

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heparin with a GP IIb/IIIa inhibitor, which was either Integrilin or ReoPro; and



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Angiomax with the provisional use of a GP IIb/IIIa inhibitor, which was either Integrilin or ReoPro, if deemed necessary by the physician during the procedure.

        The trial also evaluated the Angiomax regimen against heparin alone using an historical control arm. The heparin historical control arm of the study was calculated using an average of the event rates from the EPISTENT and ESPRIT trials, which were previous angioplasty trials of other companies in which heparin alone was compared to heparin plus a GP IIb/IIIa inhibitor.

        The primary objective of REPLACE-2 was to demonstrate superiority versus heparin and non-inferiority to heparin plus a GP IIb/IIIa inhibitor for the quadruple composite endpoint of death, MI, urgent revascularization or major bleeding. The secondary objectives of REPLACE-2 included superiority versus heparin and non-inferiority to heparin plus a GP IIb/IIIa inhibitor for a triple composite endpoint of death, MI or urgent revascularization.

        Based on 30-day, six-month and 12-month patient follow-up results, Angiomax met all primary and secondary objectives for the study:

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The primary quadruple composite endpoint of death, MI, urgent revascularization or major bleeding was met at 30 days:



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Angiomax was superior to heparin alone.



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Angiomax was non-inferior to heparin plus a GP IIb/IIIa inhibitor.



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The secondary triple composite endpoint of death, MI or urgent revascularization was met at 30 days and six-months:



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Angiomax was superior to heparin alone.



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Angiomax was non-inferior to heparin plus a GP IIb/IIIa inhibitor.

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The final long-term endpoint of death was met at 12-months:



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Mortality benefit seen at 30 days was maintained.



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A numeric mortality advantage in the Angiomax arm widened from the six-month and 12-month long-term findings, although this numeric advantage was not statistically significant.

        Additional findings from the study included:

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The Angiomax treatment group demonstrated a significant decrease in bleeding complications and thrombocytopenia as compared to heparin plus a GP IIb/IIIa inhibitor.



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7.2% of the patients in the Angiomax treatment group received a GP IIb/IIIa inhibitor on a provisional basis.



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97% of patients achieved desired anticoagulation targets with the initial dose of Angiomax versus 88% with heparin plus a GP IIb/IIIa inhibitor, resulting in 12% of the patients with heparin plus a GP IIb/IIIa inhibitor having to receive multiple doses of heparin.



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The average patient duration of infusion was 44 minutes with Angiomax versus 12 to 18 hours for patients treated with heparin plus a GP IIb/IIIa inhibitor.



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A protocol-defined health economic analysis of the 30-day follow-up data, presented at a symposium as part of the 2003 American College of Cardiology conference, demonstrated that the costs associated with treating patients in the Angiomax arm were statistically significantly lower than the costs associated with treating patients in the heparin plus GP IIb/IIIa arm. This reduction in costs included:



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savings of $185 per patient due to fewer bleeding, MI and thrombocytopenia complications in patients in the Angiomax arm of the trial



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savings of $402 per patient due to lower cost of drugs in the Angiomax arm, which had 7.2% combination use of GP IIb/IIIa inhibitors.

        The 30-day findings were published in the Journal of the American Medical Association, or JAMA, in February of 2003. We have submitted the 30-day, six-month and 12-month data for FDA review as part of a supplement to update the product labeling to include the REPLACE-2 data. In addition, we used the REPLACE-2 results as the basis for regulatory updates and submissions in international markets, including Europe and Canada.

Angiomax Commercial Operations in Coronary Angioplasty.

        We are selling Angiomax in the United States with a hospital sales force of 93 sales representatives and managers as of February 17, 2004. Our sales force has been configured to target, as potential hospital customers, those hospitals with cardiac catheterization laboratories in the United States that perform 500 or more coronary angioplasties per year. These hospitals conduct a significant number of the coronary angioplasties in the United States. In addition, we have medical information and medical affairs support personnel, some of whom have scientific qualifications as physicians, nurses or pharmacists. Our development, medical, marketing and sales professionals are qualified and trained to deal with complex scientific, pharmacy and economic questions on a day-to-day basis.

        We are focusing our Angiomax marketing efforts on interventional cardiologists and other key clinical decision-makers at these cardiac catheterization laboratories. We use educational programs, preceptorships in leading medical centers, publications, and other targeted techniques in efforts to educate physicians and other healthcare providers regarding the advantages of Angiomax use. We believe our ability to deliver relevant, advanced and reliable educational programs to our customers and

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our concentrated customer base provides us with significant market presence even in the highly competitive sub-segments of the hospital market such as cardiology. We work collaboratively with a number of prominent hospitals and teaching institutions around the United States that share our mission to educate our customers in the appropriate use of our products as part of modern practice and that provide independent guidance to their colleagues.

        We sell Angiomax primarily to a limited number of national medical and pharmaceutical distributors and wholesalers with distribution centers located throughout the United States, including AmerisourceBergen Drug Corporation, McKesson Corporation and Cardinal Health, Inc., each of which accounted for more than 10% of our revenues for the year ended December 31, 2003. These wholesalers and distributors then sell to hospitals. If Angiomax is approved for use in other indications, we intend to market Angiomax for these indications in the United States by supplementing our commercial organization, or by collaborating with other health care companies.

        We market, sell and distribute Angiomax outside of the United States through third-party distributors. In August 2003, we filed a market authorization application for approval to sell Angiomax in the European Union. The application is currently under review. If the application is approved, Nycomed Danmark A/S has exclusive rights for the distribution and promotion of Angiomax in approximately 35 countries, including 12 countries in the European Union. In addition, we expect approvals to market Angiomax in certain South American countries in 2004 or 2005. We have agreements with other third-party distributors, including Grupo Ferrer Internacional, S.A. in certain Latin American countries, for future sales of Angiomax pending regulatory marketing approvals.

Angiomax Potential Applications

        We believe that Angiomax is the leading replacement for heparin in angioplasty and can become the leading replacement for heparin in the treatment of arterial thrombosis. In particular, we are evaluating Angiomax in the operating room for use in open vascular surgery such as CABG surgery and in the emergency department in medical conditions that require urgent treatment such as unstable angina. We are also studying Angiomax in patients with heparin allergy, in children and in peripheral angioplasty.

        Before we can obtain regulatory approvals to market Angiomax for any of these indications, we are required to complete extensive clinical trials to demonstrate safety and efficacy. There are numerous factors that could delay our clinical trials or prevent us from completing our trials successfully. See "Factors That May Affect Future Results—Risks Related to Our Business." If we are able to obtain regulatory approval in these additional indications, we believe that Angiomax could be marketed to customers across a spectrum of hospital-based acute cardiovascular care—in the emergency department, cardiac catheterization laboratory and the operating room.

        We are currently focused on Phase 3 clinical trials of Angiomax in the operating room and in the emergency department.

        Use of Angiomax in the operating room for CABG surgery.    Heparin is used widely as an anticoagulant in major surgical procedures. Many surgery patients, however, develop antibodies to heparin as a result of their exposure to heparin. Heparin antibody positivity is the major marker for the development of HIT/HITTS. Even absent the clinical condition of HIT/HITTS, the presence of heparin antibodies alone has been associated with an increased risk of death or major complications and in length of stay in hospital after CABG surgery. In addition, the effects of heparin are routinely reversed with protamine, the use of which has been associated with an allergic reaction and a subsequent increase in the risk of death or major complications.

        Clinical publications have cited several different rates of CABG surgery patients who are heparin antibody positive, ranging from 25% to 50%. Clinical data indicate that heparin antibody positive

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patients have a significant increase in major complications of CABG surgery, resulting in increased hospital stay or death. Based on hospital reimbursement data, in the United States in 2002 there were approximately 345,000 CABG surgery procedures performed.

        Surgeons conduct CABG surgery either on-pump or off-pump. On-pump CABG surgery is conducted with the use of a cardiac pulmonary bypass machine, a device that pumps the patient's blood while the heart is stopped and the surgery is conducted. For off-pump CABG surgery, physicians slow the heartbeat, stabilize the heart by keeping certain areas immobile with various devices, and therefore do not use a bypass machine.

        We have completed a 100 patient Phase 2/3 trial of Angiomax comparing Angiomax to heparin in patients undergoing off-pump CABG surgery. Trial results demonstrated that patients in the trial who received Angiomax experienced more rapid and consistent anticoagulation, a similar level of bleeding and significant improvement in graft patency. We expect the principal investigator to publish the trial data in a medical journal in early 2004.

        We have also completed Phase 2/3 dose-finding studies of Angiomax in on-pump CABG surgery. We believe that the optimal dosing regimen for Angiomax in CABG surgery will be employed in the Phase 3 program based on these results.

        We are conducting four studies as part of our Phase 3 clinical development program in CABG surgery:

•

CHOOSE includes on-pump and off-pump studies to evaluate the use of Angiomax in patients identified to be at risk for HIT/HITTS, having tested positive for the heparin antibody or having a history of HIT/HITTS;



•

EVOLUTION includes on-pump and off-pump studies to evaluate if the use of Angiomax in the general CABG surgery patient population can yield similar results to the heparin plus protamine treatment regimen.

        As of February 17, 2004, we have completed enrollment in the EVOLUTION off-pump study, and have enrolled patients in the CHOOSE off-pump study. We plan to commence enrollment of patients in the on-pump studies in 2004. Assuming positive results in the Phase 3 CHOOSE and EVOLUTION studies, we intend to submit the study data to the FDA in an application for approval to market Angiomax in patients at risk for HIT/HITTS, including patients who are heparin antibody positive, undergoing CABG surgery.

        Use of Angiomax in the emergency department for urgent medical treatment.    Ischemic heart disease patients are subject to chest pain that results from a range of conditions, from unstable angina to acute myocardial infarction, or AMI. The severe onset of these cardiac conditions is collectively referred to as acute coronary syndromes, or ACS. Some ACS patients enter the hospital by way of the emergency department and are triaged to be medically managed with pharmacotherapy and observation, scheduled for an angioplasty procedure, and/or scheduled for CABG surgery.

        Unstable angina is a condition in which patients experience the new onset of severe chest pain, increasingly frequent chest pain or chest pain that occurs while they are resting. Unstable angina is caused most often by a rupture of plaque on an arterial wall that results in clot formation and ultimately decreases coronary blood flow but does not cause complete blockage of the artery. Unstable angina is often medically managed in the emergency department with anticoagulation therapy that may include aspirin, indirect thrombin inhibitors such as heparin or a low molecular weight heparin such as enoxaparin and GP IIb/IIIa inhibitors. Many unstable angina patients also undergo coronary angioplasty or CABG surgery depending on the severity of the disease.

        AMI is a leading cause of death in ischemic heart disease patients. AMI occurs when coronary arteries, which supply blood to the heart, become completely blocked by a clot. AMI patients are

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routinely treated with heparin, with and without fibrinolytics, in combination with GP IIb/IIIa inhibitors. AMI patients are increasingly undergoing angioplasty as a primary treatment to unblock clogged arteries.

        Based on hospital reimbursement data, in the United States in 2001 there were approximately 1,680,000 patients hospitalized for ACS, including 758,000 unstable angina patients and 959,000 patients with heart attacks of varying severity.

        Angiomax has been the subject of five Phase 2 trials in patients with unstable angina or who had experienced a less serious form of MI known as non Q-wave MI. These trials enrolled a total of 630 patients, of whom 553 received various doses of Angiomax. These studies have demonstrated that Angiomax is an anticoagulant that can be administered safely in patients with unstable angina.

        We are currently conducting a Phase 3 trial, ACUITY, to study Angiomax in the ACS population. We plan to enroll a total of 13,800 patients worldwide in three main treatment regimens:

•

Angiomax monotherapy starting in the emergency department and continued through the cardiac catheterization laboratory, permitting use of GP IIb/IIIa inhibitors for treatment of breakthrough ischemic events prior to percutaneous coronary intervention, or PCI, or for bail-out during PCI;



•

Angiomax with GP IIb/IIIa inhibitors started either in the emergency department and then continued through the cardiac catheterization laboratory, or Angiomax monotherapy started in the emergency department and GP IIb/IIIa inhibitors started in the cardiac catheterization laboratory only; or



•

Enoxaparin, a low molecular weight heparin, with GP IIb/IIIa inhibitors started either in the emergency department and then continued through the cardiac catheterization laboratory or enoxaparin monotherapy started in the emergency department and GP IIb/IIIa inhibitors started in the cardiac catheterization laboratory only.

        We believe that the Angiomax plus a GP IIb/IIIa inhibitor combination may demonstrate outcomes at least equivalent to enoxaparin plus a GP IIb/IIIa inhibitor. We also believe that the Angiomax alone arm may demonstrate that it is as effective as enoxaparin with a GP IIb/IIIa inhibitor, while at the same time being less likely to cause bleeding. Investigators began enrolling patients in the ACUITY trial in August 2003. We expect recruitment to last until July 2005.

        If the results of the ACUITY study confirm our expectations, we intend to submit the study data to the FDA in an application to obtain approval to market Angiomax in patients with ACS, who are starting treatment in the emergency department.

Use of Angiomax in Other Indications

        We have conducted a number of additional clinical trials evaluating Angiomax for other indications.

        HIT/HITTS.    Approximately one to three percent of patients who receive heparin experience HIT/HITTS. The underlying mechanism for the condition appears to be an immunological response to a complex formed by heparin and another factor, resulting in thrombocytopenia, and in some cases in arterial or venous clotting, which may result in death or the need for limb amputation. In order to treat a HIT/HITTS patient, an alternative anticoagulant is necessary because further administration of heparin is not possible.

        Prior to 1997, Angiomax was administered to a total of 39 HIT/HITTS patients treated for a variety of indications, including patients requiring anticoagulation for angioplasty, invasive coronary procedures or treatment of thrombosis. For those patients undergoing angioplasty and other

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procedures, Angiomax provided adequate anticoagulation, was well-tolerated and rarely resulted in bleeding complications. In the December 2000 approval letter for Angiomax, the FDA required us to complete our trial designed to evaluate the use of Angiomax for treatment of HIT/HITTS patients undergoing angioplasty. That trial, called ATBAT, was completed in 2003 and the results of the ATBAT trial were part of the supplemental new drug application package submitted to FDA with the REPLACE-2 data in July 2003.

        We are also conducting the Phase 3 CHOOSE trials studying the use of Angiomax as an anticoagulant in patients at risk for HIT/HITTS undergoing CABG surgery, with and without the use of a bypass pump.

        Neonates and Infants (AT deficiency).    Heparin can only bind to thrombin by first binding to AT, which may be absent or present in insufficient amounts in some patients. AT deficiency is often severe or unpredictable in infants and children, making the treatment and prevention of thrombosis especially difficult. We are conducting a Phase 2 trial program in neonates and infants up to six months old requiring intravenous anticoagulation due to active thrombosis.

        Angiomax Phase 4 trials.    In addition to the clinical trials conducted to pursue additional uses of Angiomax, we conduct Phase 4 post-marketing clinical trials. Phase 4 trials are intended to provide information about the use of Angiomax in procedures performed in the cardiac catheterization laboratory in specific patient populations or employing new technologies. These trials include the use of Angiomax:

•

when a new device technology known as drug-eluting stents are employed;



•

when using new technologies or techniques, such as ablation techniques that blast clots using high pressure water or beta-brachytherapy, which uses radiation to reduce the size of clots;



•

when conducting peripheral percutaneous intervention, which is similar to coronary angioplasty, but conducted in arteries outside of the heart such as the carotid artery in the neck;



•

in patients with severe dysfunction of the kidneys, which has been shown to impede cardiovascular treatment; and



•

in patients who started treatment in the emergency department with enoxaparin, who are switched to Angiomax in the cardiac catheterization laboratory.

        We believe that these Phase 4, post-market studies provide an important service to our customers. They help us to provide contemporary clinical data about the use of Angiomax and also answer specific questions about the use of Angiomax posed by the marketplace.

Regulatory Status

        In December 2000, we received approval from the FDA for the use of Angiomax in combination with aspirin in patients with unstable angina undergoing coronary angioplasty. In connection with this approval, the FDA required us to complete our ATBAT trial evaluating the use of Angiomax for the treatment of HIT/HITTS patients undergoing angioplasty. We completed the ATBAT trial and submitted results as part of the submission to the FDA in 2003, which we believe fulfills this post-approval requirement.

        In July 2003, we submitted for FDA review an update to the Angiomax product labeling to include the most contemporary data of Angiomax in coronary angioplasty. We submitted data from studies in more than 7,000 patients undergoing coronary angioplasty in the REPLACE-1 and REPLACE-2 trials and the ATBAT study. Also in July 2003, we submitted a Marketing Authorization Application, or MAA, to the European Agency for the Evaluation of Medicinal Products, or EMEA, for authority to market Angiomax in the EU for use in patients undergoing coronary angioplasty. This filing was

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conducted with our European distributors, Nycomed and Grupo Ferrer. We believe that this submission addressed the concerns expressed by the Committee of Proprietary Medicinal Products, or CPMP, of EMEA with regard to an MAA submitted in February 1998 that we subsequently withdrew.

        Angiomax was approved in New Zealand in September 1999 for use in the treatment of patients undergoing coronary angioplasty. Angiomax was approved in Canada in October 2002 and Israel in June 2002 for use in unstable angina patients undergoing coronary angioplasty. We and our partners have filed applications for marketing authorization in several Latin American countries.

Clevelox

Overview

        In March 2003, we acquired from AstraZeneca exclusive license rights to Clevelox for all countries other than Japan. We acquired this license after conducting development work pursuant to the study and exclusive option agreement with AstraZeneca entered into in March 2002. Since acquiring the product, we have:

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conducted manufacturing development activities to scale the bulk product manufacturing process for clinical study and potential commercial use;



•

commenced a Phase 2 clinical trial comparing Clevelox with nitroglycerin, a drug that is typically used to control high blood pressure in patients undergoing cardiac surgery; and



•

commenced a Phase 3 clinical trial program in cardiac surgery after meeting with FDA to define program parameters.

Background

        Blood pressure control is important in patients undergoing surgery or other interventional procedures in a hospital. These patients are treated by a team of physicians and nurses, which include the surgeon and anesthesiologist. Usually, the anesthesiologist is responsible for controlling blood pressure and, in doing so, these physicians often employ multiple medications, which may increase the duration of the patient's stay in the intensive care unit. These medications include sodium nitroprusside, nicardipine and nitroglycerine. Each of these agents has been shown to increase a cardiac side effect known as reflex tachycardia, which is characterized by a quickening of the patient's heart rate that may cause severe adverse surgical outcomes.

        Clevelox belongs to a well-known class of drugs called calcium channel blockers, which are used to control high blood pressure. Clevelox acts by selectively relaxing the smooth muscle cells that line small arteries, resulting in widening of the artery opening and reducing blood pressure within the artery. Unlike some other blood pressure reducing agents, including some other calcium channel blockers, Clevelox does not appear, based on animal studies, to have effects on the coronary arteries or the veins, and has not been associated with reflex tachycardia in anesthetized patients. Moreover, Clevelox has been shown in clinical trials to improve the pumping performance of the heart.

        Prior to licensing Clevelox to us, AstraZeneca conducted Phase 2 clinical trials of Clevelox. These clinical trials demonstrated that Clevelox acts to reduce blood pressure rapidly after intravenous infusion. Clevelox is metabolized rapidly by enzymes in the blood, which results in the drug being cleared from the blood stream in a short period of time. Therefore, the effects of Clevelox are short-lived, and clinical trials have demonstrated reductions in blood pressure that are dose-dependent and that cease rapidly after stopping Clevelox infusions.

        We believe that attributes of Clevelox demonstrated in clinical trials to date, namely rapid, titratable onset of effect on blood pressure, simple preparation and administration, arterial selectivity and rapid metabolism and elimination, could potentially benefit patients with high blood pressure

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undergoing surgical procedures and patients with severely elevated blood pressure that requires rapid reduction.

        We are initially focusing our development efforts on the potential use of Clevelox in surgery, particularly cardiac surgery. Cardiac surgery is comprised of CABG surgery conducted on-pump or off-pump, as well as heart valve replacement surgery.

Development Investments

        After meeting with the FDA in 2003, we defined Phase 3 trials in two programs to investigate the potential of Clevelox to control blood pressure in patients undergoing surgery.

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The ESCAPE program consists of two clinical trials to evaluate the efficacy of Clevelox in controlling blood pressure before and after cardiac surgery compared to a placebo control. The protocols provide for approximately 200 patients to be enrolled in these trials. In December 2003, we commenced patient enrollment in this program.



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The ECLIPSE program consists of three clinical trials to evaluate the safety of Clevelox in comparison to sodium nitroprusside, nicardipine, and nitroglycerine during and following cardiac surgery. The protocols provide for a total of approximately 1,500 patients in these trials.

        We are also conducting a blinded Phase 2 study in approximately 100 patients undergoing cardiac surgery comparing Clevelox with nitroglycerin to evaluate if Clevelox can be feasibly administered in this patient population. Two data safety reviews have been conducted and cleared the study to continue. We expect to complete this Phase 2 study in 2004.

        We believe that Clevelox can be efficiently sold by our U.S. sales force to hospital customers, including Angiomax customers, when and if Clevelox is approved for sale by the FDA. We also believe that manufacturing development work conducted in 2003 in conjunction with a manufacturing infrastructure partner has scaled the manufacturing to a level ready for customer demand on an initial commercial scale.

Cangrelor

Overview

        We acquired cangrelor in December 2003 from AstraZeneca. Under terms of the agreement with AstraZeneca, we acquired exclusive license rights to develop, market and sell cangrelor worldwide excluding Japan, China, Korea, Taiwan and Thailand.

        Cangrelor is short-acting injectable platelet inhibitor agent that prevents the aggregation of platelets in the clotting process. We believe that cangrelor may fit into our hospital acute care product portfolio because of potential uses in the cardiac catheterization laboratory and the operating room.

        Cangrelor acts directly on the P2Y12 platelet receptor, a clinically validated target to treat or prevent arterial thrombosis by acting on a specific, well studied, enzyme pathway known as ADP. There is currently no short-acting, intravenous, P2Y12 antagonist approved for acute patient care.

        In the cardiac catheterization laboratory, the use of platelet inhibitors that block activation is considered important therapy because of several studies of oral platelet inhibitors that have demonstrated better patient outcomes when these agents are administered before coronary angioplasty.

        The leading oral platelet activation inhibitor is clopidogrel. Clopidogrel is commonly administered at a high dose by giving patients several oral tablets before the angioplasty procedure. This practice is known as pre-loading. Although clopidogrel pre-loading has been shown to improve ischemic outcomes

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in coronary angioplasty, there are several convenience and safety issues with the use of this agent in acute care practice:

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As a pro-drug, clopidogrel requires liver metabolism to form the active agent; therefore, the pre-loading doses require more than six hours to metabolize.



•

There is not a clear relationship between increased dosage and intended effect that is consistent across different patient groups.



•

The inhibition of platelet function is irreversible, meaning the agent remains active for the life of the platelet, which is typically five days; this may impede patient management and treatment flexibility, especially if a patient needs cardiac surgery, which is usually delayed for days to wait for the clopidogrel to be cleared from the bloodstream.



•

Oral agents are difficult to administer in the acute care setting because they need to be swallowed by patients that may be under light anesthesia; this is especially true when there is a need to swallow multiple tablets in a restricted period of time.

        Based on input from our hospital customers in the cardiac catheterization laboratory, we believe that the combination of the ischemic outcomes benefits of platelet activation inhibition and the acute care limitations of current oral therapy has created a need for an injectable platelet antagonist that acts quickly and is cleared from the bloodstream rapidly. We believe that cangrelor has demonstrated these attributes in preclinical studies and clinical studies conducted in approximately 500 patients to date. Cangrelor has demonstrated the following characteristics in these studies:

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An immediate inhibitory effect on platelets;



•

Inhibition of both platelet activation and aggregation that is proportional to the dose administered;



•

Inhibitory effects that are sustainable through a period of infusion;



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Rapid clearance—half life of less than ten minutes; and



•

Platelet function recovery in less than hour.

        With these attributes, we believe that cangrelor could also have utility as an anticoagulant administered for surgery patients. Surgeons have never had an approved agent at their disposal to control thrombosis during surgery by inhibiting platelets. The antiplatelet agents currently approved for use in coronary angioplasty, GP IIb/IIIa inhibitors, oral thienopyridines and aspirin, have not demonstrated feasibility in surgery due to bleeding concerns or the necessity of long infusions. We believe that cangrelor has potential for use in surgery due to its rapid effect in inhibiting platelets and the rapid recovery of platelet function following administration.

Development

        We plan to develop cangrelor for potential use as an antiplatelet agent in the acute care settings of the cardiac catheterization laboratory, the operating room, and/or the emergency department. Several features of the development program may be similar to those followed for Angiomax.

        In 2003, we began the process of transferring product technology and data from AstraZeneca. We believe that technology transfer and manufacturing development will take approximately one year to 18 months. Following these activities, we intend to conduct clinical development of cangrelor. We may also study the combination of Angiomax and cangrelor, which we believe are compatible anticoagulants.

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Manufacturing

        We do not build or operate manufacturing facilities but instead contract for manufacturing development and/or commercial supply. We have in-house expertise in manufacturing development, but do not have facilities to manufacture commercial supply products. We believe we can focus successfully on the specialty hospital markets without incurring the substantial fixed overhead costs associated with building or acquiring manufacturing infrastructure.

Angiomax

        In December 1999, we entered into a commercial development and supply agreement with UCB Bioproducts S.A. for the development and supply of Angiomax bulk drug substance. Together with UCB Bioproducts, we developed a second generation chemical synthesis process to improve the economics of manufacturing Angiomax bulk drug substance. This process, which was approved by the FDA in May 2003, is known as the Chemilog process.

        We have agreed that we will purchase a substantial portion of our Angiomax bulk drug substance exclusively from UCB Bioproducts at agreed upon prices for a period ending in September 2010, seven years from the first commercial sale of Angiomax produced under the Chemilog process. Following the expiration of the agreement, which automatically renews for consecutive three year periods unless either party provides notice of non-renewal within one year prior to the expiration of the initial term or any renewal term, or if we terminate the agreement prior to its expiration, UCB Bioproducts has agreed to transfer the development technology to us. We may only terminate the agreement prior to its expiration in the event of a material breach by UCB Bioproducts. If we engage a third party to manufacture Angiomax for us using this technology during the first ten years following the date of the first commercial sale of Angiomax produced under the Chemilog process, we will be obligated to pay UCB Bioproducts a royalty based on the amount paid by us to the third-party manufacturer.

        We have developed reproducible analytical methods and processes for the fill-finish of Angiomax drug product by Ben Venue Laboratories, Inc. Ben Venue Laboratories has carried out all of our Angiomax fill-finish activities.

Clevelox

        Prior to our acquisition of the Clevelox product, Astra Production Chemicals manufactured all clevidipine bulk drug which, after testing and release by Astra Hassle, has been used in clinical trials. Both Astra Production Chemicals and Astra Hassle are divisions of AstraZeneca. The manufacturing process for bulk drug has been transferred to PharmEco, a Johnson Matthey Company, for scale up and manufacture for Phase 3 clinical trials and commercial supplies. We have also entered into an agreement with Fresenius Kabi L.P. pursuant to which, using its formulation technology, Fresenius has agreed to manufacture all finished drug product for all Phase 3 clinical trials and commercial supplies and to carry out release testing and clinical packaging.

Competition

        The development and commercialization of new drugs is competitive, and we face competition from major pharmaceutical companies, specialty pharmaceutical companies and biotechnology companies worldwide. Our competitors may develop or license products or other novel technologies that are more effective, safer or less costly than any that have been or are being developed by us, or may obtain FDA approval for their products more rapidly than we may obtain approval for ours.

        The acquisition or licensing of pharmaceutical products is a competitive area, and a number of more established companies, which have acknowledged strategies to license or acquire products, may have competitive advantages as may emerging companies taking similar or different approaches to

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product acquisition. These established companies may have a competitive advantage over us due to their size, cash flows and institutional experience.

        Many of our competitors will have substantially greater financial, technical and human resources than we have. Additional mergers and acquisitions in the pharmaceutical industry may result in even more resources being concentrated in our competitors. Competition may increase further as a result of advances made in the commercial applicability of technologies and greater availability of capital for investment in these fields. Our success will be based in part on our ability to build and actively manage a portfolio of drugs that addresses unmet medical needs and creates value in patient therapy.

Angiomax

        Due to the incidence and severity of cardiovascular diseases, the market for anticoagulant therapies is large and competition is intense. We are evaluating Angiomax for additional uses in open vascular surgery such as CABG surgery, in medical conditions that require urgent treatment such as ACS, in patients with heparin allergy, in children and in peripheral angioplasty. There are a number of anticoagulant therapies currently on the market, awaiting regulatory approval or in development for these uses.

        In general, anticoagulant drugs may currently be classified into four groups according to their interaction with clotting mechanisms.

        Direct thrombin inhibitors.    Direct thrombin inhibitors act directly on thrombin, inhibiting the action of thrombin in the clotting process. Because thrombin activates platelets, direct thrombin inhibitors also prevent platelet aggregation. Direct thrombin inhibitors include Angiomax, Refludan from Berlex Laboratories and Argatroban from GlaxoSmithKline, Encysive Pharmaceuticals Inc, and Mitsubishi Chemical Corp. Both Refludan and Argatroban are approved for use in the treatment of patients with HIT/HITTS. Argatroban is also approved for use in patients with HIT/HITTS undergoing angioplasty.

        Indirect thrombin inhibitors.    Heparin and low molecular weight heparins act by first binding to AT-III. Heparin is manufactured and distributed by a number of companies as a generic product. Low molecular weight heparin products include Lovenox from Aventis Pharmaceuticals, Inc. and Fragmin from Pfizer Inc. Very short molecules of heparin, called pentasaccharide sequences, include Arixtra from Sanofi-Synthelabo Inc. Heparin is widely used in patients with ischemic heart disease. Low molecular weight heparins have been approved for use in the treatment of patients with unstable angina and are being developed for use in angioplasty and vascular surgery. Arixtra has been approved for use in the treatment and prevention of deep vein thrombosis and is being developed for arterial thrombosis.

        Platelet inhibitors.    Platelet inhibitors, such as GP IIb/IIIa inhibitors, block the aggregation of platelets by blocking surface sites on the platelets that allow the platelets to attach to fibrin and to each other. GP IIb/IIIa inhibitors include ReoPro from Eli Lilly and Company and Johnson & Johnson/Centocor, Inc., Integrilin from Millennium Pharmaceuticals, Inc. and Schering-Plough Corporation, and Aggrastat from Merck & Co., Inc. and Guilford Pharmaceuticals Inc. ReoPro is approved and marketed for angioplasty in a broad range of patients. Integrilin is approved and marketed for angioplasty and for the management of acute coronary syndromes. Aggrastat is approved for the management of ACS.

        Fibrinolytics.    Fibrinolytics, or thrombolytics, dissolve fibrin in clots that have already formed. Fibrinolytics include Streptase from Aventis, Retevase from Johnson & Johnson/Centocor, TNKase from Genentech, Inc., and Abbokinase from Abbott Laboratories. These products are approved for use in the treatment of AMI, stroke and/or peripheral vascular arterial blockages.

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        Although platelet inhibitors and fibrinolytic drugs may be complementary to Angiomax, Angiomax may compete with platelet inhibitors and fibrinolytic drugs for the use of hospital financial resources. For example, many U.S. hospitals receive a fixed reimbursement amount per procedure for the angioplasties and other treatment therapies they perform. Because this amount is not based on the actual expenses the hospital incurs, hospitals may be forced to use either Angiomax or a platelet inhibitor or fibrinolytic drugs but not necessarily several of the drugs together.

        In each case, we will compete with other anticoagulant drugs on the basis of efficacy, safety, ease of administration and economic value.

        We face potential competition from products that currently are in clinical development. One such potential competitor is an oral direct thrombin inhibitor, Exanta, for which AstraZeneca has submitted a new drug application, or NDA, to the FDA for the prevention of stroke in patients with atrial fibrillation and associated complications. We believe that use of Exanta in these indications will not have an effect upon our planned positioning for Angiomax.

Clevelox

        Clevelox will compete with a variety of parenteral antihypertensive agents including nigroglycerine, a generic product, Nipride from Hoffmann-La Roche Inc., Cardene from Hoffmann-La Roche Inc., Brevibloc from Baxter Healthcare Corporation, and Corlopam from Abbott Laboratories.

Research and Development

        Company-sponsored research and development expenses totaled $35.9 million in 2003, $38.0 million in 2002 and $32.8 million in 2001. The funding for Angiomax has represented and will continue to represent a significant portion of our research and development spending. We rely on contract research organizations, including International Health Care, to provide expertise, flexibility and resources in managing clinical trials.

Patents, Proprietary Rights and Licenses

        Our success will depend in part on our ability to protect the products we acquire or license by obtaining and maintaining patent protection both in the United States and in other countries. We rely upon trade secrets, know-how, continuing technological innovations, contractual restrictions and licensing opportunities to develop and maintain our competitive position. We plan to prosecute and defend any patents or patent applications we acquire or license, as well as any proprietary technology.

        In all, as of February 25, 2004, we exclusively licensed 16 issued United States patents and a broadly filed portfolio of corresponding foreign patents and patent applications. We have not yet filed any independent patent applications. The U.S. patents licensed by us are currently set to expire at various dates ranging from March 2010, in the case of the principal patent relating to Angiomax, to November 2019.

        We have exclusively licensed from Biogen patents and applications for patents covering Angiomax and Angiomax analogs and other novel anticoagulants as compositions of matter, and processes for using Angiomax and Angiomax analogs and other novel anticoagulants. We are responsible for prosecuting and maintaining patents and patent applications relating to Angiomax. We have exclusively licensed from AstraZeneca, patents and patent applications covering formulations and uses of Clevelox and patents and patent applications covering the formulations and uses of cangrelor. Under both licenses, AstraZeneca is responsible for prosecuting and maintaining these patents and patent applications relating to Clevelox and cangrelor, and we are required to reimburse AstraZeneca for expenses it incurs in connection with the prosecution and maintenance of the patents or patent applications. We have exclusively licensed patents and applications relating to CTV-05, a strain of

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bacteria with potential applications in the areas of gynelogical and reproductive health, from GyneLogix, Inc. In December 2002, we sublicensed our rights to develop CTV-05 to Osel, Inc. on an exclusive basis. Osel has assumed our obligation to prosecute and maintain the related patents and patent applications.

        The patent positions of pharmaceutical and biotechnology firms like us can be uncertain and involve complex legal, scientific and factual questions. In addition, the coverage claimed in a patent application can be significantly reduced before the patent is issued. Consequently, we do not know whether any of the applications we acquire or license will result in the issuance of patents or, if any patents are issued, whether they will provide significant proprietary protection or will be challenged, circumvented or invalidated. Because unissued U.S. patent applications filed prior to November 29, 2000 and patent applications filed within the last 18 months are maintained in secrecy until patents issue, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the priority of inventions covered by pending patent applications. Moreover, we may have to participate in interference proceedings declared by the United States Patent and Trademark Office to determine priority of invention, or in opposition proceedings in a foreign patent office, either of which could result in substantial cost to us, even if the eventual outcome is favorable to us. There can be no assurance that the patents, if issued, would be held valid by a court of competent jurisdiction. An adverse outcome could subject us to significant liabilities to third parties, require disputed rights to be licensed from third parties or require us to cease using such technology.

        The development of anticoagulants is intensely competitive. A number of pharmaceutical companies, biotechnology companies, universities and research institutions have filed patent applications or received patents in this field. Some of these applications could be competitive with applications we have acquired or licensed, or could conflict in certain respects with claims made under such applications. Such conflict could result in a significant reduction of the coverage of the patents we have acquired or licensed, if issued, which would have a material adverse effect on our business, financial condition and results of operations. In addition, if patents are issued to other companies that contain competitive or conflicting claims and such claims are ultimately determined to be valid, no assurance can be given that we would be able to obtain licenses to these patents at a reasonable cost, or develop or obtain alternative technology.

        We also rely on trade secret protection for our confidential and proprietary information. No assurance can be given that others will not independently develop substantially equivalent proprietary information and techniques or otherwise gain access to our trade secrets or disclose such technology, or that we can meaningfully protect our trade secrets. We have a number of trademarks that we consider important to our business. These trademarks are protected by registration in the United States and other countries in which our products are marketed.

        It is our policy to require our employees, consultants, outside scientific collaborators, sponsored researchers and other advisors to execute confidentiality agreements upon the commencement of employment or consulting relationships with us. These agreements provide that all confidential information developed or made known to the individual during the course of the individual's relationship with us is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees, the agreements provide that all inventions conceived by the individual shall be our exclusive property. There can be no assurance, however, that these agreements will provide meaningful protection or adequate remedies for the our trade secrets in the event of unauthorized use or disclosure of such information.

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License Agreements

Biogen

        In March 1997, we entered into an agreement with Biogen, Inc., a predecessor of Biogen Idec, Inc., for the license of the anticoagulant pharmaceutical bivalirudin, which we have developed as Angiomax. Under the terms of the agreement, we acquired exclusive worldwide rights to the technology, patents, trademarks, inventories and know-how related to Angiomax. In exchange for the license, we paid $2.0 million on the closing date and are obligated to pay up to an additional $8.0 million upon the first commercial sales of Angiomax for the treatment of AMI in the United States and Europe. In addition, we are obligated to pay royalties on sales of Angiomax and on any sublicense royalties on a country-by-country basis earned until the later of (1) 12 years after the date of the first commercial sales of the product in a country or (2) the date on which the product or its manufacture, use or sale is no longer covered by a valid claim of the licensed patent rights in such country. Under the terms of the agreement, the royalty rate due to Biogen on sales increases with growth in annual sales of Angiomax. The agreement also stipulates that we use commercially reasonable efforts to meet certain milestones related to the development and commercialization of Angiomax, including expending at least $20 million for certain developmental and commercialization activities, which we met in 1998. The license and rights under the agreement remain in force until our obligation to pay royalties ceases. Either party may terminate the agreement for material breach by the other party, if the material breach is not cured within 90 days after written notice. In addition, we may terminate the agreement for any reason upon 90 days prior written notice. Through February 25, 2004, we have paid a total of approximately $9.6 million in royalties relating to Angiomax under our agreement with Biogen.

AstraZeneca

        In March 2003, we acquired from AstraZeneca exclusive worldwide license rights to Clevelox for all countries other than Japan. We acquired this license after having studied Clevelox under the study and exclusive option agreement with AstraZeneca that we entered into in March 2002. In exchange for the license, we paid $1.0 million in 2003 upon entering into the license and may have to pay up to an additional $5.0 million upon reaching certain regulatory milestones. In addition, we will be obligated to pay royalties on a country-by-country basis on future annual sales of Clevelox, and on any sublicense royalties earned, until the later of (1) the duration of the licensed patent rights which are necessary to manufacture, use or sell Clevelox in a country or (2) ten years from our first commercial sale of Clevelox in such country. The licenses and rights under the agreement remain in force until we cease selling Clevelox in any country or the agreement is otherwise terminated. We may terminate the agreement upon 30 days written notice, unless AstraZeneca, within 20 days of having received our notice, requests that we enter into good faith discussions to redress its concerns. If we cannot reach a mutually agreeable solution with AstraZeneca within three months of the commencement of such discussions, we may then terminate the agreement upon 90 days written notice. Either party may terminate the agreement for material breach upon 60 days prior written notice, if the breach is not cured within such 60 days.

        In December 2003, we acquired from AstraZeneca exclusive license rights to cangrelor for all countries other than Japan, China, Korea, Taiwan and Thailand. In exchange for the license, we accrued in December 2003 and paid in January 2004 an upfront payment upon entering into the license and may have to make additional payments upon reaching certain regulatory milestones. In addition, we will be obligated to pay royalties on a country-by-country basis on future annual sales of cangrelor, and on any sublicense royalties earned, until the later of (1) the duration of the licensed patent rights which are necessary to manufacture, use or sell cangrelor in a country or (2) ten years from our first commercial sale of cangrelor in such country. The licenses and rights under the agreement remain in force until we cease selling cangrelor in any country or the agreement is otherwise terminated. We may

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terminate the agreement upon 30 days written notice, unless AstraZeneca, within 20 days of having received our notice, requests that we enter into good faith discussions to redress its concerns. If we cannot reach a mutually agreeable solution with AstraZeneca within three months of the commencement of such discussions, we may then terminate the agreement upon 90 days written notice. Either party may terminate the agreement for material breach upon 60 days prior written notice, if the breach is not cured within such 60 days.

Government Regulation

        Government authorities in the United States and other countries extensively regulate, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing of our products. In the United States, the FDA regulates drugs under the Federal Food, Drug, and Cosmetic Act, and, in the case of biologics, also under the Public Health Service Act, and implementing regulations. Failure to comply with the applicable U.S. requirements may subject us to administrative or judicial sanctions, such as a refusal by the FDA to approve pending applications, warning letters, product recalls, product seizures, total or partial suspension of production or distribution, injunctions, and/or criminal prosecution.

        The steps required before a drug may be marketed in the United States include:

•

pre-clinical laboratory tests, animal studies and formulation studies;



•

submission to the FDA of an investigational new drug exemption, or IND, for human clinical testing, which must become effective before human clinical trials may begin;



•

adequate and well-controlled clinical trials to establish the safety and efficacy of the drug for each indication;



•

submission to the FDA of an NDA, or biologics license application, or BLA;



•

satisfactory completion of an FDA inspection of the manufacturing facility or facilities at which the drug is produced to assess compliance with current good manufacturing practices, or cGMP; and



•

FDA review and approval of the NDA or BLA.

        Pre-clinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies. The results of the pre-clinical tests, together with manufacturing information and analytical data, are submitted to the FDA as part of an IND, which must become effective before human clinical trials may begin. An IND will automatically become effective 30 days after receipt by the FDA, unless before that time the FDA raises concerns or questions about issues such as the conduct of the trials as outlined in the IND. In such a case, the IND sponsor and the FDA must resolve any outstanding FDA concerns or questions before clinical trials can proceed. Submission of an IND does not necessarily result in the FDA allowing clinical trials to commence.

        Clinical trials involve the administration of the investigational drug to human subjects under the supervision of qualified investigators. Clinical trials are conducted under protocols detailing the objectives of the study, the parameters to be used in monitoring safety, and the effectiveness criteria to be evaluated. Each protocol must be submitted to the FDA as part of the investigational new drug exemption.

        Clinical trials typically are conducted in three sequential phases, but the phases may overlap or be combined. Each trial must be reviewed and approved by an independent Institutional Review Board before it can begin. Phase 1 usually involves the initial introduction of the investigational drug into

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people to evaluate its safety, dosage tolerance, pharmacodynamics, and, if possible, to gain an early indication of its effectiveness. Phase 2 usually involves trials in a limited patient population to:

•

evaluate dosage tolerance and appropriate dosage;



•

identify possible adverse effects and safety risks; and



•

evaluate preliminarily the efficacy of the drug for specific indications.

        Phase 3 trials usually further evaluate clinical efficacy and test further for safety by using the drug in its final form in an expanded patient population. We cannot guarantee that Phase 1, Phase 2 or Phase 3 testing will be completed successfully within any specified period of time, if at all. Furthermore, we or the FDA may suspend clinical trials at any time on various grounds, including a finding that the subjects or patients are being exposed to an unacceptable health risk.

        Assuming successful completion of the required clinical testing, the results of the preclinical studies and of the clinical studies, together with other detailed information, including information on the manufacture and composition of the drug, are submitted to the FDA in the form of an NDA or BLA requesting approval to market the product for one or more indications. Before approving an application, the FDA usually will inspect the facility or the facilities at which the drug is manufactured, and will not approve the product unless cGMP compliance is satisfactory. If the FDA determines the application and the manufacturing facilities are acceptable, the FDA will issue an approval letter. If the FDA determines the application or manufacturing facilities are not acceptable, the FDA will outline the deficiencies in the submission and often will request additional testing or information. Notwithstanding the submission of any requested additional information, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval. After approval, certain changes to the approved product, such as adding new indications, manufacturing changes, or additional labeling claims are subject to further FDA review and approval. The testing and approval process requires substantial time, effort and financial resources, and we cannot be sure that any approval will be granted on a timely basis, if at all. As a condition of approval of an application, the FDA may require postmarket testing and surveillance to monitor the drug's safety or efficacy.

        In addition, holders of an approved NDA or BLA are required to report certain adverse reactions and production problems, if any, to the FDA, and to comply with certain requirements concerning advertising and promotional labeling for their products. Also, quality control and manufacturing procedures must continue to conform to cGMP after approval, and the FDA periodically inspects manufacturing facilities to assess compliance with cGMP. Accordingly, manufacturers must continue to expend time, money, and effort in the area of production and quality control to maintain compliance with cGMP and other aspects of regulatory compliance.

        We use and will continue to use third-party manufacturers to produce our products in clinical and commercial quantities, and we cannot be sure that future FDA inspections will not identify compliance issues at our facilities or at the facilities of our contract manufacturers that may disrupt production or distribution, or require substantial resources to correct. In addition, discovery of problems with a product may result in restrictions on a product, manufacturer, or holder of an approved NDA or BLA, including withdrawal of the product from the market. Also, new government requirements may be established that could delay or prevent regulatory approval of our products under development.

        We are also subject to foreign regulatory requirements governing human clinical trials and marketing approval for pharmaceutical products which we sell outside the United States. The requirements governing the conduct of clinical trials, product licensing, pricing and reimbursement vary widely from country to country. Whether or not we obtain FDA approval, we must obtain approval of a product by the comparable regulatory authorities of foreign countries before manufacturing or marketing the product in those countries. The approval process varies from country to country and the time required for these approvals may differ substantially from that required for FDA approval.

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Clinical trials in one country may not be accepted by other countries, and approval in one country may not result in approval in any other country. For clinical trials conducted outside the United States, the clinical stages generally are comparable to the phases of clinical development established by the FDA.

Employees

        We believe that our success will depend greatly on our ability to identify, attract and retain capable employees. We have assembled a management team with significant experience in drug development and commercialization.

        As of February 25, 2004, we employed 190 persons. Our employees are not represented by any collective bargaining unit, and we believe our relations with our employees are good.

Available Information

        Our Internet address is http://www.themedicinescompany.com. The contents of our website are not part of this Annual Report on Form 10-K, and our Internet address is included in this document as an inactive textual reference only. We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports available free of charge on our website as soon as reasonably practicable after we file such reports with, or furnish such reports to, the Securities and Exchange Commission, or the SEC.

Item 2. Properties

        We currently occupy approximately 20,220 square feet of office space in Parsippany, New Jersey under a lease expiring in January 2013. We have entered into an agreement to lease approximately 12,400 square feet of additional office space in the same building in Parsippany, New Jersey that we plan to occupy in June 2004, with a term expiring in January 2013. In addition, we lease approximately 5,700 square feet of office space in Waltham, Massachusetts under a lease expiring in December 2008. We believe our current arrangements will be sufficient to meet our needs for the foreseeable future and that any required additional space will be available on commercially reasonable terms to meet space requirements if they arise. We also have offices in Milton Park, Abingdon, United Kingdom and Parnell, Auckland, New Zealand.

Item 3. Legal Proceedings

        In November 2003, the Company received a notice from the Equal Employment Opportunity Commission, or EEOC, that a current employee of the Company had filed a Charge of Discrimination with the EEOC alleging that the Company has engaged in sexual discrimination and sexual harassment in violation of Title VII of the Civil Rights Act of 1964 and the New Jersey Law Against Discrimination. The Company has agreed to participate in non-binding mediation with the complainant to attempt to resolve the matter. If the matter is not resolved through mediation and a lawsuit is subsequently filed, the Company intends to vigorously defend against the allegations.

Item 4. Submission of Matters to a Vote of Security Holders

        No matters were submitted to a vote of our security holders through solicitation of proxies or otherwise, during the fourth quarter of the year ended December 31, 2003.

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PART II

Item 5. Market for Registrant's Common Equity and Related Stockholder Matters

Market Information and Holders

        Our common stock trades on the Nasdaq National Market under the symbol "MDCO". The following table reflects the range of the high and low bid information per share of our common stock, as reported on the Nasdaq National Market for the periods indicated. These prices reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	High		Low
Year Ended December 31, 2002
First Quarter	$	14.81	$	9.86
Second Quarter	$	14.33	$	7.40
Third Quarter	$	12.50	$	7.22
Fourth Quarter	$	17.50	$	9.45
Year Ended December 31, 2003
First Quarter	$	20.00	$	15.20
Second Quarter	$	25.91	$	16.83
Third Quarter	$	31.41	$	19.25
Fourth Quarter	$	29.98	$	22.80

        Mellon Investor Services, LLC is the transfer agent and registrar for our common stock. As of the close of business on February 25, 2004, we had 199 holders of record of our common stock.

Dividends

        We have never declared or paid cash dividends on our common stock. We anticipate that we will retain all of our future earnings, if any, for use in the expansion and operation of our business and do not anticipate paying cash dividends in the foreseeable future. Payment of future dividends, if any, will be at the discretion of our board of directors.

Recent Sales of Unregistered Securities

        None

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Item 6. Selected Consolidated Financial Data

        In the table below, we provide you with our selected consolidated financial data. We have prepared this information using our audited consolidated financial statements for the years ended December 31, 2003, 2002, 2001, 2000 and 1999. The pro forma net loss per share data reflect the conversion of our convertible notes, and accrued interest, and the conversion of our outstanding redeemable convertible preferred stock, and accrued dividends, into common stock upon the closing of our initial public offering in August 2000. The net loss per share data and pro forma net loss per share data do not include the effect of any options or warrants outstanding. For further discussion of earnings per share, please see note 8 to our consolidated financial statements.

				2003			2002			2001			2000			1999
				(in thousands, except share and per share data)
Statements of Operations Data
	Net revenue			$	85,591		$	38,301		$	14,248		$	—		$	—
	Operating expenses
		Cost of revenue			22,749			10,284			2,110			—			—
		Research and development			35,905			37,951			32,768			39,572			30,345
		Selling, general and administrative			45,082			36,808			36,567			15,034			5,008
			Total operating expenses		103,736			85,043			71,445			54,606			35,353
		Loss from operations			(18,145	)		(46,742	)		(57,197	)		(54,606	)		(35,353	)
		Other income (expense), net			1,403			911			2,313			(16,686	)		640
		Income taxes			(128	)		—			—			—			—
		Net loss after taxes			(16,870	)		(45,831	)		(54,884	)		(71,292	)		(34,713	)
		Dividends and accretion to redemption value of redeemable convertible preferred stock			—			—			—			(30,343	)		(5,893	)
		Net loss attributable to common stockholders		$	(16,870	)	$	(45,831	)	$	(54,884	)	$	(101,635	)	$	(40,606	)
		Net loss attributable to common stockholders per common share, basic and diluted		$	(.37	)	$	(1.23	)	$	(1.67	)	$	(8.43	)	$	(80.08	)
		Shares used in computing net loss attributable to common stockholders per common share, basic and diluted			45,624,289			37,209,931			32,925,968			12,059,275			507,065
		Unaudited pro forma net loss attributable to common stockholders per common share, basic and diluted		$	(.37	)	$	(1.23	)	$	(1.67	)	$	(2.10	)	$	(1.94	)
		Shares used in computing unaudited pro forma net loss attributable to common stockholders per common share, basic and diluted			45,624,289			37,209,931			32,925,968			24,719,075			17,799,876

		As of December 31,
		2003			2002			2001			2000			1999
		(in thousands)
Balance Sheet Data
	Cash and cash equivalents, available for sale securities and accrued interest receivable	$	136,855		$	43,638		$	54,016		$	80,718		$	7,238
	Working capital (deficit)	$	139,725			54,172			59,744			68,023			(4,103	)
	Total assets		166,662			74,714			78,674			84,363			7,991
	Convertible notes		—			—			—			—			5,776
	Redeemable convertible preferred stock		—			—			—			—			85,277
	Accumulated deficit		(314,145	)		(297,275	)		(251,444	)		(196,560	)		(94,925	)
	Total stockholders' (deficit) equity		140,165			53,934			61,121			69,239			(94,558	)

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with "Selected Consolidated Financial Data" and our financial statements and accompanying notes included elsewhere in this annual report. In addition to the historical information, the discussion in this annual report contains certain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated by the forward-looking statements due to the factors set forth under "Factors That May Affect Future Results" below and elsewhere in this annual report.

Overview

        We are a pharmaceutical company that specializes in acute hospital care with growing revenue from sales of our first product, Angiomax® (bivalirudin). Angiomax is a direct thrombin inhibitor that was approved by the FDA in December 2000 for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing coronary angioplasty. We began selling the product in the United States in January 2001. Our total net revenue was $14.2 million in 2001, $38.3 million in 2002, and $85.6 million in 2003, generated almost entirely from sales of Angiomax in the United States.

        Since the announcement of the results of our REPLACE-2 clinical trial, additional hospitals have granted Angiomax formulary approval and hospital demand for the product has increased, which are critical elements of our ability to increase revenues. We expect that these trends will continue, although near-term growth in our sales of Angiomax depends on a variety of factors, including physician acceptance of the REPLACE-2 trial results. In the fourth quarter of 2003, based on data from a third-party industry source, the number of hospitals purchasing Angiomax increased by approximately 15% as compared to the third quarter of 2003 and the number of hospitals purchasing four or more boxes of Angiomax increased by approximately 20% as compared to the third quarter of 2003. We focus on increased use of Angiomax by existing hospital customers, as well as penetration to new hospitals, to evaluate our operating performance.

        Since our inception we have generated significant losses, although we achieved profitability for the first time for the three months ended December 31, 2003. Most of our expenditures to date have been for research and development activities and selling, general and administrative expenses. Research and development expenses represent costs incurred for product acquisition, clinical trials, activities relating to regulatory filings and manufacturing development efforts. We outsource our clinical trials and manufacturing development activities to independent organizations to maximize efficiency and minimize our internal overhead. We expense our research and development costs as they are incurred. Selling, general and administrative expenses consist primarily of salaries and related expenses, general corporate activities and costs associated with promotion and marketing activities.

        We expect to continue to spend significant amounts on the development of our products in the future. In 2004, we plan to continue to invest in clinical studies to expand the use of Angiomax and to develop Clevelox. In addition, we plan to invest in the manufacturing development of cangrelor. We also plan to continue our sales and marketing programs to educate and inform physicians, nurses, pharmacists and other medical decision-makers about the benefits of Angiomax. In light of these activities, as well as our plan to continue to evaluate possible acquisitions of development-stage or approved products that would fit within our growth strategy, we will likely need to generate greater revenues to maintain profitability.

        We have not generated any U.S. taxable income to date. Any taxes paid or accrued have been state taxes based on net worth and some income taxes in international jurisdictions. At December 31, 2003, net operating losses available to offset future taxable income for federal income tax purposes were approximately $235.2 million. If not utilized, federal net operating loss carryforwards will expire at various dates beginning in 2011 and ending in 2023. We have not recognized the potential tax benefit

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of our net operating losses in our balance sheets or statements of operations. The future utilization of our net operating loss carryforwards may be limited based upon changes in ownership pursuant to regulations promulgated under the Internal Revenue Code of 1986, as amended.

Application of Critical Accounting Policies

        The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect our reported assets and liabilities, revenues and expenses, and other financial information. Actual results may differ significantly from these estimates under different assumptions and conditions. In addition, our reported financial condition and results of operations could vary due to a change in the application of a particular accounting standard.

        We regard an accounting estimate or assumption underlying our financial statements as a "critical accounting estimate" where:

•

the nature of the estimate or assumption is material due to the level of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change; and



•

the impact of the estimates and assumptions on financial condition or operating performance is material.

        Our significant accounting policies are more fully described in Note 2 to our consolidated financial statements. Not all of these significant accounting policies, however, fit the definition of "critical accounting estimates." We have discussed our accounting policies with the audit committee of our board of directors, and we believe that our estimates relating to revenue recognition and inventory described below fit the definition.

Revenue Recognition

        Product Sales.    We sell our products primarily to wholesalers and distributors, who, in turn, sell to hospitals. We do not recognize revenue from product sales until there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed and determinable, the buyer is obligated to pay us, the obligation to pay is not contingent on resale of the product, the buyer has economic substance apart from us, we have no obligation to bring about the sale of the product, the amount of returns can be reasonably estimated and collectibility is reasonably assured.

        We record allowances for product returns, rebates and discounts at the time of sale, and report revenue net of such allowances. We must make significant judgments and estimates in determining these allowances. In particular, determining the allowances is difficult because we must estimate whether trends in past buying patterns will predict future product sales. We have adjusted the allowances in the past based on our actual sales experience, and we will likely be required to make adjustments to these allowances in the future. In determining the allowances, our considerations include the following:

•

Our customers have the right to return any unopened product during the 18 month period beginning six months prior to the labeled expiration date and ending 12 months after the labeled expiration date. As a result, in calculating the allowance for product returns, we must estimate the likelihood that product sold to wholesalers might remain in their inventory to within six months of expiration and determine if it will be returned. We base our estimates on information from wholesalers, historic patterns of returns, industry data and on the expiration dates of product currently being shipped.

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•

Certain hospitals purchasing our products from wholesalers have the right to receive a discounted price and a volume-based rebate if they have a direct contract with us or participate in a group purchasing organization that has a contract with us. As a result, we must estimate the likelihood that product sold to wholesalers might be ultimately sold to a participating hospital. We base our estimates on information from wholesalers and hospitals, industry data, historic patterns of discounts and customer rebate thresholds.

        Collaborations.    Revenue from collaborative agreements with partners may include milestone payments. We record these payments as deferred revenue until contractual performance obligations have been satisfied, and we then recognize these payments ratably over the term of these agreements. When the period of deferral cannot be specifically identified from the contract, we must estimate the period based upon other critical factors contained within the contract. We review these estimates at least annually, which could result in a change in the deferral period.

Inventories

        We record inventory upon the transfer of title from our vendors. Inventory is stated at the lower of cost or market value, with cost determined using a weighted average of acquisition costs. Prior to FDA approval of Angiomax and of its original manufacturing process in December 2000, we expensed all costs associated with the manufacture of Angiomax bulk drug product and finished product to which title had transferred to us as research and development. We recorded as inventory any Angiomax bulk drug product manufactured according to its original manufacturing process to which we took title after FDA approval. Along with our contract manufacturing partner, UCB Bioproducts S.A., we have developed a second-generation chemical synthesis process, the Chemilog process, for the manufacture of Angiomax bulk drug substance. The Chemilog process involves enhancements to early manufacturing steps to improve the efficiency of synthesizing bivalirudin, the active ingredient of Angiomax. On May 23, 2003, we received FDA approval for this process. Accordingly, all Angiomax bulk drug product manufactured using the Chemilog process to which title had transferred to us prior to May 23, 2003 has been expensed as research and development, and all bulk drug product manufactured after FDA approval of the Chemilog process has been and will be recorded as inventory. We review our inventory for slow moving or obsolete amounts based on expected revenues. If actual revenues are less than expected, we may be required to make allowances for excess amounts of inventory in the future.

Results of Operations

Years Ended December 31, 2003 and 2002

        Net Revenue.    Net revenue increased 123% to $85.6 million for the year ended December 31, 2003 as compared to $38.3 million for the year ended December 31, 2002. Virtually all the revenue in both periods was from U.S. sales of Angiomax. We believe that growth in 2003 was due primarily to increased use of Angiomax by existing hospital customers and adoption of Angiomax by new hospital customers as well as increased prices.

        In each of 2003 and 2002, we recognized $0.1 million of a $1.5 million non-refundable distributor fee received from Nycomed Danmark A/S, a European pharmaceutical company, pursuant to a collaboration agreement we entered into in 2002. This payment was recorded as deferred revenue in 2002 and is being recognized ratably over the term of our agreement with Nycomed, which we estimated to be twelve years at that time.

        Cost of Revenue.    Cost of revenue in 2003 was $22.7 million, or 27% of net revenue, compared to $10.3 million, or 27% of net revenue in 2002. Cost of revenue in 2003 consisted of expenses in connection with the manufacture of the Angiomax sold, which represented 62% of the 2003 cost of revenue, royalty expenses under our agreement with Biogen which represented 25% of the 2003 cost of revenue and the logistics costs of selling Angiomax, such as distribution, storage, and handling, which

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represented 13% of the 2003 cost of revenue. Cost of revenue in 2002 consisted of expenses in connection with the manufacture of the Angiomax sold, which represented 58% of the 2002 cost of revenue, royalty expenses under our agreement with Biogen which represented 28% of the 2002 cost of revenue and the logistics costs of selling Angiomax, such as distribution, storage, and handling, which represented 14% of the 2002 cost of revenue.

        Prior to obtaining FDA approval for Angiomax and its original manufacturing process, all costs of manufacturing Angiomax were expensed as research and development costs and therefore not reflected in cost of revenue. In late 2000, after obtaining FDA approval for Angiomax and its original manufacturing process, we began recording the costs of manufacturing Angiomax as inventory, which is reflected in cost of revenue when sold, rather than as research and development expense.

        During 2002 and in early 2003, we took delivery of drug material manufactured using the Chemilog process. Because this material was manufactured prior to FDA approval of the Chemilog process, we expensed all costs of manufacturing as research and development. This process was approved by the FDA on May 23, 2003, and we are recording all costs of manufacturing Angiomax incurred after May 23, 2003 as inventory.

        Although we sold some Angiomax in 2003 that had been manufactured using the Chemilog process, most of the Angiomax that we sold in 2003 was manufactured using the original manufacturing process following the date of FDA approval of Angiomax. We recorded the cost of manufacturing such material as cost of revenue during 2003. In 2002, we sold a greater proportion of Angiomax whose costs had been previously expensed than Angiomax for which the cost of manufacturing needed to be recorded in 2002. As a result, our cost of manufacturing as a percentage of cost of revenue was higher in 2003 compared to 2002.

        Late in the third quarter of 2003, we began selling Angiomax produced by the Chemilog process whose cost of manufacturing was previously expensed. As a result, our cost of manufacturing as a percentage of product revenue decreased substantially in the fourth quarter of 2003. We expect that we will begin selling Angiomax produced using the Chemilog process after FDA approval as soon as the second quarter of 2004. At such time, we will experience an increase in our cost of manufacturing as a percentage of net revenue.

Research and Development Expenses.

        The funding for Angiomax has represented and will continue to represent a significant portion of our research and development spending. Over 76% of our research and development expenses in 2003 and 93% of our research and development expenses in 2002 related to Angiomax. For 2003 and 2002, research and development expenses relating to Angiomax included the costs of clinical trials, manufacturing development costs for the bulk drug product and infrastructure, including the cost associated with preparation of U.S. and worldwide marketing applications. For 2003, research and development expenses relating to Clevelox, which represented 17% of our total research and development expenses, consisted of a $1.0 million license fee to AstraZeneca and manufacturing development and other start-up costs relating to the Phase 3 clinical trial we commenced in the fourth quarter of 2003 in patients undergoing cardiac surgery. Research and development expenses in 2002 relating to Clevelox represented less than one percent of our total research and development expenses for 2002. For 2003, research and development expenses relating to cangrelor consisted of an initial payment to AstraZeneca in connection with our license. We had no research and development expenses in 2002 relating to cangrelor.

        Research and development expenses decreased 5% to $35.9 million for 2003, from $38.0 million for 2002. The decrease in research and development expenses was primarily due to $17.3 million less of clinical trial costs in 2003 relating to REPLACE-2, which completed enrollment in 2002, and $4.0 million in lower manufacturing development costs incurred in connection with our receipt of

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Angiomax manufactured using the Chemilog process. These lower costs were partly offset by the addition of clinical development costs of $4.8 million for ACUITY, $4.0 million in additional costs for clinical trial programs studying Angiomax use in cardiac surgery and $5.8 million in additional costs relating to Clevelox development.

        The following table identifies for each of our clinical trial programs, the indication, development phase and clinical trial spending for the years ended December 31, 2003 and 2002. Spending for past periods is not indicative of spending in future periods.

Major Research and Development Projects

		Year Ended December 31,
Program
		2003		2002
		(in thousands)
Angiomax
	Clinical trials	$	17,970	$	23,493
	Manufacturing development		3,232		7,184
	Infrastructure		6,105		4,468
Clevelox			6,052		258
Other			2,546		2,548
		$	35,905	$	37,951

        We currently plan to spend approximately $49 million to $52 million on research and development in 2004, of which approximately 80% is planned for Angiomax. However, our success in expanding the approved indications for Angiomax, or developing our product candidates, is highly uncertain. We cannot reasonably estimate or know the nature, timing and estimated costs of the efforts necessary to complete the development of, or the period in which material net cash inflows are expected to commence from, any of our product candidates due to the numerous risks and uncertainties associated with developing drugs, including the uncertainty of:

•

the scope, rate of progress and cost of our clinical trials and other research and development activities;



•

the financial contributions of our third-party distributors to the costs of our clinical trials;



•

future clinical trial results;



•

the terms and timing of any collaborative, licensing and other arrangements that we may establish;



•

the cost and timing of regulatory approvals;



•

the cost and timing of establishing sales, marketing and distribution capabilities;



•

the cost of establishing clinical and commercial supplies of our product candidates;



•

the effect of competing technological and market developments; and



•

the cost of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights.

        We partially funded development activities relating to the Chemilog process, including validation and process batch costs of approximately $1.2 million and $6.7 million incurred in 2003 and 2002, respectively. We expensed all of these development costs as research and development in the period incurred.

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        Selling, General and Administrative Expenses.    Selling, general and administrative expenses increased 22% to $45.1 million for 2003, from $36.8 million for 2002. The increase in selling, general and administrative expenses of $8.3 million was primarily due to an increase in salary and recruiting expenses relating to our sales force, which grew in early 2003 from 86 to 97 persons, and additional marketing and medical education expenses relating to the promotion of Angiomax, and certain non-cash stock compensation recorded in connection with options granted to non-employees.

        Non-cash Stock Compensation.    We amortize the deferred stock compensation that was recorded in 2000 over the respective vesting periods of the individual stock options. We recorded amortization expense for such deferred compensation of approximately $2.2 million and $3.3 million for the years ended December 31, 2003 and 2002, respectively. We expect to record additional amortization expense for the deferred compensation associated with these options of approximately $0.8 million in 2004. The amortization expense is included in our operating expenses in the consolidated statements of operations.

        In May 2003 we granted options to a non-employee consultant to purchase 50,000 shares of common stock. In September 2003, we amended the terms of fully vested options to purchase 10,000 shares of common stock that were granted to a non-employee consultant in May 2001. In connection with these actions, we recorded $1.2 million in related non-cash stock compensation expense during 2003. The unvested options granted in May 2003 will be revalued, utilizing the Black-Scholes option pricing model, and expensed over the remaining five months of their one-year vesting term. In 2002, we accelerated the vesting of stock options held by terminated employees in connection with their termination agreements, which resulted in $0.5 million in non-cash compensation expense. Non-cash compensation expense is included in our operating expenses in the consolidated statements of operations.

        Other Income and Expense.    Interest income increased over 49% to $1.4 million for 2003, from $0.9 million for 2002. The increase in interest income of $0.5 million was primarily due to higher cash and available for sale securities balances attributable to our public offerings in 2002 and 2003, offset in part by lower available interest rates on securities. For 2002, interest income was attributable to the investment of the remaining proceeds of our sales of shares of common stock in a private placement in May 2001 and in a public offering in 2002.

        We had no interest expense in 2003 as there were no borrowings during this period. We had interest expense of $33,000 during 2002 associated with the draw down of our revolving line of credit at the end of March 2002. We terminated the revolving line of credit in August 2002.

Years Ended December 31, 2002 and 2001

        Net Revenue.    Net revenue increased 169% to $38.3 million in 2002 as compared to $14.2 million for 2001. Virtually all the revenue was from U.S. sales of Angiomax, which we commercially launched during the first quarter of 2001. The growth in 2002 was due primarily to increased use of Angiomax by existing hospital customers and penetration to new hospitals. Since we announced the results of REPLACE-2 in November 2002, additional hospitals have granted Angiomax formulary approval and hospital demand for the product has increased.

        In 2002, we received $1.5 million from Nycomed as a non-refundable distributor fee. This payment has been recorded as deferred revenue and is being recognized ratably over the term of our agreement with Nycomed, which we estimated to be twelve years at that time.

        Cost of Revenue.    Cost of revenue in 2002 was $10.3 million, or 27% of net revenue, compared to $2.1 million, or 15% of net revenue in 2001. Cost of revenue in 2002 consisted of expenses in connection with the manufacture of the Angiomax sold, which represented 58% of the 2002 cost of revenue, royalty expenses under our agreement with Biogen which represented 28% of the 2002 cost of

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revenue and the logistics costs of selling Angiomax, such as distribution, storage, and handling, which represented 14% of the 2002 cost of revenue. Prior to obtaining FDA approval for Angiomax and its original manufacturing process, all costs of manufacturing Angiomax were expensed as research and development costs. In late 2000, after obtaining FDA approval for Angiomax and its original manufacturing process, we began recording the costs of manufacturing Angiomax as inventory, which is reflected in cost of revenue when sold, rather than as research and development expense. As a result, our cost of manufacturing as a percentage of net revenue increased substantially in 2002 as we sold a higher percentage of product manufactured after the date of FDA approval of Angiomax.

        Research and Development Expenses.    Research and development expenses increased 16% to $38.0 million for 2002, from $32.8 million for 2001. Over 90% of the 2002 expenses related to Angiomax development activities, of which 60% were associated with REPLACE-2. The increase in research and development expenses was primarily due to higher clinical development costs of $11.6 million relating to our REPLACE-2 trial and $1.5 million in higher manufacturing development cost incurred in connection with our receipt of Angiomax manufactured using the Chemilog process. These higher costs were partly offset by the absence of clinical development costs of the HERO-2 trial program, our Phase 3 trial of Angiomax in AMI that we completed in 2001 and other development programs savings.

Major Research and Development Projects

		Year Ended December 31,
Program
		2002		2001
		(in thousands)
Angiomax
	Clinical trials	$	23,493	$	18,774
	Manufacturing development		7,184		5,713
	Infrastructure		4,468		4,459
Clevelox			258		—
Other			2,548		3,822
		$	37,951	$	32,768

        We partially funded development activities relating to the Chemilog process, including validation and process batch costs of $6.7 million and $4.8 million incurred in 2002 and 2001, respectively. We expensed all of these development costs as research and development in the period incurred.

        Selling, General and Administrative Expenses.    Selling, general and administrative expenses increased 1% to $36.8 million for 2002, from $36.6 million for 2001. The increase in selling, general and administrative expenses of $241,000 was primarily due to additional sales expense related to the promotion of Angiomax, offset in part by lower marketing expenses.

        Non-cash Stock Compensation.    We amortize the deferred stock compensation that was recorded in 2000 over the respective vesting periods of the individual stock options. We recorded amortization expense for deferred compensation of approximately $3.3 million and $4.1 million for the years ended December 31, 2002 and 2001, respectively. In 2002, we accelerated the vesting of stock options held by terminated employees in connection with their termination agreements, which resulted in $500,000 in non-cash compensation expense. The amortization and non-cash compensation expense is included in our operating expenses in the consolidated statements of operations.

        Other Income and Expense.    Interest income decreased 70% to $944,000 for 2002, from $3.2 million for 2001. The decrease in interest income of $2.3 million was primarily due to lower cash

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and available for sale securities balances and lower available interest rates on securities. For 2002, interest income was attributable to the investment of the remaining proceeds of our sales of shares of common stock in a private placement in May 2001 and in a public offering in 2002. In 2001, interest income was primarily attributable to the investment of the remaining proceeds of our initial public offering in August and September 2000.

        We had interest expense of $33,000 during 2002 associated with the draw down of our revolving line of credit at the end of March 2002. We terminated the revolving line of credit in August 2002. We had no interest expense for 2001. In 2001, we liquidated our $3.0 million principal investment in Southern California Edison 5⁷/8% bonds, recognizing a loss of $850,000 on the sale.

Liquidity and Capital Resources

        Sources of Liquidity.    Since our inception, we have financed our operations through the sale of common and preferred stock, sales of convertible promissory notes and warrants, interest income and revenues from sales of Angiomax. We experienced our first quarterly profit during the three months ended December 31, 2003.

        In August and September 2000, we received $101.4 million in net proceeds from the sale of common stock in our initial public offering. Since our initial public offering, we have received an additional $41.8 million in net proceeds in May 2001 from the sale of 4.0 million shares of our common stock in a private placement, $30.9 million in net proceeds in June 2002 from the sale of 4.0 million shares of our common stock in a public offering and $91.5 million in net proceeds in March 2003 from the sale of 5.6 million shares of our common stock in a public offering. Prior to our initial public offering, we had received net proceeds of $79.4 million from the private placement of equity securities, primarily redeemable convertible preferred stock, and $19.4 million from the issuance of convertible notes and warrants.

        In 2003, employees purchased stock pursuant to option exercises and our employee stock purchase plan for aggregate net proceeds to us of approximately $8.0 million.

        In March 2002, we entered into a collaboration agreement with Nycomed, under which Nycomed will serve as the exclusive distributor of Angiomax in approximately 35 countries, including 12 countries in the European Union. Under the agreement, Nycomed paid us an initial non-refundable fee of $1.5 million and agreed to pay up to $2.5 million in additional milestones based on regulatory approvals in Europe. In addition, Nycomed purchased 79,428 shares of our common stock for a total purchase price of approximately $1.0 million.

        Cash Flows.    As of December 31, 2003, we had $43.4 million in cash and cash equivalents, as compared to $36.8 million as of December 31, 2002. Our major uses of cash during 2003 include net cash used for operating activities of $5.2 million and net cash used in investing activities of $87.7 million, which were more than offset by $99.5 million received from financing activities.

        We used net cash of $5.2 million in operating activities during 2003. This use of cash consisted of a net loss of $16.9 million, an increase in accounts receivable of $0.6 million related to higher sales volume and accrued interest receivable of $0.9 million related to higher investment balance, a decrease in accounts payable of $1.0 million, a decrease in prepaid expenses of $0.3 million, and amortization of deferred revenue of $0.1 million, partly offset by a increase in accrued expenses of $6.8 million, non-cash stock compensation of $3.4 million, a decrease in inventory of $2.7 million, and depreciation of $0.6 million and amortization of premium on available for sale securities of $0.9 million. The increase in accrued expenses can be largely attributed to $2.1 million additional patient related accruals for our clinical trials currently underway, $1.1 million additional employee compensation accruals and increased royalty accruals and $1.3 million additional sales related accruals associated with higher sales volumes.

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        During 2003, we used $87.7 million in cash in net investing activities, which consisted principally of the purchase of $142.8 million of available for sale securities and purchase of $1.2 million of fixed assets, mostly related to our leasehold improvements, offset by $56.3 million in proceeds from the maturation and sale of available for sale securities.

        Cash provided by financing activities of $99.5 million during 2003 consisted primarily of the proceeds of the public offering of 5.6 million shares of our common stock in March 2003 that resulted in net proceeds of $91.5 million. In addition, employees purchased stock pursuant to option exercises and our employee stock purchase plan for aggregate net proceeds to us of approximately $8.0 million.

        Funding Requirements.    We expect to devote substantial resources to our research and development efforts and to our sales, marketing and manufacturing programs associated with the commercialization of our products. Our funding requirements will depend on numerous factors including:

•

the extent to which Angiomax is commercially successful;



•

the progress, level and timing of our research and development activities related to our clinical trials with respect to Angiomax, Clevelox and cangrelor;



•

the cost and outcomes of regulatory reviews;



•

the continuation or termination of third party manufacturing or sales and marketing arrangements;



•

the cost and effectiveness of our sales and marketing programs;



•

the status of competitive products;



•

our ability to defend and enforce our intellectual property rights; and



•

the establishment of additional strategic or licensing arrangements with other companies or acquisitions.

        We believe, based on our operating plan as of the date of this annual report, which includes anticipated revenues from Angiomax and interest income, that our current cash, cash equivalents and available for sale securities would be sufficient to fund our operations into 2005 and beyond, without requiring us to obtain external financing. We expect, however, to periodically assess our financing alternatives and access the capital markets opportunistically. If our existing resources are insufficient to satisfy our liquidity requirements due to slower than anticipated revenues from Angiomax or otherwise, or if we acquire additional product candidates, we may need to sell additional equity or debt securities or seek additional financing through other arrangements. Any sale of additional equity or debt securities may result in additional dilution to our stockholders, and we cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to us, if at all. If we are unable to obtain this additional financing, we may be required to delay, reduce the scope of, or eliminate one or more of our planned research, development and commercialization activities, which could harm our financial condition and operating results.

Contractual Obligations

        Our long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business. These include inventory related commitments to manufacture our products, research and development service agreements, operating leases and other selling and general administrative related obligations.

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        Future estimated contractual obligations are:

Contractual Obligations	2004		2005		2006		2007		2008		Later Years		Total
Inventory related commitments	$	21,318,000	$	28,574,000	$	—	$	—	$	—	$	—	$	49,892,000
Research and development		9,752,000		3,686,000		602,000		—		—		—		14,040,000
Operating Leases		938,000		1,071,000		1,136,000		1,154,000		1,151,000		4,134,000		9,584,000
Selling, general and administrative		698,000		—		—		—		—		—		698,000
Total contractual obligations	$	32,706,000	$	33,331,000	$	1,738,000	$	1,154,000	$	1,151,000	$	4,134,000	$	74,214,000

        Included above are inventory related non-cancellable commitments to make payments to UCB Bioproducts of a total of $18.7 million during 2004 for Angiomax bulk drug substance to be produced using the Chemilog process and $2.6 million in related filling, finishing and packaging commitments through August 2004. We also have $13.8 million of estimated contractual obligations for research and development activities of which $1.0 million is non-cancellable. The amounts included in selling, general and administrative obligations are primarily related to non-cancellable consulting arrangements.

        In addition to the contractual obligations above, we have agreed to make payments upon the achievement of sales and regulatory milestones, and agreed to pay royalties, to Biogen Idec, Inc. and to AstraZeneca AB under our product license agreements for Angiomax, Clevelox and cangrelor. Under the Angiomax license, we have agreed to pay up to an additional $8.0 million upon the first commercial sales of Angiomax for the treatment of acute myocardial infarction in the United States and Europe. Under the Clevelox license, we have agreed to pay up to an additional $5.0 million upon reaching certain regulatory milestones. Under the cangrelor license, we have made an upfront payment and will provide milestone payments upon regulatory approval in major markets.

Factors That May Affect Future Results

        This Annual Report on Form 10-K includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. For this purpose, any statements contained herein regarding our strategy, future operations, financial position, future revenues, projected costs, prospects, plans and objectives of management, other than statements of historical facts, are forward-looking statements. The words "anticipates," "believes," "estimates," "expects," "intends," "may," "plans," "projects," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. We cannot guarantee that we actually will achieve the plans, intentions or expectations expressed or implied in our forward-looking statements. There are a number of important factors that could cause actual results, levels of activity, performance or events to differ materially from those expressed or implied in the forward-looking statements we make. These important factors include our "critical accounting estimates" and the risk factors set forth below. Although we may elect to update forward-looking statements in the future, we specifically disclaim any obligation to do so, even if our estimates change, and readers should not rely on those forward-looking statements as representing our views as of any date subsequent to the date of this annual report.

Risks Related to Our Business

We have a history of net losses and may not achieve or maintain profitability

        We have incurred net losses on an annual basis since our inception, including a net loss of approximately $16.9 million for the year ended December 31, 2003. As of December 31, 2003, we had an accumulated deficit of approximately $314.1 million. We expect to make substantial expenditures to further develop and commercialize our products, including costs and expenses associated with clinical trials, regulatory approvals and commercialization. Although we achieved profitability for the three months ended December 31, 2003, in light of our planned expenditures, we will likely need to generate

35

significantly greater revenues to maintain profitability. We remain unsure as to when we will become profitable on an annual basis, if at all, or whether we will remain profitable for any substantial period of time. If we fail to achieve profitability on an annual basis within the time frame expected by investors or securities analysts, the market price of our common stock may decline.

Our business is very dependent on the commercial success of Angiomax

        Angiomax is our only commercial product and, we expect, will account for almost all of our revenues for the foreseeable future. The commercial success of Angiomax will depend upon its continued acceptance by regulators, physicians, patients and other key decision-makers as a safe, therapeutic and cost-effective alternative to heparin and other products used in current practice, or currently being developed. If Angiomax is not commercially successful, we will have to find additional sources of funding or curtail or cease operations.

Near-term growth in our sales of Angiomax is highly dependent on physician acceptance of the REPLACE-2 trial

        In the fall of 2002, we completed a 6,002 patient post-marketing Phase 3b/4 clinical trial of Angiomax in coronary angioplasty called REPLACE-2. In November 2002, the principal investigators of the clinical trial announced that, based on 30-day patient follow-up results, Angiomax met all of the primary and secondary objectives of the trial. In March 2003, we released the results of the detailed cost analysis study to examine per-patient total hospital resource consumption at U.S. clinical trial sites. In September 2003, the principal investigators of the clinical trial further announced that, based on six-month patient follow-up results, Angiomax again met all of the primary and secondary objectives of the trial. In November 2003, the principal instigators presented one-year follow-up mortality data from the trial, which confirmed the 30-day and six-month mortality results.

        We believe that the near-term commercial success of Angiomax will depend upon the extent to which physicians, patients and other key decision-makers accept the results of the REPLACE-2 trial. Since the original results were announced, additional hospitals have granted Angiomax formulary approval and hospital demand for the product has increased. We cannot be certain, however, that these trends will continue. Some commentators have challenged various aspects of the trial design of REPLACE-2, the conduct of the study and the analysis and interpretation of the results from the study, including how we define bleeding and the clinical relevance of types of ischemic events. If physicians, patients and other key decision-makers do not accept the trial results, adoption of Angiomax may suffer, and our business will be materially adversely affected.

We cannot expand the indications for which we are marketing Angiomax unless we receive FDA approval for each additional indication. Failure to expand these indications will limit the size of the commercial market for Angiomax

        In December 2000, we received approval from the FDA for the use of Angiomax as an anticoagulant in combination with aspirin in patients with unstable angina undergoing coronary angioplasty. One of our key objectives is to expand the indications for which Angiomax is approved for marketing by the FDA. In order to market Angiomax for these expanded indications, we will need to complete our clinical trials that are currently underway, conduct additional clinical trials, obtain positive results from those trials and obtain FDA approval for such proposed indications. If we are unsuccessful in expanding the approved indications for the use of Angiomax, the size of the commercial market for Angiomax will be limited.

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Failure to obtain regulatory approval in foreign jurisdictions will prevent us from marketing Angiomax abroad

        We intend to market Angiomax through distribution partners in international markets, including Europe. In order to market Angiomax in the European Union and many other foreign jurisdictions, we or our distribution partners must obtain separate regulatory approvals. Obtaining foreign approvals may require additional trials and expense. In February 1998, we submitted a Marketing Authorization Application, or MAA, to the European Agency for Evaluation of Medicinal Products, or the EMEA, for use of Angiomax in unstable angina patients undergoing coronary angioplasty. Following extended interaction with European regulatory authorities, the Committee of Proprietary Medicinal Products of the EMEA voted in October 1999 not to recommend Angiomax for approval in coronary angioplasty, and we withdrew our application to the EMEA. In August 2003, we resubmitted an MAA with the results of the REPLACE-2 trial, and we are in discussions with regulatory authorities regarding the resubmitted MAA. We may not be able to obtain approval or may be delayed in obtaining approval from any or all of the jurisdictions in which we seek approval to market Angiomax.

The development and commercialization of our products may be terminated or delayed, and the costs of development and commercialization may increase, if third parties on which we rely to manufacture and support the development and commercialization of our products do not fulfill their obligations

        Our development and commercialization strategy entails entering into arrangements with corporate and academic collaborators, contract research organizations, distributors, third-party manufacturers, licensors, licensees and others to conduct development work, manage our clinical trials, manufacture our products and market and sell our products outside of the United States. We do not have the expertise or the resources to conduct such activities on our own and, as a result, are particularly dependent on third parties in most areas.

        We may not be able to maintain our existing arrangements with respect to the commercialization of Angiomax or establish and maintain arrangements to develop and commercialize Clevelox, cangrelor or any additional product candidates or products we may acquire on terms that are acceptable to us. Any current or future arrangements for development and commercialization may not be successful. If we are not able to establish or maintain agreements relating to Angiomax, Clevelox, cangrelor or any additional products we may acquire on terms that we deem favorable, our results of operations would be materially adversely affected.

        Third parties may not perform their obligations as expected. The amount and timing of resources that third parties devote to developing, manufacturing and commercializing our products are not within our control. Furthermore, our interests may differ from those of third parties that manufacture or commercialize our products. Disagreements that may arise with these third parties could delay or lead to the termination of the development or commercialization of our product candidates, or result in litigation or arbitration, which would be time consuming and expensive.

        If any third party that manufactures or supports the development or commercialization of our products breaches or terminates its agreement with us, or fails to conduct its activities in a timely manner, such breach, termination or failure could:

•

delay or otherwise adversely impact the development or commercialization of Angiomax, Clevelox, cangrelor or any additional products that we may acquire or develop;



•

require us to undertake unforeseen additional responsibilities or devote unforeseen additional resources to the development or commercialization of our products; or



•

result in the termination of the development or commercialization of our products.

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Failure to achieve our revenue targets or raise additional funds in the future may affect the development, manufacture and sale of our products

        We will need to generate significantly greater revenues to achieve and then maintain profitability on an annual basis. The product development, including clinical trials, manufacturing development and regulatory approvals, of Angiomax for additional indications, Clevelox and cangrelor, and the acquisition and development of additional product candidates by us will require a commitment of substantial funds. Our future funding requirements depend upon many factors, including our ability to achieve our revenue targets, and may be significantly greater than we expect.

        As of the date of this annual report, we believe, based on our current operating plan, which includes anticipated revenues from Angiomax and interest income, that our current cash, cash equivalents and available for sale securities will be sufficient to fund our operations into 2005 and beyond, without requiring us to obtain external financing. If our existing resources are insufficient to satisfy our liquidity requirements due to slower than anticipated sales of Angiomax or otherwise, or if we acquire additional product candidates, we may need to sell additional equity or debt securities or seek additional financing through other arrangements. Any sale of additional equity or debt securities may result in additional dilution to our stockholders, and we cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to us, if at all. If we are unable to obtain this additional financing, we may be required to delay, reduce the scope of, or eliminate one or more of our planned research, development and commercialization activities, which could harm our financial condition and operating results. In addition, in order to obtain additional financing, we may be required to relinquish rights to products, product candidates or technologies that we would not otherwise relinquish.

We depend on single suppliers for the production of Angiomax and Clevelox bulk drug substance and different single suppliers to carry out all fill-finish activities

        We do not manufacture any of our products and do not plan to develop any capacity to manufacture them. As of the date of this annual report, we obtain all of our Angiomax bulk drug substance from one manufacturer, UCB Bioproducts, and rely on another manufacturer, Ben Venue Laboratories, to carry out all fill-finish activities for Angiomax, which includes final formulation and transfer of the drug into vials where it is then freeze-dried and sealed. The terms of our agreement with UCB Bioproducts require us to purchase a substantial portion of our Angiomax bulk drug product from UCB Bioproducts, which could hinder our ability to obtain an additional supplier for Angiomax.

        As of the date of this annual report, we obtain all of our Clevelox bulk drug substance for use in clinical trials from one manufacturer, Pharm-Eco, a Johnson Matthey Company. We will rely on a different single supplier, Fresnius Kabi Clayton, L.P., and its proprietary formulation technology, for the manufacture of all finished Clevelox product, as well as release testing and clinical packaging.

        The FDA requires that all manufacturers of pharmaceuticals for sale in or from the United States achieve and maintain compliance with the FDA's current good manufacturing practices, or cGMP, regulations and guidelines. There are a limited number of manufacturers that operate under cGMP regulations capable of manufacturing Angiomax. As of the date of this annual report, we do not have alternative sources for production of Angiomax bulk drug substance or to carry out fill-finish activities. In the event that either UCB Bioproducts or Ben Venue is unable to carry out its respective manufacturing obligations, we may be unable to obtain alternative manufacturing, or obtain such manufacturing on commercially reasonable terms or on a timely basis. If we were required to transfer manufacturing processes to other third party manufacturers, we would be required to satisfy various regulatory requirements, which could cause us to experience significant delays in receiving an adequate supply of Angiomax. Any delays in the manufacturing process may adversely impact our ability to meet commercial demands for Angiomax on a timely basis and supply product for clinical trials of Angiomax.

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We do not own the technology underlying the Chemilog process and may be unable to utilize the Chemilog process if UCB Bioproducts breaches our agreement

        Our agreement with UCB Bioproducts for the supply of Angiomax bulk drug substance provides that UCB Bioproducts owns all of the proprietary technology that was used to develop the Chemilog process. Although the agreement requires that UCB Bioproducts transfer this technology to a secondary supplier of Angiomax bulk drug substance or to us or an alternate supplier at the expiration of the agreement, if UCB Bioproducts fails or is unable to transfer successfully this technology, we would be unable to employ the Chemilog process to manufacture our Angiomax bulk drug substance, which could cause us to experience delays in the manufacturing process and increase our manufacturing costs in the future.

Clinical trials of product candidates are expensive and time-consuming, and the results of these trials are uncertain

        Before we can obtain regulatory approvals to market any product for a particular indication, we will be required to complete pre-clinical studies and extensive clinical trials in humans to demonstrate the safety and efficacy of such product for such indication. As of the date of this annual report, we are evaluating Angiomax in clinical trials for additional uses in open vascular surgery such as CABG surgery, in medical conditions that require urgent treatment such as unstable angina, in patients with heparin allergy, in children and in peripheral angioplasty. As of the date of this annual report, we have commenced a Phase 3 trial program in patients undergoing cardiac surgery to investigate the potential of Clevelox to simplify and improve the treatment of these patients. There are numerous factors that could delay our clinical trials or prevent us from completing our trials successfully. We, or the FDA, may suspend a clinical trial at any time on various grounds, including a finding that patients are being exposed to unacceptable health risks.

        The rate of completion of clinical trials depends in part upon the rate of enrollment of patients. Patient enrollment is a function of many factors, including the size of the patient population, the proximity of patients to clinical sites, the eligibility criteria for the trial, the existence of competing clinical trials and the availability of alternative or new treatments. In particular, the patient population targeted by some of our clinical trials may be small. Delays in future planned patient enrollment may result in increased costs and program delays.

        In addition, clinical trials, if completed, may not show a product candidate to be safe or effective for the intended use. Results obtained in pre-clinical studies or early clinical trials are not always indicative of results that will be obtained in later clinical trials. Moreover, data obtained from pre-clinical studies and clinical trials may be subject to varying interpretations. As a result, the FDA or other applicable regulatory authorities may not approve a product in a timely fashion, or at all. Even if regulatory approval to market a product is granted, the regulatory approval may impose limitations on the indicated use for which the product may be marketed.

Our failure to acquire and develop additional product candidates or approved products will impair our ability to grow

        We have a single product approved for marketing. In order to generate additional revenues, we intend to acquire and develop additional product candidates or approved products. The success of this growth strategy depends upon our ability to identify, select and acquire pharmaceutical products that meet the criteria we have established. Because we neither have, nor intend to establish, internal scientific research capabilities, we are dependent upon pharmaceutical and biotechnology companies and other researchers to sell or license product candidates to us. We will be required to integrate any acquired products into our existing operations. Managing the development of a new product entails

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numerous financial and operational risks, including difficulties in attracting qualified employees to develop the product.

        Any product candidate we acquire will require additional research and development efforts prior to commercial sale, including extensive pre-clinical and/or clinical testing and approval by the FDA and corresponding foreign regulatory authorities. All product candidates are prone to the risks of failure inherent in pharmaceutical product development, including the possibility that the product candidate will not be safe, non-toxic and effective or approved by regulatory authorities.

        In addition, we cannot assure you that any approved products that we develop or acquire will be:

•

manufactured or produced economically;



•

successfully commercialized; or



•

widely accepted in the marketplace.

        We have previously acquired rights to products and, after having conducted development activities, determined not to devote further resources to those products. We cannot assure you that any additional products that we acquire will be successfully developed.

        In addition, proposing, negotiating and implementing an economically viable acquisition is a lengthy and complex process. Other companies, including those with substantially greater financial, marketing and sales resources, may compete with us for the acquisition of product candidates and approved products. We may not be able to acquire the rights to additional product candidates and approved products on terms that we find acceptable, or at all.

A breach of any of the agreements under which we license commercialization rights to products or technology from others could cause us to lose license rights that are important to our business or subject us to claims by our licensors

        We license rights to products and technology that are important to our business, and we expect to enter into additional licenses in the future. For instance, we have exclusively licensed patents and patent applications relating to Angiomax from Biogen and relating to Clevelox and cangrelor from AstraZeneca. Under these agreements, we are subject to commercialization and development, sublicensing, royalty, patent prosecution and maintenance, insurance and other obligations. Any failure by us to comply with any of these obligations or any other breach by us of these license agreements could give the licensor the right to terminate the license in whole, terminate the exclusive nature of the license or bring a claim against us for damages. Any such termination or claim, particularly relating to our agreement with Biogen, could have a material adverse effect on our business. Even if we contest any such termination or claim and are ultimately successful, our stock price could suffer. In addition, upon any termination of a license agreement, we may be required to license to the licensor any related intellectual property that we developed.

We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants

        Our industry has experienced a high rate of turnover of management personnel in recent years. We are highly dependent on our ability to attract and retain qualified personnel for the acquisition, development and commercialization activities we conduct or sponsor. If we lose one or more of the members of our senior management, including our executive chairman, Dr. Clive A. Meanwell, or our chief executive officer, David M. Stack, or other key employees or consultants, our ability to implement successfully our business strategy could be seriously harmed. Our ability to replace these key employees may be difficult and may take an extended period of time because of the limited number of individuals in our industry with the breadth of skills and experience required to acquire, develop and

40

commercialize products successfully. Competition to hire from this limited pool is intense, and we may be unable to hire, train, retain or motivate such additional personnel.

Because the market for thrombin inhibitors is competitive, our product may not obtain widespread use

        We have positioned Angiomax as a replacement for heparin, which is a widely used, inexpensive, generic drug used in patients with arterial thrombosis. Because heparin is inexpensive and has been widely used for many years, physicians and medical decision-makers may be hesitant to adopt Angiomax. In addition, due to the high incidence and severity of cardiovascular diseases, competition in the market for thrombin inhibitors is intense and growing. There are a number of direct and indirect thrombin inhibitors currently on the market, awaiting regulatory approval and in development, including orally administered agents. The thrombin inhibitors on the market include products for use in the treatment of patients with a clinical condition known as HIT/HITTS, patients with unstable angina and patients with deep vein thrombosis.

Angiomax may compete with all groups of anticoagulant drugs, including platelet inhibitors and fibrinolytic drugs, which may limit the use of Angiomax

        In general, anticoagulant drugs may be classified into four groups: drugs that directly target and inhibit thrombin, drugs that indirectly target and inhibit thrombin, drugs that target and inhibit platelets and drugs that break down fibrin. Because each group of anticoagulants acts on different components of the clotting process, we believe that there will be continued clinical work to determine the best combination of drugs for clinical use. We expect Angiomax to be used with aspirin alone or in conjunction with platelet inhibitors or fibrinolytic drugs. Although platelet inhibitors and fibrinolytic drugs may be complementary to Angiomax, we recognize that Angiomax may compete with these and other anticoagulant drugs to the extent Angiomax and any of these anticoagulant drugs are approved for the same indication.

        In addition, platelet inhibitors and fibrinolytic drugs may compete with Angiomax for the use of hospital financial resources. For example, many U.S. hospitals receive a fixed reimbursement amount per procedure for the angioplasties and other treatment therapies they perform. Because this amount is not based on the actual expenses the hospital incurs, hospitals may be forced to use either Angiomax or platelet inhibitors or fibrinolytic drugs but not necessarily several of the drugs together.

We face substantial competition, which may result in others discovering, developing or commercializing competing products before or more successfully than we do

        Our industry is highly competitive. Our success will depend on our ability to acquire and develop products and apply technology, and our ability to establish and maintain markets for our products. Potential competitors in the United States and other countries include major pharmaceutical and chemical companies, specialized pharmaceutical companies and biotechnology firms, universities and other research institutions. Many of our competitors have substantially greater research and development capabilities and experience, and greater manufacturing, marketing and financial resources, than we do. Accordingly, our competitors may develop or license products or other novel technologies that are more effective, safer or less costly than existing products or technologies or products or technologies that are being developed by us or may obtain FDA approval for products more rapidly than we are able. Technological development by others may render our products or product candidates noncompetitive. We may not be successful in establishing or maintaining technological competitiveness.

Fluctuations in our operating results could affect the price of our common stock

        Our operating results may vary from period to period based on factors including the amount and timing of sales of Angiomax, the availability and timely delivery of a sufficient supply of Angiomax, the

41

timing and expenses of clinical trials, announcements regarding clinical trial results and product introductions by us or our competitors, the availability and timing of third-party reimbursement and the timing of regulatory approvals. If our operating results do not match the expectations of securities analysts and investors as a result of these and other factors, the trading price of our common stock will likely decrease.

We may undertake strategic acquisitions in the future and any difficulties from integrating such acquisitions could damage our ability to attain or maintain profitability

        We may acquire additional businesses and products that complement or augment our existing business. Integrating any newly acquired business or product could be expensive and time-consuming. We may not be able to integrate any acquired business or product successfully or operate any acquired business profitably. Moreover, we may need to raise additional funds through public or private debt or equity financing to acquire any businesses or products, which may result in dilution for stockholders and the incurrence of indebtedness.

Our revenues are substantially dependent on a limited number of wholesalers to which we sell Angiomax, and such revenues may fluctuate from quarter to quarter based on the buying patterns of these wholesalers

        We sell Angiomax primarily to a limited number of national medical and pharmaceutical distributors and wholesalers with distribution centers located throughout the United States. During the year ended December 30, 2003, revenues from the sale of Angiomax to three wholesalers totaled approximately 95% of our net revenues. Our reliance on this small number of wholesalers could cause our revenues to fluctuate from quarter to quarter based on the buying patterns of these wholesalers. In addition, if any of these wholesalers fails to pay us on a timely basis or at all, our financial position and results of operations could be materially adversely affected.

Risks Related to Our Industry

If we do not obtain FDA approvals for our products or comply with government regulations, we may not be able to market our products and may be subject to stringent penalties

        Except for Angiomax, which has been approved for sale in the United States for use as an anticoagulant in patients undergoing coronary angioplasty, and which has been approved for sale in five other countries for indications similar to that approved by the FDA, we do not have a product approved for sale in the United States or any foreign market. We must obtain approval from the FDA in order to sell our product candidates in the United States and from foreign regulatory authorities in order to sell our product candidates in other countries. We must successfully complete our clinical trials and demonstrate manufacturing capability before we can file with the FDA for approval to sell our products. The FDA could require additional studies as part of the regulatory review process. Delays in obtaining or failure to obtain regulatory approvals may:

•

delay or prevent the successful commercialization of any of our product candidates;



•

diminish our competitive advantage; and



•

defer or decrease our receipt of revenues or royalties.

        The regulatory review and approval process is lengthy, expensive and uncertain. Extensive pre-clinical data, clinical data and supporting information must be submitted to the FDA for each additional indication to obtain such approvals, and we cannot be certain when we will receive these regulatory approvals, if ever.

42

        In addition to initial regulatory approval, our product and product candidates are subject to extensive and rigorous ongoing domestic and foreign government regulation of, among other things, the research, development, testing, manufacture, labeling, promotion, advertising, distribution and marketing of our products and product candidates. Any approvals, once obtained, may be withdrawn if compliance with regulatory requirements is not maintained or safety problems are identified. Failure to comply with these requirements may also subject us to stringent penalties.

We may not be able to obtain or maintain patent protection for our products, and we may infringe the patent rights of others

        The patent positions of pharmaceutical companies like us are generally uncertain and involve complex legal, scientific and factual issues. Our success depends significantly on our ability to:

•

obtain and maintain U.S. and foreign patents;



•

protect trade secrets;



•

operate without infringing the proprietary rights of others; and



•

prevent others from infringing our proprietary rights.

        We may not have any additional patents issued from any patent applications that we own or license. If additional patents are granted, the claims allowed may not be sufficiently broad to protect our technology. In addition, issued patents that we own or license may be challenged, invalidated or circumvented. Our patents also may not afford us protection against competitors with similar technology. Because patent applications in the United States and many foreign jurisdictions are typically not published until eighteen months after filing and because publications of discoveries in the scientific literature often lag behind actual discoveries, we cannot be certain that others have not filed or maintained patent applications for technology used by us or covered by our pending patent applications without our being aware of these applications.

        We exclusively license U.S. patents and patent applications and corresponding foreign patents and patent applications relating to Angiomax, Clevelox, cangrelor and CTV-05. As of the date of this annual report, we exclusively license six issued U.S. patents relating to Angiomax, three issued U.S. patents relating to Clevelox, four issued U.S. patents relating to cangrelor and three issued U.S. patents relating to CTV-05. The principal U.S. patent that covers Angiomax expires in 2010. The U.S. Patent and Trademark Office has rejected our application for an extension of the term of the patent beyond 2010 because the application was not filed on time. We are exploring an alternative to extend the term of the patent, but we can provide no assurance that we will be successful. We have not yet filed any independent patent applications.

        We may not hold proprietary rights to some patents related to our product candidates. In some cases, others may own or control these patents. As a result, we may be required to obtain licenses under third-party patents to market some of our product candidates. If licenses are not available to us on acceptable terms, we will not be able to market these products.

        We may become a party to patent litigation or other proceedings regarding intellectual property rights. The cost to us of any patent litigation or other proceeding, even if resolved in our favor, could be substantial. If any patent litigation or other intellectual property proceeding in which we are involved is resolved unfavorably to us, we may be enjoined from manufacturing or selling our products without a license from the other party, and we may be held liable for significant damages. We may not be able to obtain any required license on commercially acceptable terms, or at all.

43

If we are not able to keep our trade secrets confidential, our technology and information may be used by others to compete against us

        We rely significantly upon unpatented proprietary technology, information, processes and know-how. We seek to protect this information by confidentiality agreements with our employees, consultants and other third-party contractors, as well as through other security measures. We may not have adequate remedies for any breach by a party to these confidentiality agreements. In addition, our competitors may learn or independently develop our trade secrets.

We could be exposed to significant liability claims if we are unable to obtain insurance at acceptable costs and adequate levels or otherwise protect ourselves against potential product liability claims

        Our business exposes us to potential product liability risks, which are inherent in the testing, manufacturing, marketing and sale of human healthcare products. Product liability claims might be made by patients in clinical trials, consumers, health care providers or pharmaceutical companies or others that sell our products. These claims may be made even with respect to those products that are manufactured in licensed and regulated facilities or otherwise possess regulatory approval for commercial sale.

        These claims could expose us to significant liabilities that could prevent or interfere with the development or commercialization of our products. Product liability claims could require us to spend significant time and money in litigation or pay significant damages. As of the date of this annual report, we are covered, with respect to our commercial sales and our clinical trials, by primary product liability insurance in the amount of $20.0 million per occurrence and $20.0 million annually in the aggregate on a claims-made basis. This coverage may not be adequate to cover any product liability claims.

        As we commercialize our products, we may wish to increase our product liability insurance. Product liability coverage is expensive. In the future, we may not be able to maintain or obtain such product liability insurance on reasonable terms, at a reasonable cost or in sufficient amounts to protect us against losses due to product liability claims.

Our ability to generate future revenue from products will depend on reimbursement and drug pricing

        Acceptable levels of reimbursement of drug treatments by government authorities, private health insurers and other organizations will have an effect on our ability to successfully commercialize, and attract collaborative partners to invest in the development of, product candidates. We cannot be sure that reimbursement in the United States or elsewhere will be available for any products we may develop or, if already available, will not be decreased in the future. If reimbursement is not available or is available only to limited levels, we may not be able to commercialize our products, and may not be able to obtain a satisfactory financial return on our products.

        Third-party payers increasingly are challenging prices charged for medical products and services. Also, the trend toward managed health care in the United States and the changes in health insurance programs, as well as legislative proposals to reform health care or reduce government insurance programs, may result in lower prices for pharmaceutical products, including any products that may be offered by us. Cost-cutting measures that health care providers are instituting, and the effect of any health care reform, could materially adversely affect our ability to sell any products that are successfully developed by us and approved by regulators. Moreover, we are unable to predict what additional legislation or regulation, if any, relating to the health care industry or third-party coverage and reimbursement may be enacted in the future or what effect such legislation or regulation would have on our business.

44

Item 7A. Quantitative and Qualitative Disclosure About Market Risk

        Market risk is the risk of change in fair value of a financial instrument due to changes in interest rates, equity prices, creditworthiness, financing, exchange rates or other factors. Our primary market risk exposure relates to changes in interest rates in our cash, cash equivalents and available for sale securities. We place our investments in high-quality financial instruments, primarily money market funds, corporate debt and U.S. government agency securities with maturities or auction dates of less than one year, which we believe are subject to limited interest rate and credit risk. We currently do not hedge interest rate exposure. At December 31, 2003, we held $135.9 million in cash, cash equivalents and available for sale securities which had an average interest rate of approximately 1.5%. Of this amount, approximately 59% of the cash, cash equivalents and available for sale securities were due on demand or within one year and had an average interest rate of approximately of 1.2%. The remaining 41% were due within two years and had an average interest rate of approximately 1.8%.

        Most of our transactions are conducted in U.S. dollars. We do have certain agreements with parties located outside the United States. Transactions under certain of these agreements are conducted in U.S. dollars, subject to adjustment based on significant fluctuations in currency exchange rates. Transactions under certain other of these agreements are conducted in the local foreign currency. If the applicable exchange rate undergoes a change of 10.0%, we do not believe that it would have a material impact on our results of operations or cash flows.

Item 8. Financial Statements and Supplementary Data

        All financial statements and schedules required to be filed hereunder are filed as Appendix A hereto and are listed under Item 15(a).

Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

        None

Item 9A. Controls and Procedures

        Our management, with the participation of our chief executive officers and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31,2003. Based on this evaluation, our chief executive officers and chief financial officer concluded that, as of December 31, 2003, our disclosure controls and procedures were (1) designed to ensure that material information relating to us, including our consolidated subsidiaries, is made known to our chief executive officers and chief financial officer by others within those entities, particularly during the period in which this report was being prepared and (2) effective, in that they provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms.

        No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the fiscal year ended December 31, 2003 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

45

PART III

Item 10. Directors and Executive Officers of the Registrant

        Our executive officers, directors and key employees and their respective ages are as follows:

Name	Age	Position
Clive A. Meanwell, M.D., Ph.D.*	45	Executive Chairman and Chairman of the Board of Directors
David M. Stack*	52	Chief Executive Officer, President and Director
Steven H. Koehler, M.B.A.*	53	Vice President and Chief Financial Officer
Gary Dickinson	52	Vice President
John D. Richards, D.Phil.*	47	Vice President
Fred M. Ryan, M.B.A	52	Vice President
Paul M. Antinori, J.D.	50	General Counsel
Leonard Bell, M.D.	45	Director
William W. Crouse, M.B.A. (3)	61	Director
Robert J. Hugin (1)	49	Director
T. Scott Johnson, M.D. (1)	56	Director
Armin M. Kessler (1)(2)(3)	65	Director
Robert G. Savage, M.B.A. (2)(3)	50	Director
James E. Thomas, M.Sc. (2)	43	Director

*

Executive Officer

(1)

Member of the Audit Committee

(2)

Member of the Compensation Committee

(3)

Member of the Nominations Committee

        Set forth below is certain information regarding the business experience during the past five years for each of the above-named persons.

        Clive A. Meanwell, M.D., Ph.D. has been a director since the inception of our company in July 1996 and has served as our Executive Chairman since September 2001. From 1996 to September 2001, Dr. Meanwell served as our Chief Executive Officer and President. From 1995 to 1996, Dr. Meanwell was a Partner and Managing Director at MPM Capital L.P., a venture capital firm. From 1986 to 1995, Dr. Meanwell held various positions at Hoffmann-La Roche, Inc., a pharmaceutical company, including Senior Vice President from 1992 to 1995, Vice President from 1991 to 1992 and Director of Product Development from 1986 to 1991. Dr. Meanwell currently serves as a director of Endo Pharmaceuticals Inc. Dr. Meanwell received an M.D. and a Ph.D. from the University of Birmingham, United Kingdom.

        David M. Stack has been our President and Chief Executive Officer and a director since September 2001. From April 1, 2000 to September 2001, Mr. Stack served as a Senior Vice President. From January 2000 to September 2001, Mr. Stack also served as President and General Partner of Stack Pharmaceuticals, Inc., a commercialization, marketing and strategy consulting firm serving healthcare companies, and, from January 2000 to December 2001, as a Senior Advisor to the Chief Executive Officer of Innovex Inc., a contract pharmaceutical organization. Mr. Stack served as President and General Manager of Innovex Inc. from May 1995 to December 1999. Mr. Stack currently serves as a director of BioImaging Technologies, Inc. Mr. Stack received a B.S. in biology from Siena College and a B.S. in pharmacy from Albany College of Pharmacy.

        Steven H. Koehler, M.B.A. has been our Vice President and Chief Financial Officer since April 2002. From March 2002 to April 2002, Mr. Koehler served as our Vice President, Finance and Business Administration. From July 2001 to March 2002, Mr. Koehler was Vice President, Finance and Chief Financial Officer of Vion Pharmaceuticals, Inc., a biotechnology company which develops cancer

46

treatments. From April 1999 to July 2001, Mr. Koehler served as Vice President, Finance and Administration and as a member of the executive board of Knoll Pharmaceuticals, Inc., a wholly owned subsidiary of BASF Corporation, the U.S. subsidiary of a transnational chemical and life sciences company. From June 1997 to April 1999, Mr. Koehler was Vice President, Finance and Controlling for Knoll AG in Ludwigshafen, Germany, the former global pharmaceutical subsidiary of BASF AG. From November 1995 to June 1997, he served as Vice President, Value Based Management for Knoll AG. Mr. Koehler was Vice President, Finance and Treasurer for Boots Pharmaceuticals, Inc. from 1993 until its acquisition by Knoll in 1995. Mr. Koehler is a Certified Public Accountant. Mr. Koehler received a B.A. degree from Duke University and an M.B.A. degree from the Kellogg Graduate School of Management, Northwestern University.

        Gary Dickinson has been a Vice President since April 2001 with a focus on human resources activities. From March 2000 to April 2001, Mr. Dickinson was the Vice President of Human Resources of Elementis Specialties, Inc., a specialty chemicals manufacturing firm. From January 1997 to April 2001, Mr. Dickinson was the Senior Director of Human Resources of Bristol-Myers Squibb Company, a pharmaceuticals firm. Mr. Dickinson holds a B.A. from the University of Sheffield, United Kingdom.

        John D. Richards, D.Phil. joined us in October 1997 and has been a Vice President since 1999, with a focus on product manufacturing and quality. From 1993 until he joined us in October 1997, Dr. Richards was Director of Process Development and Manufacturing at Immulogic Pharmaceutical Corporation, a pharmaceutical company. From 1989 to 1993, Dr. Richards was a Technical Manager at Zeneca PLC, a pharmaceutical company, where he developed and implemented processes for the manufacture of peptides as pharmaceutical active intermediates. In 1986, Dr. Richards helped establish Cambridge Research Biochemicals, a manufacturer of peptide-based products for pharmaceutical and academic customers. Dr. Richards received an M.A. and a D.Phil. in organic chemistry from the University of Oxford, United Kingdom, and has carried out post-doctoral research work at the Medical Research Councils Laboratory of Molecular Biology in Cambridge, United Kingdom.

        Fred M. Ryan, M.B.A. has been a Vice President since April 2000, with a focus on corporate strategic development, new product acquisitions and Angiomax commercial development. From April 2000 to September 2001, Mr. Ryan also served as a Partner and the Vice President of Business Development of Stack Pharmaceuticals, Inc. From July 1991 to April 2000, he held senior management positions with Novartis Pharmaceuticals Corporation, a pharmaceutical company, in the United States in the areas of Finance, Strategic Planning, Business Development and Marketing, serving from 1998 to April 2000 as Executive Director Mature Products responsible for managing sales and marketing activities for a portfolio of products having annual sales in excess of $500 million. He received a B.S. and a B.A. degrees from Bryant College and his M.B.A. from Fairleigh Dickinson University.

        Paul M. Antinori, J.D. has been our General Counsel since May 2002. From March 1998 to April 2002, Mr. Antinori was General Counsel and a consultant to Physician Computer Network, Inc., a healthcare information technology company. Prior to March 1998, Mr. Antinori was a partner at Gibbons, Del Deo, Dolan, Griffinger & Vecchione in Newark, NJ. Mr. Antinori received his J.D. from the University of Virginia School of Law and his B.A. from Boston College.

        Leonard Bell, M.D. has been a director since May 2000. From January 1992 to March 2002, Dr. Bell served as the President and Chief Executive Officer, Secretary and Treasurer of Alexion Pharmaceuticals, Inc., a pharmaceutical company. Since March 2002, Dr. Bell has served as the Chief Executive Officer, Secretary and Treasurer of Alexion Pharmaceuticals, Inc. Since 1993, Dr. Bell has served as an Adjunct Assistant Professor of Medicine and Pathology at the Yale University School of Medicine. From 1991 to 1992, Dr. Bell was an Assistant Professor of Medicine and Pathology and co-Director of the Program in Vascular Biology at the Yale University School of Medicine. From 1990 to 1992, Dr. Bell was an attending physician at the Yale-New Haven Hospital and an Assistant

47

Professor in the Department of Internal Medicine at the Yale University School of Medicine. Dr. Bell was the recipient of the Physician Scientist Award from the National Institutes of Health and Grant-in-Aid from the American Heart Association. Dr. Bell is the recipient of various honors and awards from academic and professional organizations and his work has resulted in more than 45 scientific publications, invited presentations and patent applications. Dr. Bell is an invited Member of the State of Connecticut Governor's Council on Economic Competitiveness and Technology and a director of Connecticut United for Research Excellence, Inc. He also served as a director of the Biotechnology Research and Development Corporation from 1993 to 1997. Dr. Bell currently also serves as a director of Alexion Pharmaceuticals, Inc. Dr. Bell received an A.B. from Brown University and an M.D. from the Yale University School of Medicine.

        William W. Crouse, M.B.A. has been a director since April 2003. Since January 1994, Mr. Crouse has been a Managing Director of HealthCare Ventures, a venture capital firm with a focus on biotechnology firms. From 1987 to 1993, Mr. Crouse served as Worldwide President of Ortho Diagnostic Systems, a subsidiary of Johnson & Johnson that manufactures diagnostic tests for hospitals, and a Vice President of Johnson & Johnson International. Before joining Johnson & Johnson, Mr. Crouse was a Division Director of DuPont Pharmaceuticals Company, a pharmaceutical firm, where he was responsible for international operations and worldwide commercial development activities. Before joining Dupont, he served as President of Revlon Health Care Group's companies in Latin America, Canada, and Asia/Pacific. Mr. Crouse currently also serves as a director of ImClone Systems, Inc. Mr. Crouse received a B.S. in finance and economics from Lehigh University and an M.B.A. from Pace University.

        Robert J. Hugin has been a director since April 2003. Since June 1999, Mr. Hugin has been the Senior Vice President and Chief Financial Officer of Celgene Corporation, a biopharmaceutical company focused on cancer and immunological diseases. From 1985 to 1999, Mr. Hugin held positions with J.P. Morgan & Co. Inc., an investment banking firm, serving most recently as a Managing Director. Mr. Hugin also currently serves as a director of Celgene Corporation. Mr. Hugin received an A.B. from Princeton University and an M.B.A. from the University of Virginia.

        T. Scott Johnson, M.D. has been a director since September 1996. In July 1999, Dr. Johnson founded JSB Partners, L.P., an investment bank focusing on mergers and acquisitions, private financings and corporate alliances within the health care sector. From September 1991 to July 1999, Dr. Johnson served as a founder and managing director of MPM Capital, L.P., a venture capital firm. Dr. Johnson received both a B.S. and an M.D. from the University of Alabama.

        Armin M. Kessler has been a director since October 1998. Mr. Kessler joined us after a 35-year career in the pharmaceutical industry, which included senior management positions at Sandoz Pharma Ltd., Basel, Switzerland, United States and Japan (now Novartis Pharma AG) and, most recently, at Hoffmann-La Roche, Basel where he was Chief Operating Officer and Head of the Pharmaceutical Division until 1995. Mr. Kessler currently also serves as a director of Spectrum Pharmaceuticals, Inc. and Gen-Probe Incorporated. Mr. Kessler received degrees in physics and chemistry from the University of Pretoria, a degree in chemical engineering from the University of Cape Town, a law degree from Seton Hall and an honorary doctorate in business administration from the University of Pretoria.

        Robert G. Savage, M.B.A. has been a director since April 2003. From March 2002 to April 2003, Mr. Savage was Group Vice President and President for the General Therapeutics and Inflammation Business, of Pharmacia Corporation, a research-based pharmaceutical firm acquired by Pfizer Inc. in April 2003. From September 1996 to January 2002, Mr. Savage held several senior positions with Johnson & Johnson, including Worldwide Chairman for the Pharmaceuticals Group during 2001, Company Group Chairman responsible for the North America pharmaceuticals business from 2000 to 2001, President, Ortho-McNeil Pharmaceuticals from 1998 to 2000 and Vice President Sales &

48

Marketing from 1996 to 1998. From 1985 to 1996, Mr. Savage held several positions at Hoffmann-La Roche, Inc., a healthcare firm. Mr. Savage also serves as a director for Noven Pharmaceuticals, a leader in the development of advanced drug delivery technologies, and NovaDel Pharma Inc., a specialty pharmaceutical company developing drug delivery systems. Mr. Savage received a B.S. in biology from Upsala College and an M.B.A. from Rutgers University.

        James E. Thomas, M.Sc. has been a director since September 1996. Since March 2001, Mr. Thomas has served as Managing Partner of Thomas, McNerney & Partners, LLC, a health care private equity investment fund. From 1989 to June 2000, Mr. Thomas served in various capacities, including from 1994 to 2000, as a Partner and Managing Director, at E.M. Warburg, Pincus & Co., LLC, a private equity investment firm. From 1984 to 1989, Mr. Thomas was a Vice President of Goldman Sachs International, an investment banking firm, in London. Mr. Thomas currently also serves as a director of Wright Medical Group. Mr. Thomas received a B.Sc. in finance and economics from The Wharton School of the University of Pennsylvania and an M.Sc. in economics from the London School of Economics.

Audit Committee

        Members of the Audit Committee.    Our board of directors has a separately-designated standing audit committee established by our full board for the purposes of overseeing our accounting and financial reporting processes and audits of our financial statements. The members of the audit committee are Robert Hugin, who serves as Chairman, Armin Kessler and T. Scott Johnson.

        Financial Expert on Audit Committee.    Our board of directors has determined that we currently have two audit committee financial experts, Robert J. Hugin and Armin M. Kessler. In deciding whether members of our audit committee qualify as financial experts within the meaning of the SEC regulations and the NASDAQ listing standards, our board considered the nature and scope of experiences and responsibilities members of our audit committee have previously had with reporting companies. Messrs. Hugin and Kessler, like all of the other members of our audit committee, are independent directors.

Section 16(a) Beneficial Ownership Reporting Compliance

        Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and holders of more than ten percent of our common stock to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities. Based solely on our review of copies of reports filed by the reporting persons furnished to us, or written representations from reporting persons, we believe that during 2003, the reporting persons complied with all Section 16(a) filing requirements, other than one late filing by Peter Teuber, a former Vice President.

Code of Ethics

        We have adopted a code of business conduct and ethics applicable to all of our employees, including our principal executive officers, our principal financial officer and our controller. The code of business conduct and ethics is available on our website (www.themedicinescompany.com).

1.

From our main web page, first click on "The Medicines Investment."

2.

Next, click on "Corporate Governance."

3.

Finally, click on "Code of Business Conduct and Ethics."

        We intend to satisfy the disclosure requirement under Item 10 of Form 8-K regarding an amendment to, or waiver from, a provision of this code of ethics by posting such information on our website, at the address and location specified above.

49

Item 11. Executive Compensation

        The following table presents summary information for the years ended December 31, 2003, 2002 and 2001, for:

•

our executive chairman and our chief executive officer; and



•

our two other executive officers who were serving at the end of the fiscal year.

        These four individuals are referred to collectively as our named executive officers.

Summary Compensation Table

						Long-Term Compensation Awards
		Annual Compensation(1)
Name And Position						Securities Underlying Options(#)	All Other Compensation($)(2)
	Year	Salary		Bonus
Clive A. Meanwell (3) Executive Chairman	2003 2002 2001	$ $ $	325,000 300,000 300,000	$ $ $	250,000 180,000 50,000	125,000 123,000 15,000	$ $ $	1,065 990 770
David M. Stack (4) President and Chief Executive Officer	2003 2002 2001	$ $ $	300,000 265,000 197,917	$ $ $	150,000 115,000 40,000	65,000 204,000 215,000	$ $ $	1,486 1,325 516
Steven H. Koehler (5) Vice President and Chief Financial Officer	2003 2002	$ $	222,500 172,689	$ $	100,000 65,000	50,000 250,000	$ $	1,083 874
John D. Richards Vice President	2003 2002 2001	$ $ $	170,000 150,000 150,000	$ $ $	105,000 48,000 30,000	50,000 25,000 15,000	$ $ $	532 450 450

(1)

Perquisites for the named executive officers did not exceed the lesser of $50,000 or 10% of total salary and bonus for the respective fiscal years and accordingly have been omitted in accordance with SEC rules.

(2)

The dollar amount in the "Other Annual Compensation" column represents life insurance premium payments made by us on behalf of the named executive officer.

(3)

Dr. Meanwell served as our President and Chief Executive Officer from 1996 to September 2001. In September 2001, he became our Executive Chairman.

(4)

Mr. Stack became our President and Chief Executive Officer in September 2001. Mr. Stack served as our Senior Vice President from April 2000 to September 2001.

(5)

Mr. Koehler became our Vice President in March 2002 and our Chief Financial Officer in April 2002.

Option Grants in 2003

        The following table summarizes information regarding options granted to each of the named executive officers during the year ended December 31, 2003. Options granted in 2003 become exercisable in 48 equal monthly installments, commencing one month after the vesting commencement date, which is typically the grant date.

        Amounts in the following table represent hypothetical gains that could be achieved for the respective options if exercised at the end of the option term. The 5% and 10% assumed annual rates of

50

compounded stock price appreciation are mandated by the rules of the SEC and do not represent an estimate or projection of our future common stock prices. These amounts represent assumed rates of appreciation in the value of our common stock from the fair market value on the date of grant. Actual gains, if any, on stock option exercises are dependent on the future performance of our common stock and overall stock market conditions. The amounts reflected in the following table may not be achieved.

Option Grants in Last Fiscal Year

	Individual Grants (1)
							Potential Realizable Value at Assumed Annual Rates of Stock Price Appreciation for Option Term
	Number Of Securities Underlying Options Granted	Percent of Options Granted to Employees in 2003
Name				Exercise Price Per Share		Expiration Date
							5%		10%
Clive A. Meanwell	125,000	6.4	%	$	28.01	12/23/13	$	2,201,917	$	5,580,091
David M. Stack	65,000	3.3	%	$	28.01	12/23/13	$	1,144,997	$	2,901,647
Steven H. Koehler	50,000	2.6	%	$	28.01	12/23/13	$	880,767	$	2,232,036
John D. Richards	50,000	2.6	%	$	27.81	12/19/13	$	874,478	$	2,216,099

(1)

The percentage of total options granted to employees in 2003 is calculated based on options granted to employees under our 1998 stock incentive plan and 2001 non-officer, non-director employee stock incentive plan.

Option Exercises in 2003 and Option Values at December 31, 2003

        The following table sets forth information regarding any options exercised by the named executive officers during the fiscal year ended December 31, 2003 and exercisable and unexercisable stock options held as of December 31, 2003 by each of the named executive officers.

        Amounts shown under the column "Value Realized" represent the difference between the option exercise price and the closing sale price of our common stock on the date of exercise. Amounts shown under the column "Value of Unexercised In-the-Money Options at December 31, 2003" have been calculated based on the closing sale price of our common stock on the Nasdaq National Market on December 31, 2003 of $29.46 per share, without taking into account any taxes that may be payable in connection with the transaction, multiplied by the number of shares underlying the option, less the exercise price payable for these shares.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values

				Number of Securities Underlying Unexercised Options at December 31, 2003
						Value of Unexercised in-the-Money Options at December 31, 2003
	Shares Acquired on Exercise
Name		Value Realized
				Exercisable	Unexercisable	Exercisable		Unexercisable
Clive A. Meanwell	—		—	457,320	271,341	$	10,410,057	$	2,462,739
David M. Stack	84,000	$	1,561,340	294,114	319,386	$	4,420,865	$	3,840,782
Steven H. Koehler	—		—	100,000	200,000	$	1,630,500	$	2,468,000
John D. Richards	15,000	$	221,761	35,358	81,208	$	556,095	$	536,851

Director Compensation

        Each of our non-employee directors who attends, either in person or by phone, at least 75% of the meetings of the board of directors held during the year receives annual compensation of $12,500. In addition, each member of our audit, compensation or nominations committee who attends, either in

51

person or by phone, at least 75% of the meetings of the committee on which he served held during the year receives an additional $12,500. Directors are reimbursed for expenses in connection with their attendance at board meetings.

        In addition, non-employee directors may receive stock options and other equity awards under our 1998 stock incentive plan and our 2000 outside director stock option plan, or 2000 Plan. In April 2003 upon their initial election to our board of directors, we granted each of Messrs. Crouse, Hugin and Savage a non-statutory stock option under our 2000 Plan to purchase 20,000 shares of common stock at an exercise price of $17.19 per share. In May 2003, we granted each of Drs. Bell and Johnson, and Messrs. Crouse, Hugin, Kessler, Savage and Thomas an option under our 2000 Plan to purchase 12,500 shares of common stock at an exercise price of $23.00 per share. We also granted to Fazle Husain, a director until his resignation in October 2003, an option under our 1998 plan to purchase 12,500 shares of common stock at an exercise price of $23.00 per share. All of the options vest in 48 equal monthly installments commencing one month after the date of grant.

2000 Outside Director Stock Option Plan

        Our 2000 Plan was adopted by our board of directors on May 15, 2000. Under the plan, our non-employee directors are eligible to receive non-statutory options to purchase shares of our common stock. A total of 250,000 shares of our common stock may be issued upon the exercise of options granted under the 2000 Plan. As of December 31, 2003, options to purchase 195,000 shares of our common stock were outstanding under the 2000 Plan.

        Under the terms of the 2000 Plan, each non-employee director will be granted an option to purchase 20,000 shares of our common stock on the date of his or her initial election to the board of directors. In addition, since the 2003 annual meeting of stockholders, each non-employee director receives an option to purchase 12,500 shares of our common stock on the date of each annual meeting of our stockholders, other than a director who was initially elected to the board of directors at any such annual meeting.

        All options granted under the 2000 Plan vest in 48 equal monthly installments commencing one month after the date of grant and have an exercise price per share equal to the closing sale price of our common stock on the Nasdaq National Market on the date of grant. An optionee may exercise his or her option only while he or she is a director and for one year after he or she ceases to be a director. Unexercised options expire ten years after the date of grant. Options granted under the 2000 Plan are not transferable or assignable other than by will or the laws of descent and distribution and expire upon an acquisition event, which is defined to mean (1) any merger or consolidation which results in our stockholders prior to the transaction holding less than a majority of the voting power of the combined or acquiring entity immediately after the transaction, (2) any sale of all or substantially all of our assets or (3) our complete liquidation.

Employment Agreements

        Dr. Meanwell serves as our Executive Chairman pursuant to the terms of an employment agreement dated September 5, 1996. This agreement renews automatically on a yearly basis unless either party provides written notice of non-renewal at least 90 days prior to the expiration of the then-current term. Pursuant to the terms of the agreement, Dr. Meanwell's annual compensation is determined by our board of directors. If Dr. Meanwell terminates his employment for good reason, as defined in the agreement, or if we terminate his employment other than for cause, Dr. Meanwell will be entitled to three months salary and the same health, disability and other benefits as were provided during his employment for a period ending upon the earlier of (1) three months after the date of his termination, or (2) the date upon which Dr. Meanwell commences full-time employment with a new employer. Dr. Meanwell has agreed not to compete with us during the term of his employment and for

52

a period of one year after his termination, unless such termination is at our election or at the election of Dr. Meanwell for good reason.

        Mr. Stack serves as our Chief Executive Officer and President pursuant to the terms of an employment agreement dated November 1, 2001. This agreement renews automatically on a yearly basis unless either party provides written notice of non-renewal at least 90 days prior to the expiration of the then-current term. Pursuant to the terms of the agreement, Mr. Stack's annual compensation is determined by our board of directors. If Mr. Stack terminates his employment for good reason, as defined in the agreement, or if we terminate his employment other than for cause, Mr. Stack will be entitled to three months salary and the same health, disability and other benefits as were provided during this employment for a period ending upon the earlier of (1) three months after the date of his termination, or (2) the date upon which Mr. Stack commences full-time employment with a new employer. Mr. Stack has agreed not to compete with us during the term of his employment and for a period of one year after his termination, unless such termination is at our election or at the election of Mr. Stack for good reason.

        Dr. Richards serves as one of our Vice Presidents pursuant to the terms of an employment agreement dated October 16, 1997. This agreement renews automatically on a yearly basis unless either party provides written notice of non-renewal. Pursuant to the terms of the agreement, Dr. Richards' annual compensation is determined by our board of directors. If Dr. Richards terminates his employment for good reason, as defined in the agreement, or if we terminate his employment other than for cause, Dr. Richards will be entitled to three months salary and the same health, disability and other benefits as were provided during his employment for a period of three months after the date of his termination. Dr. Richards has agreed not to compete with us during the term of his employment and for a period of one year after his termination.

Compensation Committee Interlocks and Insider Participation

        The compensation committee consists of Messrs. Kessler, Savage and Thomas, none of whom ever has been an officer or employee of our company. Messrs. Kessler and Thomas served on the compensation committee throughout 2003 while Mr. Savage began serving on the compensation committee in April 2003. Nicholas J. Lowcock, a former director, served on the compensation committee from January 1, 2003 until April 2003. Mr. Lowcock has never been an officer or employee of our company.

        None of our executive officers has served as a director or member of the compensation committee, or other committee serving an equivalent function, of any other entity, one of whose executive officers served as one of our directors or as a member of our compensation committee.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

        The following table presents information we know regarding the beneficial ownership of our common stock as of January 31, 2004 for each person, entity or group of affiliated persons whom we know to beneficially own more than 5% of our common stock. The table also sets forth such information for our directors and named executive officers, individually, and our directors and executive officers as a group.

        Beneficial ownership is determined in accordance with the rules of the SEC. Except as indicated by footnote, to our knowledge, the persons named in the table have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them. Common stock purchase warrants and options to purchase shares of common stock that are exercisable within 60 days of January 31, 2004 are deemed to be beneficially owned by the person holding such options for the purpose of computing ownership of such person, but are not treated as outstanding for the purpose of

53

computing the ownership of any other person. Applicable percentage of beneficial ownership is based on 47,514,460 shares of common stock outstanding as of January 31, 2004.

        Unless otherwise indicated in the footnotes, the address of each of the individuals named below is: c/o The Medicines Company, 8 Campus Drive, Parsippany, New Jersey 07054.

Beneficial Owner:	Number of Shares Beneficially Owned	Percentage Beneficially Owned
Wellington Management Company, LLP (1)	5,943,400	12.5	%
Biotech Growth N.V. (2)	4,700,000	9.8	%
Sectoral Asset Management (3)	3,247,055	6.8	%
T. Rowe Price Associates, Inc. (4)	2,370,910	5.0	%
Clive A. Meanwell (5)	658,662	1.4	%
David M. Stack (6)	326,246	*
Steven H. Koehler (7)	120,750	*
John D. Richards (8)	50,192	*
Leonard Bell (9)	25,347	*
William W. Crouse (10)	7,187	*
Robert J. Hugin (11)	7,187	*
T. Scott Johnson (12)	60,638	*
Armin M. Kessler (13)	97,665	*
Robert G. Savage (14)	7,187	*
James E. Thomas (15)	77,547	*
All directors and executive officers as a group (11 persons)	1,438,608	3.0	%

*

Represents beneficial ownership of less than 1%.

(1)

Includes shares owned by various investors for which Wellington Management Company, LLP serves as investment advisor with shared power to direct investments and/or to vote the shares. The shares were acquired by Wellington Trust Company, NA, a wholly owned subsidiary of Wellington Management Company, LLP. The address of Wellington Trust Company, NA and Wellington Management Company, LLP is 75 State Street, Boston, Massachusetts 02109. This information is based on a Schedule 13G/A filed by Wellington Management Company, LLP with the SEC on February 12, 2004.

(2)

Consists of warrants to purchase 675,925 shares and 4,024,075 shares owned directly by Biotech Growth N.V. with respect to which BB Biotech AG and Biotech Growth N.V. share voting and dispositive power. Biotech Growth N.V. is a wholly owned subsidiary of BB Biotech AG. The address of Biotech Growth N.V. is Calle 53, Urbanizacion Obarrio, Torre Swiss Bank, Piso 16, Panama City, Zona 1, Republic of Panama. This information is based on a Schedule 13G/A filed by BB Biotech AG on behalf of Biotech Growth N.V. with the SEC on February 17, 2004.

(3)

Consists of shares for which Sectoral Asset Management, Inc. has or shares dispositive power and/or voting power in its capacity as an investment adviser. Jérôme G. Pfund and Michael L. Sjöström are the sole shareholders of Sectoral Asset Management, Inc. Jérôme G. Pfund, Michael L. Sjöström and Sectoral Asset Management, Inc. disclaim beneficial ownership of such shares. The address of Sectoral Asset Management is 2120-1000 Sherbrooke St., West Montreal PQ H3A 3G4 Canada. This information is based on a Schedule 13G with the SEC on February 13, 2004.

54

(4)

Includes shares owned by various individual and institutional investors for which T. Rowe Price Associates, Inc. serves as investment advisor with power to direct investments and/or sole power to vote the shares. For purposes of the reporting requirements of the Securities Exchange Act of 1934, T. Rowe Price Associates, Inc. is deemed to be a beneficial owner of such shares; however, T. Rowe Price Associates, Inc. expressly disclaims that it is, in fact, the beneficial owner of such shares. The address of T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202. This information is based on a Schedule 13G/A filed by T. Rowe Price Associates, Inc. with the SEC on February 6, 2004.

(5)

Includes warrants to purchase 59,143 shares and options to purchase 496,933 shares. Excludes 450,000 shares subject to pre-paid variable forward sales contracts, pursuant to which Dr. Meanwell pledged 450,000 shares to secure future obligation to deliver a maximum of 350,000 shares in February 2006 and 100,000 shares in August 2006.

(6)

Includes options to purchase 321,846 shares.

(7)

Includes options to purchase 118,750 shares.

(8)

Includes options to purchase 43,092 shares.

(9)

Consists of options to purchase 25,347 shares.

(10)

Consists of options to purchase 7,187 shares.

(11)

Consists of options to purchase 7,187 shares.

(12)

Includes 5,000 shares held by Dr. Johnson as trustee, warrants to purchase 13,744 shares held by Dr. Johnson and options to purchase 11,355 shares held by Dr. Johnson.

(13)

Includes 3,000 shares held by Mr. Kessler's wife, warrants to purchase 33,796 shares held by Mr. Kessler and options to purchase 25,955 shares held by Mr. Kessler.

(14)

Consists of options to purchase 7,187 shares.

(15)

Includes options to purchase 25,347 shares.

55

Securities Authorized for Issuance Under Equity Compensation Plans

        The following table provides information as of December 31, 2003 about the securities authorized for issuance under our equity compensation plans.

Equity Compensation Plan Information

Plan Category		Number of Securities to be Issued Upon Exercise of Outstanding Options		Weighted-average Exercise Price of Outstanding Options			Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities reflected in column (a))
		(a)		(b)			(c)
Equity compensation plans approved by security holders		4,404,674(1	)(2)	$	16.21(2	)	455,931(3	)
Equity compensation plans not approved by security holders		911,319(4	)	$	14.86		4,115(5	)
	Total	5,315,993		$	15.98(1	)(2)(4)	460,046(3	)(5)

(1)

Includes shares of common stock issuable under our 1998 stock incentive plan and 2000 outside director stock option plan.

(2)

Excludes shares issuable at the end of the then-current offering period under our 2000 employee stock purchase plan.

(3)

Includes shares available for issuance as of December 31, 2003 under our 1998 stock incentive plan, 2000 outside director stock option plan and 2000 employee stock purchase plan (which includes shares which were subsequently issued on February 22, 2004 at the close of the then-current offering period). All of the shares available under the 1998 stock incentive plan, and none of the shares available under the 2000 outside director stock option plan or the 2000 employee stock purchase plan, may be issued in the form of restricted stock or other equity-based awards.

(4)

Consists of shares of common stock issuable under our 2001 non-officer, non-director employee stock incentive plan.

(5)

Consists of shares available for issuance as of December 31, 2003 under our 2001 non-officer, non-director employee stock incentive plan.

2001 Non-Officer, Non-Director Employee Stock Incentive Plan

        In May 2001, our board of directors approved the 2001 plan pursuant to which non-statutory stock options for up to 1,250,000 shares of common stock were authorized to be issued to our employees, consultants and advisors and those of our subsidiaries. The 2001 plan has not been approved by our stockholders.

        Our board is authorized to administer the 2001 plan, to adopt, amend and repeal the administrative rules, guidelines and practices relating to the 2001 plan and to interpret the provisions of the 2001 plan. Our board may amend, suspend or terminate the 2001 plan at any time. In accordance with the provisions of the 2001 plan, our board of directors may delegate any or all of its powers under the 2001 plan to one or more committees or subcommittees of the board.

        Our board selects the recipients of awards under the 2001 plan and determines:

•

the number of shares of common stock covered by such awards;

56

•

the dates upon which such awards become exercisable;



•

the exercise price of options; and



•

the duration of the options.

        If any award granted under the 2001 plan expires or is terminated, surrendered, canceled or forfeited, the unused shares of common stock covered by such option or other award will again be available for grant under the 2001 plan.

        Our board is required to make appropriate adjustments in connection with the 2001 plan to reflect any stock split, reverse stock split, stock dividend, recapitalization, combination of shares, reclassification of shares, spin-off or other similar event to the extent that the board determines, in good faith, that such as adjustment is necessary and appropriate. Upon the occurrence of an acquisition event, as defined in the 2001 plan, the 2001 plan requires our board to take one or more of the following actions with respect to any then outstanding options and other awards:

•

provide that each outstanding option or award will be assumed, or an equivalent option or award will be substituted by, the successor entity or an affiliate of the successor entity;



•

provide that all outstanding options become exercisable in full for a specified period of time before such acquisition event takes place, even if such options would not have been exercisable otherwise; and



•

if the acquisition event involves a cash payment to holders of common stock in exchange for their shares of common stock, provide for the termination of all outstanding options and provide for a cash payment to each option holder equal to the amount by which (1) the cash payment per share of common stock paid the holders of common stock multiplied by the number of shares of common stock subject to such outstanding option (whether or not exercisable), exceeds (2) the total exercise price of such options.

        Upon the occurrence of a change in control, as defined in the 2001 plan, that is not an acquisition event, each option shall become immediately exercisable in full if, on or prior to the first anniversary of the date of the change in control event, a termination event, as defined in the 2001 plan, occurs, provided that the parties involved in the change of control have not explicitly agreed to the contrary.

Item 13. Certain Relationships and Related Transactions

        None

57

Item 14. Principal Accountant Fees and Services

Independent Auditor's Fees

        The following table summarizes the fees of Ernst & Young LLP, our independent auditor, billed to us for each of the last two fiscal years for audit services and billed to us in each of the last two fiscal years for other services:

Fee Category		2003		2002
Audit Fees (1)		$	359,876	$	373,296
Audit-Related Fees (2)			18,000		—
Tax Fees (3)			60,457		28,988
All Other Fees			—		—
	Total Fees	$	438,333	$	402,284

(1)

Audit fees consist of fees for the audit of our financial statements, the review of the interim financial statements included in our quarterly reports on Form 10-Q, and other professional services provided in connection with statutory and regulatory filings or engagements.

(2)

Audit-related fees consist of fees for assurance and related services that are reasonably related to the performance of the audit and the review of our financial statements and which are not reported under "Audit Fees." These services relate to Sarbanes-Oxley compliance.

(3)

Tax fees consist of fees for tax compliance, tax advice and tax planning services. Tax compliance services, which relate to preparation of original and amended tax returns, accounted for all of the total tax fees paid for 2003 and 2002.

Pre-Approval Policy and Procedures

        The audit committee has adopted policies and procedures relating to the approval of all audit and non-audit services that are to be performed by our independent auditor. This policy generally provides that we will not engage our independent auditor to render audit or non-audit services unless the service is specifically approved in advance by the audit committee or the engagement is entered into pursuant to one of the pre-approval procedures described below.

        From time to time, the audit committee may pre-approve specified types of services that are expected to be provided to us by our independent auditor during the next 12 months. Any such pre-approval is detailed as to the particular service or type of services to be provided and is also generally subject to a maximum dollar amount.

58

PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a)

Documents filed as part of this Report:

        (1)   Financial Statements. The Consolidated Financial Statements are included as Appendix A hereto and are filed as part of this Report. The Consolidated Financial Statements include:

	Page
1. Report of Independent Auditors	F-2
2. Consolidated Balance Sheets	F-3
3. Consolidated Statements of Operations	F-4
4. Consolidated Statements of Stockholders' Equity (Deficit)	F-5
5. Consolidated Statements of Cash Flows	F-6
6. Notes to Consolidated Financial Statements	F-7

        (2)   Financial Statement Schedule. The financial statement schedule following the Notes to Consolidated Financial Statements is filed as part of this Report.

        (3)   Exhibits. The exhibits set forth on the Exhibit Index following the signature page to this Report are filed as part of this Report. This list of exhibits identifies each management contract or compensatory plan or arrangement required to be filed as an exhibit to this Report.

(b)

Reports on Form 8-K:

        On October 21, 2003, we filed a current report on Form 8-K, dated October 21, 2003, with the SEC furnishing our announcement of financial results for the quarter and nine-month period ended September 30, 2003.

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SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 5, 2004.

THE MEDICINES COMPANY
By:	/s/  CLIVE A. MEANWELL Clive A. Meanwell Executive Chairman

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on March 5, 2004:

Signature	Title(s)
/s/  CLIVE A. MEANWELL Clive A. Meanwell	Executive Chairman and Chairman of the Board of Directors (Principal Executive Officer)
/s/  DAVID M. STACK David M. Stack	Chief Executive Officer and President and Director (Principal Executive Officer)
/s/  STEVEN H. KOEHLER Steven H. Koehler	Vice President, Chief Financial Officer, Treasurer and Secretary (Principal Financial and Accounting Officer)
/s/  LEONARD BELL Leonard Bell	Director
/s/  WILLIAM W. CROUSE William W. Crouse	Director
/s/  ROBERT J. HUGIN Robert J. Hugin	Director
/s/  T. SCOTT JOHNSON T. Scott Johnson	Director
/s/  ARMIN M. KESSLER Armin M. Kessler	Director
/s/  ROBERT G. SAVAGE Robert G. Savage	Director
/s/  JAMES E. THOMAS James E. Thomas	Director

60

APPENDIX A

61

INDEX TO THE
CONSOLIDATED FINANCIAL STATEMENTS OF
THE MEDICINES COMPANY

	Page
Report of Independent Auditors	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Stockholders' Equity (Deficit)	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-7

F-1

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Stockholders
The Medicines Company

        We have audited the accompanying consolidated balance sheets of The Medicines Company as of December 31, 2003 and 2002, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows, for each of the three years in the period ending December 31, 2003. Our audits also included the financial statement schedule listed in Item 15(a). These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

        We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of The Medicines Company at December 31, 2003 and 2002, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2003, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related financial statement schedule when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

/s/ ERNST & YOUNG LLP

MetroPark, New Jersey
February 10, 2004

F-2

THE MEDICINES COMPANY

CONSOLIDATED BALANCE SHEETS

			December 31,
			2003			2002
ASSETS
Current assets:
	Cash and cash equivalents		$	43,401,610		$	36,777,007
	Available for sale securities			92,462,883			6,731,728
	Accrued interest receivable			990,824			129,414
	Accounts receivable, net of allowance of approximately $2.23 million and $0.64 million at December 31, 2003 and 2002			15,660,148			15,078,488
	Inventories			11,459,771			14,178,660
	Prepaid expenses and other current assets			976,258			660,720
		Total current assets		164,951,494			73,556,017
	Fixed assets, net			1,510,706			924,497
	Other assets			200,265			233,854
		Total assets	$	166,662,465		$	74,714,368
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
	Accounts payable		$	7,274,943		$	8,291,995
	Accrued expenses			17,951,845			11,092,134
		Total current liabilities		25,226,788			19,384,129
Commitments and contingencies				—			—
Deferred revenue				1,270,833			1,395,833
Stockholders' equity:
	Preferred stock, $1.00 par value per share, 5,000,000 shares authorized; no shares issued and outstanding			—			—
	Common stock, $.001 par value per share, 75,000,000 shares authorized at December 31, 2003 and 2002, respectively; 47,443,902 and 39,894,285 issued and outstanding at December 31, 2003 and 2002, respectively			47,444			39,894
	Additional paid-in capital			454,804,001			354,239,193
	Deferred compensation			(744,107	)		(3,125,494	)
	Accumulated deficit			(314,144,531	)		(297,274,830	)
	Accumulated other comprehensive income			202,037			55,643
		Total stockholders' equity		140,164,844			53,934,406
		Total liabilities and stockholders' equity	$	166,662,465		$	74,714,368

See accompanying notes.

F-3

THE MEDICINES COMPANY

CONSOLIDATED STATEMENTS OF OPERATIONS

			Year Ended December 31,
			2003			2002			2001
Net revenue			$	85,590,503		$	38,301,286		$	14,247,724
Operating expenses:
	Cost of revenue			22,748,868			10,284,033			2,110,425
	Research and development			35,904,844			37,951,458			32,767,394
	Selling, general and administrative			45,082,170			36,807,679			36,566,761
		Total operating expenses		103,735,882			85,043,170			71,444,580
Loss from operations				(18,145,379	)		(46,741,884	)		(57,196,856	)
Other income/(expense):
	Interest income			1,403,849			943,583			3,163,208
	Interest expense			—			(32,847	)		—
	Loss on sale of investment			—			—			(850,000	)
Pre-tax net loss				(16,741,530	)		(45,831,148	)		(54,883,648	)
	Income taxes			(128,171	)		—			—
Net loss after taxes			$	(16,869,701	)	$	(45,831,148	)	$	(54,883,648	)
Basic and diluted net loss per common share			$	(.37	)	$	(1.23	)	$	(1.67	)
Shares used in computing net loss per common share:
	Basic and diluted			45,624,289			37,209,931			32,925,968

See accompanying notes.

F-4

THE MEDICINES COMPANY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
For The Years Ended December 31, 2001, 2002 and 2003

		Common Stock														Accumulated Comprehensive Income (Loss)
							Additional Paid-in Capital			Deferred Stock Compensation			Accumulated Deficit						Total Stockholders' Equity/(Deficit
		Shares		Amount
Balance at December 31, 2000		30,320,455			30,320			279,126,337			(13,355,694	)		(196,560,034	)		(1,946	)		69,238,983
	Repurchase of common stock	(11,239	)		(11	)		—												(11	)
	Employee stock purchases	297,366			298			743,147												743,445
	Issuance of common stock through private placement	4,000,000			4,000			41,798,975												41,802,975
	Adjustments to deferred compensation for terminations							(626,755	)		626,755									—
	Amortization of deferred stock compensation										4,135,166									4,135,166
	Net loss													(54,883,648	)					(54,883,648	)
	Currency translation adjustment																47,446			47,446
	Unrealized gain on available for sale securities																36,608			36,608
	Comprehensive loss																			(54,799,594	)
Balance at December 31, 2001		34,606,582		$	34,607		$	321,041,704		$	(8,593,773	)	$	(251,443,682	)	$	82,108		$	61,120,964
	Employee stock purchases	738,081			738			2,993,498												2,994,236
	Issuance of common stock—Nycomed purchase	79,428			79			999,921												1,000,000
	Issuance of common stock—through public sale	4,000,000			4,000			30,906,000												30,910,000
	Issuance of common stock—Warrant purchases	470,194			470			(547	)											(77	)
	Adjustments to deferred compensation for terminations							(2,191,644	)		2,191,644									—
	Non-cash stock compensation—terminations							490,261												490,261
	Amortization of deferred stock compensation										3,276,635									3,276,635
	Net loss													(45,831,148	)					(45,831,148	)
	Currency translation adjustment																(42,240	)		(42,240	)
	Unrealized gain on available for sale securities																15,775			15,775
	Comprehensive loss																			(45,857,613	)
Balance at December 31, 2002		39,894,285		$	39,894		$	354,239,193		$	(3,125,494	)	$	(297,274,830	)	$	55,643		$	53,934,406
	Employee stock purchases	897,783			898			8,021,854												8,022,752
	Issuance of common stock—through public sale	5,597,280			5,597			91,506,354												91,511,951
	Issuance of common stock—Warrant purchases	1,054,554			1,055			(1,163	)											(108	)
	Adjustments to deferred compensation for terminations							(151,491	)		151,491									—
	Non-cash stock compensation—Consultants							1,189,254												1,189,254
	Amortization of deferred stock compensation										2,229,896									2,229,896
	Net loss													(16,869,701	)					(16,869,701	)
	Currency translation adjustment																(18,614	)		(18,614	)
	Unrealized gain on available for sale securities																165,008			165,008
	Comprehensive loss																			(16,723,307	)
Balance at December 31, 2003		47,443,902		$	47,444		$	454,804,001		$	(744,107	)	$	(314,144,531	)	$	202,037		$	140,164,844

See accompanying notes.

F-5

THE MEDICINES COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS

				Year Ended December 31,
				2003			2002			2001
Cash flows from operating activities:
	Net loss			$	(16,869,701	)	$	(45,831,148	)	$	(54,883,648	)
	Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation				572,103			555,026			470,930
	Amortization of premium on available for sale securities				905,195			66,517			—
	Non-cash stock compensation expense				3,419,150			3,766,895			4,135,166
	Loss on sales and disposal of fixed assets				56,474			1,079			2,113
	Changes in operating assets and liabilities:
		Accrued interest receivable			(861,410	)		(122,657	)		1,386,171
		Accounts receivable			(581,660	)		(9,545,107	)		(6,119,325	)
		Inventory			2,718,889			2,405,669			(14,620,838	)
		Prepaid expenses and other current assets			(314,877	)		(108,340	)		(85,806	)
		Other assets			33,589			(80,778	)		96,927
		Accounts payable			(1,020,676	)		(516,068	)		2,819,943
		Accrued expenses			6,825,628			2,887,070			(377,245	)
		Deferred revenue			(125,000	)		1,395,833			—
			Net cash used in operating activities		(5,242,296	)		(45,126,009	)		(67,175,612	)
Cash flows from investing activities:
	Purchase of available for sale securities				(142,847,331	)		(6,782,470	)		(7,430,886	)
	Maturities and sales of available for sale securities				56,375,989			125,000			49,863,097
	Purchase of fixed assets				(1,204,828	)		(247,218	)		(735,571	)
			Net cash (used in)/provided by investing activities		(87,676,170	)		(6,904,688	)		41,696,640
Cash flows from financing activities:
	Proceeds from revolving line of credit borrowings				—			10,000,000			—
	Repayments of revolving line of credit borrowings				—			(10,000,000	)		—
	Proceeds from issuances of common stock, net				99,534,595			34,904,155			42,546,409
			Net cash provided by financing activities		99,534,595			34,904,155			42,546,409
Effect of exchange rate changes on cash					8,474			19,173			14,583
Increase/(decrease) in cash and cash equivalents					6,624,603			(17,107,369	)		17,082,020
Cash and cash equivalents at beginning of period					36,777,007			53,884,376			36,802,356
Cash and cash equivalents at end of period				$	43,401,610		$	36,777,007		$	53,884,376
Supplemental disclosure of cash flow information:
	Interest paid			$	—		$	32,847		$	—
	Taxes paid			$	49,021		$	35,069		$	6,303

See accompanying notes.

F-6

THE MEDICINES COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2003

1. Nature of Business

        The Medicines Company (the "Company") was incorporated in Delaware on July 31, 1996. The Company is a pharmaceutical company engaged in the acquisition, development and commercialization of late-stage development drugs or drugs approved for marketing, and specializes in acute care hospital products. The U.S. Food and Drug Administration approved Angiomax® (bivalirudin) for use as an anticoagulant in combination with aspirin in patients with unstable angina undergoing coronary angioplasty in December 2000, and the Company commenced sales of Angiomax in the first quarter of 2001. The Company reported total net revenue of $85.6 million in 2003, $38.3 million in 2002, and $14.2 million in 2001, generated almost entirely from sales of Angiomax in the United States. The Company has invested in, and plans to continue investing in Angiomax development programs to enable the Company to garner additional regulatory approvals. Additionally, the Company plans to continue development investments in Clevelox™ (clevidipine) and cangrelor to yield regulatory approval that will enable their use in hospitals.

2. Significant Accounting Policies

Basis of Presentation

        The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. The Company has no unconsolidated subsidiaries.

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Reclassification

        Certain reclassifications have been made to prior years' information to conform to the 2003 presentation.

Risks and Uncertainties

        The Company is subject to risks common to companies in the pharmaceutical industry including, but not limited to, uncertainties related to regulatory approvals, dependence on key products, dependence on key customers and suppliers, and protection of proprietary rights.

Concentrations of Credit Risk

        Financial instruments that potentially subject the Company to concentration of credit risk include cash, cash equivalents, available for sale securities and accounts receivable. The Company believes it minimizes its exposure to potential concentrations of credit risk by placing investments in high-quality financial instruments with high quality institutions. At December 31, 2003, approximately $21.0 million of the cash and cash equivalents balance was invested in a single fund, the Evergreen Institutional Money Market Fund, a no-load money market fund, with the Capital Advisors Group.

F-7

        The Company's products are sold primarily to a limited number of national medical and pharmaceutical distributors and wholesalers with distribution centers located throughout the United States, including AmerisourceBergen Drug Corporation, McKesson Corporation and Cardinal Health, Inc., which accounted for 30%, 31% and 34%, respectively, of our revenue for the year ended December 31, 2003. Revenue from each of these customers accounted for similar percentages of total revenue in 2002 and 2001. During 2003, 2002 and 2001, the Company's revenues from these three customers totaled approximately 95%, 94% and 94%, respectively, of net revenues. At December 31, 2003 and 2002, these same customers represented approximately $16.9 million, or 96%, and $15.1 million, or 96%, respectively, of gross accounts receivable. The Company performs ongoing credit evaluations of its customers and generally does not require collateral. The Company maintains reserves for potential credit losses and, during 2003, such losses were within the expectations of management.

Cash, Cash Equivalents and Available for Sale Securities

        The Company considers all highly liquid investments purchased with an original maturity at date of purchase of three months or less to be cash equivalents. Cash equivalents at December 31, 2003 consisted of investments of $21.0 million in money market funds and $12.8 million of corporate bonds with original maturities of less than three months. Cash equivalents at December 31, 2002 consisted of investments in money market funds. These investments are carried at cost, which approximates fair value.

        The Company considers securities with original maturities of greater than three months to be available for sale securities. Securities under this classification are recorded at fair market value and unrealized gains and losses are recorded as a separate component of stockholders' equity. The cost of debt securities in this category is adjusted for amortization of premium and accretion of discount to maturity. The estimated fair value of the available for sale securities is determined based on quoted market prices or rates for similar instruments.

        At December 31, 2003, the Company held available for sale securities with fair value totaling $92.5 million. These available for sale securities included various certificates of deposit, corporate debt securities and United States government agency notes, $55.5 million of which had original maturities of more than one year and up to two years and $37.0 million of which had original maturities of more than three months and up to one year. At December 31, 2002, the Company held available for sale securities with fair value totaling $6.7 million, all with original maturities greater than three months and up to one year. Available for sale securities consisted of investments in corporate bonds, United States government agency notes and certificates of deposit are summarized as follows:

2003		Cost		Unrealized Gain		Fair Value
Certificates of deposit		$	1,099,944	$	56	$	1,100,000
Corporate debt securities			10,937,557		8,589		10,946,146
U.S. government agency notes			80,244,599		172,138		80,416,737
	Total	$	92,282,100	$	180,783	$	92,462,883

2002		Cost		Unrealized Gain		Fair Value
Certificates of deposit		$	1,499,944	$	—	$	1,499,944
Corporate debt securities			2,606,044		7,042		2,613,086
U.S. government agency notes			2,609,965		8,733		2,618,698
	Total	$	6,715,953	$	15,775	$	6,731,728

F-8

        During 2001, the Company sold its $3.0 million investment in Southern California Edison 5⁷/8% bonds, which were originally due on January 15, 2001, realizing a loss of $850,000 on the sale. There were also maturities of available for sale securities during the year ended December 31, 2001, which are disclosed in the accompanying consolidated statements of cash flows.

Revenue Recognition

        The Company sells its products primarily to wholesalers and distributors who, in turn sell to hospitals. The Company does not recognize revenue from product sales until there is persuasive evidence of an arrangement, delivery has occurred, the price is fixed and determinable, the buyer is obligated to pay the Company and the obligation to pay is not contingent on resale of the product, the buyer has economic substance apart from the Company, the Company has no obligation to bring about sale of the product, the amount of returns can be reasonably estimated and collectibility is reasonably assured.

        The Company records allowances for product returns, rebates and discounts at the time of sale, and reports revenue net of such allowances. The Company must make significant judgments and estimates in determining the allowances. For instance:

•

The Company's wholesaler customers have the right to return any unopened product during the 18 month period beginning six months prior to the labeled expiration date and ending 12 months after the labeled expiration date. As a result, in calculating the allowance for product returns, the Company must estimate the likelihood that product sold to wholesalers might remain in their inventory to within six months of expiration and determine if it will be returned. The Company bases its estimates on information from wholesalers, historic patterns of returns, industry data and on the expiration dates of product currently being shipped.



•

Certain hospitals purchasing the Company's products from wholesalers have the right to receive a discounted price and a volume-based rebate if they have a direct contract with the Company or participate in a group purchasing organization that has a contract with the Company. As a result, the Company must estimate the likelihood that product sold to wholesalers might be ultimately sold to a participating hospital. The Company bases its estimates on information from wholesalers and hospitals, industry data, historic patterns of discounts and customer rebate thresholds.

        If actual results differ from the Company's estimates, the Company will be required to make adjustments to these allowances in the future.

        Revenue from collaborative agreements may include milestone payments. These payments are recorded as deferred revenue until contractual performance obligations have been satisfied, and they are recognized ratably over the term of these agreements. When the period of deferral cannot be specifically identified from the contract, the Company must estimate the period based upon other critical factors contained within the contract. The Company reviews these estimates at least annually, which could result in a change in the deferral period.

Advertising Costs

        The Company expenses advertising costs as incurred. Advertising costs were approximately $1,422,000, $837,000 and $1,258,000, for the years ended December 31, 2003, 2002 and 2001, respectively.

Inventories

        Inventory is recorded upon the transfer of title from the Company's vendors. Inventory is stated at the lower of cost or market value. Angiomax bulk drug product is classified as raw materials and its

F-9

costs are determined using a weighted average of acquisition costs. Work-in-progress costs of filling, finishing and packaging are recorded against specific product batches, or lots. Prior to FDA approval of Angiomax and of its original manufacturing process in December 2000, the Company expensed all of these costs as research and development. The Company recorded as inventory any Angiomax bulk drug product manufactured according to its original manufacturing process to which the Company took title after FDA approval.

        Together with its contract-manufacturing partner, UCB Bioproducts S.A., the Company has developed a second-generation chemical synthesis process, the Chemilog process, for the manufacture of Angiomax bulk drug substance. In May 2003, the Company received FDA approval of this process. Accordingly, all Angiomax bulk drug product manufactured using the Chemilog process to which title had transferred to the Company prior to approval was expensed as research and development, and all bulk drug product manufactured after FDA approval has been and will be recorded as inventory upon transfer of title from the Company's vendors.

        The major classes of inventory were as follows:

Inventories		2003		2002
Raw materials		$	6,237,677		4,126,870
Work-in-progress			4,371,565		8,370,949
Finished Goods			850,529		1,680,841
	Total	$	11,459,771	$	14,178,660

Fixed Assets

        Fixed assets are stated at cost. Depreciation is provided using the straight-line method based on estimated useful lives or, in the case of leasehold improvements, over the lesser of the useful lives or the lease terms.

Research and Development

        Expenditures for research and development costs are expensed as incurred.

Stock-Based Compensation

        Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation" encourages, but does not require, companies to record compensation cost for stock-based employee compensation plans at fair value. The Company has elected to account for stock-based compensation using the intrinsic value method prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB 25").

F-10

        The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of SFAS 123 to stock-based employee compensation:

	Years Ended December 31,
	2003			2002			2001
Net loss—As reported	$	(16,869,701	)	$	(45,831,148	)	$	(54,883,648	)
Deduct: Total stock-based compensation expense determined under fair value based method for all stock option awards and discounts under the Employee Stock Purchase Plan		(10,408,223	)		(5,753,913	)		(15,058,318	)
Add: Amortization of deferred stock compensation		2,229,896			3,276,635			4,135,166
Net loss—Pro forma	$	(25,048,028	)	$	(48,308,426	)	$	(65,806,800	)
Net loss per common share—As reported	$	(0.37	)	$	(1.23	)	$	(1.67	)
Net loss per common share—Pro forma	$	(0.55	)	$	(1.30	)	$	(2.00	)

        The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions:

	Years Ended December 31,
	2003		2002		2001
Expected dividend yield	0	%	0	%	0	%
Expected stock price volatility	86	%	90	%	96	%
Risk-free interest rate	1.85	%	3.0	%	4.0	%
Expected option term	2.84		2.79		3.34
	years		years		years

Translation of Foreign Currencies

        The functional currencies of the Company's foreign branches and subsidiaries are the local currencies: British pound sterling, Swiss franc and New Zealand dollar. The Company translates its foreign operations using a current exchange rate. In accordance with Statement of Financial Accounting Standards No. 52, assets and liabilities are translated using the current exchange rate as of the balance sheet date. Stockholders' equity is translated using historical rates at the balance sheet date. Expenses and items of income are translated using a weighted average exchange rate over the period ended on the balance sheet date. Adjustments resulting from the translation of the financial statements of the Company's foreign subsidiaries into U.S. dollars are excluded from the determination of net loss and are accumulated in a separate component of stockholders' equity. Foreign exchange transaction gains and losses are included in the results of operations and are not material to the Company's consolidated financial statements.

Income Taxes

        Deferred tax assets and liabilities are determined based on differences between financial reporting and income tax bases of assets and liabilities, as well as net operating loss carryforwards, and are measured using the enacted tax rates and laws in effect when the differences reverse. Deferred tax assets are reduced by a valuation allowance to reflect the uncertainty associated with ultimate realization.

F-11

Comprehensive Income (Loss)

        The Company reports comprehensive income (loss) and its components in accordance with the provisions of SFAS No. 130, "Reporting Comprehensive Income." Comprehensive income (loss) includes all changes in equity for cumulative translations adjustments resulting from the consolidation of foreign branches and subsidiaries' financial statements and unrealized gains and losses on available for sale securities.

Net Loss per Share

        Basic net loss per share is computed using the weighted average number of shares of common stock outstanding during the period reduced, where applicable, for outstanding, yet unvested, shares. Diluted net loss per share includes the effect of stock options, and warrants outstanding during the period, if dilutive. Since the Company has a net loss for all periods presented, the effect of all potentially dilutive securities is antidilutive. Accordingly, basic and diluted net loss per share are the same.

Segments

        The Company manages its business and operations as one segment and is focused on the acquisition, development and commercialization of late-stage development drugs and drugs approved for marketing. The Company has license rights to Angiomax®, Clevelox™ and cangrelor. Revenues reported to date are derived primarily from the sales of the Company's Angiomax® product.

3. The Company's Plans and Financing

        The Company has incurred substantial losses since inception, although the Company achieved profitability for the first time for the three months ended December 31, 2003. To date, the Company has primarily funded its operations through the issuance of debt and equity. The Company expects to continue to expend substantial amounts for continued product research, development and commercialization activities for the foreseeable future, and the Company plans to fund these expenditures by increasing revenue or through debt or equity financing, if possible, and to secure collaborative partnering arrangements that will provide available cash funding for operations. Should revenue growth or additional debt or equity financing or collaborative partnering arrangements be unavailable to the Company, it will restrict certain of its planned activities and operations, as necessary, to sustain operations and conserve cash resources.

4. Fixed Assets

        Fixed assets consist of the following:

		December 31,
	Estimated Life (Years)
		2003			2002
Furniture, fixtures and equipment	3	$	384,977		$	785,190
Computer hardware and software	3		1,570,186			1,443,076
Leasehold improvements	5-10		850,178			269,448
			2,805,341			2,497,714
Less: Accumulated depreciation			(1,294,635	)		(1,573,217	)
		$	1,510,706		$	924,497

        Depreciation expense was approximately $572,000, $555,000 and $471,000 for the years ended December 31, 2003, 2002 and 2001, respectively.

F-12

5. Accrued Expenses

        Accrued expenses consist of the following at December 31:

	2003		2002
Compensation related	$	3,951,621	$	2,812,737
Research and development services		6,553,273		3,118,093
Product returns, rebates and discounts		2,929,892		2,320,834
Sales and marketing		910,823		651,375
Royalties and commissions		2,985,463		1,676,718
Legal, accounting and other		620,773		512,377
	$	17,951,845	$	11,092,134

6. Common Stock Purchase Warrants

        In October 1999, the Company issued $6,000,000 of 8% convertible notes (October Notes) and 1,013,877 Common Stock purchase warrants (October Warrants) to existing investors, raising proceeds of $6,000,000. The October Notes were ultimately converted into shares of Common Stock of the Company. Each October Warrant provides the holder with the right to purchase one share of Common Stock at a price of $5.92 per share at any time prior to October 19, 2004. At December 31, 2003 there were 120,946 October Warrants outstanding.

        In March 2000, the Company issued $13,348,779 of 8% Convertible Notes (March Notes) and 2,255,687 Common Stock Purchase Warrants (March Warrants) to current stockholders, raising proceeds of $13,348,779. The March Notes were ultimately converted into shares of Common Stock of the Company. Each March Warrant provides the holder with the right to purchase one share of Common Stock of the Company at a price of $5.92 per share at any time prior to March 2005. At December 31, 2003 there were 674,486 March Warrants outstanding.

7. Stockholders' Equity

Preferred Stock

        The Company has 5,000,000 shares of preferred stock (Preferred Stock) authorized, none of which has been issued.

Common Stock

        Common stockholders are entitled to one vote per share and dividends when declared by the Company's board of directors (Board of Directors), subject to the preferential rights of any outstanding shares of Preferred Stock.

        In May 2001, the Company received $41.8 million from a private placement of 4,000,000 shares of Common Stock sold to both new and existing shareholders at a price of $11.00 per share. The shares sold in the private placement were subsequently registered for resale.

        In March 2002, the Company received $1.0 million in proceeds from the sale of shares of Common Stock to Nycomed at the then fair market price of $12.59 per share at the time of purchase. In June 2002, the Company received $30.9 million in proceeds from the sale of 4.0 million shares of Common Stock in a public offering at a price of $8.20 per share.

        In March 2003, the Company received $91.5 million in proceeds from the sale of 5.6 million shares of its common stock in a public offering at the then fair market price of $17.50 per share at the time of purchase.

F-13

        Employees of the Company purchased stock pursuant to option exercises and our employee stock purchase plan for aggregate net proceeds to the Company of approximately $8.0 million, $3.0 million and $0.7 million, respectively, for the years ended December 31, 2003, 2002 and 2001, respectively.

        During 1996, 1997 and 1998, certain employees of the Company purchased 335,800, 627,070 and 32,850 shares of Common Stock, respectively, for $0.001 per share. These shares are subject to restriction and vesting agreements that limit transferability and allow the Company to repurchase unvested shares at the original purchase price. The shares vest ratably over a four-year period that generally begins on each employee's hire date. During 2001 and 2002, the Company repurchased 11,239 and 177 shares, respectively, of unvested Common Stock for $0.001 per share. There were no shares of unvested Common Stock at December 31, 2003.

Stock Plans

        In April 1998, the Company adopted the 1998 Stock Incentive Plan (the "1998 Plan"), which provides for the grant of stock options, restricted stock and other stock-based awards to employees, directors and consultants. The Board of Directors determines the term of each option, the option price, the number of shares for which each option is granted and the rate at which each option is exercisable. During 1999, the Board of Directors amended all outstanding grants to allow holders the opportunity to exercise options prior to vesting. Exercised options that are unvested are subject to repurchase by the Company at the original exercise price. Options granted under the 1998 Plan generally vest in increments over four years and have a ten year term.

        In January 2000, the Board of Directors approved an amendment to the 1998 Plan to increase the number of shares available under the 1998 Plan to 1,448,259. In May 2000, the Board of Directors approved an amendment to the 1998 Plan to increase the number of shares available under the 1998 Plan to 4,368,259. In February 2002, the Board of Directors also adopted, subject to stockholder approval which was received in May 2002, an increase in the number of shares of common stock under the 1998 Plan to 6,118,259 shares.

        The Board of Directors also approved the 2000 Employee Stock Purchase Plan (the "2000 ESPP") which provides for the issuance of up to 255,500 shares of Common Stock to participating employees and the 2000 Directors Stock Option Plan which provides for the issuance of up to 250,000 shares of Common Stock to the Company's outside directors. Both the 2000 ESPP and the 2000 Directors Stock Option Plan have received stockholder approval.

        In May 2001, the Board of Directors approved the 2001 Non-Officer, Non-Director Employee Stock Incentive Plan (the "2001 Plan"), which provides for the grant of nonstatutory stock options to employees, consultants and advisors, of the Company and its subsidiaries. The 2001 Plan provides for the issuance of up to 1,250,000 shares of stock. The Board of Directors administers the 2001 Plan, although it may delegate its authority to one or more committees and, in limited circumstances, to one or more of the executive officers.

        Prior to the Company's IPO, the Board of Directors determined the fair value of the Common Stock in its good faith judgment at each option grant date for grants under the 1998 Plan considering a number of factors including the financial and operating performance of the company, recent transactions in the Common Stock and Preferred Stock, if any, the values of similarly situated companies and the lack of marketability of Common Stock. Following the IPO, the fair value is determined based on the traded value of Common Stock.

        During the period January 1, 2000 to September 30, 2000, the Company issued 2,273,624 options at exercise prices below the estimated fair value of the Common Stock as of the date of grant of such options based on the price of the Common Stock in connection with the IPO. The total deferred compensation associated with these options is approximately $17.3 million. Included in the results of

F-14

operations for the years ended December 31, 2003, 2002 and 2001 is compensation expense of approximately and $2.2 million, $3.3 million and $4.1 million, respectively, associated with such options. Total deferred compensation is reduced when the associated options are cancelled prior to exercise. During 2003, 2002 and 2001, cancellation of options that had not been exercised resulted in a reduction in total deferred compensation of approximately $0.2 million, $2.2 million and $0.6 million, respectively.

        In May 2003 we granted options to a non-employee consultant to purchase 50,000 shares of common stock. In September 2003, we amended the terms of fully vested options to purchase 10,000 shares of common stock that were granted to a non-employee consultant in May 2001. In connection with these actions, we recorded $1.2 million in related non-cash stock compensation expense during 2003. The unvested options granted in May 2003 will be revalued, utilizing the Black-Scholes option pricing model, and expensed over the remaining five months of their one-year vesting term. In 2002, we accelerated the vesting of stock options held by terminated employees in connection with their termination agreements, which resulted in $0.5 million in non-cash compensation expense. Non-cash compensation expense is included in our operating expenses in the consolidated statements of operations.

        The Company has elected to follow APB 25 in accounting for its stock options granted to employees because the alternative fair value accounting provided for under SFAS 123, requires the use of option valuation models that were not developed for use in valuing employee stock options. Because the exercise price of the Company's stock options generally equals the market price of the underlying stock on the date of grant, no compensation is recognized under APB 25.

        A summary of stock option activity under all the Company's stock option plans are as follows:

	Number of Shares		Weighted Average Exercise Price Per Share
Outstanding, December 31, 2000	3,215,154		$	9.43
Granted	2,090,000			11.25
Exercised	(216,118	)		2.45
Canceled	(329,086	)		14.94
Outstanding, December 31, 2001	4,759,950		$	10.16
Granted	1,945,700			12.71
Exercised	(708,723	)		3.88
Canceled	(1,158,270	)		12.39
Outstanding, December 31, 2002	4,838,657		$	11.57
Granted	1,945,800			23.45
Exercised	(855,001	)		8.84
Canceled	(613,463	)		14.88
Outstanding, December 31, 2003	5,315,993		$	15.98
Available for future grant at December 31, 2003	293,039

        The weighted average per share fair value of options granted during 2003, 2002 and 2001 was $12.51, $6.95 and $7.17, respectively. There were no options granted during 2003, 2002 and 2001 with an exercise price below the fair market value of the underlying shares on the date of grant. The weighted average fair value and exercise price of options granted during 2000 that were granted with exercise prices below fair market value were $9.35 and $4.68, respectively. The weighted average fair value and exercise price of options granted with exercise prices equal to fair value were $12.51 and $23.61, respectively, during 2003, $6.95 and $12.71, respectively, during 2002, and $7.17 and $11.25, respectively, during 2001.

F-15

        The following table summarizes information about stock options from all the Company's stock option plans outstanding at December 31, 2003:

	Options Outstanding
					Options Vested
		Weighted Average Remaining Contractual Life (Years)
Range of Exercise Prices Per Share	Number Outstanding at 12/31/03		Weighted Average Exercise Price Per Share		Number Outstanding at 12/31/03	Weighted Average Exercise Price Per Share
$0.69 - $5.90	795,133	6.41	$	4.15	666,059	$	3.95
$5.92 - $10.77	854,637	8.03		9.11	347,917		8.97
$10.97 - $13.80	551,352	7.88		12.40	260,305		12.30
$15.00 - $15.50	695,948	8.86		15.49	172,615		15.48
$15.70 - $19.00	706,115	8.69		17.61	176,113		17.76
$19.42 - $25.48	669,133	8.68		23.35	169,138		23.46
$25.61 - $27.96	682,175	9.36		27.25	91,940		25.97
$28.01 - $31.15	361,500	9.84		28.37	8,604		29.08
	5,315,993	8.35	$	15.98	1,892,691	$	11.28

Common Stock Reserved for Future Issuance

        At December 31, 2003, there were 6,571,546 shares of Common Stock reserved for future issuance under the 2000 ESPP, for conversion of the October Warrants and March Warrants and for grants made under the 1998 Plan, the 2001 Plan and the 2000 Directors Stock Option Plan.

8. Net Loss per Share

        The following table sets forth the computation of basic and diluted net loss per share for the respective periods.

	Year Ended December 31,
	2003			2002			2001
Basic and diluted
Net loss	$	(16,869,701	)	$	(45,831,148	)	$	(54,883,648	)
Weighted average common shares outstanding		45,628,258			37,223,342			32,987,766
Less: unvested restricted common shares outstanding		(3,969	)		(13,411	)		(61,798	)
Weighted average common shares used to compute net loss per share		45,624,289			37,209,931			32,925,968
Basic and diluted net loss per share	$	(0.37	)	$	(1.23	)	$	(1.67	)

        Options to purchase 5,315,993, 4,838,657 and 4,759,950 shares of Common Stock have not been included in the computation of diluted net loss per share for the years ended December 31, 2003, 2002 and 2001, respectively, as their effects would have been antidilutive. Warrants to purchase 795,432, 2,373,975 and 3,156,073 shares of Common Stock were also excluded from the computation of diluted net loss per share for the years ended December 31, 2003, 2002 and 2001, respectively, as their effect would be antidilutive.

9. Income Taxes

        The provision for income taxes in 2003 consists of state taxes paid based on net worth and income taxes in international jurisdictions.

F-16

        The difference between tax expense and the amount computed by applying the statutory federal income tax rate (34%) to income before income taxes is as follows:

		Year Ended December 31,
		2003			2002
Statutory rate applied to pre-tax (loss)		($	5,692,000	)	($	15,583,000	)
Add (deduct):
	State income taxes, net of federal benefit		(709,000	)		—
	Foreign		(40,000	)		—
	Compensation Expense		648,000			—
	Tax Credits		(1,497,000	)		(1,985,000	)
	Other		220,000			227,000
	Increase to valuation allowance (net)		7,198,000			17,341,000
Income taxes		$	128,000			—

        The significant components of the Company's deferred tax assets are as follows:

		December 31,
		2003			2002
Deferred tax assets:
	Net operating loss carryforwards	$	92,357,000		$	86,128,000
	Research and development credit		8,449,000			7,556,000
	Intangible assets		807,000			886,000
	Other		3,323,000			1,543,000
			104,936,000			96,113,000
Valuation allowance			(104,936,000	)		(96,113,000	)
Net deferred tax assets		$	—		$	—

        The Company has increased its valuation allowance by $8,823,000 in 2003 to provide a full valuation allowance for deferred tax assets since the realization of these future benefits is not considered more likely than not. Of this amount, $1,625,000 relates primarily to the current year exercise of non-qualified stock options. The amount of the deferred tax asset considered realizable is subject to change based on estimates of future taxable income during the carryforward period. If the Company achieves profitability, these deferred tax assets would be available to offset future income taxes. The future utilization of net operating losses and credits may be subject to limitation based upon changes in ownership under the rules of the Internal Revenue Code. The Company has not yet determined the effect of these rules on the utilization of its net operating loss and credit carryforwards. The Company assesses the need for the valuation allowance at each balance sheet date based on all available evidence.

F-17

        At December 31, 2003, the Company had federal net operating loss carryforwards available to reduce taxable income, and federal research and development tax credit carryforwards available to reduce future tax liabilities, which expire approximately as follows:

Year of Expiration	Federal Net Operating Loss Carryforwards		Federal Research and Development Tax Credit Carryforwards
2011	$	929,000	$	22,000
2012		15,260,000		527,000
2018		27,876,000		425,000
2019		33,803,000		1,002,000
2020		45,270,000		1,176,000
2021		51,100,000		477,000
2022		41,403,000		1,876,000
2023		19,525,000		2,268,000
	$	235,166,000	$	7,773,000

        At December 31, 2003 a total of $2.8 million of the deferred tax asset valuation allowance related to net operating loss carryforwards associated with the exercise of non-qualified stock options. Such benefits, when realized, will be credited to additional paid-in capital.

        For state tax purposes, net operating loss carryforwards of approximately $206,666,000 expire in the years 2004 through 2011. State research and development tax credit carryforwards are approximately $676,000.

10. License Agreements

Angiomax® (bivalirudin)

        In March 1997, the Company entered into an agreement with Biogen, Inc., a predecessor of Biogen Idec, Inc., for the license of the anticoagulant pharmaceutical bivalirudin, which the Company has developed as Angiomax. Under the terms of the agreement, the Company acquired exclusive worldwide rights to the technology, patents, trademarks, inventories and know-how related to Angiomax. In exchange for the license, the Company paid $2.0 million on the closing date and is obligated to pay up to an additional $8.0 million upon the first commercial sales of Angiomax for the treatment of acute myocardial infarction in the United States and Europe. In addition, the Company will pay royalties on future sales of Angiomax and on any sublicense royalties on a country-by-country basis earned until the later of (1) 12 years after the date of the first commercial sale of the product in a country or (2) the date on which the product or its manufacture, use or sale is no longer covered by a valid claim of the licensed patent rights in such country. Under the terms of the agreement, the royalty rate due to Biogen on sales increases with growth in annual sales of Angiomax. The agreement also stipulates that the Company use commercially reasonable efforts to meet certain milestones related to the development and commercialization of Angiomax, including expending at least $20 million for certain development and commercialization activities, which the Company met in 1998. The license and rights under the agreement remain in force until the Company's obligation to pay royalties ceases. Either party may terminate the agreement for material breach by the other party, if the material breach is not cured within 90 days after written notice. In addition, the Company may terminate the agreement for any reason upon 90 days prior written notice. The Company recognized royalty expense under the agreement of $5.7 million in 2003, $2.8 million in 2002, and $1.1 million in 2001 for Angiomax sales.

F-18

Clevelox™ (clevidipine)

        In March 2003, the Company acquired from AstraZeneca AB exclusive license rights to Clevelox for all countries other than Japan, pursuant to a study and exclusive option agreement with AstraZeneca that the Company entered into in March 2002. The Company plans to develop Clevelox as a short acting blood pressure control agent for use in hospital setting. In exchange for the license, the Company paid $1.0 million in 2003 upon entering into the license and may have to pay up to an additional $5.0 million upon reaching certain regulatory milestones. In addition, the Company will be obligated to pay royalties on a country-by-country basis on future annual sales of Clevelox, and on any sublicense royalties earned, until the later of (1) the duration of the licensed patent rights which are necessary to manufacture, use or sell Clevelox in a country or (2) ten years from our first commercial sale of Clevelox in such country. The licenses and rights under the agreement remain in force until the Company ceases selling Clevelox in any country or the agreement is otherwise terminated. The Company may terminate the agreement upon 30 days written notice, unless AstraZeneca, within 20 days of having received the Company's notice, requests that the Company enter into good faith discussions to redress its concerns. If the Company cannot reach a mutually agreeable solution with AstraZeneca within three months of the commencement of such discussions, the Company may then terminate the agreement upon 90 days written notice. Either party may terminate the agreement for material breach upon 60 days prior written notice, if the breach is not cured within such 60 days.

Cangrelor

        In December 2003, the Company entered into a license agreement with AstraZeneca AB relating to the development and commercialization of a late-stage development compound known as cangrelor. Cangrelor, a non-thienopyridine which is given by injection, acts directly on the P2Y12 platelet receptor, a clinically validated target to treat or prevent arterial thrombosis. Prior to December 2003, AstraZeneca conducted Phase 2 clinical trials studying cangrelor in approximately 500 patients. These studies demonstrate that cangrelor inhibits platelet activation and aggregation within seconds of starting drug administration and that platelet function recovers within less than 60 minutes after stopping infusion. The Company plans to develop cangrelor for potential use as an antiplatelet agent in patients undergoing percutaneous coronary interventions such as angioplasty and stenting.

        Under terms of the license agreement, the Company has acquired rights to develop, market and sell cangrelor in all countries other than Japan, China, Korea, Taiwan and Thailand. In exchange for the license, the Company accrued in December 2003 and paid in January 2004 an upfront payment and will provide milestone payments upon regulatory approval in major markets. In addition, the Company will also pay royalties on a country-by-country basis on future annual sales of cangrelor, and on any sublicense royalties earned until the later of (1) the duration of the licensed patent rights which are necessary to manufacture, use or sell cangrelor in a country or (2) ten years from our first commercial sale of cangrelor in such country. The licenses and rights under the agreement remain in force until the Company ceases selling cangrelor in any country or the agreement is otherwise terminated. The Company may terminate the agreement upon 30 days written notice, unless AstraZeneca, within 20 days of having received the Company's notice, requests that the Company enter into good faith discussions to redress its concerns. If the Company cannot reach a mutually agreeable solution with AstraZeneca within three months of the commencement of such discussions, the Company may then terminate the agreement upon 90 days written notice. Either party may terminate the agreement for material breach upon 60 days prior written notice, if the breach is not cured within such 60 days.

F-19

11. Strategic Alliances and Related Parties

UCB Bioproducts

        In December 1999, the Company entered into a commercial supply agreement with UCB Bioproducts S.A. ("UCB") for the development and supply of the Angiomax bulk drug substance. Under the terms of the commercial supply agreement, UCB completed development of a modified production process known as the Chemilog process and filed an amendment in 2001 to its drug master file for regulatory approval of the Chemilog process by the FDA. In addition, UCB manufactured two validation batches of Angiomax bulk drug substance using the Chemilog process in 2001, with a third validation batch completed in January 2002. In addition, the Company has agreed to purchase a substantial portion of its Angiomax bulk drug product from UCB at agreed upon prices for a period of seven years from the date of the first commercial sale of Angiomax produced using the Chemilog process. Following the expiration of the agreement, or if the Company terminates the agreement prior to its expiration, UCB will transfer the development technology to the Company. If the Company engages a third party to manufacture Angiomax using this technology, the Company will be obligated to pay UCB a royalty based on the amount paid by the Company to the third-party manufacturer.

        During 2003, 2002 and 2001 the Company recorded $11.1 million, $9.7 million and $19.4 million, respectively, in costs related to UCB's production of Angiomax bulk drug substance and Angiomax related development activities, of which $1.1 million, $6.8 million and $4.8 million were expensed as research and development in 2003, 2002 and 2001, respectively, as FDA approval of the Angiomax manufacturing processes had not been received. In addition, $1.5 million was also expensed in 2001 related to cancellation of a contract commitment with UCB.

International Health Care

        Through December 31, 2003, the Company has entered into approximately six work orders with International Health Care (IHC) to provide clinical research services and has paid IHC a total of $4.1 million. During 2003 and 2002, expenses incurred for such services were approximately $5.0 million and $0.3 million respectively, of which approximately $1.2 million was recorded in accounts payable and accrued expenses at December 31, 2003.

PharmaBio

        In August 1996, the Company entered into a strategic alliance with one of its stockholders, PharmaBio Development Inc. ("PharmaBio"), a wholly owned subsidiary of Quintiles Transnational Corporation ("Quintiles"). Under the terms of the strategic alliance agreement, PharmaBio and any of its affiliates who work on the Company's projects will, at no cost to the Company, review and evaluate, jointly with the Company, development programs designed by the Company related to potential or actual product acquisitions. The purpose of this collaboration is to optimize the duration, cost, specifications and quality aspects of such programs. PharmaBio and its affiliates have also agreed to perform other services with respect to the Company's products, including clinical and non-clinical development services, project management, project implementation, pharmacoeconomic services, regulatory affairs and post marketing surveillance services and statistical programming, data processing and data management services pursuant to work orders agreed to by the Company and PharmaBio from time to time. Through December 31, 2003, the Company has entered into approximately 46 work orders with PharmaBio and has paid PharmaBio a total of $15.3 million. During 2003, 2002, and 2001, expenses incurred for such services were approximately $0.8 million, $1.1 million, and $2.3 million respectively, of which approximately $48,000 was recorded in accounts payable and accrued expenses at December 31, 2003.

F-20

Innovex

        In January 1997, the Company entered into a consulting agreement with Innovex, Inc. ("Innovex"), a subsidiary of Quintiles, which was subsequently superceded by a consulting agreement executed with Innovex in December 1998. Pursuant to the terms of the agreement, Innovex provided the Company with consulting services with respect to pharmaceutical marketing and sales. Since December 1997, the Company has also entered into various clinical services agreements with Innovex pursuant to which Innovex has provided project management, clinical monitoring, site management, medical monitoring, regulatory affairs, data management and quality assurance services with respect to clinical trials of Angiomax. None of the clinical services agreements is currently outstanding. Through December 31, 2001, the Company paid Innovex $1.8 million under these agreements. The Company did not make any payments to Innovex in 2003 or 2002 under these agreements.

        In December 2000, the Company signed a master services agreement and a work order with Innovex under which Innovex agreed to provide contract sales, marketing and commercialization services relating to Angiomax. Under the master services agreement and the Angiomax work order, Innovex was to provide a sales force of up to 52 representatives, a sales territory management system and operational support for the launch of Angiomax. The Company provided the marketing plan and marketing materials for the sales force and other sales and marketing support and direction for the sales force. For Innovex services, the Company agreed to pay a daily fee for each day worked by the members of the Innovex sales force. The Company was also responsible for reimbursing Innovex for expenses incurred in providing its services and for the incentive compensation paid to the sales force. The Company had the right to terminate the work order and the master services agreement at any time upon 90 days prior written notice and could hire members of the sales force, potentially incurring additional fees to Innovex. In June 2001, the Company notified Innovex of its decision to terminate the agreement with Innovex, and in October, the Company hired most of the Innovex sales representatives. Through December 31, 2003, the Company has paid Innovex $7.0 million under the master services agreement and work order.

        During 2001, total expenses incurred for services provided by Innovex was approximately $5.6 million, of which approximately $275,000 was recorded in accounts payable and accrued expenses at December 31, 2001. There were no expenses recorded in 2003 and 2002, and there were no amounts recorded in accounts payable and accrued expenses at December 31, 2003 and 2002.

Stack Pharmaceuticals

        In 2000, the Company entered into an agreement with Stack Pharmaceuticals Inc. (SPI), an entity controlled by David M. Stack, then one of the Company's senior vice presidents. Pursuant to the terms of this agreement, SPI performed infrastructure services for the Company, which included providing office facilities, equipment and supplies, and such consulting, advisory and related services for the Company as was agreed upon from time to time. For the infrastructure services, the Company agreed to pay SPI a service fee of $20,100 per month. From January 2000 through March 2000, SPI provided the Company with consulting services under a consulting agreement that expired on March 31, 2000. In November 2001, the Company terminated its agreement with SPI when David M. Stack became President and Chief Executive Officer of the Company. As part of the termination agreement, the Company assumed SPI's facility lease in Parsippany, New Jersey and acquired all its furniture and equipment for approximately $70,000. Through December 31, 2001, the Company had paid SPI $711,000 under these agreements. The Company did not make any payments to SPI in 2003 or 2002.

F-21

12. Commitments and Contingencies

        The Company's long-term contractual obligations include commitments and estimated purchase obligations entered into in the normal course of business. These include inventory related commitments to manufacture the Company's products, research and development service agreements, operating leases and other selling and general administrative related obligations.

        Future estimated contractual obligations are:

Contractual Obligations	2004		2005		2006		2007		2008		Later Years		Total
Inventory related commitments	$	21,318,000	$	28,574,000	$	—	$	—	$	—	$	—	$	49,892,000
Research and development		9,752,000		3,686,000		602,000		—		—		—		14,040,000
Operating Leases		938,000		1,071,000		1,136,000		1,154,000		1,151,000		4,134,000		9,584,000
Selling, general and administrative		698,000		—		—		—		—		—		698,000
Total contractual obligations	$	32,706,000	$	33,331,000	$	1,738,000	$	1,154,000	$	1,151,000	$	4,134,000	$	72,214,000

        Included above are inventory related non-cancellable commitments to make payments to UCB Bioproducts of a total of $18.7 million during 2004 for Angiomax bulk drug substance to be produced using the Chemilog process and $2.6 million in related filling, finishing and packaging commitments through August 2004. The Company also has $13.8 million of estimated contractual obligations for research and development activities of which $1.0 million is non-cancellable. The amounts included in selling, general and administrative obligations are primarily related to non-cancellable consulting arrangements.

        In addition to the contractual obligations above, the Company has certain milestone payments to Biogen Idec, Inc. and to AstraZeneca AB related to the Company's product licenses for Angiomax, Clevelox and cangrelor. Under the Angiomax license, the Company may have to pay up to an additional $8.0 million upon reaching certain Angiomax sales milestones, which are the first commercial sales of Angiomax for the treatment of acute myocardial infarction in the United States and Europe. Under the Clevelox license, the Company may have to pay up to an additional $5.0 million upon reaching certain regulatory milestones. Under the cangrelor license, the Company made an upfront payment and will provide milestone payments upon regulatory approval in major markets.

Litigation

        The Company is involved in ordinary and routine matters and litigation incidental to its business. In the opinion of management, there are no matters outstanding that would have a material adverse effect on the consolidated financial position or results of operations of the Company.

13. Employee Benefit Plan

        The Company has an employee savings and retirement plan which is qualified under Section 401(k) of the Internal Revenue Code. The Company's employees may elect to reduce their current compensation up to the statutorily prescribed limit and have the amount of such reduction contributed to the 401(k) plan. The Company may make matching or additional contributions to the 401(k) plan in amounts to be determined annually by the Board of Directors. The Company has not made any matching or additional contributions to date.

F-22

14. Selected Quarterly Financial Data (Unaudited)

        The following table presents selected quarterly financial data for the years ended December 31, 2003 and 2002.

		Three Months Ended
		Mar. 31, 2003			June 30, 2003			Sept. 30, 2003			Dec. 31, 2003		Mar. 31, 2002			June 30, 2002			Sept. 30, 2002			Dec. 31, 2002
		(in thousands, except per share data)
Net revenue		$	16,705		$	18,750		$	21,248		$	28,888	$	7,715		$	7,156		$	9,133		$	14,297
Cost of sales			6,263			6,970			6,603			2,914		1,085			1,647			2,227			5,324
Total operating expenses			23,292			25,749			27,820			26,874		19,726			20,439			20,561			24,317
Net (loss)/income			(6,416	)		(6,587	)		(6,162	)		2,296		(11,641	)		(13,141	)		(11,212	)		(9,837	)
Basic net (loss) /income per common share		$	(0.16	)	$	(0.14	)	$	(0.13	)	$	0.05	$	(0.34	)	$	(0.37	)	$	(0.29	)	$	(0.25	)
Diluted net income per common share			—			—			—			0.05		—			—			—			—
Market Price
	High	$	20.00		$	25.91		$	31.41		$	29.98	$	14.81		$	14.33		$	12.50		$	17.50
	Low	$	15.20		$	16.83		$	19.25		$	22.80	$	9.86		$	7.40		$	7.22		$	9.45

F-23

Schedule II
Valuation and Qualifying Accounts
Year(s) ended December 31, 2003, 2002 and 2001

	Balance at Beginning of Period		(Credit) Charged to Costs and Expenses(1)		Other Charges (Deductions)(2)		Balance at End of Period
2003
Allowances for chargebacks, cash discounts and doubtful accounts	$	636,000	$	5,746,000	$	4,156,000	$	2,226,000
2002
Allowances for chargebacks, cash discounts and doubtful accounts	$	258,000	$	1,428,000	$	1,050,000	$	636,000
2001
Allowances for chargebacks, cash discounts and doubtful accounts	$	—	$	468,000	$	210,000	$	258,000

(1)

amounts presented herein were charged to and reduced revenues

(2)

represents actual cash discounts, chargeback credits and other deductions

F-24

INDEX TO EXHIBITS

Number	Description
3.1(1)	Third Amended and Restated Certificate of Incorporation of the registrant
3.2(2)	Amended and Restated By-laws of the registrant, as amended
4.1(1)	Form of Common Stock Purchase Warrant dated October 19, 1999
4.2(1)	Form of Common Stock Purchase Warrant dated March 2, 2000
10.1(1)*	1998 Stock Incentive Plan, as amended
10.2(2)*	2000 Employee Stock Purchase Plan, as amended
10.3(3)*	2000 Outside Director Stock Option Plan, as amended
10.4(4)	2001 Non-Officer, Non-Director Employee Stock Incentive Plan
10.5(5)	Amended and Restated Registration Rights Agreement, dated as of August 12, 1998, as amended, by and among the registrant and the other parties thereto
10.6(1)†	Chemilog Development and Supply Agreement, dated as of December 20, 1999, by and between the registrant and UCB Bioproducts S.A.
10.7(1)†	License Agreement, dated as of June 6, 1990, by and between Biogen, Inc. and Health Research, Inc., as assigned to the registrant
10.8(1)†	License Agreement dated March 21, 1997, by and between the registrant and Biogen, Inc.
10.9(6)†	Sales, Marketing and Distribution Agreement dated March 25, 2002 by and between Nycomed Danmark A/S and the registrant
10.10(7)	Termination Agreement, dated November 1, 2001, by and between the registrant and Stack Pharmaceuticals, Inc. relating to the Services Agreement dated April 1, 2000, as amended
10.11(1)*	Employment agreement dated September 5, 1996 by and between the registrant and Clive Meanwell
10.12(8)*	Employment Agreement dated October 16, 1997 by and between the registrant and John D. Richards
10.13(7)*	Amended and Restated Employment Agreement, dated November 1, 2001, by and between the registrant and David M. Stack
10.14(7)	Assignment and Assumption of Lease, dated October 18, 2001, by and between the Registrant and Stack Pharmaceuticals, Inc.
10.15	Lease for 8 Campus Drive dated September 30, 2002 by and between Sylvan/Campus Realty L.L.C. and the registrant, as amended
10.16(9)	Lease for 200 Fifth Avenue, Waltham, MA dated June 19, 2003 by and between Prospect Hill Acquisition Trust and the registrant
10.17††	License Agreement effective as of March 28, 2003 by and between AstraZeneca AB and the registrant
10.18††	License Agreement dated as of December 18, 2003 by and between AstraZeneca AB and the registrant
21	Subsidiaries of the registrant
23	Consent of Ernst & Young LLP, Independent Auditors

31.1	Executive Chairman—Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Chief Executive Officer—Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3	Chief Financial Officer—Certification pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Executive Chairman—Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Chief Executive Officer—Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3	Chief Financial Officer—Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

*

Management contract or compensatory plan or arrangement filed as an exhibit to this form pursuant to Items 15(a) and 15(c) of Form 10-K

†

Confidential treatment was granted for certain portions of this Exhibit pursuant to Rule 406 promulgated under the Securities Act of 1933, as amended, or Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended

††

Confidential treatment has been requested for certain portions of this Exhibit pursuant to Rule 24b-2 promulgated under the Securities Exchange Act of 1934, as amended

(1)

Incorporated by reference to the exhibits to the registration statement on Form S-1 (registration no. 333-37404)

(2)

Incorporated by reference to the exhibits to the registrant's annual report on Form 10-K for the year ended December 31, 2001

(3)

Incorporated by reference to the exhibits to the registrant's quarterly report on Form 10-Q for the quarter ended March 31, 2003

(4)

Incorporated by reference to the exhibits to the registration statement on Form S-8 (registration no. 333-74612)

(5)

Incorporated by reference to the exhibits to the registrant's quarterly report on Form 10-Q for the quarter ended June 30, 2002

(6)

Incorporated by reference to the exhibits to the registrant's quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2002

(7)

Incorporated by reference to the exhibits to the registrant's quarterly report on Form 10-Q for the quarter ended September 30, 2001

(8)

Incorporated by reference to the exhibits to the registration statement on Form S-1 (registration no. 333-53280)

(9)

Incorporated by reference to the exhibits to the registrant's quarterly report on Form 10-Q for the fiscal quarter ended June 30, 2003

EX-10.15

                                                                   Exhibit 10.15

                                      LEASE


                                      FROM:

                          SYLVAN/ CAMPUS REALTY L.L.C.

                                     LESSOR


                                       TO:

                              THE MEDICINES COMPANY

                                     LESSEE


                                    BUILDING:

                                 8 CAMPUS DRIVE
                             PARSIPPANY, NEW JERSEY



                                TABLE OF CONTENTS

                                                                       
1.    DESCRIPTION:............................................................3
2.    TERM:...................................................................3
3.    BASIC RENT:.............................................................3
4.    USE AND OCCUPANCY:......................................................3
5.    CARE AND REPAIR OF PREMISES/ENVIRONMENTAL:..............................3
6.    ALTERATIONS, ADDITIONS OR IMPROVEMENTS:.................................6
7.    ACTIVITIES INCREASING FIRE INSURANCE RATES:.............................6
8.    ASSIGNMENT AND SUBLEASE:................................................6
9.    COMPLIANCE WITH RULES AND REGULATIONS:.................................10
10.   DAMAGES TO BUILDING:...................................................10
11.   EMINENT DOMAIN:........................................................10
12.   INSOLVENCY OF LESSEE:..................................................11
13.   LESSOR'S REMEDIES ON DEFAULT:..........................................11
14.   DEFICIENCY:............................................................11
15.   SUBORDINATION OF LEASE:................................................12
16.   SECURITY DEPOSIT:......................................................12
17.   RIGHT TO CURE LESSEE'S BREACH:.........................................13
18.   MECHANIC'S LIENS:......................................................13
19.   RIGHT TO INSPECT AND REPAIR:...........................................13
20.   SERVICES TO BE PROVIDED BY LESSOR/LESSOR'S EXCULPATION:................14
21.   INTERRUPTION OF SERVICES OR USE:.......................................14
22.   BUILDING STANDARD OFFICE ELECTRICAL SERVICE:...........................14
23.   ADDITIONAL RENT:.......................................................16
24.   LESSEE'S ESTOPPEL:.....................................................18
25.   HOLDOVER TENANCY:......................................................18
26.   RIGHT TO SHOW PREMISES:................................................19
27.   LESSOR'S WORK - LESSEE'S DRAWINGS:.....................................19
28.   WAIVER OF TRIAL BY JURY:...............................................19
29.   LATE CHARGE:...........................................................19
30.   LESSEE'S INSURANCE:....................................................19



                                        i


                                                                       
31.   NO OTHER REPRESENTATIONS:..............................................21
32.   QUIET ENJOYMENT:.......................................................21
33.   INDEMNITY:.............................................................21
34.   ARTICLE HEADINGS:......................................................22
35.   APPLICABILITY TO HEIRS AND ASSIGNS:....................................22
36.   OUTSIDE PARKING SPACES:................................................22
37.   LESSOR'S LIABILITY FOR LOSS OF PROPERTY:...............................22
38.   PARTIAL INVALIDITY:....................................................22
39.   LESSEE'S BROKER:.......................................................22
40.   PERSONAL LIABILITY:....................................................23
41.   NO OPTION:.............................................................23
42.   DEFINITIONS:...........................................................23
43.   LEASE COMMENCEMENT:....................................................24
44.   NOTICES:...............................................................24
45.   ACCORD AND SATISFACTION:...............................................24
46.   EFFECT OF WAIVERS:.....................................................24
47.   LEASE CONDITION:.......................................................25
48.   MORTGAGEE'S NOTICE AND OPPORTUNITY TO CURE:............................25
49.   LESSOR'S RESERVED RIGHT:...............................................25
50.   CORPORATE AUTHORITY:...................................................25
51.   AFTER-HOURS USE:.......................................................25
52.   LESSEE'S EXPANSION/RELOCATION:.........................................26
53.   BUILDING PERMIT:.......................................................26
54.   OPTION TO RENEW: ......................................................26
55.   RIGHT OF FIRST OFFER:..................................................27



                                       ii


        LEASE, is made the 30th day of September, 2002 between SYLVAN/ CAMPUS
REALTY L.L.C. (herein referred to as "Lessor") whose address is c/o Mack-Cali
Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 and THE
MEDICINES COMPANY (herein referred to as "Lessee") whose address is 5 Sylvan
Way, Parsippany, New Jersey, 07054.

                                    PREAMBLE

                     BASIC LEASE PROVISIONS AND DEFINITIONS

In addition to other terms elsewhere defined in this Lease, the following terms
whenever used in this Lease shall have only the meanings set forth in this
section, unless such meanings are expressly modified, limited or expanded
elsewhere herein.

1.      ADDITIONAL RENT shall mean all sums in addition to Fixed Basic Rent
        payable by Lessee to Lessor pursuant to the provisions of the Lease.

2.      BASE PERIOD COSTS shall mean the following:

        A.      Base Operating Costs: Those Operating Costs incurred during
                Calendar Year 2003.

        B.      Base Real Estate Taxes: Those Real Estate Taxes incurred during
                Calendar Year 2003.

        C.      Base Utility and Energy Costs: Those Utility and Energy Costs
                incurred during Calendar Year 2003

3.      BUILDING shall mean 8 Campus Drive, Parsippany, New Jersey.

4.      BUILDING HOLIDAYS shall be those shown on Exhibit F.

5.      BUILDING HOURS shall be Monday through Friday, 8:00 a.m. to 6:00 p.m.,
        but excluding those holidays as set forth on Exhibit F attached hereto
        and made a part hereof, except that Common Facilities, lighting in the
        Building and Office Building Area shall be maintained for such
        additional hours as, in Lessor's sole judgement, is necessary or
        desirable to insure proper operating of the Building and Office Building
        Area.

6.      COMMENCEMENT DATE is the date of this Lease. RENT COMMENCEMENT DATE is
        the date which is the earlier of (i) the date upon which Lessee, or
        anyone claiming under or through Lessee, commences using the Premises
        for the conduct of business, or (ii) the date which is ninety (90) days
        after the date of this Lease.

7.      DEMISED PREMISES OR PREMISES shall be deemed to be 16,779 gross rentable
        square feet on the second (2nd) floor as shown on Exhibit A hereto,
        which includes an allocable share of the Common Facilities as defined in
        Article 42(b).

8.      EXHIBITS shall be the following, attached to this Lease and incorporated
        herein and made a part hereof.

                      Exhibit A             Location of Premises
                      Exhibit A-1           Office Building Area
                      Exhibit B             Rules and Regulations
                      Exhibit C             Lessor's Work
                      Exhibit C-1           Air Conditioning &
                                            Heating Design Standards
                      Exhibit D             Cleaning Services
                      Exhibit E             Building Holidays
                      Exhibit F             Tenant Estoppel Certificate
                      Exhibit G             Commencement Date Agreement
                      Exhibit H             Form of Letter of Credit
                      Exhibit I             Exclusions from Operating Costs

9.      EXPIRATION DATE shall be the last day of the month in which the day
        before the ten (10) year anniversary of the Rent Commencement Date
        occurs.

                                        1


10.     FIXED BASIC RENT shall mean: FIVE MILLION SEVENTY-FIVE THOUSAND SIX
        HUNDRED FORTY-SEVEN AND 50/100 DOLLARS ($5,075,647.50) for the Term
        commencing on the Rent Commencement Date payable as follows:



                Year        Yearly Rate            Monthly Installments
                ----       -------------           --------------------
                                             
                1          $ 469,812.00            $ 39,151.00
                2          $ 478,201.50            $ 39,850.13
                3          $ 486,591.00            $ 40,549.25
                4          $ 494,980.50            $ 41,248.38
                5          $ 503,370.00            $ 41,947.50
                6          $ 511,759.50            $ 42,646.63
                7          $ 520,149.00            $ 43,345.75
                8          $ 528,538.50            $ 44,044.88
                9          $ 536,928.00            $ 44,744.00
                10         $ 545,317.50            $ 45,443.13


11.     LESSEE'S BROKER shall mean Trammell Crow Company.

12.     LESSEE'S PERCENTAGE shall be 7.80% subject to adjustment as provided in
        the Lease.

13.     OFFICE BUILDING AREA is as set forth on Exhibit A-1.

14.     PARKING SPACES shall mean a total of sixty-three (63) unassigned surface
        parking spaces.

15.     PERMITTED USE shall be general office use and for no other purpose.

16.     SECURITY DEPOSIT shall be EIGHTY-FOUR THOUSAND FIVE HUNDRED NINETY-FIVE
        AND 00/100 DOLLARS ($84,595.00)

17.     TERM shall mean ten (10) years from the Rent Commencement Date, plus the
        number of days, if any, to have the Lease expire on the last day of a
        calendar month, unless extended pursuant to any option contained herein.

                              -- End of Preamble --

                                        2


                               W I T N E S S E T H

                For and in consideration of the covenants herein contained, and
upon the terms and conditions herein set forth, Lessor and Lessee agree as
follows:

1.      DESCRIPTION:

        Lessor hereby leases to Lessee, and Lessee hereby hires from Lessor, the
        Premises as defined in the Preamble which includes an allocable share of
        the Common Facilities, as shown on the plan or plans, initialed by the
        parties hereto, marked Exhibit A attached hereto and made part of this
        Lease in the Building as defined in the Preamble, (hereinafter called
        the "Building") which is situated on that certain parcel of land
        (hereinafter called "Office Building Area") as described on Exhibit A-1
        attached hereto and made part of this Lease, together, with the right to
        use in common with other lessees of the Building, their invitees,
        customers and employees, those public areas of the Common Facilities as
        hereinafter defined.

2.      TERM:

        The Premises are leased for a term to commence on the Commencement Date,
        and to end at 12:00 midnight on the Expiration Date, all as defined in
        the Preamble.

3.      BASIC RENT:

        The Lessee shall pay to the Lessor during the Term, the Fixed Basic Rent
        as defined in the Preamble (hereinafter called "Fixed Basic Rent")
        payable in such coin or currency of the United States of America as at
        the time of payment shall be legal tender for the payment of public and
        private debts. The Fixed Basic Rent shall accrue at the Yearly Rate as
        defined in the Preamble and shall be payable, in advance, on the first
        day of each calendar month during the Term commencing on the Rent
        Commencement Date at the Monthly Installments as defined in the
        Preamble, except that a proportionately lesser sum may be paid for the
        first and last months of the Term of this Lease if the Term commences on
        a day other than the first day of the month, in accordance with the
        provisions of this Lease herein set forth. Lessor acknowledges receipt
        from Lessee of the first monthly installment by check, subject to
        collection, for Fixed Basic Rent for the first month of the Lease Term.
        Lessee shall pay Fixed Basic Rent, and any Additional Rent as
        hereinafter provided, to Lessor at Lessor's above stated address, or at
        such other place as Lessor may designate in writing, without demand and
        without counterclaim, deduction or set off.

4.      USE AND OCCUPANCY:

        Lessee shall use and occupy the Premises for the Permitted Use as
        defined in the Preamble.

        Lessee hereby acknowledges "no smoking" is permitted in the Common
        Facilities. Lessee shall use its best efforts to enforce Lessor's policy
        prohibiting its employees, agents or invitees from smoking within the
        Common Facilities including the areas outside of the Building's main
        entrance.

5.      CARE AND REPAIR OF PREMISES/ENVIRONMENTAL:

        (a)     Lessee shall commit no act of waste and shall take good care of
                the Premises and the fixtures and appurtenances therein, and
                shall, in the use and occupancy of the Premises, conform to all
                laws, orders and regulations of the federal, state and municipal
                governments or any of their departments affecting the Premises
                and with any and all environmental requirements resulting from
                the Lessee's particular use of the Premises, this covenant to
                survive the expiration or sooner termination of the Lease.
                Notwithstanding anything to the contrary contained in this
                Lease, Lessee shall not be required to make any repairs,
                alterations or modifications to the Premises as a result of any
                laws, orders and regulations of the federal, state and municipal
                governments or any of their departments affecting the Premises
                unless the need for

                                        3


                such repairs, alterations or modifications arises from the
                particular manner in which Lessee uses the Premises, and
                repairs, alterations or modifications to the Premises as a
                result of any laws, orders and regulations of the federal, state
                and municipal governments or any of their departments affecting
                the Premises which are required of all owners and tenants
                generally, and do not arise from the particular manner in which
                an owner or tenant uses its premises, shall be undertaken by and
                at the sole cost and expense of Lessor and same may be included
                in Operating Costs pursuant to Article 23 of this Lease. Lessor
                shall, subject to the same being included in Operating Costs
                (except as expressly excluded in the immediately preceding
                sentence.), make all necessary repairs to the Premises, Common
                Facilities and to the assigned parking areas, if any, except
                where the repair has been made necessary by misuse or neglect by
                Lessee or Lessee's agents, servants, visitors or licensees, in
                which event Lessor shall nevertheless make the repair but Lessee
                shall pay to Lessor, as Additional Rent, immediately upon
                demand, the costs therefor. All improvements made by Lessee to
                the Premises, which are so attached to the Premises, shall
                become the property of Lessor upon installation. Not later than
                the last day of the Term, Lessee shall, at Lessee's expense,
                remove all Lessee's personal property and those improvements
                made by Lessee which have not become the property of Lessor,
                including trade fixtures, cabinetwork, movable paneling,
                partitions and the like; repair all injury done by or in
                connection with the installation or removal of said property and
                improvements; and surrender the Premises in as good condition as
                they were at the beginning of the Term, reasonable wear and
                damage by fire, the elements, casualty or other cause not due to
                the misuse or neglect by Lessee, Lessee's agents, servants,
                visitors or licensees excepted and excluding maintenance and
                repairs required to be undertaken by Lessor. All other property
                of Lessee remaining on the Premises after the last day of the
                Term of this Lease shall be conclusively deemed abandoned and
                may be removed by Lessor, and Lessee shall reimburse Lessor for
                the cost of such removal. Lessor may have any such property
                stored at Lessee's risk and expense.

        ENVIRONMENTAL

        (b)     COMPLIANCE WITH ENVIRONMENTAL LAWS. Lessee shall, at Lessee's
                own expense, promptly comply with each and every federal, state,
                county and municipal environmental law, ordinance, rule,
                regulation, order, directive and requirement, now or hereafter
                existing ("Environmental Laws"), applicable to the Premises,
                Lessee, Lessee's operations at the Premises, or all of them,
                except if there is any violation of Environmental Laws with
                regard to the Premises existing at the date of this Lease,
                Lessor shall comply therewith at its sole cost and expense,
                which cost and expense shall not be included in Operating
                Costs..

        (c)     ISRA COMPLIANCE. Lessee shall, at Lessee's own expense, comply
                with the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 ET SEQ.,
                the regulations promulgated thereunder and any amending and
                successor legislation and regulations ("ISRA"), if and to the
                extent the need for such compliance is triggered by Lessee
                having become an Industrial Establishment (as defined in ISRA)
                with respect to its use of the Premises.

        (d)     INFORMATION TO LESSOR. At no expense to Lessor, Lessee shall
                promptly provide all information and sign all documents
                requested by Lessor with respect to compliance with
                Environmental Laws.

        (e)     LESSOR AUDIT. Lessee shall permit Lessor and its representatives
                access to the Premises, from time to time, to conduct an
                environmental assessment, investigation and sampling, all at
                Lessor's own expense. If such assessment, investigation and
                sampling reveal a violation of this provision, the cost shall be
                borne by Lessee.

        (f)     LESSEE REMEDIATION. Should any assessment, investigation or
                sampling reveal the existence of any spill, discharge or
                placement of Contaminants in, on, under, or about, or migrating
                from or onto the Premises, the Building or the Office Building
                Area, as a result of the action or omission of Lessee or a
                "Lessee Representative", then, in addition to being in default
                under this Lease and Lessor having all rights available to
                Lessor under this Lease and by law by reason of such default,
                Lessee shall, at Lessee's own expense, in accordance with
                Environmental Laws, undertake all action required by Lessor and
                any governmental authority, including, without

                                        4


                limitation, promptly obtaining and delivering to Lessor an
                unconditional No Further Action Letter. For purposes of this
                Article, the term "Lessee's Representative" shall mean any
                shareholder, officer, director, member, partner, employee,
                agent, licensee, assignee, sublessee or invitee of Lessee, or
                any third party for whom Lessee is legally responsible. In no
                event shall any of Lessee's remedial action involve engineering
                or institutional controls, a groundwater classification
                exception area or well restriction area, and Lessee's remedial
                action shall meet the most stringent published or unpublished
                remediation standards for soil, surface water, groundwater and
                drinking water. Promptly upon completion of all required
                investigatory and remedial activities, Lessee shall, at Lessee's
                own expense, to Lessor's satisfaction, restore the affected
                areas of the Premises, the Building or the Office Building Area,
                as the case may be, from any damage or condition caused by the
                investigatory or remedial work.

        (g)     ENVIRONMENTAL QUESTIONNAIRE. Upon Lessor's request,
                contemporaneously with the signing and delivery of this Lease,
                and thereafter upon renewal of the lease, if at all, Lessee
                shall complete, execute and deliver to Lessor an environmental
                questionnaire in form and substance satisfactory to Lessor.

        (h)     ENVIRONMENTAL DOCUMENTS AND CONDITIONS. For purposes of this
                Article, the term "Environmental Documents" shall mean all
                environmental documentation concerning the Building or the
                Office Building Area, of which the Premises is a part, or its
                environs, in the possession or under the control of Lessee,
                including, without limitation, plans, reports, correspondence
                and submissions. During the term of this Lease and subsequently,
                promptly upon receipt by Lessee or Lessee's Representatives,
                Lessee shall deliver to Lessor all Environmental Documents
                concerning or generated by or on behalf of Lessee, whether
                currently or hereafter existing. In addition, Lessee shall
                promptly notify Lessor of any environmental condition of which
                Lessee has knowledge, which may exist in, on, under, or about,
                or may be migrating from or onto the Building or the Office
                Building Area.

        (i)     LESSOR'S RIGHT TO PERFORM LESSEE'S OBLIGATIONS. Notwithstanding
                anything to the contrary set forth in this Lease, in the event,
                pursuant to this Lease, Lessee is required to undertake any
                sampling, assessment, investigation or remediation with respect
                to the Premises, the Building or the Office Building Area, as
                the case may be, then, at Lessor's discretion, Lessor shall have
                the right, if Lessee has failed to do so with reasonable
                promptness upon notice to Lessee, from time to time, to perform
                such activities at Lessee's expense, and all sums incurred by
                Lessor shall be paid by Lessee, as Additional Rent, upon demand.

        (j)     INDEMNITY. Lessee shall indemnify, defend and hold harmless
                Lessor, Lessor's officers, directors, shareholders, employees
                and personal or legal representatives from and against any and
                all claims, liabilities, losses, damages, penalties and costs,
                foreseen or unforeseen, including, without limitation, counsel,
                engineering and other professional or expert fees, which an
                indemnified party may incur resulting directly or indirectly,
                wholly or partly from Lessee's actions or omissions with regard
                to Lessee's obligations under this Article.

                Lessor shall indemnify, defend and hold harmless Lessee,
                Lessee's officers, directors, shareholders, employees and
                personal or legal representatives from and against any and all
                claims, liabilities, losses, damages, penalties and costs,
                foreseen or unforeseen, including, without limitation, counsel,
                engineering and other professional or expert fees, which an
                indemnified party may incur resulting directly or indirectly,
                wholly or partly from Lessor's actions or omissions with regard
                to Lessor's obligations under this Article. Any cost or expense
                incurred by Lessor pursuant to this indemnity shall be excluded
                from Operating Costs.

        (k)     SURVIVAL. This Article shall survive the expiration or earlier
                termination of this lease. Lessee's failure to abide by the
                terms of this Article shall be restrainable or enforceable, as
                the case may be, by injunction.

        (l)     INTERPRETATION. The obligations imposed upon Lessee under
                subparagraphs (a) through (j) above are in addition to and are
                not intended to limit, but to expand upon, the obligations
                imposed upon Lessee under this Article 5. As used in this
                Article, the term "Contaminants" shall include, without
                limitation, any regulated substance, toxic

                                        5


                substance, hazardous substance, hazardous waste, pollution,
                pollutant, contaminant, petroleum, asbestos or polychlorinated
                biphenyls, as defined or referred to in any Environmental Laws.
                Where a law or regulation defines any of these terms more
                broadly then another, the broader definition shall apply.

6.      ALTERATIONS, ADDITIONS OR IMPROVEMENTS:

        Lessee shall not, without first obtaining the written consent of Lessor,
        make any structural or Building Systems alterations, additions or
        improvements in, to or about the Premises. Building Systems shall mean
        any structural, life safety, plumbing, electrical, heating, ventilation
        or air conditioning system or its components. Lessee shall not, without
        first obtaining the written consent of Lessor (which shall not be
        unreasonably withheld or delayed) make any non-Building Systems
        alterations, additions or improvements in, to or about the Premises.
        Lessee may, upon notification to Lessor, perform minor cosmetic
        improvements, such as painting and wallpapering, without prior consent
        of Lessor.

7.      ACTIVITIES INCREASING FIRE INSURANCE RATES:

        Lessee shall not do or suffer anything to be done on the Premises which
        will increase the rate of fire insurance on the Building.

8.      ASSIGNMENT AND SUBLEASE:

        Provided Lessee is not in default of any provisions of this Lease,
        Lessee may assign or sublease the within Lease to any party subject to
        the following:

        a.      In the event Lessee desires to assign this Lease or sublease all
                or part of the Premises to any other party, the terms and
                conditions of such assignment or sublease shall be communicated
                to the Lessor in writing no less than thirty (30) days prior to
                the effective date of any such sublease or assignment, and,
                prior to such effective date, the Lessor shall have the option,
                exercisable in writing to the Lessee, to: (i) recapture in the
                case of subletting, that portion of the Premises to be sublet or
                all of the Premises in the case of an assignment ("Recapture
                Space") so that such prospective sublessee or assignee shall
                then become the lessee of Lessor hereunder, or (ii) recapture
                the Recapture Space for Lessor's own use. In the event that
                Lessor exercise its option to Recapture Space, the within Lessee
                shall be fully released from any and all obligations hereunder
                with respect to the Recapture Space and the Fixed Basic Rent and
                Lessee's Percentage shall be adjusted appropriately. Lessor
                shall advise Lessee in writing of Lessor's election with respect
                to the Recapture Space within twenty (20) days after Lessor's
                receipt of Lessee's notice of its intent to sublet or assign.
                Notwithstanding the foregoing, Lessor shall have no right to
                exercise its rights pursuant to clauses (i) or (ii) above if the
                space that Lessee proposes to sublet is less than eighty percent
                (80%) of the Premises and the term of such subletting, including
                renewal options, if any, is to expire at any time prior to the
                commencement of the last year of the Term.

        b.      In the event that the Lessor elects not to recapture the Lease
                or relet the Premises as hereinabove provided or in the event
                the proposed sublease falls within the provisions of the last
                sentence of sub section a. above, the Lessee may assign this
                Lease or sublet the whole or any portion of the Premises,
                subject to the Lessor's prior written consent, which consent
                shall not be unreasonably withheld and shall be deemed to have
                been given if Lessor does not advise Lessee otherwise in writing
                not less than twenty (20) days after Lessor's receipt of
                Lessee's notice of its intent to sublease or assign, on the
                basis of the following terms and conditions:

                i.      The Lessee shall provide to the Lessor the name and
                        address of the assignee or sublessee.

                ii.     The assignee or sublessee shall assume, by written
                        instrument, all of the obligations of this Lease, and a
                        copy of such assumption agreement shall be furnished to
                        the Lessor within ten (10) days of its execution. Any
                        sublease

                                        6


                        shall expressly acknowledge that said sublessee's rights
                        against Lessor shall be no greater than those of Lessee.
                        Lessee further agrees that notwithstanding any such
                        subletting, no other and further subletting of the
                        Premises by Lessee or any person claiming through or
                        under Lessee shall or will be made except upon
                        compliance with and subject to the provisions of this
                        Article 8.

                iii.    Each sublease shall provide that it is subject and
                        subordinate to this Lease and to the matters to which
                        this Lease is or shall be subordinate, and that in the
                        event of default by Lessee under this Lease, Lessor may,
                        at its option, take over all of the right, title and
                        interest of Lessee, as sublessor, under such sublease,
                        and such sublessee shall, at Lessor's option, attorn to
                        Lessor pursuant to the then executory provisions of such
                        sublease, except that Lessor shall not (i) be liable for
                        any previous act or omission of Lessee under such
                        sublease or, (ii) be subject to any offset not expressly
                        provided in such sublease which theretofore accrued to
                        such sublease to which Lessor has not specifically
                        consented in writing or by any previous prepayment of
                        more than one month's rent.

                iv.     The Lessee and each assignee shall be and remain liable
                        for the observance of all the covenants and provisions
                        of this Lease, including, but not limited to, the
                        payment of Fixed Basic Rent and Additional Rent reserved
                        herein, through the entire Term of this Lease, as the
                        same may be renewed, extended or otherwise modified.

                v.      The Lessee and any assignee shall promptly pay to Lessor
                        fifty percent (50%) of any consideration received for
                        any assignment and/or fifty percent (50%) of the rent,
                        as and when received, in excess of the Rent required to
                        be paid by Lessee for the area sublet computed on the
                        basis of an average square foot rent for the gross
                        square footage Lessee has leased after deducting
                        therefrom Lessee's actual and reasonable expenses in
                        connection with such sublease or assignment.

                vi.     In any event, the acceptance by the Lessor of any rent
                        from the assignee or from any of the subtenants or the
                        failure of the Lessor to insist upon a strict
                        performance of any of the terms, conditions and
                        covenants herein shall not release the Lessee herein,
                        nor any assignee assuming this Lease, from any and all
                        of the obligations herein during and for the entire Term
                        of this Lease.

                vii.    In Lessor's reasonable judgment, the proposed assignee
                        or subtenant is engaged in a business or activity, and
                        the Premises, or the relevant part thereof, will be used
                        in a manner, which (a) is in keeping with the then
                        standard of the Building and (b) is limited to the use
                        of the Premises as general offices.

                viii.   The proposed assignee or subtenant is not then an
                        occupant of any part of the Building or any other
                        building then owned by Lessor or its affiliates within
                        the Mack-Cali Business Campus and Lessor has space
                        available for leasing reasonably equivalent to the
                        Premises, in the case of an assignment, or the space
                        proposed to be sublet, in the case of a subletting. For
                        the purposes hereof, the "Mack-Cali Business Campus"
                        shall mean, Two Hilton Court, One Sylvan Way, Two Dryden
                        Way, 4 Campus Drive, 4 Gatehall Drive, 5 Sylvan Way, 6
                        Campus Drive, 600 Parsippany Road, 7 Campus Drive, 7
                        Sylvan Way, and 9 Campus Drive.

                ix.     The proposed assignee or subtenant is not an entity or a
                        person with whom Lessor is or has been, within the
                        preceding sixty (60) day period, engaged in active
                        negotiations to lease space in the Building or any other
                        building owned by Lessor or its affiliates within the
                        Mack-Cali Business Campus and Lessor has space available
                        for leasing reasonably equivalent to the Premises, in
                        the case of an assignment, or the space proposed to be
                        sublet in case of a subletting.

                x.      There shall not be more than three (3) subtenants in the
                        Premises.

                                        7


                xi.     Lessee shall not publicly advertise the subtenancy for
                        less than the then current market rent per rentable
                        square foot for the Premises as though the Premises were
                        vacant; provided that nothing contained herein shall
                        prohibit subleases for less than the then current market
                        rent.

                xii.    Lessee shall not have (a) publicly advertised the
                        availability of the Premises without prior notice to and
                        approval by Lessor (which approval shall not be
                        unreasonably withheld or delayed), nor shall any
                        advertisement state the name (as distinguished from the
                        address) of the Building or (b) listed the Premises for
                        subletting or assignment other than with a broker, agent
                        or representative who waives any entitlement to a
                        commission or other fee from Lessor in the event of a
                        recapturing of the Premises;

                xiii.   The proposed occupancy shall not, in Lessor's reasonable
                        opinion, exceed the parking allocation presently
                        provided for in this Lease;

                xiv.    The proposed assignee or subtenant shall only use the
                        Premises for general offices and shall not be engaged in
                        any of the following:

                        (a)     educational, including but not limited to,
                                instructional facilities and correspondence
                                schools;
                        (b)     employment agencies;
                        (c)     model agencies;
                        (d)     photographic studios or laboratories;
                        (e)     spas, health, physical fitness or exercise
                                salons;
                        (f)     small loan offices;
                        (g)     real estate brokerage or real estate sales
                                offices open to the general public or
                                construction offices;
                        (h)     medical or dental facilities, including
                                professional offices, treatment facilities,
                                dispensaries or laboratories;
                        (i)     federal, state or local government offices;
                        (j)     so-called boiler room operations;
                        (k)     retail stock brokerage offices; and
                        (l)     religious organizations making facilities
                                available to congregations for uses other than
                                business purposes; and
                        (m)     executive office suite use.

                xv.     The proposed assignee or subtenant shall not be
                        entitled, directly or indirectly, to diplomatic or
                        sovereign immunity and shall be subject to the service
                        of process in, and the jurisdiction of, the state courts
                        of New Jersey.

                xvi.    Lessor shall require a FIVE HUNDRED AND 00/100 DOLLAR
                        ($500.00) payment to cover its handling charges for each
                        request for consent to any sublet or assignment prior to
                        its consideration of the same. Unless it is judicially
                        determined that Lessor has acted in bad faith, Lessee
                        acknowledges that its sole remedy with respect to any
                        assertion that Lessor's failure to consent to any sublet
                        or assignment is unreasonable shall be the remedy of
                        specific performance and Lessee shall have no other
                        claim or cause of action against Lessor as a result of
                        Lessor's actions in refusing to consent thereto.

        c.      If Lessee is a corporation other than a corporation whose stock
                is listed and traded on a nationally recognized stock exchange,
                the provisions of Sub-section a. shall apply to a transfer
                (however accomplished, whether in a single transaction or in a
                series of related or unrelated transactions) of stock (or any
                other mechanism such as, by way of example, the issuance of
                additional stock, a stock voting agreement or change in
                class(es) of stock) which results in a change of control of
                Lessee as if such transfer of stock (or other mechanism) which
                results in a change of control of Lessee were an assignment of
                this Lease, and if Lessee is a partnership or joint venture,
                said provisions shall apply with respect to a transfer (by one
                or more transfers) of an interest in the distributions of
                profits and losses of such partnership or joint venture (or
                other mechanism, such as, by way of example, the creation of
                additional general partnership or limited partnership interests)
                which results in a change of control of such a partnership or
                joint venture, as if such transfer of an interest in the
                distributions of profits and losses of such partnership or joint
                venture which results in

                                        8


                a change of control of such partnership or joint venture were an
                assignment of this Lease; provided, however: (A) said provisions
                of Sub-section a. of this Article 7 shall not apply to
                transactions with a corporation into or with which Lessee is
                merged or consolidated or to which all or substantially all of
                Lessee's assets are transferred or to any corporation which
                controls or is controlled by Lessee or is under common control
                with Lessee (any of such transactions, a "Capital Transaction"),
                (B) Lessor's consent shall not be required with respect to a
                Capital Transaction in which (i) the successor to Lessee has the
                financial ability, in Lessor's reasonable discretion, to meet
                Lessee's obligations under the Lease, and (ii) proof
                satisfactory to Lessor of such financial ability to meet
                Lessee's obligations shall have been delivered to Lessor at
                least 10 days prior to the effective date of any such
                transaction.

        d.      In the event that any or all of Lessee's interest in the
                Premises and/or this Lease is transferred by operation of law to
                any trustee, receiver, or other representative or agent of
                Lessee, or to Lessee as a debtor in possession, and subsequently
                any or all of Lessee's interest in the Premises and/or this
                Lease is offered or to be offered by Lessee or any trustee,
                receiver, or other representative or agent of Lessee as to its
                estate or property (such person, firm or entity being
                hereinafter referred to as the "Grantor"), for assignment,
                conveyance, lease, or other disposition to a person, firm or
                entity other than Lessor (each such transaction being
                hereinafter referred to as a "Disposition"), it is agreed that
                Lessor has and shall have a right of first refusal to purchase,
                take, or otherwise acquire, the same upon the same terms and
                conditions as the Grantor thereof shall accept upon such
                Disposition to such other person, firm, or entity; and as to
                each such Disposition the Grantor shall give written notice to
                Lessor in reasonable detail of all of the terms and conditions
                of such Disposition within twenty (20) days next following its
                determination to accept the same but prior to accepting the
                same, and Grantor shall not make the Disposition until and
                unless Lessor has failed or refused to accept such right of
                first refusal as to the Disposition, as set forth herein.

                Lessor shall have sixty (60) days next following its receipt of
                the written notice as to such Disposition in which to exercise
                the option to acquire Lessee's interest by such Disposition, and
                the exercise of the option by Lessor shall be effected by notice
                to that effect sent to the Grantor; but nothing herein shall
                require Lessor to accept a particular Disposition or any
                Disposition, nor does the rejection of any one such offer of
                first refusal constitute a waiver or release of the obligation
                of the Grantor to submit other offers hereunder to Lessor. In
                the event Lessor accept such offer of first refusal, the
                transaction shall be consummated pursuant to the terms and
                conditions of the Disposition described in the notice to Lessor.
                In the event Lessor rejects such offer of first refusal, Grantor
                may consummate the Disposition with such other person, firm, or
                entity; but any decrease in price of more than two percent (2%)
                of the price sought from Lessor or any change in the terms of
                payment for such Disposition shall constitute a new transaction
                requiring a further option of first refusal to be given to
                Lessor hereunder.

        e.      Without limiting any of the provisions of Articles 12 and 13, if
                pursuant to the Federal Bankruptcy Code (herein referred to as
                the "Code"), or any similar law hereafter enacted having the
                same general purpose, Lessee is permitted to assign this Lease
                notwithstanding the restrictions contained in this Lease,
                adequate assurance of future performance by an assignee
                expressly permitted under such Code shall be deemed to mean the
                deposit of cash security in an amount equal to the sum of one
                year's Fixed Basic Rent plus an amount equal to the Additional
                Rent for the calendar year preceding the year in which such
                assignment is intended to become effective, which deposit shall
                be held by Lessor for the balance of the Term, without interest,
                as security for the full performance of all of Lessee's
                obligations under this Lease, to be held and applied in the
                manner specified for security in Article 16.

        f.      Except as specifically set forth above, no portion of the
                Premises or of Lessee's interest in this Lease may be acquired
                by any other person or entity, whether by assignment, mortgage,
                sublease, transfer, operation of law or act of the Lessee, nor
                shall Lessee pledge its interest in this Lease or in any
                security deposit required hereunder.

                                        9


9.      COMPLIANCE WITH RULES AND REGULATIONS:

        Lessee shall observe and comply with the rules and regulations
        hereinafter set forth in Exhibit B attached hereto and made a part
        hereof and with such further reasonable rules and regulations as Lessor
        may prescribe, on written notice to the Lessee, for the safety, care and
        cleanliness of the Building and the comfort, quiet and convenience of
        other occupants of the Building. Lessee shall not place a load upon any
        floor of the Premises exceeding the floor load per square foot area
        which it was designed to carry and which is allowed by law. Lessor
        reserves the right to prescribe the weight and position of all safes,
        business machines and mechanical equipment. Such installations shall be
        placed and maintained by Lessee, at Lessee's expense, in settings
        sufficient, in Lessor's judgement, to absorb and prevent vibration,
        noise and annoyance.

10.     DAMAGES TO BUILDING:

        If the Building is damaged by fire or any other cause to such extent the
        cost of restoration, as reasonably estimated by Lessor, will equal or
        exceed twenty-five percent (25%) of the replacement value of the
        Building (exclusive of foundations) just prior to the occurrence of the
        damage, then Lessor may, no later than the sixtieth (60th) day following
        the date of damage, give Lessee a notice of election to terminate this
        Lease, or if the cost of restoration will equal or exceed fifty percent
        (50%) of such replacement value and if the Premises shall not be
        reasonably usable for the purpose for which they are leased hereunder,
        or if restoration of the damage will require more than one hundred
        eighty (180) days to complete or if such damage is not fully repaired
        and reasonable access to the Premises restored within one hundred eighty
        (180) days from the date of damage, then, in any such event, Lessee may,
        no later than the sixtieth (60th) day following the date of damage or
        following the end of said one hundred eighty (180) day period, give
        Lessor a notice of election to terminate this Lease. In either said
        event of election, this Lease shall be deemed to terminate on the
        thirtieth (30th) day after the giving of said notice, and Lessee shall
        surrender possession of the Premises within a reasonable time
        thereafter, and the Fixed Basic Rent, and any Additional Rent, shall be
        apportioned as of the date of said casualty and any Fixed Basic Rent or
        Additional Rent paid for any period beyond said date shall be repaid to
        Lessee. If the cost of restoration or condition of the Premises shall
        not entitle Lessor or Lessee to terminate this Lease, or if, despite the
        cost or such condition, neither Lessor nor Lessee elects to terminate
        this Lease within the periods provided above, Lessor shall restore the
        Building and the Premises with reasonable promptness, subject to Force
        Majeure, and Lessee shall have no right to terminate this Lease, except
        as set forth above. Lessor need not restore fixtures and improvements
        owned by Lessee.

        In any case in which use of the Premises is affected by any damage to
        the Building, there shall be either an abatement or an equitable
        reduction in Fixed Basic Rent, depending on the period for which and the
        extent to which the Premises are not reasonably usable for the purpose
        for which they are leased hereunder. The words "restoration" and
        "restore" as used in this Article 10 shall include repairs. If the
        damage results from the fault of the Lessee, Lessee's agents, servants,
        visitors or licensees, Lessee shall not be entitled to any abatement or
        reduction in Fixed Basic Rent, except to the extent of any rent
        insurance received by Lessor.

11.     EMINENT DOMAIN:

        If Lessee's use of the Premises is materially affected due to the taking
        by eminent domain of (a) the Premises or any part thereof or any estate
        therein; or (b) any other part of the Building; then, in either event,
        this Lease shall terminate on the date when title vests pursuant to such
        taking. The Fixed Basic Rent, and any Additional Rent, shall be
        apportioned as of said termination date and any Fixed Basic Rent or
        Additional Rent paid for any period beyond said date, shall be repaid to
        Lessee. Lessee shall not be entitled to any part of the award for such
        taking or any payment in lieu thereof, but Lessee may file a separate
        claim for any taking of fixtures and improvements owned by Lessee which
        have not become the Lessor's property, and for moving expenses, provided
        the same shall, in no way, affect or diminish Lessor's award. In the
        event of a partial taking which does not effect a termination of this
        Lease but does deprive Lessee of the use of a portion of the Premises,
        there shall either be an abatement or an equitable reduction of the
        Fixed Basic Rent, and an equitable

                                       10


        adjustment reducing the Base Period Costs as hereinafter defined
        depending on the period for which and the extent to which the Premises
        so taken are not reasonably usable for the purpose for which they are
        leased hereunder.

12.     INSOLVENCY OF LESSEE:

        Either (a) the appointment of a receiver to take possession of all or
        substantially all of the assets of Lessee, or, (b) a general assignment
        by Lessee for the benefit of creditors, or, (c) any action taken or
        suffered by Lessee under any insolvency or bankruptcy act, shall
        constitute a default of this Lease by Lessee, and Lessor may terminate
        this Lease forthwith and upon notice of such termination Lessee's right
        to possession of the Premises shall cease, and Lessee shall then quit
        and surrender the Premises to Lessor but Lessee shall remain liable as
        hereinafter provided in Article 14 hereof.

13.     LESSOR'S REMEDIES ON DEFAULT:

        If Lessee defaults in the payment of Fixed Basic Rent, or any Additional
        Rent, or defaults in the performance of any of the other covenants and
        conditions hereof or permits the Premises to become deserted, abandoned
        or vacated, Lessor may give Lessee notice of such default, and if Lessee
        does not cure any Fixed Basic Rent or Additional Rent default within ten
        (10) days or other default within thirty (30) days after giving of such
        notice (or if such other default is of such nature that it cannot be
        completely cured within such period, if Lessee does not commence such
        curing within such thirty (30) day period and thereafter proceed with
        reasonable diligence and in good faith to cure such default), then
        Lessor may terminate this Lease on not less than ten (10) days notice to
        Lessee, and on the date specified in said notice, Lessee's right to
        possession of the Premises shall cease but Lessee shall remain liable as
        hereinafter provided. If this Lease shall have been so terminated by
        Lessor pursuant to Articles 12 or 13 hereof, Lessor may at any time
        thereafter resume possession of the Premises by any lawful means and
        remove Lessee or other occupants and their effects. The unsuccessful
        party shall pay tothe prevailing party, on demand, such expenses asthe
        prevailing party may incur, including, without limitation, court costs
        and reasonable attorney's fees and disbursements, in any proceeding
        relating to this Lease. Notwithstanding the foregoing, Lessee's vacating
        of the Premises shall not be deemed a default under this Lease, provided
        that at the time of such vacating of the Premises, Lessee shall deliver
        to Lessor a certification of the Chief Executive Officer or Chief
        Financial Officer of Lessee certifying that Lessee has the ability to
        meet its financial obligations under this Lease.

14.     DEFICIENCY:

        In any case where Lessor has recovered possession of the Premises by
        reason of Lessee's default, Lessor may, at Lessor's option, occupy the
        Premises or cause the Premises to be redecorated, altered, divided,
        consolidated with other adjoining premises or otherwise changed or
        prepared for reletting, and may relet the Premises or any part thereof,
        as agent of Lessee or otherwise, for a term or terms to expire prior to,
        at the same time as or subsequent to, the original Expiration Date of
        this Lease, at Lessor's option and receive the rent therefor. Rent so
        received shall be applied first to the payment of such reasonable
        expenses as Lessor may have incurred in connection with the recovery of
        possession, redecorating, altering, dividing, consolidating with other
        adjoining premises, or otherwise changing or preparing for reletting,
        and the reletting, including brokerage and reasonable attorney's fees,
        and then to the payment of damages in amounts equal to the Fixed Basic
        Rent and Additional Rent hereunder and to the costs and expenses of
        performance of the other covenants of Lessee as herein provided. Lessee
        agrees, in any such case, whether or not Lessor has relet, to pay to
        Lessor damages equal to the Fixed Basic Rent and Additional Rent from
        the date of such default to the date of expiration of the term demised
        and other sums herein agreed to be paid by Lessee, less the net proceeds
        of the reletting, if any, received by Lessor during the remainder of the
        unexpired term hereof, as ascertained from time to time, and the same
        shall be payable by Lessee on the several rent days above specified.
        Lessee shall not be entitled to any surplus accruing as a result of any
        such reletting. In reletting the Premises as aforesaid, Lessor may grant
        commercially reasonable rent concessions, and Lessee shall not be
        credited therewith. No such reletting shall constitute a surrender and
        acceptance or be deemed evidence thereof. If Lessor elects, pursuant
        hereto, actually to occupy and use the Premises or

                                       11


        any part thereof during any part of the balance of the Term as
        originally fixed or since extended, there shall be allowed against
        Lessee's obligation for rent or damages as herein defined, during the
        period of Lessor's occupancy, the reasonable value of such occupancy,
        not to exceed, in any event, the Fixed Basic Rent and Additional Rent
        herein reserved and such occupancy shall not be construed as a release
        of Lessee's liability hereunder.

        Alternatively, in any case where Lessor has recovered possession of the
        Premises by reason of Lessee's default, Lessor may at Lessor's option,
        and at any time thereafter, and without notice or other action by
        Lessor, and without prejudice to any other rights or remedies it might
        have hereunder or at law or equity, become entitled to recover from
        Lessee, as Damages for such breach, in addition to such other sums
        herein agreed to be paid by Lessee, to the date of re-entry, expiration
        and/or dispossess, an amount equal to the difference between the Fixed
        Basic Rent and Additional Rent reserved in this Lease from the date of
        such default to the date of Expiration of the original Term demised and
        the then fair and reasonable rental value of the Premises for the same
        period. Said Damages shall become due and payable to Lessor immediately
        upon such breach of this Lease and without regard to whether this Lease
        be terminated or not, and if this Lease be terminated, without regard to
        the manner in which it is terminated. In the computation of such
        Damages, the difference between an installment of Fixed Basic Rent and
        Additional Rent thereafter becoming due and the fair and reasonable
        rental value of the Premises for the period for which such installment
        was payable shall be discounted to the date of such default at the rate
        of not more than six percent (6%) per annum.

        Lessee hereby waives all right of redemption to which Lessee or any
        person under Lessee might be entitled by any law now or hereafter in
        force.

        Lessor's remedies hereunder are in addition to any remedy allowed by
        law.

15.     SUBORDINATION OF LEASE:

        This Lease shall, at Lessor's option, or at the option of any holder of
        any underlying lease or holder of any mortgages or trust deed, be
        subject and subordinate to any such underlying leases and to any such
        mortgages or trust deed which may now or hereafter affect the real
        property of which the Premises form a part, and also to all renewals,
        modifications, consolidations and replacements of said underlying leases
        and said mortgages or trust deed provided, that Lessor shall use
        commercially reasonable efforts to obtain a non-disturbance agreement
        from the holder of any such underlying lease, mortgage or trust deed.
        Any reasonable expenses charged by the mortgagee in connection with the
        obtaining of the aforesaid agreement shall be paid by Lessee. Although
        no instrument or act on the part of Lessee shall be necessary to
        effectuate such subordination, Lessee will, nevertheless, execute and
        deliver such further instruments confirming such subordination of this
        Lease as may be desired by the holders of said mortgages or trust deed
        or by any of the lessor's under such underlying leases. Lessee hereby
        appoints Lessor attorney-in-fact, irrevocably, to execute and deliver
        any such instrument for Lessee. If any underlying lease to which this
        Lease is subject terminates, Lessee shall, on timely request, attorn to
        the owner of the reversion.

        Lessor represents that there currently is no mortgage encumbering the
        Premises.

16.     SECURITY DEPOSIT:

        Lessee shall deposit with Lessor on the signing of this Lease, the
        Security Deposit as defined in the Preamble for the full and faithful
        performance of Lessee's obligations under this Lease, including without
        limitation, the surrender of possession of the Premises to Lessor as
        herein provided. If Lessor applies any part of said Security Deposit to
        cure any default of Lessee, Lessee shall, on demand, deposit with Lessor
        the amount so applied so that Lessor shall have the full Security
        Deposit on hand at all times during the Term of this Lease. In the event
        of a bona fide sale of the Building, subject to this Lease, Lessor shall
        have the right to transfer the Security Deposit to the vendee, and
        Lessor shall be considered released by Lessee from all liability for the
        return of the Security Deposit; and Lessee agrees to look solely to the
        new lessor for the return of the Security Deposit, and it is agreed that
        this shall apply to every transfer or assignment made of the Security
        Deposit to the new lessor. Provided this Lease is not in default, the
        Security Deposit (less any portions thereof used, applied or retained by
        Lessor in accordance with the provisions of this Article 16), shall be
        returned to Lessee after

                                       12


        the expiration or sooner termination of this Lease and after delivery of
        the entire Premises to Lessor in accordance with the provisions of this
        Lease. Lessee covenants that it will not assign or encumber or attempt
        to assign or encumber the Security Deposit and Lessor shall not be bound
        by any such assignment, encumbrance or attempt thereof.

        In the event of the insolvency of Lessee, or in the event a petition is
        filed by or against Lessee under any chapter of the bankruptcy laws of
        the State of New Jersey or the United States of America, then in such
        event, Lessor may require the Lessee to deposit additional security in
        an amount which in Lessor's sole judgement would be sufficient to
        adequately assure Lessee's performance of all of its obligations under
        this Lease including all payments subsequently accruing. Failure of
        Lessee to deposit the security required by this Article 16 within ten
        (10) days after Lessor's written demand shall constitute a material
        breach of this Lease by Lessee.

        Lessee may deliver to Lessor after the date hereof, in lieu of the cash
        deposit set forth in this Article, an irrevocable negotiable letter of
        credit in amount set forth in Paragraph 16 of the Preamble and
        substantially in the form annexed hereto as Exhibit H. Said letter of
        credit shall be for a term of not less than one (1) year and shall be
        renewed by Lessee (without notice from Lessor) no later than forty-five
        (45) days prior to its expiration, and the expiration of each
        replacement thereof, until Lessor shall be required to return the
        security to Lessee pursuant to the terms of this Lease but in no event
        earlier than ninety (90) days after the Expiration Date, and each such
        renewal letter of credit shall be delivered to Lessor no later than
        forty-five (45) days prior to the expiration of the letter of credit
        then held by Lessor. If any portion of the security deposit shall be
        utilized by Lessor in the manner permitted by this Lease, Lessee shall,
        within five (5) days after request by Lessor, replenish the security
        account by depositing with Lessor, in cash or by letter of credit, an
        amount equal to that utilized by Lessor. Failure of Lessee to comply
        strictly with the provisions of this Article shall constitute a material
        breach of this Lease and Lessor shall be entitled to present the letter
        of credit held by for payment (without notice to Lessee). If the cash
        security is converted into a letter of credit, the provisions with
        respect to letters of credit shall apply (with the necessary changes in
        Points of detail) to such letter of credit deposit. In the event of a
        bank failure or insolvency affecting the letter of credit, Lessee shall
        replace same within twenty (20) days after being requested to do so by
        Lessor.

17.     RIGHT TO CURE LESSEE'S BREACH:

        If Lessee breaches any covenant or condition of this Lease, Lessor may,
        on reasonable notice to Lessee (except that no notice need be given in
        case of emergency), cure such breach at the expense of Lessee and the
        reasonable amount of all expenses, including attorney's fees, incurred
        by Lessor in so doing (whether paid by Lessor or not) shall be deemed
        Additional Rent payable on demand.

18.     MECHANIC'S LIENS:

        Lessee shall, within fifteen (15) days after notice from Lessor,
        discharge or satisfy by bonding or otherwise any mechanic liens for
        materials or labor claimed to have been furnished to the Premises on
        Lessee's behalf.

19.     RIGHT TO INSPECT AND REPAIR:

        Lessor may enter the Premises but shall not be obligated to do so
        (except as required by any specific provision of this Lease) at any
        reasonable time on reasonable notice to Lessee (except that no notice
        need be given in case of emergency), in such a manner and at such times
        as to minimize interference with Lessee's business, for the purpose of
        inspection or the making of such repairs, replacement or additions in,
        to, on and about the Premises or the Building, as Lessor deems necessary
        or desirable. Lessee shall have no claims or cause of action against
        Lessor by reason thereof. In no event shall Lessee have any claim
        against Lessor for interruption of Lessee's business, however occurring,
        including but not limited to that arising from the negligence of Lessor,
        its agents, servants or invitees, or from defects, errors or omissions
        in the construction or design of the Premises and/or the Building,
        including the structural and non-structural portions thereof.

                                       13


20.     SERVICES TO BE PROVIDED BY LESSOR/LESSOR'S EXCULPATION:

        Subject to intervening laws, ordinances, regulations and executive
        orders, Lessor agrees to furnish, except on holidays, as set forth on
        Exhibit E attached hereto and made a part hereof:

        a.      The cleaning services, as set forth on Exhibit D attached hereto
                and made a part hereof, and subject to the conditions therein
                stated. Except as set forth on Exhibit D, Lessee shall pay the
                cost of all other cleaning services required by Lessee.

        b.      Heating, ventilating and air conditioning (herein "HVAC") as
                appropriate for the season, and as set forth on Exhibit C-1,
                attached hereto and made a part hereof, together with Common
                Facilities lighting and electric energy all during Building
                Hours, as defined in the Preamble.

        c.      Cold and hot water for drinking and lavatory purposes.

        d.      Elevator service during Building Hours (if the Building contains
                an elevator or elevators for the use of the occupants thereof).

        e.      Restroom supplies and exterior window cleaning when reasonably
                required.

        f.      Notwithstanding the requirements of Exhibit C-1 (as to HVAC) or
                D or any other provision of this Lease, Lessor shall not be
                liable for failure to furnish any of the aforesaid services when
                such failure is due to Force Majeure, as hereinafter defined.
                Lessor shall not be liable, under any circumstances, including,
                but not limited to, that arising from the negligence of Lessor,
                its agents, servants or invitees, or from defects, errors or
                omissions in the construction or design of the Premises and/or
                the Building, including the structural and non-structural
                portions thereof, for loss of or injury to Lessee or to
                property, however occurring, through or in connection with or
                incidental to the furnishings of, or failure to furnish, any of
                the aforesaid services or for any interruption to Lessee's
                business, however occurring.

21.     INTERRUPTION OF SERVICES OR USE:

        Interruption or curtailment of any service maintained in the Building or
        at the Office Building Area, if caused by Force Majeure, as hereinafter
        defined, shall not entitle Lessee to any claim against Lessor or to any
        abatement in rent, and shall not constitute a constructive or partial
        eviction, unless Lessor fails to take measures as may be reasonable
        under the circumstances to restore the service without undue delay. If
        the Premises are rendered untenantable in whole or in part, for a period
        of five (5) consecutive business days, by the making of repairs,
        replacements or additions, other than those made with Lessee's consent
        or caused by misuse or neglect by Lessee, or Lessee's agents, servants,
        visitors or licensees, there shall be a proportionate abatement of Rent
        from and after said fifth (5th) consecutive business day and continuing
        for the period of such untenantability. In no event, shall Lessee be
        entitled to claim a constructive eviction from the Premises unless
        Lessee shall first have notified Lessor in writing of the condition or
        conditions giving rise thereto, and if the complaints be justified,
        unless Lessor shall have failed, within a reasonable time after receipt
        of such notice, to remedy, or commence and proceed with due diligence to
        remedy such condition or conditions, all subject to Force Majeure as
        hereinafter defined.

22.     BUILDING STANDARD OFFICE ELECTRICAL SERVICE:

        The cost of electric current which is supplied by the Lessor for use by
        the Lessee in the Premises, other than for heating or air conditioning
        purposes, shall be reimbursed to the Lessor at terms, classification and
        rates normally charged by the public utilities corporation serving that
        part of the municipality where the subject Premises are located.

        a.      From and after the Commencement Date, Lessee agrees to pay as
                Additional Rent an estimated electrical charge of $.10 per
                square foot per month, payable on the first day

                                       14


                of each and every month, until such time as an electrical survey
                can be performed pursuant to Article 22(b) below.

        b.      Lessee agrees that an independent electrical engineering
                consultant shall make a survey of electric power demand of the
                electric lighting fixtures and the electric equipment of Lessee
                used in the Premises to determine the average monthly electric
                consumption thereof, and the costs of said survey shall be borne
                by Lessee but not in excess of $350.00. The findings of said
                consultant as to the average monthly electric consumption of
                Lessee shall, unless objected to by Lessee within forty-five
                (45) days, be conclusive and binding on Lessor and Lessee. After
                Lessor's consultant has submitted its report, Lessee shall pay
                to Lessor, within ten (10) days after demand therefor by Lessor,
                the amount (based on the monthly consumption found by such
                consultant) as owing from the Lease Term's Commencement Date,
                and the then expired months, to include the then current month
                and thereafter adjusted for the estimated electrical charges
                already paid pursuant to Article 22(a), on the first day of
                every month, in advance, the amount set forth as the monthly
                consumption in said report. Said amounts shall be treated as
                Additional Rent due hereunder. Proportionate sums shall be
                payable for periods of less than a full month if the Term
                commences or ends on any other than the first or last day of the
                month. If Lessee objects to said findings, Lessee shall
                nevertheless pay and continue to pay the amount determined by
                Lessor's consultant until the issue is finally resolved, but
                Lessee may, at its expense, seek the services of an independent
                electrical consultant who shall make a survey as provided above.
                If Lessor's and Lessee's consultant cannot agree as to Lessee's
                consumption within thirty (30) days of Lessee's consultant's
                findings either Lessor or Lessee may request the American
                Arbitration Association in Somerset, New Jersey to appoint an
                electrical engineering consultant whose decision shall be final
                and binding on Lessor and Lessee, and whose cost shall be shared
                equally. Upon the issue being finally resolved, any overpayment
                made by Lessee shall be promptly refunded.

        c.      In the event that there shall be an increase or decrease in the
                rate schedule (including surcharges or demand adjustments), of
                the public utility for the supply of Building Standard Office
                Electrical Service, or the imposition of any tax with respect to
                such service or increase in any such tax following the Lease
                Term's commencement, the Additional Rent payable hereunder shall
                be adjusted equitably to reflect the increase or decrease in
                rate or imposition or increase in the aforesaid tax. All
                computations shall be made on the basis of Lessee's surveyed
                usage as if a meter exclusively measuring such usage to the
                Premises was in place.

        d.      Lessee covenants that it shall notify Lessor immediately upon
                the introduction of any office equipment or lighting different
                from that on the Premises as of Lessor's electrical survey or in
                addition to the aforesaid equipment or lighting on the Premises
                as of said survey. The introduction of any new or different
                equipment or lighting shall be cause for, at Lessor's election,
                a resurveying of the Premises at Lessee's expense. Lessor
                reserves the right to inspect the Premises to insure compliance
                with this provision.

        e.      Lessor shall not be liable in any way to Lessee for any loss,
                damage or expense which Lessee may sustain or incur as a result
                of any failure, defect or change in the quantity or character of
                electrical energy available for redistribution to the Premises
                pursuant to this Article 22 nor for any interruption in the
                supply, and Lessee agrees that such supply may be interrupted
                for inspection, repairs and replacement and in emergencies. In
                any event, the full measure of Lessor's liability for any
                interruption in the supply due to Lessor's acts or omissions
                shall be an abatement of Fixed Basic Rent and Additional Rent,
                unless Lessor fails to take such measures as may be reasonable
                under the circumstances to restore such service without undue
                delay. In no event shall Lessor be liable for any business
                interruption suffered by Lessee.

        f.      Lessor, at Lessee's expense, shall furnish and install all
                replacement lighting tubes, lamps, ballasts and bulbs required
                in the Premises. Lessee, however, shall have the right to
                furnish and/or install any or all of the items mentioned in this
                Article 22(f).

        g.      Lessee's use of electrical service as contemplated herein shall
                be during Building Hours, and any use in excess of said Building
                Hours shall result in an adjustment as set forth in Article
                22(a) hereof to reflect such additional consumption.

                                       15


23.     ADDITIONAL RENT:

        It is expressly agreed that Lessee will pay in addition to the Fixed
        Basic Rent provided in Article 3 hereof, an Additional Rent to cover
        Lessee's Percentage as defined in the Preamble, of the increased cost to
        Lessor, for each of the categories enumerated herein, over the "Base
        Period Costs", as defined in the Preamble for said categories.

        a.      OPERATING COST ESCALATION -- If the Operating Costs incurred for
                the Building in which the Premises are located and Office
                Building Area for any Lease Year or Partial Lease Year during
                the Lease Term shall be greater than the Base Operating Costs
                (adjusted proportionately for periods less than a Lease Year),
                then Lessee shall pay to Lessor, as Additional Rent, Lessee's
                Percentage of all such excess Operating Costs. Operating Costs
                shall include, by way of illustration and not of limitation:
                personal property taxes; management fees; labor, including all
                wages and salaries; social security taxes, and other taxes which
                may be levied against Lessor upon such wages and salaries;
                supplies; repairs and maintenance; maintenance and service
                contracts; painting; wall and window washing; laundry and towel
                service; tools and equipment (which are not required to be
                capitalized for federal income tax purposes); fire and other
                insurance; trash removal; lawn care; snow removal and all other
                items properly constituting direct operating costs according to
                standard accounting practices (hereinafter collectively referred
                to as the "Operating Costs"), but not including any of the
                exclusions from Operating Costs set forth on Exhibit I attached
                hereto.

        b.      FUEL, UTILITIES AND ELECTRIC COST ESCALATION (hereinafter
                referred to as "Utility and Energy Costs") - If the Utility and
                Energy Costs, including any fuel surcharges or adjustments with
                respect thereto, incurred for water, sewer, gas, electric, other
                utilities and heating, ventilating and air conditioning for the
                Building, to include all leased and leasable areas (not
                separately billed or metered within the Building), and Common
                Facilities electric, lighting, water, sewer and other utilities
                for the Building and Office Building Area, for any Lease Year or
                Partial Lease Year, during the Term, shall be greater than the
                Base Utility and Energy Costs (adjusted proportionately for
                periods less than a Lease Year), then Lessee shall pay to Lessor
                as Additional Rent, Lessee's Percentage of all such excess
                Utility and Energy Costs. As used in this Article 23, the Base
                Utility and Energy Costs shall be as defined in the Preamble.

        c.      TAX ESCALATION -- If the Real Estate Taxes for the Building and
                Office Building Area at which the Premises are located for any
                Lease Year or Partial Lease Year, during the Lease Term, shall
                be greater than the Base Real Estate Taxes (adjusted
                proportionately for periods less than a Lease Year), then
                provided that such increase in Real Estate Taxes is not the
                result of expansion or addition to the Building and the Office
                Building Area at which the Premises are located, Lessee shall
                pay to Lessor as Additional Rent, Lessee's Percentage as
                hereinafter defined, of all such excess Real Estate Taxes.
                Lessor represents to Lessee that the Building and Office
                Building Area at which the Premises are located are assessed for
                Real Estate Tax purposes as of the date of this Lease as fully
                completed.

                As used in this Article 23(c), the words and terms which follow
                mean and include the following:

                i.      "Base Real Estate Taxes" shall be as defined in the
                        Preamble.

                ii.     "Real Estate Taxes" shall mean the property taxes and
                        assessments imposed upon the Building and Office
                        Building Area, or upon the rent, as such, payable to the
                        Lessor, including, but not limited to, real estate,
                        city, county, village, school and transit taxes, or
                        taxes, assessments, or charges levied, imposed or
                        assessed against the Building and Office Building Area
                        by any other taxing authority, whether general or
                        specific, ordinary or extraordinary, foreseen or
                        unforeseen. If due to a future change in the method of
                        taxation, any franchise, income or profit tax shall be
                        levied against Lessor in substitution for, or in lieu
                        of, or in addition to, any tax which would otherwise
                        constitute a Real Estate Tax, such franchise, income or
                        profit tax shall be

                                       16


                        deemed to be a Real Estate Tax for the purposes hereof;
                        conversely, any additional real estate tax hereafter
                        imposed in substitution for, or in lieu of, any
                        franchise, income or profit tax (which is not in
                        substitution for, or in lieu of, or in addition to, a
                        Real Estate Tax as hereinbefore provided) shall not be
                        deemed a Real Estate Tax for the purposes hereof.

        d.      LEASE YEAR -- As used in this Article 23, Lease Year shall mean
                a calendar year. Any portion of the Term which is less than a
                Lease Year as hereinbefore defined, that is, from the
                Commencement Date through the following December 31, and from
                the last January 1, falling within the Term to the end of the
                Term, shall be deemed a "Partial Lease Year". Any reference in
                this Lease to a Lease Year shall, unless the context clearly
                indicates otherwise, be deemed to be a reference to a Partial
                Lease Year if the period in question involves a Partial Lease
                Year.

        e.      PAYMENT -- At any time, and from time to time, after the
                establishment of the Base Period Costs for each of the
                categories referred to above, Lessor shall advise Lessee in
                writing of Lessee's Percentage share with respect to each of the
                categories as reasonably estimated for the next twelve (12)
                month period (or proportionate part thereof if the last period
                prior to the Lease's expiration is less than twelve (12) months)
                as then known to the Lessor, and thereafter, the Lessee shall
                pay as Additional Rent, Lessee's Percentage share of these costs
                for the then current period affected by such advice (as the same
                may be periodically revised by Lessor as additional costs are
                incurred) in equal monthly installments, such new rates being
                applied to any months, for which the Fixed Basic Rent shall have
                already been paid which are affected by the Operating Cost
                Escalation and/or Utility and Energy Cost Escalation and/or Tax
                Escalation Costs above referred to, as well as the unexpired
                months of the current period, the adjustment for the then
                expired months to be made at the payment of the next succeeding
                monthly rental, all subject to final adjustment at the
                expiration of each Lease Year as defined in Article 23(e) hereof
                (or Partial Lease Year if the last period prior to the Lease's
                termination is less than twelve (12) months).

                In the event the last period prior to the Lease's termination is
                less than twelve (12) months, the Base Period Costs during said
                period shall be proportionately reduced to correspond to the
                duration of said final period.

        f.      BOOKS AND REPORTS -- For the protection of Lessee, Lessor shall
                maintain books of account which, together with the back-up
                materials thereto, shall be open to Lessee and its
                representatives at all reasonable times so that Lessee can
                determine that such Operating, Utility and Energy and Real
                Estate Tax Costs have, in fact, been paid or incurred. Lessee's
                representatives shall not (i) perform such inspection and/or
                audit on a contingency basis, or (ii) perform such an inspection
                and/or audit for any other tenant in the Building. At Lessor's
                request, Lessee shall execute a confidentiality agreement
                reasonably acceptable to Lessor prior to any examination of
                Lessor's books and records. In the event Lessee disputes any one
                or more of said charges, Lessee shall attempt to resolve such
                dispute with Lessor, provided that if such dispute shall not be
                satisfactorily settled between Lessor and Lessee, the dispute
                shall be referred by either party to an independent certified
                public accountant to be mutually agreed upon, and if such an
                accountant cannot be agreed upon, The American Arbitration
                Association may be asked by either party to select an
                arbitrator, whose decision on the dispute will be final and
                binding upon both parties, who shall jointly share any cost of
                such arbitration. If the arbitrator determines that Lessor has
                overstated the disputed sum by more than five percent (5%), then
                Lessor shall pay the entire cost of the arbitration. Pending
                resolution of said dispute the Lessee shall pay to Lessor the
                sum so billed by Lessor subject to its ultimate resolution as
                aforesaid. The parties agree to make any adjustment to such
                Operating, Utility and Energy and Real Estate Tax Costs payments
                determined to be necessary as a result of such review by Lessee
                and/or arbitration.

        g.      RIGHT OF REVIEW -- Once Lessor shall have finally determined
                said Operating, Utility and Energy or Real Estate Tax Costs at
                the expiration of a Lease Year, then as to the item so
                established, Lessee shall only be entitled to dispute said
                charge as finally established for a period of six (6) months
                after such charge is finally established, and

                                       17


                Lessee specifically waives any right to dispute any such charge
                at the expiration of said six (6) month period.

        h.      OCCUPANCY ADJUSTMENT -- If, with respect to Operating Cost
                Escalation, as established in Article 23(a) hereof, and Utility
                and Energy Cost Escalation, as established in Article 23(b)
                hereof, the Building is less than ninety-five percent (95%)
                occupied during the establishment of the respective Base
                Periods, then the Base Costs incurred with respect to said
                Operating Cost or Utility and Energy Cost shall be adjusted
                during any such period within the Base Period so as to reflect
                ninety-five percent (95%) occupancy. Similarly, if during any
                Lease Year or Partial Lease Year, subsequent to the Base Period
                the Building is less than ninety-five percent (95%) occupied,
                then the actual costs incurred for Operating Cost and Utility
                and Energy Cost shall be increased during any such period to
                reflect ninety-five percent (95%) occupancy so that at all times
                after the Base Period the Operating Cost or Utility and Energy
                Cost shall be actual costs, but in the event less than
                ninety-five percent (95%) of the Building is occupied during all
                or part of the Lease Year involved, the Operating Cost or
                Utility and Energy Cost shall not be less than that which would
                have been incurred had ninety-five percent (95%) of the Building
                been occupied. The aforesaid adjustment shall only be made with
                respect to those items that are in fact affected by variations
                in occupancy levels.

24.     LESSEE'S ESTOPPEL :

        Lessee shall, from time to time, on not less than ten (10) days prior
        written request by Lessor, execute, acknowledge and deliver to Lessor a
        written statement, substantially in the form of Exhibit F attached
        hereto, certifying that the Lease is unmodified and in full force and
        effect, or that the Lease is in full force and effect as modified and
        listing the instruments of modification; the dates to which the rents
        and charges have been paid; and, to the best of Lessee's knowledge,
        whether or not Lessor is in default hereunder, and if so, specifying the
        nature of the default. It is intended that any such statement delivered
        by Lessee pursuant to this Article 24 may be relied on by a prospective
        purchaser of Lessor's interest or mortgagee of Lessor's interest or
        assignee of any mortgage of Lessor's interest.

        Lessor shall, from time to time, on not less than ten (10) days prior
        written request by Lessee, execute, acknowledge and deliver to Lessee a
        written statement reasonably acceptable to Lessee, certifying that the
        Lease is unmodified and in full force and effect, or that the Lease is
        in full force and effect as modified and listing the instruments of
        modifications; the dates to which the rents and charges have been paid;
        and whether or not Lessee is in default hereunder, and if so, specifying
        the nature of the default. It is intended that any such statement
        delivered by Lessor pursuant to this Article24 may be relied on by the
        person to whom Lessee requests that such statement be addressed.

25.     HOLDOVER TENANCY:

        If Lessee holds possession of the Premises after the Expiration Date of
        this Lease, Lessee shall (i) become a tenant from month to month under
        the provisions herein provided, but at one hundred fifty percent (150%)
        of the monthly Fixed Basic Rent for the last month of the Term, plus the
        Additional Rent, for the first two (2) months of Lessee's holding over
        and two hundred percent (200%) of the monthly Fixed Basic Rent for the
        last month of the Term, plus the Additional Rent, thereafter, which
        shall continue as provided in the Lease which sum shall be payable in
        advance on the first day of each month, and without the requirement for
        demand or notice by Lessor to Lessee demanding delivery of possession of
        said Premises, and such tenancy shall continue until terminated by
        Lessor, or until Lessee shall have given to Lessor, at least thirty (30)
        days prior to the intended date of termination, a written notice of
        intent to terminate such tenancy, which termination date must be as of
        the end of a calendar month; and (ii) indemnify Lessor against loss or
        liability resulting from the delay by Lessee in so surrendering the
        Premises including, without limitation, any claims made by any
        succeeding occupant founded on such delay. Lessee's obligations under
        this Section shall survive the expiration or sooner termination of the
        Lease. The time limitations described in this Article 25 shall not be
        subject to extension for Force Majeure.

                                       18


26.     RIGHT TO SHOW PREMISES:

        Lessor may show the Premises to prospective purchasers and mortgagees;
        and during the twelve (12) months prior to termination of this Lease, to
        prospective tenants, during Building Hours on reasonable notice to
        Lessee.

27.     LESSOR'S WORK - LESSEE'S DRAWINGS:

        Lessee shall accept the Premises "as is". Such term shall mean in the
        same condition and repair in which the prior tenant vacated such space,
        and Lessee shall be responsible for any demolition and removal of any
        improvements existing in the Premises in connection with the prior
        tenant's occupancy, and all other work as may be necessary to convert
        the Premises to Lessee's requirements. Lessor shall not be responsible
        for performing any work with respect to such space. Any work, changes or
        improvements made to such space shall be performed at Lessee's expense
        in accordance with the terms of Exhibit C of this Lease.

28.     WAIVER OF TRIAL BY JURY:

        To the extent such waiver is permitted by law, the parties waive trial
        by jury in any action or proceeding brought in connection with this
        Lease or the Premises.

29.     LATE CHARGE:

        Anything in this Lease to the contrary notwithstanding, at Lessor's
        option, Lessee shall pay a "Late Charge" of five percent (5%) of any
        installment of Fixed Basic Rent or Additional Rent paid more than five
        (5) business days after the due date thereof, to cover the extra expense
        involved in handling delinquent payments, said Late Charge to be
        considered Additional Rent. The amount of the Late Charge to be paid by
        Lessee shall be reassessed and added to Lessee's obligations for each
        successive monthly period until paid.

        Notwithstanding anything in this Section to the contrary, Lessor shall
        waive a Late Charge one time during each Lease Year provided, however,
        the installment of Fixed Basic Rent or Additional Rent so due is paid by
        the fifteenth (15th) day of the month.

30.     LESSEE'S INSURANCE:

        a.      Lessee covenants to provide at Lessee's cost and expense on or
                before the earlier of (i) the Commencement Date, or (ii)
                Lessee's taking actual possession for the purpose of completing
                any improvement work, and to keep in full force and effect
                during the entire Term and so long thereafter as Lessee, or
                anyone claiming by, through or under Lessee, shall occupy the
                Premises, insurance coverage as follows:

                i.      Commercial General Liability insurance with contractual
                        liability endorsements with respect to the Premises and
                        the business of Lessee in which Lessee shall be
                        adequately covered under limits of liability of not less
                        than FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00)
                        combined single limit per occurrence for bodily or
                        personal injury (including death) and property damage.
                        Such insurance may be carried (x) under a blanket policy
                        covering the Premises and other locations of Lessee, if
                        any, provided that each such policy shall in all
                        respects comply with this Article and shall specify that
                        the portion of the total coverage of such policy that is
                        allocated to the Premises is in the amounts required
                        pursuant to this Article 30 and (y) under a primary
                        liability policy of not less than ONE MILLION AND 00/100
                        DOLLARS ($1,000,000.00) and the balance under an
                        umbrella policy. Notwithstanding anything to the
                        contrary contained in this Lease, the carrying of
                        insurance by Lessee in compliance with this Article 30
                        shall not modify, reduce, limit or impair Lessee's
                        obligations and liability under Article 33 hereof.

                                       19


                ii.     Fire and Extended Coverage, Vandalism, Malicious
                        Mischief, Sprinkler Leakage and Special Extended
                        Coverage Insurance in an amount adequate to cover the
                        cost of replacement of all personal property,
                        decoration, trade fixtures, furnishings, equipment in
                        the Premises and all contents therein. Lessor shall not
                        be liable for any damage to such property of Lessee by
                        fire or other peril includable in the coverage afforded
                        by the standard form of fire insurance policy with
                        extended coverage endorsement attached (whether or not
                        such coverage is in effect), no matter how caused, it
                        being understood that the Lessee will look solely to its
                        insurer for reimbursement.

                iii.    Worker's Compensation Insurance in the minimum statutory
                        amount covering all persons employed by Lessee.

                iv.     Said limits shall be subject to periodic review and
                        Lessor reserves the right to increase said coverage
                        limits if, in the reasonable opinion of Lessor, said
                        coverage becomes inadequate and is less than that
                        commonly maintained by tenants in similar buildings in
                        the area by tenants making similar uses. On or before
                        the Commencement Date, and thereafter at Lessor's
                        request, Lessee shall provide Lessor evidence of the
                        insurance coverage required herein in the form of a
                        duplicate original insurance policy, an insurance binder
                        (countersigned by the insurer), or Evidence of Insurance
                        (in form ACORD 27 with respect to property insurance and
                        ACORD 25-S with respect to liability insurance) for each
                        of the insurance policies Lessee is required to carry in
                        compliance with its obligations under this Lease.

        b.      All of the aforesaid insurance shall (i) name Lessor as an
                additional insured on a primary basis; (ii) be written by one or
                more responsible insurance companies licensed in the State of
                New Jersey satisfactory to Lessor and in form satisfactory to
                Lessor; (iii) contain endorsements substantially as follows: "It
                is understood and agreed that the insurer will give to Lessor,
                or any successor lessor, c/o Mack-Cali Realty Corporation, 11
                Commerce Drive, Cranford, New Jersey, thirty (30) days prior
                written notice of any material change in or cancellation of this
                policy."; (iv) shall be written on an "occurrence" basis and not
                on a "claims made" basis.

        c.      Lessee shall be solely responsible for payment of premium and
                Lessor (or its designee) shall not be required to pay any
                premium for such insurance. Lessee shall deliver to Lessor at
                least fifteen (15) days prior to the expiration of such policy,
                either a duplicate original or a certificate it being the
                intention of the parties hereto that the insurance required
                under the terms hereof shall be continuous during the entire
                Term of this Lease and any other period of time during which
                pursuant to the Term hereof, said insurance is required. Any
                insurance carried by Lessee shall be in excess of and will not
                contribute with the insurance carried by Lessor for injuries or
                damage arising out of the Premises.

        d.      Lessee agrees, at its own cost and expense, to comply with all
                rules and regulations of the National Fire Protection
                Association (NFPA) National Fire Code. If, at any time or from
                time to time, as a result of or in connection with any failure
                by Lessee to comply with the foregoing sentence or any act or
                omission or commission by Lessee, its employees, agents,
                contractors or licensees, or a result of or in connection with
                the use to which the Premises are put (notwithstanding that such
                use may be for the purposes hereinbefore permitted or that such
                use may have been consented to by Lessor), the fire insurance
                rate(s) applicable to the Premises shall be higher than that
                which would be applicable for a business office legally
                permitted therein, Lessee agrees that it will pay to Lessor as
                Additional Rent, such portion of the premiums for all Lessor's
                fire insurance policies in force with respect to the building
                and the contents of any occupant thereof as shall be
                attributable to such higher rate(s).

        e.      Lessor makes no representation that the limits of liability
                specified to be carried by Lessee or Lessor under the terms of
                this Lease are adequate to protect Lessee against Lessee's
                undertaking under this Article 30, and in the event Lessee
                believes that any such insurance coverage called for under this
                Lease is insufficient, Lessee shall provide, at is own expense,
                such additional insurance as Lessee deems adequate.

                                       20


        f.      Lessor and Lessee shall procure a clause in, or endorsement on,
                each of their policies for fire or extended coverage insurance
                covering the Premises or personal property, fixtures or
                equipment located therein, pursuant to which the insurance
                company waives subrogation or consents to a waiver of right of
                recovery against the other party. Lessor and Lessee agree not to
                make claims against, or seek to recover from, the other party
                for loss or damage to its property or property of others covered
                by such insurance (or which would be covered by insurance
                required to be maintained hereunder). To the extent either party
                shall be a self-insurer, such party waives the right of
                recovery, if any, against the other party, its agents and
                employees, for loss, damages or destruction of such self-insured
                party's property. In the event of any conflict between the
                provisions of this Section 30 f. and any other provision of this
                Lease, the provisions of this Section 30f. shall control.

        g.      Should Lessee fail to maintain the insurance coverage as set
                forth in this Article 30, then Lessee shall be in default
                hereunder and shall be deemed to have breached its covenants as
                set forth herein.

31.     NO OTHER REPRESENTATIONS:

        No representations or promises shall be binding on the parties hereto
        except those representations and promises contained herein or in some
        future writing signed by the party making such representation(s) or
        promise(s).

32.     QUIET ENJOYMENT:

        Lessor covenants that if, and so long as, Lessee pays Fixed Basic Rent,
        and any Additional Rent as herein provided, and performs Lessee's
        covenants hereof, neither Lessor nor anyone claiming by, through or
        under Lessor shall do anything to affect Lessee's right to peaceably and
        quietly have, hold and enjoy the Premises for the Term herein mentioned,
        subject to the provisions of this Lease.

33.     INDEMNITY:

        Lessee shall defend, indemnify and save harmless Lessor and its agents
        against and from; (a) any and all claims (i) arising from (x) the
        conduct or management by Lessee, its subtenants, licensees, its or their
        employees, agents, contractors or invitees on the Premises or of any
        business therein, or (y) any work or thing whatsoever done, or any
        condition created (other than by Lessor for Lessor's or Lessee's
        account) in or about the Premises during the Term of this Lease, or
        during the period of time, if any, prior to the Commencement Date that
        Lessee may have been given access to the Premises, (z) any default by
        Lessee under the terms, covenants and conditions of this Lease or (ii)
        arising from any negligent or otherwise wrongful act or omission of
        Lessee or any of its subtenants or licensees or its or their employees,
        agents, contractors or invitees, and (b) all costs, expenses and
        liabilities including attorneys fees and disbursements incurred in or in
        connection with each such claim, action or proceeding brought thereon.
        In case any action or proceeding be brought against Lessor by reason of
        any such claim, Lessee, upon notice from Lessor, shall resist and defend
        such action or proceeding.

        Lessor shall indemnify and save harmless Lessee and Lessee's
        shareholders, officers, directors, employees, agents and contractors
        (collectively, the "Lessee INDEMNITEES") from and against (a) any and
        all claims of whatever nature against Lessee and/or the Lessee
        Indemnitees (i) arising from (x) the conduct or management by Lessor,
        its employees, agents, contractors or invitees on the Office Building
        Area or the Building, or (y) any work or thing whatsoever done, or any
        condition created by Lessor for Lessor's or Lessee's account in or about
        the Office Building Area or the Building during the Term of this Lease,
        (z) any default by Lessor in the performance of Lessor's obligations
        under this Lease, or (ii) arising from any negligent or otherwise
        wrongful act or omission of Lessor or any of its employees, agents or
        contractors, and (b) all costs, expenses and liabilities including
        attorneys' fees and disbursements incurred in or in connection with each
        such claim, action or proceeding brought thereon. In case any action or
        proceeding be brought against Lessee by reason of any

                                       21


        such claim, Lessor, upon notice from Lessee, shall resist and defend
        such action or proceeding.

34.     ARTICLE HEADINGS:

        The article headings in this Lease and position of its provisions are
        intended for convenience only and shall not be taken into consideration
        in any construction or interpretation of this Lease or any of its
        provisions.

35.     APPLICABILITY TO HEIRS AND ASSIGNS:

        The provisions of this Lease shall apply to, bind and inure to the
        benefit of Lessor and Lessee, and their respective heirs, successors,
        legal representatives and assigns. It is understood that the term
        "Lessor" as used in this Lease means only the owner, a mortgagee in
        possession or a term lessee of the Building, so that in the event of any
        sale of the Building or of any lease thereof, or if a mortgagee shall
        take possession of the Premises, the Lessor herein shall be and hereby
        is entirely freed and relieved of all covenants and obligations of
        Lessor hereunder accruing thereafter, and it shall be deemed without
        further agreement that the purchaser, the term lessee of the Building,
        or the mortgagee in possession has assumed and agreed to carry out any
        and all covenants and obligations of Lessor hereunder.

36.     OUTSIDE PARKING SPACES:

        Lessee's occupancy of the Premises shall include the use of the number
        of outside parking spaces as set forth in the Preamble. Lessor shall not
        be responsible for any damage or theft of any vehicle in the parking
        area and shall not be required to keep parking spaces clear of
        unauthorized vehicles or to otherwise supervise the use of the parking
        area. Lessee shall, upon request, promptly furnish to Lessor the license
        numbers of the cars operated by Lessee and its subtenants, licensees,
        invitees, concessionaires, officers and employees. If any vehicle of the
        Lessee, or of any subtenant, licensee, concessionaire, or of their
        respective officers, agents or employees, is parked in any part of the
        Common Facilities other than the employee parking area(s) designated
        therefor by Lessor, Lessee shall pay to Lessor such reasonable penalty
        as may be fixed by Lessor from time to time. All amounts due under the
        provisions of this Article 36 shall be deemed to be Additional Rent.

37.     LESSOR'S LIABILITY FOR LOSS OF PROPERTY:

        Lessor shall not be liable for any loss of property from any cause
        whatsoever, including but not limited to theft or burglary from the
        Premises, and any such loss arising from the negligence of Lessor, its
        agents, servants or invitees, or from defects, errors or omissions in
        the construction or design of the Premises and/or the Building,
        including the structural and non-structural portions thereof, and Lessee
        covenants and agrees to make no claim for any such loss at any time.

38.     PARTIAL INVALIDITY:

        If any of the provisions of this Lease, or the application thereof to
        any person or circumstances, shall to any extent, be invalid or
        unenforceable, the remainder of this Lease, or the application of such
        provision or provisions to persons or circumstances other than those as
        to whom or which it is held invalid or unenforceable, shall not be
        affected thereby, and every provision of this Lease shall be valid and
        enforceable to the fullest extent permitted by law.

39.     LESSEE'S BROKER:

        Lessee represents and warrants to Lessor that its broker, as defined in
        the Preamble is the sole broker with whom Lessee has negotiated in
        bringing about this Lease and Lessee agrees to indemnify and hold Lessor
        and its mortgagee(s) harmless from any and all claims of other

                                       22


        brokers claiming to have dealt with Lessee and expenses in connection
        therewith arising out of or in connection with the negotiation of or the
        entering into this Lease by Lessor and Lessee. In no event shall
        Lessor's mortgagee(s) have any obligation to any broker involved in this
        transaction. In the event that no broker was involved as aforesaid, then
        Lessee represents and warrants to the Lessor that no broker brought
        about this transaction, and Lessee agrees to indemnify and hold Lessor
        harmless from any and all claims of any broker claiming to have dealt
        with Lessee arising out of or in connection with the negotiations of, or
        entering into of, this Lease by Lessee and Lessor.

40.     PERSONAL LIABILITY:

        Notwithstanding anything to the contrary provided in this Lease, it is
        specifically understood and agreed, such agreement being a primary
        consideration for the execution of this Lease by Lessor, that there
        shall be absolutely no personal liability on the part of Lessor, its
        constituent members (to include but not be limited to, officers,
        directors, partners and trustees) their respective successors, assigns
        or any mortgagee in possession (for the purposes of this Article,
        collectively referred to as "Lessor"), with respect to any of the terms,
        covenants and conditions of this Lease, and that Lessee shall look
        solely to the equity of Lessor in the Building (including, without
        limitation, rental income and proceeds of sale, insurance and
        condemnation) for the satisfaction of each and every remedy of Lessee in
        the event of any breach by Lessor of any of the terms, covenants and
        conditions of this Lease to be performed by Lessor, such exculpation of
        liability to be absolute and without any exceptions whatsoever.

41.     NO OPTION:

        The submission of this Lease Agreement for examination does not
        constitute a reservation of, or option for, the Premises, and this Lease
        Agreement becomes effective as a Lease Agreement only upon execution and
        delivery thereof by Lessor and Lessee.

42.     DEFINITIONS:

        a.      AFFILIATE -- Affiliate shall mean any corporation related to
                Lessee as a parent, subsidiary or brother-sister corporation so
                that such corporation and such party and other corporations
                constitute a controlled group as determined under Section 1563
                of the Internal Revenue Code of 1986, as amended and as
                elaborated by the Treasury Regulations promulgated thereunder or
                any business entity in which Lessee has more than a fifty
                percent (50%) interest.

        b.      COMMON FACILITIES -- Common Facilities shall mean the
                non-assigned parking areas; lobby; elevator(s); fire stairs;
                public hallways; public lavatories; all other general Building
                facilities that service all Building tenants; air conditioning
                rooms; fan rooms; janitors' closets; electrical closets;
                telephone closets; elevator shafts and machine rooms; flues;
                stacks; pipe shafts and vertical ducts with their enclosing
                walls. Lessor may at any time close temporarily any Common
                Facilities to make repairs or changes therein or to effect
                construction, repairs or changes within the Building, or to
                discourage non-tenant parking, and may do such other acts in and
                to the Common Facilities as in its judgement may be desirable to
                improve the convenience thereof, but shall always in connection
                therewith, endeavor to minimize any inconvenience to Lessee.

        c.      FORCE MAJEURE -- Force Majeure shall mean and include those
                situations beyond Lessor's reasonable control, including by way
                of example and not by way of limitation, acts of God; accidents;
                repairs; strikes; shortages of labor, supplies or materials;
                inclement weather; or, where applicable, the passage of time
                while waiting for an adjustment or insurance proceeds. Any time
                limits required to be met by either party hereunder, whether
                specifically made subject to Force Majeure or not, except those
                related to the payment of Fixed Basic Rent or Additional Rent,
                shall, unless specifically stated to the contrary elsewhere in
                this Lease, be automatically extended by the number of days by
                which any performance called for is delayed due to Force
                Majeure.

                                       23


        d.      LESSEE'S PERCENTAGE -- The parties agree that Lessee's
                Percentage, as defined in the Preamble, reflects and will be
                continually adjusted to reflect the ratio of the gross square
                feet of the area rented to Lessee (including an allocable share
                of all Common Facilities) [the numerator] as compared with the
                total number of gross square feet of the entire Building (or
                additional buildings that may be constructed within the Office
                Building Area) [the denominator] measured outside wall to
                outside wall, but excluding therefrom any storage areas. Lessor
                shall have the right to make changes or revisions in the Common
                Facilities of the Building so as to provide additional leasing
                area. Lessor shall also have the right to construct additional
                buildings in the Office Building Area for such purposes as
                Lessor may deem appropriate, and subdivide the lands for that
                purpose if necessary, and upon so doing, the Office Building
                Area shall become the subdivided lot on which the Building in
                which the Premises is located. However, if any service provided
                for in Article 23(a) or any utility provided for in Article
                23(b) is separately billed or separately metered within the
                Building, then the square footage so billed or metered shall be
                subtracted from the denominator and the Lessee's proportionate
                share for such service and/or utility shall be separately
                computed, and the Base Costs for such item shall not include any
                charges attributable to said square footage. Lessee understands
                that as a result of changes in the layout of the Common
                Facilities from time to time occurring due to, by way of example
                and not by way of limitation, the rearrangement of corridors,
                the aggregate of all Building tenant proportionate shares may be
                equal to, less than or greater than one hundred percent (100%).

43.     LEASE COMMENCEMENT:

        The Rent Commencement Date of this Lease, as defined in the Preamble to
        this Lease, shall occur regardless of Lessee's failure to complete
        tenant improvement work pursuant to Exhibit C attached hereto. Lessor
        and Lessee shall ratify and confirm the Rent Commencement Date and
        Expiration Date by completing and signing Exhibit G attached hereto and
        made a part hereof.

44.     NOTICES:

        Any notice by either party to the other shall be in writing and shall be
        deemed to have been duly given only if (i) delivered personally or (ii)
        sent by registered mail or certified mail return receipt requested in a
        postage paid envelope addressed or (iii) sent by nationally recognized
        overnight delivery service, if to Lessee, at the Building (except that
        any notice to Lessee prior to the Rent Commencement Date shall be
        addressed to Lessee at 5 Sylvan Way, Parsippany, NJ 07054); if to
        Lessor, at Lessor's address as set forth above; or, to either at such
        other address as Lessee or Lessor, respectively, may designate in
        writing. Notice shall be deemed to have been duly given, if delivered
        personally, on delivery thereof, if mailed, upon the tenth (10th) day
        after the mailing thereof or if sent by overnight delivery service, the
        next business day.

45.     ACCORD AND SATISFACTION:

        No payment by Lessee or receipt by Lessor of a lesser amount than the
        rent and additional charges payable hereunder shall be deemed to be
        other than a payment on account of the earliest stipulated Fixed Basic
        Rent and Additional Rent, nor shall any endorsement or statement on any
        check or any letter accompanying any check or payment for Fixed Basic
        Rent or Additional Rent be deemed an accord and satisfaction, and Lessor
        may accept such check or payment without prejudice to Lessor's right to
        recover the balance of such Fixed Basic Rent and Additional Rent or
        pursue any other remedy provided herein or by law.

46.     EFFECT OF WAIVERS:

        No failure by Lessor to insist upon the strict performance of any
        covenant, agreement, term or condition of this Lease, or to exercise any
        right or remedy consequent upon a breach thereof, and no acceptance of
        full or partial rent during the continuance of any such breach,

                                       24


        shall constitute a waiver of any such breach or of such covenant,
        agreement, term or condition. No consent, or waiver, express or implied,
        by Lessor to or of any breach of any covenant, condition or duty of
        Lessee shall be construed as a consent or waiver to or of any other
        breach of the same or any other covenant, condition or duty, unless in
        writing signed by Lessor.

47.     LEASE CONDITION: INTENTIONALLY OMITTED


48.     MORTGAGEE'S NOTICE AND OPPORTUNITY TO CURE:

        Lessee agrees to give any mortgagees and/or trust deed holders, by
        registered mail, a copy of any notice of default served upon Lessor,
        provided that, prior to such notice, Lessee has been notified in writing
        (by way of notice of assignment of rents and leases or otherwise) of the
        address of such mortgagees and/or trust deed holders. Lessee further
        agrees that, if Lessor shall have failed to cure such default within the
        time provided for in this Lease, then the mortgagees and/or trust deed
        holders shall have an additional thirty (30) days within which to cure
        such default, or if such default cannot be cured within that time, then
        such additional time as may be necessary, if within such thirty (30)
        days, any mortgagee and/or trust deed holder has commenced and is
        diligently pursuing the remedies necessary to cure such default
        (including but not limited to commencement of foreclosure proceedings if
        necessary to effect such cure), in which event this Lease shall not be
        terminated while such remedies are being so diligently pursued.

49.     LESSOR'S RESERVED RIGHT:

        Lessor and Lessee acknowledge that the Premises are in a Building which
        is not open to the general public. Access to the Building is restricted
        to Lessor, Lessee, their agents, employees and contractors and to their
        invited visitors. In the event of a labor dispute including a strike,
        picketing, informational or associational activities directed at Lessee
        or any other tenant, Lessor reserves the right unilaterally to alter
        Lessee's ingress and egress to the Building or make any change in
        operating conditions to restrict pedestrian, vehicular or delivery
        ingress and egress to a particular location.

50.     CORPORATE AUTHORITY:

        If Lessee is a corporation, Lessee represents and warrants that this
        Lease has been duly authorized and approved by the corporation's Board
        of Directors. The undersigned officers and representatives of the
        corporation represent and warrant that they are officers of the
        corporation with authority to execute this Lease on behalf of the
        corporation, and within fifteen (15) days of execution hereof, Lessee
        will provide Lessor with a corporate resolution confirming the
        aforesaid.

51.     AFTER-HOURS USE:

        Lessee shall be entitled to make use of said Standard Electric Service
        and HVAC beyond the Building Hours, at Lessee's sole cost and expense,
        provided Lessee shall notify the Lessor by 3:00 p.m. on the day that
        Lessee shall require said overtime use if said overtime use is required
        on any weekday, and by 3:00 p.m. on Friday for Saturday and/or Sunday
        overtime use. It is understood and agreed that Lessee shall pay the sum
        of SEVENTY-FIVE AND 00/100 DOLLARS ($75.00) per hour per zone for
        air-conditioning service and SIXTY AND 00/100 DOLLARS ($60.00) per hour
        per zone for heating services, plus such additional percentage increase
        of the aforesaid hourly sum computed by measuring the percentage
        increase between the rate in effect (including fuel surcharges or
        adjustments) during the month for which such overtime use is requested
        and the Base Rate. The Base Rate for purposes hereof shall be the
        average of the rates in effect (including surcharges and/or adjustments)
        during Calendar Year 2003.

                                       25


        In no event shall the Lessee pay less than the sum of SEVENTY-FIVE AND
        00/100 DOLLARS ($75.00) per hour per zone for such overtime
        air-conditioning service or less than SIXTY AND 00/100 DOLLARS ($60.00)
        per hour per zone for such overtime heating service.

52.     LESSEE'S EXPANSION/RELOCATION: INTENTIONALLY OMITTED


53.     BUILDING PERMIT:

        Intentionally Omitted.

54.     OPTION TO RENEW

        (a)     If the term of this Lease shall then be in full force and effect
                and Lessee is not in default hereunder beyond applicable notice
                and grace periods, Lessee shall have the option to extend the
                term of this Lease for a period of five (5) years (the "Renewal
                Term") commencing on the day immediately following the
                Expiration Date, provided however that Lessee shall give Lessor
                notice of its election to extend the term no earlier than
                eighteen (18) months prior to the Expiration Date nor later than
                nine (9) months prior to the Expiration Date of the initial
                term. TIME BEING OF THE ESSENCE in connection with the exercise
                of Lessee's option pursuant to this Article.

        (b)     Such extension of the term of this Lease shall be upon the same
                covenants and conditions, as herein set forth except: (i) for
                the Fixed Basic Rent (which shall be determined in the manner
                set forth below), (ii) the Base Period Costs shall be re-set to
                be those incurred in the first year of the Renewal Term, and
                (iii) that Lessee shall have no further right to extend the term
                of this Lease after the exercise of the single option described
                in paragraph (a) of this Section. If Lessee shall duly give
                notice of its election to extend the term of this Lease, the
                Renewal Term shall be added to and become a part of the Term of
                this Lease (but shall not be considered a part of the initial
                Term), and any reference in this Lease to the "Term of this
                Lease", the "Term hereof", or any similar expression shall be
                deemed to include such Renewal Term, and, in addition, the term
                "Expiration Date" shall thereafter mean the last day of such
                Renewal Term. Lessor shall have no obligation to perform any
                alteration or preparatory or other work in and to the Premises
                and Lessee shall continue possession thereof in its "as is"
                condition.

        (c)     If Lessee exercises its option for the Renewal Term, the Fixed
                Basic Rent during the Renewal Term shall be the fair market rent
                for the Premises, as hereinafter defined.

        (d)     Lessor and Lessee shall use their best efforts, within thirty
                (30) days after Lessor receives Lessee's notice of its election
                to extend the Term of this Lease for the Renewal Term
                ("Negotiation Period"), to agree upon the Fixed Basic Rent to be
                paid by Lessee during the Renewal Term. If Lessor and Lessee
                shall agree upon the Fixed Basic Rent for the Renewal Term, the
                parties shall promptly execute an amendment to this Lease
                stating the Fixed Basic Rent for the Renewal Term.

        (e)     If the parties are unable to agree on the Fixed Basic Rent for
                the Renewal Term during the Negotiation Period, then within
                fifteen (15) days after notice from the other party, given after
                expiration of the Negotiation Period, each party, at its cost
                and upon notice to the other party, shall appoint a person to
                act as an appraiser hereunder, to determine the fair market rent
                for the Premises for the Renewal Term. Each such person shall be
                a real estate broker or appraiser with at least ten years'
                active commercial real estate appraisal or brokerage experience
                (involving the leasing of office space as agent for both
                landlords and lessees) in the County of Morris. If a party does
                not appoint a person to act as an appraiser within said fifteen
                (15) day period, the person appointed by the other party shall
                be the sole appraiser and shall determine the aforesaid fair
                market rent. Each notice containing the name of a person to act
                as appraiser shall contain also the person's address. Before
                proceeding to establish the fair market rent, the appraisers
                shall subscribe and swear to an oath fairly and impartially to
                determine such rent.

                                       26


                If the two appraisers are appointed by the parties as stated in
                the immediately preceding paragraph, they shall meet promptly
                and attempt to determine the fair market rent. If they are
                unable to agree within forty-five (45) days after the
                appointment of the second appraiser, they shall attempt to
                select a third person meeting the qualifications stated in the
                immediately preceding paragraph within fifteen (15) days after
                the last day the two appraisers are given to determine the fair
                market rent. If they are unable to agree on the third person to
                act as appraiser within said fifteen (15) day period, the third
                person shall be appointed by the American Arbitration
                Association (the "Association"), upon the application of Lessor
                or Lessee to the office of the Association nearest the Building.
                The person appointed to act as appraiser by the Association
                shall be required to meet the qualifications stated in the
                immediately preceding paragraph. Each of the parties shall bear
                fifty percent (50%) of the cost of appointing the third person
                and of paying the third person's fees. The third person, however
                selected, shall be required to take an oath similar to that
                described above.

                The three appraisers shall meet and determine the fair market
                rent. A decision in which two of the three appraisers concur
                shall be binding and conclusive upon the parties. In deciding
                the dispute, the appraisers shall act in accordance with the
                rules then in force of the Association, subject however, to such
                limitations as may be placed on them by the provisions of this
                Lease.

                Notwithstanding the foregoing, in no event shall the Fixed Basic
                Rent during the Renewal Term be less than the Fixed Basic Rent
                during the last year of the initial Term of this Lease.

        (f)     After the fair market rent for the Renewal Term has been
                determined by the appraiser or appraisers and the appraiser or
                appraisers shall have notified the parties, at the request of
                either party, both parties shall execute and deliver to each
                other an amendment of this Lease stating the Fixed Basic Rent
                for the Renewal Term.

        (g)     If the Fixed Basic Rent for the Renewal Term has not been agreed
                to or established prior to the commencement of the Renewal Term,
                then Lessee shall pay to Lessor an annual rent ("Temporary
                Rent") which Temporary Rent shall be equal to the Fixed Basic
                Rent payable by Lessee for the last year of the initial Term.
                Thereafter, if the parties shall agree upon a Fixed Basic Rent,
                or the Fixed Basic Rent shall be established upon the
                determination of the fair market rent by the appraiser or
                appraisers, at a rate at variance with the Temporary Rent (i) if
                such Fixed Basic Rent is greater than the Temporary Rent, Lessee
                shall promptly pay to Lessor the difference between the Fixed
                Basic Rent determined by agreement or the appraisal process and
                the Temporary Rent, or (ii) if such Fixed Basic Rent is less
                than the Temporary Rent, Lessor shall credit to Lessee's
                subsequent monthly installments of Fixed Basic Rent the
                difference between the Temporary Rent and the Fixed Basic Rent
                determined by agreement or the appraisal process.

        (h)     In describing the fair market rent during the Renewal Term, the
                appraiser or appraisers shall be required to take into account
                the rentals at which leases are then being concluded (as of the
                last day of the initial Term) (for five (5) year leases without
                renewal options with the lessor and lessee each acting
                prudently, with knowledge and for self-interest, and assuming
                that neither is under undue duress) for as-is comparable space
                in the Building and in comparable office buildings in the County
                of Morris, without a Lessor contribution for tenant fit-up but
                with new base years.

55.     RIGHT OF FIRST OFFER

        a.      i.      Subject to the provisions of this Article, Lessee shall
                        have the option to lease from Lessor space on the east
                        wing of the second (2nd) floor as shown on the attached
                        floor plan, ("Additional Space") at the expiration of
                        the existing space lease(s) for such Additional Space,
                        or to the extent any portion of the Additional Space is
                        presently vacant, at the expiration of the initial lease
                        for such vacant space. If the Term of this Lease shall
                        be in full force and effect on the expiration or
                        termination date of the existing space lease(s) or
                        initial space lease, as the case may be, for the
                        Additional Space, subject to Lessor's right to

                                       27


                        renew such lease(s), and the date upon which Lessee
                        shall exercise the option hereinafter referred to,
                        Lessee shall have the option to lease all, but not less
                        than all of the Additional Space on an as-is basis,
                        provided Lessee gives Lessor written notice of such
                        election within fifteen (15) business days after Lessee
                        shall receive Lessor's notice that such Additional Space
                        is available for leasing to Lessee. If Lessee fails or
                        refuses to exercise this option within the time period
                        set forth above (TIME BEING OF THE ESSENCE), then and in
                        such event Lessee shall have no further rights under
                        this Section with respect to such Additional Space. If
                        Lessee shall elect to lease said Additional Space: (v)
                        said Additional Space shall be deemed incorporated
                        within and part of the Premises on the date that Lessor
                        shall notify Lessee that such Additional Space is ready
                        for occupancy by Lessee and shall expire on the
                        Expiration Date of this Lease, (x) the Fixed Basic Rent
                        payable under this Lease shall be increased by an amount
                        such that during the balance of the term of this Lease
                        the Fixed Basic Rent for said Additional Space shall be
                        the then fair market rent for the Additional Space, as
                        determined in the manner set forth in clause (ii) below,
                        (y) Lessee's Percentage Share shall be proportionately
                        increased, and (z) all other terms and provisions set
                        forth in this Lease shall apply, except that Lessor not
                        be required to perform any work with respect to said
                        Additional Space.

                        The parties shall promptly execute an amendment of this
                        Lease confirming Lessee's election to lease said
                        Additional Space and the incorporation of said
                        Additional Space into the Premises.

                ii.     Lessor and Lessee shall use their best efforts, within
                        thirty (30) days after Lessor receives Lessee's notice
                        of its election to lease said Additional Space,
                        ("Negotiation Period") to agree upon the Fixed Basic
                        Rent to be paid by Lessee for said Additional Space. If
                        Lessor and Lessee shall agree upon the Fixed Basic Rent,
                        the parties shall promptly execute an amendment to this
                        Lease stating the Fixed Basic Rent for the Additional
                        Space.

                        If the parties are unable to agree on the Fixed Basic
                        Rent for said Additional Space during the Negotiation
                        Period, then within fifteen (15) days notice from the
                        other party, given after expiration of the Negotiation
                        Period, each party, at its cost and upon notice to the
                        other party, shall appoint a person to act as an
                        appraiser hereunder, to determine the fair market rent
                        for the Additional Space. Each such person shall be a
                        real estate broker or appraiser with at least ten (10)
                        years' active commercial real estate appraisal or
                        brokerage experience (involving the leasing of similar
                        space as agent for both landlords and tenants) in Morris
                        County. If a party does not appoint a person to act as
                        an appraiser within said fifteen (15) day period, the
                        person appointed by the other party shall be the sole
                        appraiser and shall determine the aforesaid fair market
                        rent. Each notice containing the name of a person to act
                        as appraiser shall contain the person's address. Before
                        proceeding to establish the fair market rent, the
                        appraisers shall subscribe and swear to an oath fairly
                        and impartially to determine such rent.

                        If the two appraisers are appointed by the parties as
                        stated in the immediately preceding paragraph, they
                        shall meet promptly and attempt to determine the fair
                        market rent. If they are unable to agree within
                        forty-five (45) days after the appointment of the second
                        appraiser, they shall attempt to select a third person
                        meeting the qualifications stated in the immediately
                        preceding paragraph within fifteen (15) days after the
                        last day the two appraisers are given to determine the
                        fair market rent. If they are unable to agree on the
                        third person to act as appraiser within said fifteen
                        (15) day period, the third person shall be appointed by
                        the American Arbitration Association, upon the
                        application of Lessor or Lessee to the office of the
                        Association nearest the Building. The person appointed
                        to act as appraiser by the Association shall be required
                        to meet the qualifications stated in the immediately
                        preceding paragraph. Each of the parties shall bear
                        fifty percent (50%) of the cost of appointing the third
                        person and of paying the third person's fees. The third
                        person, however selected, shall be required to take an
                        oath similar to that described above.

                        The three appraisers shall meet and determine the fair
                        market rent. A decision

                                       28


                        in which two of the three appraisers concur shall be
                        binding and conclusive upon the parties. In deciding the
                        dispute, the appraisers shall act in accordance with the
                        rules then in force of the American Arbitration
                        Association, subject however, to such limitations as may
                        be placed on them by the provisions of this Lease.

                        After the Fixed Basic Rent for the Additional Space has
                        been determined by the appraiser or appraisers and the
                        appraiser or appraisers shall have notified the parties,
                        at the request of either party, both parties shall
                        execute and deliver to each other an amendment of this
                        Lease stating the Fixed Basic Rent for the Additional
                        Space.

                        If the Fixed Basic Rent for said Additional Space has
                        not been agreed to or established prior to the
                        incorporation of said Additional Space in the Premises,
                        then Lessee shall pay to Lessor an annual rent
                        ("Temporary Rent") which Temporary Rent on a per square
                        foot basis shall be equal to the Fixed Basic Rent, on a
                        per square foot basis, then being paid by Lessee for the
                        Premises.

                        Thereafter, if the parties shall agree upon a Fixed
                        Basic Rent, or the Fixed Basic Rent shall be established
                        upon the determination of the fair market rent by the
                        appraiser or appraisers, at a rate at variance with the
                        Temporary Rent (i) if such Fixed Basic Rent is greater
                        than the Temporary Rent, Lessee shall promptly pay to
                        Lessor the difference between the Fixed Basic Rent
                        determined by agreement or the appraisal process and the
                        Temporary Rent, or (ii) if such Fixed Basic Rent is less
                        than the Temporary Rent, Lessor shall credit to Lessee's
                        subsequent monthly installments of Fixed Basic Rent the
                        difference between the Temporary Rent and the Fixed
                        Basic Rent determined by agreement or the appraisal
                        process.

                        In determining the fair market rent for said Additional
                        Space, the appraiser or appraisers shall be required to
                        take into account the rentals at which leases are then
                        being concluded for comparable space in the Building and
                        in comparable buildings in the County of Morris, New
                        Jersey, without a Lessor contribution for tenant fit-up.
                        In no event shall the Fixed Basic Rent for the
                        Additional Space, on a per square foot basis, be less
                        than the Fixed Basic Rent for the Premises, on a per
                        square foot basis.

                b.      The option granted to Lessee under this Article 55 may
                be exercised only by Lessee, its permitted successors and
                assigns, and not by any subtenant or any successor to the
                interest of Lessee by reason of any action under the Bankruptcy
                Code, or by any public officer, custodian, receiver, United
                States Trustee, trustee or liquidator of Lessee or substantially
                all of Lessee's property. Lessee shall have no right to exercise
                any of such options subsequent to the date Lessor shall have the
                right to give the notice of termination referred to in Article
                13. Notwithstanding the foregoing, Lessee shall have no right to
                exercise the option granted to Lessee hereunder if, at the time
                it gives notice of such election (i) Lessee shall not be in
                occupancy of substantially all of the Premises or (ii) the
                Premises or any part thereof shall be the subject of a sublease.
                If Lessee shall have elected to exercise its option hereunder,
                such election shall bee deemed withdrawn if, at any time after
                the giving of notice of such election and prior to the occupancy
                of the Additional Space, Lessee shall sublease all or any part
                of the Premises.

56.     ROOF RIGHTS.

        Without limiting any other provision of this Lease, Lessee shall have
        the non-exclusive right to install one satellite dish ( the "Dish") and
        a supplemental air conditioning unit for the Premises (the "Air
        Conditioner" and, together with the Dish, the "Facilities") on the roof
        of the Building (including necessary connection to the Demised Premises)
        for use by Lessee, provided any such installations shall be subject to
        Lessor's prior consent, which consent shall not be unreasonably
        withheld, conditioned or delayed. Any such Facilities shall be installed
        in accordance with all applicable laws and building codes. Lessee shall
        remove such Facilities at the expiration or

                                       29


        earlier termination of the Lease; provided Lessee shall repair any
        damage to the roof caused by such removal. Prior to making any
        installations on the roof of the Building, Lessee shall use a roofing
        contractor for all work to be performed by Lessee on the roof of the
        Building approved by Lessor, which approval shall not be unreasonably
        withheld.

        Lessee shall furnish detailed plans and specifications for the
        Facilities (or any modifications thereof) to Lessor for its approval.
        The parties agree that Lessee's use of the rooftop of the Building is a
        non-exclusive use and Lessor may permit the use of any other portion of
        the roof to any other person for any use including installation of other
        satellite dishes, antennas and support equipment. Lessee shall use its
        reasonable efforts to insure that its use of the rooftop does not impair
        such other person's data transmission and reception via its respective
        antennas and support equipment. If Lessee's construction, installation,
        maintenance, repair, operation or use of the Dish shall interfere with
        the rights of Lessor (including, without limitation, Lessor's right to
        reasonably use the remainder of the roof) or other lessees in the
        Building, Lessee shall cooperate with Lessor or such other lessees in
        eliminating such interference; provided, however, the cost of remedying
        such interference shall be borne by the party which is suffering such
        interference, unless such party was not suffering such interference
        prior to the use of the Dish causing such interference by Lessee, in
        which case the cost of remedying such interference shall be borne by
        Lessee. Lessee shall secure and keep in full force and effect, from and
        after the time Lessee begins construction and installation of the
        Facilities, such supplementary insurance with respect to the Facilities
        as Lessor may reasonably require, provided that the same shall not be in
        excess of that which would customarily be required from time to time by
        Lessors of buildings of similar class and character in Morris County,
        New Jersey with respect to similar installations.

        In connection with the installation, maintenance and operation of the
        Facilities , Lessee, at Lessee's sole cost and expense, shall comply
        with all legal requirements and shall procure, maintain and pay for all
        permits required therefor, and Lessor makes no warranties whatsoever as
        to the permissibility of the Facilities under applicable legal
        requirements or the suitability of the roof of the Building for the
        installation thereof. If Lessor's structural engineer deems it advisable
        that there be structural reinforcement of the roof in connection with
        the installation of the Facilities, Lessor shall perform same at
        Lessee's cost and expense and Lessee shall not perform any such
        installation prior to the completion of any such structural
        reinforcement. The installation of the Facilities shall be subject to
        the provisions of Articles 5 and 6 applicable to alterations and
        installations. For the purpose of installing, servicing or repairing the
        Facilities, Lessee shall have access to the rooftop of the Building,
        upon reasonable notice to Lessor, and Lessor shall have the right to
        require, as a condition to such access, that Lessee (or its employee,
        contractor or other representative) at all times be accompanied by a
        representative of Lessor. Lessee shall pay for all electrical service
        required for Lessee's use of the Facilities, in accordance with the
        provision set forth in Article 22 hereof.

        Lessee, at its sole cost and expense, shall promptly repair any and all
        damage to the rooftop or to any other part of the Building caused by the
        installation, maintenance and repair, operation or removal of the
        Facilities. Lessee shall be responsible for all costs and expense for
        repairs of the roof which result from Lessee's use of the roof for the
        construction, installation, maintenance, repair, operation and use of
        the Facilities. All installations made by Lessee on the rooftop or in
        any other part of the Building pursuant to the provisions of this
        Article 56 shall be at the sole risk of Lessee, and neither Lessor, nor
        any agent or employee of Lessor, shall be responsible or liable for any
        injury or damage to, or arising out of, the Facilities. Lessee's
        indemnity under Article 33 shall apply with respect to the installation,
        maintenance, operations, presence or removal of the Facilities by
        Lessee.

        Upon the expiration of the Term, the Facilities shall be removed by
        Lessee at its sole cost and expense, and Lessee shall repair any damage
        to the rooftop or any other portions of the Building to substantially
        their condition immediately prior to Lessee's installation of the
        Facilities (ordinary wear and tear excepted).

        Notwithstanding anything to the contrary contained in this Article 56,
        Lessor shall have the right, at Lessor's expense, on not less than
        thirty (30) days' prior notice, to relocate the Facilities to another
        location on the roof of the Building, such expense to include, without
        limitation, the removal of the existing Facilities, the purchasing of
        labor, materials and equipment necessary for the relocation thereof and
        the reinstallation of the Facilities at such other location as
        reasonably designated by Lessor on the roof of the Building, provided
        that Lessor does not, except if work is reasonably required to be
        performed on the roof or in the

                                       30


        Building, either materially interfere with or adversely affect the
        receipt of and/or transmittal of microwaves or other similar signals,
        and Lessee shall cooperate in all reasonable respects with Lessor in any
        such relocations; provided, however, that if such relocation is done
        pursuant to any legal requirement, the cost thereof shall be borne by
        Lessee (unless such legal requirement relates to, or results from, other
        actions taken, or permitted to be taken, by Lessor, in which event
        Lessor shall bear all of the costs and expenses of such relocation).

        The rights granted in this Article 56 are given in connection with, and
        as part of the rights created under this Lease and are not separately
        transferable or assignable.

        If the installation of the Facilities or act or omission relating
        thereto should revoke, negate or in any manner impair or limit any roof
        warranty or guaranty obtained by Lessor, then Lessee shall reimburse
        Lessor for any loss or damage sustained or costs or expenses incurred by
        Lessor as a result of such impairment or limitation.

57.     LESSOR'S INSURANCE:

        During the Term, Lessor shall maintain the following insurance, insuring
        Lessor and any mortgagee, as their respective interests may appear: (x)
        insurance against damage to the Building and Office Building Area by all
        risks of direct physical loss in an amount equivalent to the full
        replacement cost thereof; (y) comprehensive general liability insurance
        against claims for bodily injury and property damage occurring in or
        about the Common Facilities in amounts customarily carried by owners of
        similar buildings in the Morris County, New Jersey area; and (z)
        insurance against such other hazards as, from time to time, are then
        commonly insured against for buildings similarly situated in amounts
        normally carried with respect thereto. All insurance maintained pursuant
        to this Article 57 may be effected by blanket insurance policies.

58.     OTHER AGREEMENTS:

        Lessor shall deliver to Lessee, upon the execution of this Lease, the
        written agreement of Mack-Cali Morris Realty L.L.C. ("MCMR"), in form
        and substance reasonably satisfactory to Lessee, providing for: (i)
        effective as of the Rent Commencement Date of this Lease, the
        termination of that certain Lease, dated August 15, 2000, by and between
        MCMR and The Medicines Company ("TMC"), and that certain Lease, dated
        February 28, 2000, between MCMR and Stack Pharmaceuticals, Inc.,
        assigned to TMC by Assignment and Assumption of Lease dated October 18,
        2001, relating to premises located at 5 Sylvan Way, Parsippany, New
        Jersey, in each case as if such termination were occurring upon the
        respective expiration dates of such leases, and (ii) the extension of
        the term of that certain Storage Space License, dated October 12, 2001,
        between MCMR and TMC until the earlier of (x) the Expiration Date of
        this Lease, or (y) such date as storage space, similar in size and
        quality to the space which is the subject of such license, shall be
        available in the Building for use by Lessee. If storage space in the
        Building shall become available for leasing, Lessor shall use
        commercially reasonable efforts to notify Lessee and Lessee shall have
        fifteen (15) business days to accept Lessor's offer upon the terms and
        conditions set forth in Lessor's offer. A failure of Lessor to notify
        Lessee of the availability of such storage space shall not constitute
        default under this Lease.

                                       31


        EACH PARTY AGREES that it will not raise or assert as a defense to any
obligation under this Lease or make any claim that this Lease is invalid or
unenforceable due to any failure of this document to comply with ministerial
requirements including, but not limited to, requirements for corporate seals,
attestations, witnesses, notarizations, or other similar requirements, and each
party hereby waives the right to assert any such defense or make any claim of
invalidity or unenforceability due to any of the foregoing.

        IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals the day and year first above written.



LESSOR:                                       LESSEE:
                                           
SYLVAN/ CAMPUS REALTY L.L.C                   THE MEDICINES COMPANY

By: Grove Street Associates of Jersey City
    Limited Partnership, member

By: Mack-Cali Sub IV, Inc., its general
    partner

By:   /s/ Michael K. Nevins                   By:   /s/ Steven H. Koehler
      -----------------------------------           ----------------------------------
      Michael K. Nevins                             Name: Steven H. Koehler
      Vice President - Leasing                      Title: Chief Financial Officer


                                       32


                                    EXHIBIT A

                              LOCATION OF PREMISES


                               Exhibit A - Page 1


                                   EXHIBIT A-1

                              OFFICE BUILDING AREA

All that certain lot, piece or parcel of land, with the buildings and
improvements thereon erected, situate, lying and being in the Township of
Parsippany-Troy Hills, County of Morris, State of New Jersey:

BEGINNING at an iron pipe at a corner common to Lot 3.10 and Lot 3.11 Block 202
on the easterly right-of-way line of Hilton Court as shown on a map entitled
"Final Plat of Prudential Business Campus, Block 202, Lots 3.02 thru 3.12 Tax
Map Sheet Nos. 62 & 63, 66 & 67, 69 & 70, situated in Parsippany-Troy Hills
Township, Morris County, New Jersey, Sheet 1 of 2" prepared by Henderson and
Bodwell, Russell S. Bodwell, P.E. & L.S., N.J. License No. 8456. Said map being
filed in the Morris County Clerk's Office on April 29, 1980 as Map #3908; thence

1.      Along the easterly right-of-way line of Hilton Court on the arc of a
        curve to the left having a radius of 525.00 feet, an arc length of
        118.00 feet and a central angle of 12? 52' 40" to a point of tangency;
        thence

2.      Continuing along same, N 08? 47' 00" E 490.89 feet to a point of
        curvature; thence

3.      Along the arc of a curve to the right having a radius of 90.00 feet, an
        arc length of 141.37 feet and a central angle of 90? 00' 00" to a
        concrete monument at a point of tangency on the southerly right-of-way
        line of Campus Drive; thence

4.      Along same, S 81 (degree) 12' 00" E 455.00 feet to a concrete monument
        at a point of curvature; thence

5.      Along the arc of a curve to the right having a radius of 40.00 feet, an
        arc length of 62.83 feet and a central angle of 90 (degree) 00' 00", to
        a concrete monument at a point of tangency; thence along the westerly
        right-of-way line of Dryden Way on the following three courses:

6.      S 08 (degree) 47' 00" W 704.33 feet to a concrete monument; thence

7.      N 81 (degree) 13' 00" W 2.00 feet to a concrete monument; thence

8.      S 08 (degree) 47' 00" W 89.88 feet to an iron pipe; thence

9.      Along a line common to Lot 3.10 and Lot 3.11, Block 202, N 68 (degree)
        20' 20" W 611.59 feet to the point of BEGINNING.

All that certain tract, or parcel of land and premises, hereinafter particularly
described, situate, lying and being in the Township of Parsippany-Troy Hills, in
the County of Morris, and the State of New Jersey:

BEGINNING at the point of intersection of the projection of the westerly
sideline of Parsippany Road and the northerly sideline of Eastman's Road,
running thence South 85 (degree) 19' 57" West 96.53 feet to the true point Of
the beginning and running thence;

(1)     Along the northerly sideline of said Eastman's Road, 60 feet wide, South
        85 (degree) 19' 57" West 393.30 feet; thence

(2)     North 53 (degree) 22' 15" West 238.00 feet; thence

(3)     North 50 (degree) 43' 10" West 216.33 feet; thence

(4)     North 39 (degree) 16'50" East 134.14 feet along southeasterly sideline
        of Interstate Route 287 (formerly U.S. Route 202) as shown on a plat
        entitled "New Jersey State Highway Department General Property Parcel
        Map Route U.S. 202 Freeway Section 1" sheets 1 through 4 dated December,
        1953 and filed in the Morris County Clerk's Office on February 18, 1955
        as Map No. 1560-F; thence

                               Exhibit A - Page 1


(5)     At right angles to said Interstate Route 287 South 50 (degree) 43' 10"
        East 5.00 feet; thence

(6)     At right angles to the previous course and along the southerly sideline
        of said Interstate 287 as shown on a plat entitled "New Jersey State
        Highway Department General Property Parcel Map Route U.S. 202 Freeway
        Section 1" sheets 1 through 4 dated December, 1953 and filed in the
        Morris County Clerk's Office on February 18, 1955 as Map No. 1560-F,
        North 39 (degree) 16' 50" East 355.00 feet; thence

(7)     Leaving the southeasterly sideline of said Interstate Route 287, North
        85 (degree) 16' 50" East 135.00 feet; thence

(8)     South 67 (degree) 43' 10" East 145.00 feet; thence

(9)     South 50 (degree) 43' 10" East 105.00 feet; thence

(10)    South 30 (degree) 43' 10" East 75.00 feet; thence

(11)    South 18 (degree) 24' 25" East 361.30 feet along the westerly sideline
        of Parsippany Road; thence

(12)    Along the westerly sideline of Parsippany Road, South 17 (degree) 35'
        00" East 44.13 feet; thence

(13)    South 51 (degree) 30' 00" West 100.73 feet; to the point of BEGINNING.

The forgoing premises are shown on a survey make by Couvrette Associates Inc.
Consulting Engineers, Rockaway, New Jersey, dated September 21, 1978, last
revised to April 1, 1992 showing Lot 1, Block 738, Tax Maps Township of
Parsippany-Troy Hills, Morris County, New Jersey.

The foregoing survey reference shall not be deemed or construed to limit or
diminish the estate more particularly described above and encumbered hereby.

                               Exhibit A - Page 2


                                   EXHIBIT B

                              RULES AND REGULATIONS

1.      OBSTRUCTION OF PASSAGEWAYS: The sidewalks, entrance, passages, courts,
        elevators, vestibules, stairways, corridors and public parts of the
        Building shall not be obstructed or encumbered by Lessee or used by
        Lessee for any purpose other than ingress and egress. If the Premises
        are situated on the ground floor with direct access to the street, then
        Lessor shall, at Lessor's expense, keep the sidewalks and curbs directly
        in front of the Premises clean and free from ice, snow and refuse.

2.      WINDOWS: Windows in the Premises shall not be covered or obstructed by
        Lessee. No bottles, parcels or other articles shall be placed on the
        windowsills, in the halls, or in any other part of the Building other
        than the Premises. No article shall be thrown out of the doors or
        windows of the Premises.

3.      PROJECTIONS FROM BUILDING: No awnings, air-conditioning units, or other
        fixtures shall be attached to the outside walls or the window sills of
        the Building or otherwise affixed so as to project from the Building,
        without prior written consent of Lessor.

4.      SIGNS: No sign or lettering shall be affixed by Lessee to any part of
        the outside of the Premises, or any part of the inside of the Premises
        so as to be clearly visible from the outside of the Premises, without
        the prior written consent of Lessor, which consent shall not be
        unreasonably withheld or delayed. However, Lessee shall have the right
        to place its name on any door leading into the Premises the size, color
        and style thereof to be subject to the Lessor's approval. Lessee shall
        not have the right to have additional names placed on the Building
        directory without Lessor's prior written consent.

5.      FLOOR COVERING: Lessee shall not lay linoleum or other similar floor
        covering so that the same shall come in direct contact with the floor of
        the Premises. If linoleum or other similar floor covering is desired to
        be used, an interlining of builder's deadening felt shall first be fixed
        to the floor by a paste or other material that may easily be removed
        with water, the use of cement or other similar adhesive material being
        expressly prohibited.

6.      INTERFERENCE WITH OCCUPANTS OF BUILDING: Lessee shall not make, or
        permit to be made, any unseemly or disturbing noises or odors and shall
        not interfere with other tenants or those having business with them.
        Lessee will keep all mechanical apparatus in the Premises free of
        vibration and noise which may be transmitted beyond the limits of the
        Premises.

7.      LOCK KEYS: No additional locks or bolts of any kind shall be placed on
        any of the doors or windows by Lessee. Lessee shall, on the termination
        of Lessee's tenancy, deliver to Lessor all keys to any space within the
        Building either furnished to or otherwise procured by Lessee, and in the
        event of the loss of any keys furnished, Lessee shall pay to Lessor the
        cost thereof. Lessee, before closing and leaving the Premises, shall
        ensure that all windows are closed and entrance doors locked. Nothing in
        this Paragraph 7 shall be deemed to prohibit Lessee from installing a
        burglar alarm within the Premises, provided: (1) Lessee obtains Lessor's
        consent which will not be unreasonably withheld or delayed; (2) Lessee
        supplies Lessor with copies of the plans and specifications of the
        system; (3) such installation shall not damage the Building; and (4) all
        costs of installation shall be borne solely by Lessee.

8.      CONTRACTORS: No contract of any kind with any supplier of towels, water,
        toilet articles, waxing, rug shampooing, venetian blind washing,
        furniture polishing, lamp servicing, cleaning of electrical fixtures,
        removal of waste paper, rubbish, garbage, or other like service shall be
        entered into by Lessee, nor shall any machine of any kind be installed
        in the Building or the Office Building Area (other than ordinary office
        equipment) without the prior written consent of the Lessor. Lessee shall
        not employ any persons other than Lessor's janitors for the purpose of
        cleaning the Premises without prior written consent of Lessor. Lessor
        shall not be responsible to Lessee for any loss of property from the
        Premises however occurring, or for any damage to the effects of Lessee
        by such janitors or any of its employees, or by any other person or any
        other cause.

                               Exhibit B - Page 1


9.      PROHIBITED ON PREMISES: Lessee shall not conduct, or permit any other
        person to conduct, any auction upon the Premises, manufacture or store
        goods, wares or merchandise upon the Premises without the prior written
        approval of Lessor, except the storage of usual supplies and inventory
        to be used by Lessee in the conduct of his business, permit the Premises
        to be used for gambling, make any unusual noises in the Building, permit
        to be played musical instrument on the Premises, permit any radio to be
        played, or television, recorded or wired music in such loud manner as to
        disturb or annoy other tenants, or permit any unusual odors to be
        produced on the Premises. Lessee shall not permit any portion of the
        Premises to be occupied as an office for a public stenographer or
        typewriter, or for the storage, manufacture, or sale of intoxicating
        beverages, narcotics, tobacco in any form or as a barber or manicure
        shop. Canvassing, soliciting and peddling in the Building and the Office
        Building Area are prohibited and Lessee shall cooperate to prevent the
        same. No bicycles, vehicles or animals of any kind shall be brought into
        or kept in or about the Premises.

10.     PLUMBING, ELECTRIC AND TELEPHONE WORK: Plumbing facilities shall not be
        used for any purpose other than those for which they were constructed;
        and no sweepings, rubbish, ashes, newspaper or other substances of any
        kind shall be thrown into them. Waste and excessive or unusual amounts
        of electricity or water is prohibited. When electric wiring of any kind
        is introduced, it must be connected as directed by Lessor, and no
        stringing or cutting of wires will be allowed, except by prior written
        consent of Lessor, and shall be done by contractors approved by Lessor.
        The number and locations of telephones, telegraph instruments,
        electrical appliances, call boxes, etc. shall be subject to Lessor's
        approval.

11.     MOVEMENT OF FURNITURE, FREIGHT OR BULKY MATTER: The carrying in or out
        of freight, furniture or bulky matter of any description must take place
        during such hours as Lessor may from time to time reasonably determine
        and only after advance notice to the superintendent of the Building. The
        persons employed by Lessee for such work must be reasonably acceptable
        to the Lessor. Lessee may, subject to these provisions, move freight,
        furniture, bulky matter, and other material into or out of the Premises
        on Saturdays between the hours of 9:00 a.m. and 1:00 p.m., provided
        Lessee pays additional costs, if any, incurred by Lessor for elevator
        operators or security guards, and for any other expenses occasioned by
        such activity of Lessee. If, at least three (3) days prior to such
        activity, Lessor requests that Lessee deposit with Lessor, as security
        of Lessee's obligations to pay such additional costs, a sum of which
        Lessor reasonably estimates to be the amount of such additional cost,
        the Lessee shall deposit such sum with Lessor as security of such cost.
        There shall not be used in the Building or Premises, either by Lessee or
        by others in the delivery or receipt of merchandise, any hand trucks
        except those equipped with rubber tires and side guards, and no hand
        trucks will be allowed in the elevators without the consent of the
        superintendent of the Building.

12.     SAFES AND OTHER HEAVY EQUIPMENT: Lessor reserves the right to prescribe
        the weight and position of all safes and other heavy equipment so as to
        distribute properly the weight thereof and to prevent any unsafe
        condition from arising.

13.     ADVERTISING: Lessor shall have the right to prohibit any advertising by
        Lessee which in Lessor's reasonable opinion tends to impair the
        reputation of the Building or its desirability as a building for
        offices, and upon written notice from Lessor, Lessee shall refrain from
        or discontinue such advertising.

14.     NON-OBSERVANCE OR VIOLATION OF RULES BY OTHER TENANTS: Lessor shall not
        be responsible to Lessee for non-observance or violation of any of these
        rules and regulations by any other tenant.

15.     AFTER HOURS USE: Lessor reserves the right to exclude from the Building
        between the hours of 6:00 p.m. and 8:00 a.m. and at all hours on
        Saturdays, Sundays and Building Holidays, all persons who do not present
        a pass to the Building signed by the Lessee. Each Lessee shall be
        responsible for all persons for whom such a pass is issued and shall be
        liable to the Lessor for the acts of such persons.

16.     PARKING: Lessee and its employees shall park their cars only in those
        portions of the parking area designated by Lessor.

                               Exhibit B - Page 2


17.     Lessor hereby reserves to itself any and all rights not granted to
        Lessee hereunder, including, but not limited to, the following rights
        which are reserved to Lessor for its purposes in operating the Building:

        a)      the exclusive right to the use of the name of the Building for
                all purposes, except that Lessee may use the name as its
                business address and for no other purposes; and

        b)      the right to change the name or address of the Building, without
                incurring any liability to Lessee for doing so; and

        c)      the right to install and maintain a sign on the exterior of the
                Building; and

        d)      the exclusive right to use or dispose of the use of the roof of
                the Building; and

        e)      the right to limit the space on the directory of the Building to
                be allotted to Lessee; and

        f)      the right to grant to anyone the right to conduct any particular
                business or undertaking in the Building.

18.     The Lessee shall be responsible for initiating, maintaining and
        supervising all health and safety precautions and/or programs required
        by Law in connection with the Lessee's use and occupancy of the
        Premises.

19.     The Lessee shall not store, introduce or otherwise permit any material
        known to be hazardous within the Premises, other than normal office
        cleaners and substances used in ordinary office machines. Any material
        within the Premises which is determined to be hazardous shall be removed
        and properly disposed of by the Lessee at the Lessee's sole expense.

                                    -- END --

                               Exhibit B - Page 3


                                    EXHIBIT C

                          LESSEE'S WORK AND ALTERATIONS

1.      Lessee may make the alterations required for Lessee's use of the
        Premises (hereinafter the "Work") after the Commencement Date subject to
        the following:

        a.      Lessee, at its sole cost and expense, shall prepare and submit
                to Lessor, for Lessor's and governmental approval, the following
                descriptive information, detailed architectural and engineering
                drawings and specifications (hereinafter the "Plans") for the
                Work. The Plans shall be as complete and finished as required to
                completely describe the Work and shall include, but not be
                limited to, the following:

                i.      Demolition Plans depicting all existing conditions to be
                        removed, abandoned or cut patched.

                ii.     Architectural floor plans depicting partition locations
                        and types; door location, size, and hardware types.

                iii.    Structural plans, if required, depicting new structural
                        components and their connections to existing elements.

                iv.     Electrical plans depicting all new and existing
                        electrical wiring, devices, fixtures and equipment.

                v.      Mechanical plans depicting all new plumbing, piping,
                        heating, ventilating, air conditioning equipment, and
                        duct work and its connections to existing elements.

                vi.     Life Safety System plans depicting all new or altered
                        alarm system fixtures, devices, detectors and wiring
                        within the Premises and their connection to existing
                        systems.

                vii.    Coordinated reflected ceiling plan showing ceiling
                        systems and materials and all of the above items and
                        their proximity to one another.

                viii.   Finish plans showing locations and types of all interior
                        finishes with a schedule of all proposed materials and
                        manufacturers.

                The Plans shall provide for all systems and construction
                components complying with the requirements of all governmental
                authorities and insurance bodies having jurisdiction over the
                Building.

        b.      The Plans for the Work are subject to Lessor's prior written
                approval which shall not be unreasonably withheld, provided,
                however, that Lessor may in any event disapprove the Plans if
                they are incomplete, inadequate or inconsistent with the terms
                of the Lease or with the quality and architecture of the
                Building. Lessor agrees to approve or disapprove the Plans
                within three (3) business days of receipt of same (the "Lessor's
                Approval Period"). If Lessor disapproves the Plans or any
                portion thereof, Lessor shall promptly notify Lessee thereof and
                of the revisions which Lessor reasonably requires in order to
                obtain Lessor's approval Lessee shall, at its sole cost and
                expense, submit the Plans, in such form as may be necessary,
                with the appropriate governmental agencies for obtaining
                required permits and certificates. Any changes required by any
                governmental agency affecting the Work or the Plans shall be
                complied with by Lessee in completing said Work at Lessee's sole
                cost and expense. Lessee shall submit completed Plans to Lessor
                simultaneously with Lessee's submission of said plans to the
                local building department.

2.      Lessor shall permit Lessee to solicit competitive pricing and select its
        own general and/or individual subcontractors to perform the Work at its
        sole cost

        a.      All general contractors shall be subject to Lessor's prior
                written approval, which shall not be unreasonably withheld.
                Lessor hereby approves Interior Resource Group as

                               Exhibit C - Page 1


                Lessee's general contractor for the Work.

        b.      Lessee shall instruct all approved general contractors to
                exclusively use Lessor's Base Building Sub-Contractors for
                heating, ventilation, air conditioning, electrical, fire
                suppression and life safety systems (hereinafter "Building
                Systems"). Other subcontractors may be used only when
                specifically approved in writing by Lessor, which approval shall
                not be unreasonably withheld or delayed.

        c.      The Base Building Sub-Contractors and their respective trades
                are set forth in Paragraph 6 below.

        d.      Lessee notifies Lessor in writing of Lessee's selection of
                general and subcontractors.

        e.      All costs associated with the biding process soliciting
                competitive pricing will be at the sole cost and expense of the
                Lessee.

        f.      Lessee's workmen and mechanics shall work in harmony and not
                interfere with the labor employed by Lessor, Lessor's mechanics
                or contractors or by any other occupant of the Building or their
                mechanic or contractors, if any. If at any time Lessee and/or
                its contractors cause disharmony or interference with the
                operation of the Building, Lessor shall give forty-eight (48)
                hours written notice to Lessee and within twenty-four (24) hours
                Lessee shall resolve any dispute so that the tenor of the
                construction process and the operation of the Building is
                returned to that which existed prior to Lessor's notice. Such
                entry by Lessee's contractors shall be deemed controlled by all
                of the terms, covenants, provisions and conditions of the Lease.

        g.      Prior to the commencement of the Work, Lessee shall provide
                Lessor with evidence of Lessee's contractors and sub-contractors
                carrying such worker's compensation, general liability, personal
                and property insurance required by law and in amounts no less
                than the amounts set forth in Paragraph 7 herein. Lessor shall
                not be liable in any way for any injury, loss or damage which
                may occur to any portion of the Work, Lessee's decorations, or
                installments so made, the same being solely at Lessee's risk.

        h.      In the event Lessor approves the use of subcontractors other
                than Lessor's Base Building sub-contractors, all proposed
                Building System work, including the preparation of the plans and
                specifications identified herein, shall be approved by Lessor's
                engineers (the "Engineering Review"), and any cost thereof shall
                be Lessee's responsibility.

        i.      Lessor shall afford Lessee and its contractors the opportunity
                to use the Building facilities at reasonable cost in order to
                enable Lessee and its contractors to perform the Work, provided
                however, that Lessee and its contractors shall remain
                responsible for the scheduling and transportation of materials
                and equipment used in the performance of such work. Lessee shall
                give Lessor adequate prior notice with regard to the scheduling
                and transportation of materials in and out of the Building.
                Lessor shall furnish, at Lessor's expense, water, electricity,
                heat and ventilation during the performance of the Work during
                regular construction trade hours of 8:00 a.m. to 5:00 p.m.,
                Monday through Friday, exclusive of trade holidays. Scavenger
                service shall be provided by Lessor at Lessee's expense.

        j.      All plans, changes to the plans and work installed by Lessee and
                its sub-contractors shall require inspections to be made by
                Lessor's Base Building Sub-Contractors at Lessee's or Lessee's
                contractors expense (the "Inspection Fees"). The Base Building
                Sub-Contractors shall supply Lessor with certification that work
                so preformed has been completed in accordance with the Plans
                which have been previously approved by Lessor. If a Base
                Building Sub-Contractor is selected and actually installs the
                work, the Inspection Fees described in this paragraph with
                respect to such work shall not be required.

        k.      Lessee shall be responsible for all cleaning and removal of
                debris necessitated by the performance of the Work. If Lessee
                fails to provide such cleaning and removal, the same may be
                performed by Lessor on Lessee's behalf and Lessee will pay
                Lessor an amount equal to the contractor's charge therefore,
                plus twenty percent (20%) thereof.

                               Exhibit C - Page 2


        l.      Neither the outside appearance nor the strength of the Building
                or of any of its structural parts shall be affected by the Work.

        m.      The proper functioning of any of the Building Systems shall not
                be adversely affected or the usage of such systems by Lessee
                shall not be materially increased above the projected usage of
                such systems indicated by the current plans and specifications
                of the Building.

        n.      Lessee and its general and sub-contractors shall be bound by and
                observe all of the conditions and covenants contained in the
                Lease and this Exhibit A.

        o.      Lessor shall designate a "Project Manager" as its representative
                in the Building who shall be responsible for coordination and
                supervision of the Work as it pertains to the daily operation of
                the Building. The Project Manager and his subordinates shall be
                granted access to the Premises at all times during the
                construction period.

        p.      Lessee agrees to pay Lessor three percent (3%) of the contract
                awarded to Lessee's general contractor and/or any subcontractors
                to reimburse Lessor for coordination, supervision, and utility
                costs.

3.      Intentionally Omitted

4.      Any part of the Work within the Premises shall become the property of
        the Lessor upon installation. Furthermore, with respect to any material
        and installation which is part of the Work, Lessee shall not be entitled
        to remove, pledge or sell same unless otherwise agreed to in writing by
        Lessor and Lessee. No refund, credit, or removal of said items shall be
        permitted at the termination of the Lease. Items installed that are not
        integrated in any such way with other common building materials do not
        fall under this provision (Example: shelving, furniture, trade
        fixtures).

5.      Lessor shall provide a cash contribution of THREE HUNDRED SIXTY-NINE
        THOUSAND ONE HUNDRED THIRTY-EIGHT AND 00/100 DOLLARS ($369,138.00)
        ("Lessor's Construction Allowance") for payment of the costs associated
        with the completion of The Work. Lessor's Construction Allowance shall
        be payable within fifteen (15) business days of Lessor's receipt of the
        following:

        a.      Copy of the Certificate of Occupancy (temporary and permanent)
                issued by the local construction official;

        b.      AIA Document G704, Certificate of substantial completion issued
                and signed by Lessee's Architect;

        c.      Release of Lien statements from the general and all
                sub-contractors associated with the Work; and

        d.      Lessee shall provide Lessor a set of reproducible drawings of
                the Plans and a "CAD" file (in .DWG or .DXF format) of the
                "As-Built" Plans.

6.      The Base Building Sub-Contractors are:

                FIRE SPRINKLER CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

                ELECTRICAL CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

                PLUMBING CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

                HVAC CONTRACTOR
                "To be provided by Lessor upon request from Lessee."

7.      Lessee's Contractor's Insurance:

                               Exhibit C - Page 3


        a.      The Lessee shall require any and all contractors of the Lessee
                performing work on or about the Premises to obtain and/or
                maintain specific insurance coverage for events which could
                occur while operations are being performed and which could occur
                after the completion of the work. The insurance coverage of the
                contractor shall be at least equal to the coverage required by
                Article 30 of the Lease and the contractor shall name Lessor
                and, if requested, Mortgagee as additional insureds on all
                policies of liability insurance.

        b.      The contractor shall purchase and maintain such insurance as
                will protect itself and Lessor and Lessee from claims set forth
                below which may arise out of or result from its operations under
                the contract and after contract completion with Lessee, whether
                such operations are performed by the contractor or by any
                subcontractor or by anyone directly or indirectly employed by
                any of them or by anyone for whose acts any of them may be
                liable. The insurance coverage shall include but not be limited
                to protection for:

                i.      Claims under Workers or Workmens Compensation,
                        Disability Benefits, and other Employee Benefit Acts;

                ii.     Claims for damages because of bodily injury,
                        occupational sickness, disease or death of its
                        employees;

                iii.    Claims for damages because of bodily injury, sickness,
                        disease, or death of any person other than its
                        employees;

                iv.     Claims for damages insured by the usual personal injury
                        liability coverages which are sustained by (i) any
                        person as a result of an offense directly or indirectly
                        related to the employment of such person by the
                        contractor, or (ii) by any other person;

                v.      Claims for damages, other than to the work itself,
                        because of injury to or destruction of tangible
                        property, including loss of use resulting therefrom;

                vi.     Claims for damages because of bodily injury or death of
                        any person and/or property damage arising out of the
                        ownership, maintenance, or use of any motor vehicle; and

                vii.    Claims which include the foregoing, but not limited
                        thereto, which may occur while operations are being
                        performed and claims which may occur after operations
                        are completed.

c.      Lessee shall secure evidence of Lessee's contractor's insurance coverage
        adequate to protect Lessor and Lessee.

        d.      The contract between the Lessee and its contractor shall require
                that the Lessee's contractor hold the Lessor harmless in a form
                and manner equal to the indemnity agreement in Article 33,
                "Indemnity" of the Lease agreement.

        e.      Lessee shall cause to be executed a waiver of all rights their
                contractors have or may have against Lessor and any Mortgagee
                involved in the Premises in any way, for damages caused by fire
                or other perils so insured.

        f.      If request by Lessor, Lessee shall obtain and furnish surety in
                a form satisfactory to Lessor, covering the faithful performance
                of the work and the payment of all obligations arising
                thereunder.

8.      All sums payable by Lessee to Lessor in connection with this Exhibit C
        and any other work to be performed by Lessor within the Premises and
        billable to Lessee shall be deemed Additional Rent.

                                      -END-

                               Exhibit C - Page 4


                               Exhibit C - Page 5


                                  EXHIBIT C - 1

                   AIR CONDITIONING & HEATING DESIGN STANDARDS

The following are design standards for the building air-conditioning system for
cooling and heating in the air in the subject building:

1.      During the normal heating season to maintain an average indoor dry bulb
        temperature of not less than 70 degrees F (21 degrees C) or more than 76
        degrees (24.4 degrees C) when the outdoor dry bulb temperature is lower
        than 65 degrees F (18 degrees C) but not lower than 0 degrees F (-13
        degrees C).

2.      To maintain comfort cooling for an average indoor dry bulb temperature
        of not more than 78 degrees F when the outside dry bulb temperature is
        95 degrees F (24 degrees C).

3.      During the intermediate seasons, when the outside dry bulb temperature
        is below 55 degrees (13 degrees C), cooling will be provided by outside
        air usage in conjunction with operating of return air, outside air and
        exhaust air dampers.

4.      To furnish not less than .10 cubic foot of fresh air per minute per
        square foot of rentable area, and between .20 and 1.0 cubic feet of
        total air per minute, per square foot of rentable occupied space.

5.      Lessor will not be responsible for the failure of the air-conditioning
        system if such failure results from (i) the occupancy of the Premises
        with more than an average of one (1) person for each one hundred (100)
        usable square feet of floor area (ii) the installation or operation by
        Lessee of machines and appliances, the installed electrical load of
        which when combined with the load of all lighting fixtures exceeds five
        (5) watts per square foot of floor area and in any manner exceeding the
        aforementioned occupancy and electrical load criteria, or (iii)
        rearrangement of partitioning after the initial preparation of the
        Premises. If interference with normal operation of the air-conditioning
        system in the Premises results, necessitating changes in the air
        conditioning system servicing the Premises, such changes shall be made
        by Lessor upon written notice to Lessee at Lessee's sole cost and
        expense. Lessee agrees to lower and close window coverings when
        necessary because of the sun's position whenever the air conditioning
        system is in operation, and Lessee agrees at all times to cooperate
        fully with Lessor and to abide by all the Rules and Regulations attached
        hereto as well as reasonable rules and regulations which Lessor may
        hereafter prescribe involving the air-conditioning system.

                                    -- END --

                              Exhibit C-1 - Page 1


                                    EXHIBIT D

                                CLEANING SERVICES
                             (Five Nights Per Week)

LESSEE'S PREMISES

1.      Vacuum clean all carpeted areas.

2.      Sweep and dust mop all non-carpeted areas. Wet mop whenever necessary.

3.      All office furniture such as desks, chairs, files, filing cabinets, etc.
        shall be dusted with a clean treated dust cloth whenever necessary and
        only if such surfaces are clear of Lessee's personal property including
        but not limited to plants.

4.      Empty and wash ashtrays.

5.      Empty wastepaper baskets and remove waste to the designated areas.

6.      All vertical surfaces within arms reach shall be spot cleaned to remove
        finger marks and smudges. Baseboard and window sills are to be spot
        cleaned whenever necessary.

7.      All cleaning of cafeterias, vending areas, kitchen facilities are
        excluded. Lessee may make necessary arrangements for same directly with
        Lessor's cleaning maintenance company.

8.      Cleaning hours shall be Monday through Friday between 5:30 p.m. and
        11:00 p.m.

9.      No cleaning service is provided on Saturday, Sunday and Building
        Holidays.

10.     Cartons or refuse in excess which can not be placed in wastebaskets will
        not be removed. Lessee is responsible to place such unusual refuse in
        trash dumpster.

11.     Cleaning maintenance company will not remove nor clean tea, office cups
        or similar containers. If such liquids are spilled in waste baskets, the
        waste baskets will be emptied but not otherwise cleaned. Lessor will not
        be responsible for any stained carpet caused from liquids leaking or
        spilling from Lessee's wastepaper receptacles.

12.     Upon completion of cleaning, all lights will be turned off and doors
        locked leaving the Premises in an orderly condition.

13.     Glass entrance doors will be cleaned nightly. Interior glass doors or
        glass partitions are excluded. Lessee may make arrangements for same
        with Lessor's cleaning maintenance company.

COMMON AREAS

1.      Vacuum all carpeting in entrance lobbies, outdoor mats and all
        corridors.

2.      Wash glass doors in entrance lobby with a clean damp cloth and dry
        towel.

3.      Clean cigarette urns. Sweep and/or wet mop all resilient tile flooring.
        Hard surface floors such as quarry tile, etc., shall be cleaned nightly.

4.      Wash, clean and disinfect water fountains.

5.      Clean all elevators and stairwells.

6.      Lavatories -- Men and Women.
        a.  Floors in all lavatories shall be wet mopped each evening with a
            germicidal detergent to ensure a clean and germ free surface.
        b.  Wash and polish all mirrors, shelves, bright work including any
            piping and toilet seats.
        c.  Wash and disinfect wash basins and sinks using a germicidal
            detergent.
        d.  Wash and disinfect toilet bowls and urinals.
        e.  Keep lavatory partitions, tiled walls, dispensers and receptacles in
            a clean condition using a germicidal detergent when necessary.
        f.  Empty and sanitize sanitary disposal receptacles.
        g.  Fill toilet tissue holders, towel dispensers and soap dispensers.
            Refills to be supplied by Lessor.

7.      Clean all air ventilation grill work in ceilings.

                               Exhibit D - Page 1


                                    EXHIBIT E

                                BUILDING HOLIDAYS

                                 BUILDING CLOSED


                               * NEW YEAR'S DAY *

                                * MEMORIAL DAY *

                              * INDEPENDENCE DAY *

                                  * LABOR DAY *

                              * THANKSGIVING DAY *

                                * CHRISTMAS DAY *

                                    -- END --

                               Exhibit E - Page 1


                                    EXHIBIT F

                           TENANT ESTOPPEL CERTIFICATE

TO: MORTGAGEE and/or its affiliates and/or whom else it may concern:

1.      The undersigned is the Lessee (Tenant) under that certain Lease dated
        ____________by and between __________ as Lessor (Landlord) and
        __________ as Lessee, covering those certain premises commonly known and
        designated as ____r.s.f. on the ____( ) floor of _________________,NJ.

2.      The Lease has not been modified, changed, altered or amended in any
        respect (except as indicated following this sentence) and is the only
        Lease or agreement between the undersigned and the Lessor affecting said
        premises. If none, state "none".

3.      The undersigned has made no agreements with Lessor or its agents or
        employees concerning free rent, partial rent, rebate of rental payments
        or any other type of rental concession (except as indicated following
        this sentence). If none, state "none".

4.      The undersigned has accepted and now occupies the premises, and is and
        has been open for business since_________, 200_. The Lease term
        began________, 2002, and the rent for said premises has been paid to and
        including_____________, 2002 in conformity with this Lease agreement. No
        rent has been prepaid for more than two (2) months. The fixed minimum
        rent being paid as above is $ __________ per month. If Lessee is not in
        full possession, whether Lessee has assigned the Lease, sublet all or
        any portion of the Premises, or otherwise transferred any interest in
        the Lease or the Premises, Lessee agrees to provide a copy of such
        assignment, sublease, or transfer upon request.

5.      The Lease is not in default and is in full force and effect. As of the
        date hereof, the undersigned is entitled to no credit, no free rent and
        no offset or deduction in rent.

6.      All alterations, improvements, additions, build-outs, or construction
        required to be performed under the Lease have been completed in
        accordance with the terms of the Workletter attached to Lease as Exhibit
        C.

7.      The Lease does not contain and the undersigned doesn't have any
        outstanding options or rights of first refusal to purchase the premises
        or any part thereof or the real property of which the premises are a
        part.

8.      No actions, whether voluntary or otherwise, are pending against the
        undersigned under the bankruptcy laws of the United States or any State
        thereof.

9.      There are currently no valid defenses, counterclaims, off-sets, credits,
        deductions in rent, or claims against the enforcement of any of the
        agreements, terms, or conditions of the Lease.

10.     The undersigned acknowledges that all the interest of Lessor in and to
        the above-mentioned Lease is being duly assigned to MORTGAGEE or one of
        its affiliates hereunder and that pursuant to the terms thereof (i) all
        rental payments under said Lease shall continue to be paid to Lessor in
        accordance with the terms of the Lease unless and until you are
        otherwise notified in writing by MORTGAGEE, or its successor or assigns
        and (ii) no modification, revision, or cancellation of the Lease or
        amendments thereto shall be effective unless a written consent thereto
        of such mortgagee is first obtained.

11.     The undersigned is authorized to execute this Tenant Estoppel
        Certificate on behalf of the Lessee.

Dated this ________ day of __________________, 2002

LESSEE:


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

                               Exhibit F - Page 1


                                    EXHIBIT G

                        RENT COMMENCEMENT DATE AGREEMENT

1.0     PARTIES

        THIS AGREEMENT made the _________day of ________, 2002 is by and between
        ________________ (hereinafter "Lessor") whose address is c/o Mack-Cali
        Realty Corporation, 11 Commerce Drive, Cranford, New Jersey 07016 and
        _________________________ (hereinafter "Lessee") whose address is
        ________________________________________.

2.0     STATEMENT OF FACTS

        2.1     Lessor and Lessee entered into a Lease dated ____________, 2002
                (hereinafter "Lease") setting forth the terms of occupancy by
                Lessee of approximately ________ rentable square feet on the
                _____ (___) floor (hereinafter "Premises") at
                _____________________________ (hereinafter "Building"); and

        2.2     The Term of the Lease is ten (10) years with the Rent
                Commencement Date being defined in the Preamble to the Lease as
                being subject to certain alternatives; and

        2.3     It has been determined that ___________, 2002 is the Rent
                Commencement Date of the Lease.

3.0     STATEMENT OF TERMS

                NOW, THEREFORE, in consideration of the Premises and the
        covenants hereinafter set forth, it is agreed:

        3.1     The Rent Commencement Date of the Lease is ___________ , and the
                Expiration Date thereof is _____________ , and the Lease
                Preamble Articles 6 shall be deemed modified accordingly.

        3.2     This Agreement is executed by the parties hereto for the purpose
                of providing a record of the Rent Commencement Date and
                Expiration Dates of the Lease.

        EXCEPT as modified herein, the Lease covering the Premises shall remain
in full force and effect as if the same were set forth in full herein and Lessor
and Lessee hereby ratify and confirm all the terms and conditions thereof.

        THIS AGREEMENT shall be binding upon and inure to the benefit of the
parties hereto and their respective legal representatives, successors and
permitted assigns.

        EACH PARTY AGREES that it will not raise or assert as a defense to any
obligation under the Lease or this Agreement or make any claim that the Lease or
this Agreement is invalid or unenforceable due to any failure of this document
to comply with ministerial requirements including, but not limited to,
requirements for corporate seals, attestations, witnesses, notarizations, or
other similar requirements, and each party hereby waives the right to assert any
such defense or make any claim of invalidity or unenforceability due to any of
the foregoing.

        IN WITNESS THEREOF, Lessor and Lessee have hereunto set their hands and
seals the date and year first above written and acknowledge one to the other
they possess the requisite authority to enter into this transaction and to sign
this Agreement.

LESSOR                                     LESSEE


By:                                        By:
        ------------------------------            ------------------------------
        Michael K. Nevins                         Name:
        Vice President - Leasing                  Title:

                               Exhibit G - Page 1


                                    EXHIBIT H

                                LETTER OF CREDIT

                                                [DATE]

TO:
[Name of Beneficiary]
[Address]

                        Re:  Irrevocable Letter of Credit

Gentlemen:

        By order of our client, _________________________, we hereby establish
our irrevocable Letter of Credit No. ______ in your favor for a sum or sums not
to exceed $__________________- (_________________U.S. Dollars) in the aggregate,
effective immediately.

        This Letter of Credit shall be payable in immediately available funds in
U.S. Dollars. Funds under this credit are payable to you upon your presentation
to us a sight draft drawn on us in the form annexed hereto. All drafts must be
marked: "Drawn under Letter of Credit No. ____ of [Name of Issuing Bank].

        This Letter of Credit shall expire twelve (12) months from the date
hereof; but is automatically extendable, so that this Letter of Credit shall be
deemed automatically extended, from time to time, without amendment, for one
year from the expiration date hereof and from each and every future expiration
date, unless at least sixty (60) days prior to any expiration date we shall
notify you by registered mail that we elect not to consider this Letter of
Credit renewed for any such additional period. The final expiration date hereof
shall be no EARLIER than [fill in suitable date after expiration of lease].

        This Letter of Credit is transferable and may be transferred one or more
times. However, no transfer shall be effective unless advice of such transfer is
received by us in our standard form.

        We hereby agree to honor each draft drawn under and in compliance with
this Letter of Credit, if duly presented at our offices at ____________________
or at any other of our offices.

        This Letter of Credit is subject to the International Standby Practices
1998, International Chamber of Commerce Publication No. 590.

                                                [Name of Bank]

                                                By:


                       [Annex Bank's Form of Sight Draft]


                                Exhibit H- Page 1


                                    EXHIBIT I

                         EXCLUSIONS FROM OPERATING COSTS

        (1)     Any ground lease rental;

        (2)     Costs of items considered capital repairs, replacements,
improvements and equipment under generally accepted accounting principles
consistently applied or otherwise, except as set forth below ("Capital Items");

        (3)     Rentals for items (except when needed in connection with normal
repairs and maintenance of permanent systems) which if purchased, rather than
rented, would constitute a Capital Item which is specifically excluded in (2)
above (excluding, however, equipment not affixed to the Building which is used
in providing janitorial or similar services);

        (4)     Costs incurred by Lessor for the repair of damage to the
Building to the extent that Lessor is or should be reimbursed by insurance
proceeds, regardless of whether such repairs are covered by insurance;

        (5)     Costs, including permit, license and inspection costs, incurred
with respect to the installation of tenant or other occupants' improvements in
the Building or incurred in renovating or otherwise improving, decorating,
painting or redecorating vacant space for tenants or other occupants of the
Building;

        (6)     Depreciation, amortization, and interest payments, except as
provided herein and except on materials, tools, supplies, and vendor-type
equipment purchased by Lessor to enable Lessor to supply services Lessor might
otherwise contract for with a third party when such depreciation, amortization
and interest payments would otherwise have been included in the charge for such
third party's services, all as determined in accordance with generally accepted
accounting principles, consistently applied, and when depreciation or
amortization is permitted or required, the item shall be amortized over its
reasonably anticipated useful life;

        (7)     Marketing costs, including without limitation, leasing
commissions, attorneys' fees in connection with the negotiation and preparation
of letters, deal memos, letters of intent, leases, subleases and/or assignments,
space planning costs, and other costs and expenses incurred in connection with
lease, sublease and/or assignment negotiations and transactions with Lessee or
present or prospective tenants or other occupants of the Building;

        (8)     Expenses for services or other benefits that are not offered to
Lessee or for which Lessee is charged for directly but that are provided to
another tenant or occupant of the Building;

        (9)     Costs incurred by Lessor because of the violation by Lessor or
any tenant of the terms and conditions of any lease of space in the Building;

        (10)    Overhead and profit increment paid to Lessor or to subsidiaries
or affiliates of Lessor for goods and/or services in or to the Building to the
extent the same exceeds the costs of such goods and/or services rendered by
unaffiliated third panics on a competitive basis;

        (11)    Interest, principal, points and fees on debts or amortization on
any mortgage or mortgages or any other debt instrument encumbering the Building
or the Land;

        (12)    Lessor's general corporate overhead and general and
administrative expenses;

        (13)    Any compensation paid to clerks, attendants or other persons in
commercial concessions operated by Lessor or in the parking garage of the
Building or wherever Lessee is granted its parking privileges and/or all fees
paid to any parking facility operator;

        (14)    Rentals and other related expenses incurred in leasing HVAC
systems, elevators or

                                Exhibit I- Page 1


other equipment ordinarily considered to be Capital Items, except for (a)
expenses in connection with making repairs on or keeping such Building systems
in operation while repairs are being made and (b) costs of equipment not affixed
to the Building which is used in providing janitorial or similar services;

        (15)    Advertising and promotional expenditures, and costs of signs in
or on the Building identifying the owner of the Building;

        (15A)   The cost of any electrical power used by any tenant in the
Building in excess of the Building-standard amount, or electric power costs for
which any tenant directly contracts with the local public service company or for
which any tenant is separately metered or submetered and pays Lessor directly;

        (16)    Services and utilities provided, taxes attributable to, and
costs incurred in connection with the operation of the retail and restaurant
operations in the Building, except to the extent the square footage of such
operations are included in the rentable square feet of the Building and do not
exceed the services, utility and tax costs that would have been incurred had the
retail and/or restaurant space been used for general office purposes;

        (17)    Costs incurred in connection with upgrading the Building to
comply with life, fire and safety codes, ordinances, statutes or other laws in
effect before the Commencement Date, including, without limitation, the ADA,
including penalties or damages incurred because of that non-compliance;

        (18)    Tax penalties incurred as a result of Lessor's failure to make
payments and/or to file any tax or informational returns when due;

        (19)    Costs for which Lessor has been compensated by a management fee,
and any management fees in excess of those management fees which are normally
and customarily charged by landlords of comparable buildings;

        (19A)   Costs arising from the negligence or fault of other tenants or
Lessor or its agents, or any vendors, contractors, or providers of materials or
services selected, hired or engaged by Lessor or its agents including, without
limitation, the selection of Building materials;

        (20)    Notwithstanding any contrary provision of the Lease, including,
without limitation, any provision relating to capital expenditures, any and all
costs arising from the presence of hazardous materials or substances (as defined
by applicable laws in effect on the date this Lease is executed) in or about the
Premises, the Building or the Office Building Area including, without
limitation, hazardous substances in the ground water or soil, not placed in the
Premises, the Building or the Land by Lessee;

        (21)    Costs arising from Lessor's charitable or political
contributions;

        (22)    Costs arising from defects in the base, shell, or core of the
Building or improvements installed by Lessor or repair thereof;

        (23)    Costs for the acquisition of (as contrasted with the maintenance
of) sculpture, paintings, or other objects of art;

        (24)    Costs (including in connection therewith all attorneys' fees and
costs of settlement judgments and payments in lieu thereof) arising from claims,
disputes or potential disputes in connection with potential or actual claims
litigation or arbitrations pertaining to Lessor and/or the Building and/or the
Office Building Area;

        (25)    Costs associated with the operation of the business of the
partnership or entity which constitutes Lessor as the same are distinguished
from the costs of operation of the Building, including partnership accounting
and legal matters, costs of defending any lawsuits with or claims by any
mortgagee (except as the actions of Lessee may be in issue), costs of selling,
syndicating, financing, mortgaging or hypothecating any of Lessor's interest in
the Building, costs of any disputes between Lessor and its employees (if any)
not engaged in Building operation, disputes of Lessor with

                                Exhibit I- Page 4


Building management, or outside fees paid in connection with disputes with other
tenants;

        (26)    Costs of any "tap fees" or any sewer or water connection fees
for the benefit of any particular tenant in the Building;

        (27)    Costs incurred in connection with any environmental clean-up,
response action, or remediation on, in, under or about the Premises or the
Building or the Office Building Area, including but not limited to, costs and
expenses associated with the defense, administration, settlement, monitoring or
management thereof;

        (28)    Any expenses incurred by Lessor for use of any portions of the
Building to accommodate events including, but not limited to shows, promotions,
kiosks, displays, filming, photography, private events or parties, ceremonies,
and advertising beyond the normal expenses otherwise attributable to providing
Building services, such as lighting and HVAC to such public portions of the
Building in normal Building operations during standard Building hours of
operation;

        (29)    Any entertainment, dining, or travel expenses for any purpose;

        (30)    Any flowers, gifts, balloons, etc. provided to any entity
whatsoever, to include, but not limited to, Lessee, other tenants, employees,
vendors, contractors, prospective tenants, and agents;

        (31)    Any "validated" parking for any entity;

        (32)    Any "finders' fees," brokerage commissions, job placement costs,
or job advertising cost;

        (33)    Any "above-standard" cleaning, including, but not limited to
construction cleanup or special cleanings associated with parties/events and
specific tenant requirements in excess of service provided to Lessee, including
related trash collection, removal, hauling and dumping;

        (34)    The cost of any magazine, newspaper, trade or other
subscriptions;

        (35)    The cost of any training or incentive programs, other than for
tenant life safety information services;

        (36)    The cost of any "tenant relations" parties, events or promotion
not consented to by an authorized representative of Lessee in writing;

        (37)    "In-house" legal and/or accounting fees; and

        (38)    Reserves for bad debts or for future improvements, repairs,
additions, etc.; and

        It is understood that Operating Costs shall be reduced by all cash
discounts, trade discounts, quantity discounts, rebates, or other amounts
received by Lessor or Lessor's managing agent in the purchase of any goods,
utilities, or services in connection with the operation of the Building. Lessor
shall make payments for goods, utilities, or services in a timely manner to
obtain the maximum possible discount. If Capital Items which are customarily
purchased by landlords of comparable buildings are leased by Lessor, rather than
purchased, the decision by Lessor to lease the item in question shall not serve
to increase Lessee's Percentage of Operating Costs beyond that which would have
applied had the item in question been purchased.

        If any facilities, services, or utilities used for the Building are
provided from another building owned or operated by Lessor or vice versa, the
costs incurred by Lessor for those facilities, services, or utilities shall be
allocated to Operating Costs by Lessor on a reasonably equitable basis.

        If any repair, replacement or improvement within the definition of
Operating Costs is capitalized under generally accepted accounting principles,
then (A) the cost of any such repair, replacement or improvement shall only be
included in Operating Costs if such repair, replacement or improvement (i) is
necessary to comply with any governmental or quasi-governmental law, statute,

                                Exhibit I- Page 4


ordinance, rule, order, requirements or regulation, which is enacted or
promulgated after the date hereof, (ii) is reasonably intended to reduce
Operating Costs or (iii) constitutes a replacement which in Lessor's reasonable
judgment is economically prudent to make in lieu of repairs, (B) the cost
thereof shall be amortized on a straight line basis over the useful life of such
repair, the amount so amortized attributable to such repair, replacement or
improvement and (C) there shall be included in Operating Costs in each Lease
Year for such portion of the amortization period which occurs during the Term,
provided, however, that all amounts thereof included in Operating Costs in any
Lease Year subsequent to the year paid shall have added thereto interest from
the date Lessor incurred such cost. For amortization purposes, applicable
interest shall be two (2) percentage points in excess of the prime rate charged
by Chase Manhattan Bank, or its successor, at the time of expenditure.

                                Exhibit I- Page 4


                            FIRST AMENDMENT TO LEASE

1.      PARTIES

        1.1     THIS AGREEMENT made the 30th day of June, 2003 is between
                SYLVAN/CAMPUS REALTY L.L.C. ("Lessor") whose address is c/o
                Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New
                Jersey 07016 and THE MEDICINES COMPANY ("Lessee"), whose address
                is 8 Campus Drive, Parsippany, New Jersey.

2.      STATEMENT OF FACTS

        2.1     Lessor and Lessee previously entered into a Lease dated
                September 30, 2002 (the "Lease") covering approximately 16,779
                gross rentable square feet on the second (2nd) floor
                ("Premises") in the building located at 8 Campus Drive,
                Parsippany, New Jersey ("Building"); and

        2.2     The Term of the Lease is for ten (10) years from the Rent
                Commencement Date with the Rent Commencement Date of the initial
                Term being defined in the Preamble to the Lease as the earlier
                of (i) the date upon which Lessee, or anyone claiming under or
                through Lessee, commences using the Premises for the conduct of
                business, or (ii) the date which is ninety (90) days after the
                date of this Lease.

        2.3     It has been determined in accordance with Paragraph 6 of the
                Preamble to the Lease that January 6, 2003 was the Rent
                Commencement Date of the Term of the Lease.

        2.4     The Term of the Lease expires at 11:59 p.m. on January 31, 2013
                ("Expiration Date"); and

        2.5     Lessee desires to expand the Premises by leasing approximately
                3,450 gross rentable square feet on the second (2nd) floor of
                the Building ("Expansion Premises"), as shown on Exhibit A
                attached hereto and made a part hereof; and

        2.6     The parties desire to amend certain terms of the Lease as set
                forth below.

3.      AGREEMENT

                NOW, THEREFORE, in consideration of the terms, covenants and
        conditions hereinafter set forth, Lessor and Lessee agree as follows:

        3.1     The above recitals are incorporated herein by reference.

        3.2     All capitalized and non-capitalized terms used in this Agreement
                which are not separately defined herein but are defined in the
                Lease shall have the meaning given to any such term in the
                Lease.

        3.3     The Term applicable to the Expansion Premises shall commence on
                the Effective Date (as defined below) and shall terminate at
                11:59 p.m. on January 31, 2013.

        3.4     The effective date applicable to the Expansion Premises shall be
                the earlier of (i) the day Lessor substantially completes the
                improvements to be made to the Expansion Premises in accordance
                with Exhibit B attached hereto and made part hereof and obtains
                a (temporary or final) certificate of occupancy for the
                Expansion Premises (if required by local law) or (ii) the date
                Lessee or anyone claiming under or through Lessee shall occupy
                the Expansion Premises (the "Effective Date").

        3.5     Lessor, at its sole cost and expense, shall perform the
                improvement work to the Expansion Premises in accordance with
                Exhibit B attached hereto and made part hereof.

        3.6     From and after the Effective Date, the following shall be
                effective:

                a.      Lessor shall lease to Lessee and Lessee shall hire from
                        Lessor the Expansion Premises as shown on Exhibit A
                        attached hereto and made part hereof.

                b.      The Premises shall be defined as approximately 20,229
                        gross rentable square feet on the second (2) floor of
                        the Building and Paragraph 7 of the Preamble

                                        1


                        to the Lease and Exhibit A shall be deemed amended
                        accordingly.

                c.      In addition to the Fixed Basic Rent payable applicable
                        to the Premises, Lessee shall pay Lessor Fixed Basic
                        Rent applicable to the Expansion Premises which shall
                        accrue as follows and Paragraph 10 of the Preamble to
                        the Lease shall be deemed supplemented accordingly:

                        (i)     commencing on the Effective Date through and
                                including the day prior to the second (2nd)
                                month anniversary of the Effective Date, the
                                Fixed Basic Rent applicable to the Expansion
                                Premises shall be ZERO AND 00/100 DOLLARS
                                ($0.00).

                        (ii)    commencing on the second (2nd) month anniversary
                                of the Effective Date through and including
                                January 31, 2005, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                NINETY-ONE THOUSAND FOUR HUNDRED TWENTY-FIVE AND
                                00/100 DOLLARS ($91,425.00) per annum, payable
                                in advance on the first day of each and every
                                calendar month in equal monthly installments of
                                SEVEN THOUSAND SIX HUNDRED EIGHTEEN AND 75/100
                                ($7,618.75); and

                        (iii)   commencing on February 1, 2005 through and
                                including January 31, 2006, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                NINETY-THREE THOUSAND ONE HUNDRED FIFTY AND
                                00/100 DOLLARS ($93,150.00) per annum, payable
                                in advance on the first day of each and every
                                calendar month in equal monthly installments of
                                SEVEN THOUSAND SEVEN HUNDRED SIXTY-TWO AND
                                50/100 DOLLARS ($7,762.50); and

                        (iv)    commencing on February 1, 2006 through and
                                including January 31, 2007, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                NINETY-FOUR THOUSAND EIGHT HUNDRED SEVENTY-FIVE
                                AND 00/100 DOLLARS ($94,875.00) per annum,
                                payable in advance on the first day of each and
                                every calendar month in equal monthly
                                installments of SEVEN THOUSAND NINE HUNDRED SIX
                                AND 25/100 DOLLARS ($7,906.25); and

                        (v)     commencing on February 1, 2007 through and
                                including January 31, 2008, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                NINETY-EIGHT THOUSAND THREE HUNDRED TWENTY-FIVE
                                AND 00/100 DOLLARS ($98,325.00) per annum,
                                payable in advance on the first day of each and
                                every calendar month in equal monthly
                                installments of EIGHT THOUSAND ONE HUNDRED
                                NINETY-THREE AND 75/100 DOLLARS ($8,193.75); and

                        (vi)    commencing on February 1, 2008 through and
                                including January 31, 2009, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                ONE HUNDRED THOUSAND FIFTY AND 00/100 DOLLARS
                                ($100,050.00) per annum, payable in advance on
                                the first day of each and every calendar month
                                in equal monthly installments of EIGHT THOUSAND
                                THREE HUNDRED THIRTY-SEVEN AND 50/100 DOLLARS
                                ($8,337.50); and

                        (vii)   commencing on February 1, 2009 through and
                                including January 31, 2010, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                ONE HUNDRED ONE THOUSAND SEVEN HUNDRED
                                SEVENTY-FIVE AND 00/100 DOLLARS ($101,775.00)
                                per annum, payable in advance on the first day
                                of each and every calendar month in equal
                                monthly installments of EIGHT THOUSAND FOUR
                                HUNDRED EIGHTY-ONE AND 25/100 DOLLARS
                                ($8,481.25); and

                        (viii)  commencing on February 1, 2010 through and
                                including January 31, 2011, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                ONE HUNDRED THREE THOUSAND FIVE HUNDRED AND
                                00/100 DOLLARS ($103,500.00) per annum, payable
                                in advance on the first day of each and every
                                calendar month in equal

                                        2


                                monthly installments of EIGHT THOUSAND SIX
                                HUNDRED TWENTY-FIVE AND 00/100 DOLLARS
                                ($8,625.00); and

                        (ix)    commencing on February 1, 2011 through and
                                including January 31, 2012, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                ONE HUNDRED FIVE THOUSAND TWO HUNDRED
                                TWENTY-FIVE AND 00/100 DOLLARS ($105,225.00) per
                                annum, payable in advance on the first day of
                                each and every calendar month in equal monthly
                                installments of EIGHT THOUSAND SEVEN HUNDRED
                                SIXTY-EIGHT AND 75/100 DOLLARS ($8,768.75); and

                        (x)     commencing on February 1, 2012 through and
                                including January 31, 2013, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                ONE HUNDRED SIX THOUSAND NINE HUNDRED FIFTY AND
                                00/100 DOLLARS ($106,950.00) per annum, payable
                                in advance on the first day of each and every
                                calendar month in equal monthly installments of
                                EIGHT THOUSAND NINE HUNDRED TWELVE AND 50/100
                                DOLLARS ($8,912.50).

                d.      Parking Spaces shall be defined as seventy-six
                        unassigned spaces and Paragraph 14 of the Preamble to
                        the Lease shall be deemed amended accordingly.

                e.      Lessee shall pay Lessor the cost of electricity consumed
                        within the Expansion Premises in accordance with Article
                        22 BUILDING STANDARD OFFICE ELECTRICAL SERVICE of the
                        Lease.

                f.      Lessee shall pay Lessor, as Additional Rent, Lessee's
                        Percentage applicable to the Expansion Premises of the
                        increased cost to Lessor for each of the categories set
                        forth in Article 23 ADDITIONAL RENT over the Base
                        Operating Costs, Base Real Estate Taxes and Base Utility
                        and Energy Costs incurred during Calendar Year 2004.

                g.      Lessee's Percentage applicable to the Expansion Premises
                        shall be 1.6%.

        3.7     This Agreement shall not extend or otherwise amend the Term or
                Fixed Basic Rent applicable to the Premises as defined herein.

        3.8     No later than thirty (30) days after the determination of the
                Effective Date, the parties shall agree to memorialize the
                Effective Date in writing.

        3.9     Lessee represents and warrants to Lessor that no broker, other
                than Trammel Crow Company, brought about this transaction, and
                Lessee agrees to indemnify and hold Lessor harmless from any and
                all claims of any other broker claiming to have been engaged by
                Lessee in connection with negotiations of, or entering into of,
                this Agreement.

        3.10    Lessee hereby represents to Lessor that (i) except for any
                default which may exist as a result of the filing of certain
                liens against the Building, there exists no default under the
                Lease either by Lessor or Lessee; (ii) Lessee is entitled to no
                credit, free rent or other offset or abatement of the rents due
                under the Lease; and (iii) there exists no offset, defense or
                counterclaim to Lessee's obligation under the Lease.

        3.11    Except as expressly amended herein, the Lease, as amended, shall
                remain in full force and effect as if the same had been set
                forth in full herein, and Lessor and Lessee hereby ratify and
                confirm all of the terms and conditions thereof.

        3.12    This agreement shall be binding upon and inure to the benefit of
                the parties hereto and their respective legal representatives,
                successors and permitted assigns.

        3.13    Each party agrees that it will not raise or assert as a defense
                to any obligation under the Lease or this Agreement or make any
                claim that the Lease or this Agreement is invalid or
                unenforceable due to any failure of this document to comply with
                ministerial requirements including, but not limited to,
                requirements for corporate seals, attestations, witnesses,
                notarizations, or other similar requirements, and each party
                hereby waives the right to assert any such defense or make any
                claim of

                                        3


                invalidity or unenforceability due to any of the foregoing.

        IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and
seals the date and year first above written, and acknowledge one to the other
that they possess the requisite authority to enter into this transaction and to
sign this Agreement.

LESSOR:                                       LESSEE:

SYLVAN/CAMPUS REALTY L.L.C.                   THE MEDICINES COMPANY

By:   Grove Street Associates of Jersey
      City Limited Partnership, member

By:   Mack-Cali Sub IV, Inc., its general
      partner

By:   /s/ Michael K. Nevins                   By:   /s/ Clive A. Meanwell
      ----------------------------------            ---------------------------
      Michael K. Nevins                             Name: Clive A. Meanwell
      Vice President - Leasing                      Title: Chairman

                                        4


                                    EXHIBIT A

                         LOCATION OF EXPANSION PREMISES


         [Schematic diagram of original premises and expansion premises]

                                        5


                                    EXHIBIT B

                                      NOTES

RE:     Workletter Agreement for office space on the second (2nd) floor at 8
        Campus Drive, Parsippany, New Jersey

                                                                   June 30, 2003

LESSEE:

THE MEDICINES COMPANY

You ("Lessee") and we ("Lessor") are executing simultaneously with this
Workletter Agreement a written lease amendment ("Amendment"), covering the space
referred to above, as more particularly described in the Amendment ("Expansion
Premises").

To induce Lessee to enter into the Amendment (which is hereby incorporated by
reference) and in consideration of the covenants hereinafter contained, Lessor
and Lessee mutually agree as follows:

1.      Lessor shall have its architect prepare the following architectural and
        mechanical drawings and specifications based upon the sketch layout
        supplied to Lessor by Lessee, attached hereto and made a part hereof,
        upon full execution of this Lease.

        a.      Architectural drawings and specifications for Lessee's partition
                layout, reflected ceiling, placement of electrical outlets and
                other installations for the work to be done by Lessor.

        b.      Mechanical plans and specifications where necessary for
                installation of air conditioning systems, ductwork and heating.

        All such plans and specifications are expressly subject to Lessor's
        written approval, which Lessor covenants it will not unreasonably
        withhold.

2.      Lessor agrees to cause the partition plan, electrical plan and the
        reflected ceiling plan to be delivered to Lessee on or before the
        fifteenth (15th) day after Lessee's approved sketch layout. Lessee
        agrees to approve said plans by initialing and returning same to Lessor
        within three (3) days of receipt of each plan. Upon approval of the
        plans initialed by Lessee, Lessor shall file said plans with the
        appropriate governmental agencies.

3.      Lessor agrees, at its expense and without charge to Lessee (unless
        otherwise provided), to do the work in the Expansion Premises as shown
        on the plans dated May 16, 2003, as amended June 24, 2003, created by
        First Floor, attached hereto and described on the "Description of
        Materials" schedule attached hereto and in conformance with the Premises
        originally leased by Lessee under the Lease, which shall hereinafter be
        referred to as "The Work" "Building Standard" shall mean the type and
        grade of material, equipment and/or device designated by Lessor as
        standard for the Building. All items are Building Standard unless
        otherwise noted. The provisions of Article 6 of the Lease shall apply to
        any alterations made to the Expansion Premises after the initial work to
        be performed herein.

4.      Intentionally omitted.

5.      All low partitioning, workstation modules, bank screen partitions and
        prefabricated partition systems shall be furnished and installed by
        Lessee.

6.      The installation or wiring of telephone and computer (data) outlets is
        not part of The Work. Lessee shall bear the responsibility to provide
        its own telephone and data systems at Lessee's sole cost and expense.
        Upon expiration or sooner termination of the Lease, Lessee shall remove
        all telephone and data equipment and wiring from the Expansion Premises
        and the Building risers upon vacation of same.

                               Exhibit B - Page 1


7.      Changes in The Work, if necessary or requested by the Lessee, shall be
        accomplished after submission of Lessee's final approved sketch layout,
        and without invalidating any part of the Lease or Workletter Agreement,
        by written agreement between Lessor and Lessee hereinafter referred to
        as a Change Order. Each Change Order shall be prepared by Lessor and
        signed by both Lessee and Lessor stating their agreement upon all of the
        following:

        a.      The scope of the change in The Work; and

        b.      The cost of the change; and

        c.      Manner in which the cost will be paid or credited; and

        d.      The estimated extent of any adjustment to the Effective Date (if
                any) as a result of the change in The Work.

                Each and every Change Order shall be signed by Lessor's and
                        Lessee's respective construction representatives. In no
                        event shall any Change Order(s) be permitted without
                        such authorizations. A 10% supervision plus 10% overhead
                        charge will be added to the cost of any Change Order and
                        to the cost of any other work to be performed by Lessor
                        in the Expansion Premises after Lessor's completion of
                        The Work. If Lessee shall fail to approve any such
                        Change Order within one (1) week, the same shall be
                        deemed disapproved in all respects by Lessee and Lessor
                        shall not be authorized to proceed thereon. Any increase
                        in the cost of The Work or the change in The Work stated
                        in a Change Order which results from Lessee's failure to
                        timely approve and return said Change Order shall be
                        paid by the Lessee. Lessee agrees to pay to Lessor the
                        cost of any Change Order promptly upon receipt of an
                        invoice for same. Similarly, any cost savings resulting
                        from such Change Order(s) shall be credited to the
                        Lessee.

8.      If Lessee elects to use the architect suggested by Lessor, this
        architect becomes the Lessee's agent solely with respect to the plans,
        specifications and The Work. If any change is made after completion of
        schematic drawings and prior to completion of final construction
        documents which result in a Change Order and additional costs, such
        costs shall be the responsibility of the Lessee.

9.      Prior to Lessee's occupancy of the Expansion Premises, Lessee shall
        identify and list any portion of The Work which does not conform to this
        Workletter Agreement ("Punch List"). The Lessor shall review with the
        Lessee all of the items so listed and correct or complete any portion of
        The Work which fails to conform to the requirements of this Workletter
        Agreement.

10.     The terms contained in the Amendment (which include all exhibits
        attached thereto) constitute Lessor's agreement with Lessee with respect
        to the work to be performed by Lessor on Lessee's behalf. If the
        architectural drawings are in conflict with the terms of the Amendment,
        then the Lease shall be deemed the controlling document.

11.     All materials and installations constructed for the Lessee within the
        Expansion Premises shall become the property of the Lessor upon
        installation. No refund, credit or removal of said items is to be
        permitted at the termination of the Lease. Items installed that are not
        integrated in any such way with other common building materials do not
        fall under this provision (e.g. shelving, furniture, etc.).

12.     It is agreed that notwithstanding the date provided in the Lease for the
        Effective Date, the term applicable to the Expansion Premises shall not
        commence until Lessor has "substantially completed" all work to be
        performed by Lessor as hereinbefore set forth in Paragraph 3 above and
        as set forth in the Amendment; provided, however, that if Lessor shall
        be delayed in substantially completing said work as a result of:

        a.      Lessee's failure to approve the plans and specifications in
                accordance with Paragraph 2 hereof; or

        b.      Lessee's failure to furnish interior finish specifications,
                i.e., paint colors, carpet

                               Exhibit B - Page 2


                selection, etc., to Lessor by the fifth (5th) working day after
                Lessor has approved the plans and specifications submitted by
                Lessee referred to in Paragraph 2 hereof; or

        c.      Lessee's request for materials, finishes or installations other
                than Lessor's Building Standard; or

        d.      Lessee's changes in The Work; or

        e.      The performance of a person, firm, partnership or corporation
                employed by Lessee and the completion of the said work by said
                person, firm, partnership or corporation;

        then the Effective Date of the term of said Lease shall be accelerated
        by the number of days of such delay and Lessee's obligation to pay Fixed
        Basic Rent and Additional Rent shall commence as of such earlier date.
        As to matters described in clauses (a) - (e) above, Lessor shall advise
        Lessee of any delay that Lessor knows is reasonably likely to occur as a
        result of the matter described, within a reasonable time after Lessor
        becomes aware of such likelihood.

13.     Lessor shall permit Lessee and its agents to enter the Expansion
        Premises prior to the Commencement Date in order that Lessee may perform
        through its own non-union contractors (or union contractor if required
        by Lessor) such other work and decorations as Lessee may desire at the
        same time Lessor's contractors are working in the Expansion Premises.
        The foregoing license to enter prior to the Commencement Date, however,
        is conditioned upon:

        a.      Lessee's workmen and mechanics working in harmony and not
                interfering with the labor employed by Lessor, Lessor's
                mechanics or contractors or by any other Lessee or its mechanics
                or contractors; and

        b.      Lessee providing Lessor with evidence of Lessee's contractors
                and subcontractors carrying such worker's compensation, general
                liability, personal and property insurance as required by law
                and in amounts no less than the amounts set forth in Article 30
                of the Lease. If at any time such entry shall cause disharmony
                or interference therewith, this license may be withdrawn by
                Lessor upon forty-eight (48) hours written notice to Lessee.
                Such entry shall be deemed controlled by all of the terms,
                covenants, provisions and conditions of said Lease, except as to
                the covenant to pay Fixed Basic Rent and Additional Rent. Lessor
                shall not be liable in any way for any injury, loss or damage
                which may occur to any of Lessee's decorations or installations
                so made prior to the Effective Date, the same being solely at
                Lessee's risk.

14.     No part of the Expansion Premises shall be deemed unavailable for
        occupancy by the Lessee, or shall any work which the Lessor is obligated
        to perform in such part of the Expansion Premises be deemed incomplete
        for the purpose of any adjustment of Fixed Basic Rent payable hereunder,
        solely due to the non-completion of details of construction, decoration
        or mechanical adjustments which are minor in character and the
        non-completion of which does not materially interfere with the Lessee's
        use of such part of the Expansion Premises.

15.     Lessee is responsible for all costs related to the repairs and
        maintenance of any additional or supplemental HVAC systems, appliances
        and equipment installed to meet Lessee's specific requirements. Lessee
        shall purchase a service contract for this equipment so that the
        equipment is covered by such service contract each year of the term of
        the Lease and shall forward a copy of such contract to Lessor.

16.     If construction is to occur in a space occupied by Lessee's employees,
        Lessee shall be liable for all costs associated with a delay if Lessee
        shall fail to comply with a submitted construction schedule to relocate
        personnel, furniture, or equipment. These costs shall include, but not
        be limited to the following:

        a.      cost of construction workers time wasted; and

        b.      cost of any overtime work necessary to meet schedule deadlines;
                and

                               Exhibit B - Page 3


        c.      any other costs associated with delays in final completion.

17.     This workletter is based on the quantities and specifications listed
        herein. Any change to these specifications shall require the
        recalculation of the construction costs. Such recalculation shall not
        negate any other section of this Lease.

18.     All sums payable by Lessee to Lessor in connection with this Exhibit B
        and any other work to be performed by Lessor within the Expansion
        Premises and billable to Lessee shall be deemed Additional Rent.

19.     With respect to the construction work being conducted in or about the
        Expansion Premises, each party agrees to be bound by the approval and
        actions of their respective construction representatives. Unless changed
        by written notification, the parties hereby designate the following
        individuals as their respective construction representatives:

        FOR LESSOR:                           FOR LESSEE:

        ________________________________      Dave Mitchell
        c/o Mack-Cali Realty Corporation      The Medicines Company
        ________________________________      8 Campus Drive, Parsippany, NJ
        ________________________________      (973) 647-6069

                               Exhibit B - Page 4


                            SECOND AMENDMENT TO LEASE

1.      PARTIES

        1.1     THIS AGREEMENT made the 31st day of December, 2003 is between
                SYLVAN/CAMPUS REALTY L.L.C. ("Lessor") whose address is c/o
                Mack-Cali Realty Corporation, 11 Commerce Drive, Cranford, New
                Jersey 07016 and THE MEDICINES COMPANY ("Lessee"), whose address
                is 8 Campus Drive, Parsippany, New Jersey 07054.

2.      STATEMENT OF FACTS

        2.1     Lessor and Lessee previously entered into a Lease dated
                September 30, 2002, as amended by First Amendment to Lease dated
                June 30, 2003 (together, the "Lease") covering approximately
                20,229 gross rentable square feet on the second (2nd) floor in
                the building located at 8 Campus Drive, Parsippany, New Jersey
                ("Building"); and

        2.2     Lessee desires to expand the office space subject to the Lease
                by leasing approximately 12,437 gross rentable square feet on
                the first (1st) floor of the Building ("Expansion Premises"), as
                shown on Exhibit A attached hereto and made a part hereof; and

        2.3     The parties desire to amend certain terms of the Lease as set
                forth below.

3.      AGREEMENT

                NOW, THEREFORE, in consideration of the terms, covenants and
        conditions hereinafter set forth, Lessor and Lessee agree as follows:

        3.1     The above recitals are incorporated herein by reference.

        3.2     All capitalized and non-capitalized terms used in this Agreement
                which are not separately defined herein but are defined in the
                Lease shall have the meaning given to any such term in the
                Lease.

        3.3     The Term applicable to the Expansion Premises shall commence on
                the Effective Date (as defined below) and shall terminate at
                11:59 p.m. on January 31, 2013.

        3.4     The effective date applicable to the Expansion Premises shall be
                the earlier of (i) the day Lessor substantially completes the
                improvements to be made to the Expansion Premises in accordance
                with Exhibit B attached hereto and made part hereof and obtains
                a (temporary or final) certificate of occupancy for the
                Expansion Premises (if required by local law) or (ii) the date
                Lessee or anyone claiming under or through Lessee shall occupy
                the Expansion Premises (the "Effective Date").

        3.5     Lessor, at its sole cost and expense, shall perform the
                improvement work to the Expansion Premises in accordance with
                Exhibit B attached hereto and made part hereof.

        3.6     From and after the Effective Date, the following shall be
                effective:

                a.      Lessor shall lease to Lessee and Lessee shall hire from
                        Lessor the Expansion Premises as shown on Exhibit A
                        attached hereto and made part hereof.

                b.      The Premises shall be defined as approximately 32,666
                        gross rentable square feet consisting of 20,229 gross
                        rentable square feet on the second (2nd) floor and
                        12,437 gross rentable square feet on the first (1st)
                        floor of the Building and Paragraph 7 of the Preamble to
                        the Lease and Exhibit A shall be deemed amended
                        accordingly.

                c.      Lessee shall pay Lessor Fixed Basic Rent applicable to
                        the Expansion Premises which shall accrue as follows and
                        Paragraph 10 of the Preamble to the Lease shall be
                        deemed supplemented accordingly.

                        (i)     commencing on the Effective Date through and
                                including January 31, 2006, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED FORTY-TWO THOUSAND SEVENTEEN AND
                                52/100 DOLLARS ($342,017.52) per annum, payable
                                in advance on the first day of each and every
                                calendar month



                                in equal monthly installments of TWENTY-EIGHT
                                THOUSAND FIVE HUNDRED ONE AND 46/100 DOLLARS
                                ($28,501.46); and

                        (ii)    commencing on February 1, 2006 through and
                                including January 31, 2007, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED FORTY-EIGHT THOUSAND TWO HUNDRED
                                THIRTY-SIX AND 00/100 DOLLARS ($348,236.00) per
                                annum, payable in advance on the first day of
                                each and every calendar month in equal monthly
                                installments of TWENTY-NINE THOUSAND NINETEEN
                                AND 67/100 DOLLARS ($29,019.67); and

                        (iii)   commencing on February 1, 2007 through and
                                including January 31, 2008, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED FIFTY-FOUR THOUSAND FOUR HUNDRED
                                FIFTY-FOUR AND 50/100 DOLLARS ($354,454.50) per
                                annum, payable in advance on the first day of
                                each and every calendar month in equal monthly
                                installments of TWENTY-NINE THOUSAND FIVE
                                HUNDRED THIRTY-SEVEN AND 88/100 DOLLARS
                                ($29,537.88); and

                        (iv)    commencing on February 1, 2008 through and
                                including January 31, 2009, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED SIXTY THOUSAND SIX HUNDRED
                                SEVENTY-THREE AND 00/100 DOLLARS ($360,673.00)
                                per annum, payable in advance on the first day
                                of each and every calendar month in equal
                                monthly installments of THIRTY THOUSAND
                                FIFTY-SIX AND 08/100 DOLLARS ($30,056.08); and

                        (v)     commencing on February 1, 2009 through and
                                including January 31, 2010, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED SIXTY-SIX THOUSAND EIGHT HUNDRED
                                NINETY-ONE AND 50/100 DOLLARS ($366,891.50) per
                                annum, payable in advance on the first day of
                                each and every calendar month in equal monthly
                                installments of THIRTY THOUSAND FIVE HUNDRED
                                SEVENTY-FOUR AND 29/100 DOLLARS ($30,574.29);
                                and

                        (vi)    commencing on February 1, 2010 through and
                                including January 31, 2011, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED SEVENTY-THREE THOUSAND ONE HUNDRED
                                TEN AND 00/100 DOLLARS ($373,110.00) per annum,
                                payable in advance on the first day of each and
                                every calendar month in equal monthly
                                installments of THIRTY-ONE THOUSAND NINETY-TWO
                                AND 50/100 DOLLARS ($31,092.50); and

                        (vii)   commencing on February 1, 2011 through and
                                including January 31, 2012, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED SEVENTY-NINE THOUSAND THREE
                                HUNDRED TWENTY-EIGHT AND 50/100 DOLLARS
                                ($379,328.50) per annum, payable in advance on
                                the first day of each and every calendar month
                                in equal monthly installments of THIRTY-ONE
                                THOUSAND SIX HUNDRED TEN AND 71/100 DOLLARS
                                ($31,610.71); and

                        (viii)  commencing on February 1, 2012 through and
                                including January 31, 2013, the Fixed Basic Rent
                                applicable to the Expansion Premises shall be
                                THREE HUNDRED EIGHTY-FIVE THOUSAND FIVE HUNDRED
                                FORTY-SEVEN AND 00/100 DOLLARS ($385,547.00) per
                                annum, payable in advance on the first day of
                                each and every calendar month in equal monthly
                                installments of THIRTY-TWO THOUSAND ONE HUNDRED
                                TWENTY-EIGHT AND 92/100 DOLLARS ($32,128.92).

                        Notwithstanding the foregoing, Tenant shall be entitled
                        to a credit against Fixed Basic Rent in the amount of
                        $14,095.27 per month for the period commencing on the
                        Effective Date through and including the first twelve
                        (12) months.

                                        2


                d.      Parking Spaces shall be increased by forty-seven (47)
                        unassigned spaces, and Paragraph 14 of the Preamble to
                        the Lease shall be deemed amended accordingly.

                e.      Lessee shall pay Lessor the cost of electricity consumed
                        within the Expansion Premises in accordance with Article
                        22 BUILDING STANDARD OFFICE ELECTRICAL SERVICE of the
                        Lease.

                f.      Lessee shall pay Lessor, as Additional Rent, Lessee's
                        Percentage applicable to the Expansion Premises of the
                        increased cost to Lessor for each of the categories set
                        forth in Article 23 ADDITIONAL RENT.

                g.      Lessee's Percentage applicable to the Expansion Premises
                        shall be 5.78%.

                h.      Base Period Costs with respect to the Expansion Premises
                        (as defined herein) only shall be as follows and
                        Paragraph 2 of the Preamble to the Lease shall be
                        supplemented accordingly:

                        (A)     Base Operating Costs: Those costs incurred for
                        the Building and Office Building Area during the
                        Calendar Year 2004.

                        (B)     Base Real Estate Taxes: Those Real Estate Taxes
                        incurred for the Building and Office Building Area
                        during Calendar Year 2004.

                        (C)     Base Utility and Energy Costs: Those costs
                        incurred for the Building and Office Building Area
                        during Calendar Year 2004.

        3.7     Article 54 of the Lease shall be applicable to the Expansion
                Premises.

        3.8     This Agreement shall not extend or otherwise amend the Term or
                Fixed Basic Rent applicable to the Premises as defined herein.

        3.9     No later than thirty (30) days after the determination of the
                Effective Date, the parties shall agree to memorialize the
                Effective Date in writing.

        3.10    Lessee represents and warrants to Lessor that no broker, other
                than Trammel Crow Company, brought about this transaction, and
                Lessee agrees to indemnify and hold Lessor harmless from any and
                all claims of any other broker claiming to have been engaged by
                Lessee in connection with negotiations of, or entering into of,
                this Agreement.

        3.11    Lessee hereby represents to Lessor that (i) except for any
                default which may exist as a result of the filing of certain
                liens against the Building, there exists no default under the
                Lease either by Lessor or Lessee; (ii) Lessee is entitled to no
                credit, free rent or other offset or abatement of the rents due
                under the Lease; and (iii) there exists no offset, defense or
                counterclaim to Lessee's obligation under the Lease.

        3.12    Except as expressly amended herein, the Lease, as amended, shall
                remain in full force and effect as if the same had been set
                forth in full herein, and Lessor and Lessee hereby ratify and
                confirm all of the terms and conditions thereof.

        3.13    This agreement shall be binding upon and inure to the benefit of
                the parties hereto and their respective legal representatives,
                successors and permitted assigns.

        3.14    Each party agrees that it will not raise or assert as a defense
                to any obligation under the Lease or this Agreement or make any
                claim that the Lease or this Agreement is invalid or
                unenforceable due to any failure of this document to comply with
                ministerial requirements including, but not limited to,
                requirements for corporate seals, attestations, witnesses,
                notarizations, or other similar requirements, and each party
                hereby waives the right to assert any such defense or make any
                claim of invalidity or unenforceability due to any of the
                foregoing.

        IN WITNESS WHEREOF, Lessor and Lessee have hereunto set their hands and
seals the date and year first above written, and acknowledge one to the other
that they possess the requisite

                                        3


authority to enter into this transaction and to sign this Agreement.

LESSOR:                                          LESSEE:

SYLVAN/CAMPUS REALTY L.L.C.                      THE MEDICINES COMPANY

By:   Mack-Cali Realty, L.P., member

By:   Mack-Cali Realty Corporation, its general
      partner

By:   s/ Michael K. Nevins                       By:   s/ Steven H. Koehler
      ----------------------------                     -------------------------
      Michael K. Nevins                                Name: Steve H. Koehler
      Vice President - Leasing                         Title: CFO

                                        4


                                    EXHIBIT A

                              LOCATION OF PREMISES

                    [Schematic diagram of expansion premises]

                                        5


                                    EXHIBIT B

RE:     Workletter Agreement for office space on the first (1st) floor at 8
        Campus Drive, Parsippany, New Jersey.

                                                           December 31, 2003

LESSEE:

THE MEDICINES COMPANY

You ("Lessee") and we ("Lessor") are executing simultaneously with this
Workletter Agreement a written lease amendment ("Amendment"), covering the space
referred to above, as more particularly described in the Amendment ("Expansion
Premises").

To induce Lessee to enter into the Amendment (which is hereby incorporated by
reference) and in consideration of the covenants hereinafter contained, Lessor
and Lessee mutually agree as follows:

1.      Lessor shall have its architect prepare the following architectural and
        mechanical drawings and specifications based upon the sketch layout
        supplied to Lessor by Lessee, attached hereto and made a part hereof,
        upon full execution of this Amendment.

        a.      Architectural drawings and specifications for Lessee's partition
                layout, reflected ceiling, placement of electrical outlets and
                other installations for the work to be done by Lessor.

        b.      Mechanical plans and specifications where necessary for
                installation of air conditioning systems, ductwork and heating.

        All such plans and specifications are expressly subject to Lessor's
        written approval, which Lessor covenants it will not unreasonably
        withhold.

2.      Lessor agrees to cause the partition plan, electrical plan and the
        reflected ceiling plan to be delivered to Lessee on or before the
        fifteenth (15th) day after Lessee's approved sketch layout. Lessee
        agrees to approve said plans by initialing and returning same to Lessor
        within five (5) days of receipt of each plan. Upon approval of the plans
        initialed by Lessee, Lessor shall file said plans with the appropriate
        governmental agencies.

3.      Lessor agrees, at its expense and without charge to Lessee (unless
        otherwise provided), to do the work in the Expansion Premises as shown
        on the plans attached hereto and described on the "Description of
        Materials" schedule attached hereto; which shall hereinafter be referred
        to as "The Work". The Work shall include Lessor's general conditions and
        overhead amounts indicated on the Description of Materials. "Building
        Standard" shall mean the type and grade of material, equipment and/or
        device designated by Lessor as standard for the Building. All items are
        Building Standard unless otherwise noted. The provisions of Article 6 of
        the Lease shall apply to any alterations made to the Expansion Premises
        after the initial work to be performed therein.

4.      Lessor has estimated the cost of The Work based upon the plans,
        specifications and Description of Materials attached hereto. If the cost
        of The Work shall exceed $310,925.00, the amount in excess of
        $310,925.00 shall be deemed Additional Rent and paid by Lessee as
        follows: (i) fifty percent (50%) upon Lessee's execution and delivery of
        this Amendment and (ii) fifty percent (50%) upon Lessor's substantial
        completion of The Work and prior to Lessee's occupancy of the Expansion
        Premises. If the cost of The Work is less than $310,925.00, the amount
        by which the cost of The Work is less than $310.925.00 shall be credited
        in payment of the Fixed Basic Rent applicable to the Expansion Premises
        in the order in which such Fixed Basic Rent shall become due. All
        subcontracts which exceed $10,000.00 in cost will be competitively bid
        by at least three (3) subcontractors. Lessee's construction
        representative identified in Paragraph 19 of this Exhibit B shall be
        given notice of and the opportunity to participate in progress meetings
        with respect to The Work.

5.      All low partitioning, workstation modules and prefabricated partition
        systems shall be furnished and installed by Lessee.



6.      The installation or wiring of telephone and computer (data) outlets is
        not part of The Work. Lessee shall bear the responsibility to provide
        its own telephone and data systems at Lessee's sole cost and expense.
        Upon expiration or sooner termination of the Lease, Lessee shall remove
        all telephone and data equipment and wiring from the Expansion Premises
        and the Building risers upon vacation of same.

7.      Changes in The Work, if necessary or requested by the Lessee, shall be
        accomplished after submission of Lessee's final approved sketch layout,
        and without invalidating any part of the Lease or Workletter Agreement,
        by written agreement between Lessor and Lessee hereinafter referred to
        as a Change Order. Each Change Order shall be prepared by Lessor and
        signed by both Lessee and Lessor stating their agreement upon all of the
        following:

        a.      The scope of the change in The Work; and

        b.      The cost of the change; and

        c.      Manner in which the cost will be paid or credited; and

        d.      The estimated extent of any adjustment to the Effective Date (if
                any) as a result of the change in The Work.

                Each and every Change Order shall be signed by Lessor's and
                Lessee's respective construction representatives. In no event
                shall any Change Order(s) be permitted without such
                authorizations. A 10% supervision plus 10% overhead charge will
                be added to the cost of any Change Order. If Lessee shall fail
                to approve any such Change Order within one (1) week, the same
                shall be deemed disapproved in all respects by Lessee and Lessor
                shall not be authorized to proceed thereon. Any increase in the
                cost of The Work or the change in The Work stated in a Change
                Order which results from Lessee's failure to timely approve and
                return said Change Order shall be paid by the Lessee. Lessee
                agrees to pay to Lessor the cost of any Change Order promptly
                upon receipt of an invoice for same. Similarly, any cost savings
                resulting from such Change Order(s) shall be credited to the
                Lessee.

8.      If any change is made after completion of schematic drawings and prior
        to completion of final construction documents which result in a Change
        Order and additional costs, such costs shall be the responsibility of
        the Lessee.

9.      Prior to Lessee's occupancy of the Expansion Premises, Lessee shall
        identify and list any portion of The Work which does not conform to this
        Workletter Agreement ("Punch List"). The Lessor shall review with the
        Lessee all of the items so listed and correct or complete any portion of
        The Work which fails to conform to the requirements of this Workletter
        Agreement.

10.     The terms contained in the Amendment (which include all exhibits
        attached thereto) constitute Lessor's agreement with Lessee with respect
        to the work to be performed by Lessor on Lessee's behalf. If the
        architectural drawings are in conflict with the terms of the Amendment,
        then the Lease shall be deemed the controlling document.

11.     All materials and installations constructed for the Lessee within the
        Expansion Premises shall become the property of the Lessor upon
        installation. No refund, credit or removal of said items is to be
        permitted at the termination of the Lease. Items installed that are not
        integrated in any such way with other common building materials do not
        fall under this provision (e.g. shelving, furniture, etc.).

12.     It is agreed that notwithstanding the date provided in the Lease for the
        Effective Date, the term applicable to the Expansion Premises shall not
        commence until Lessor has "substantially completed" all work to be
        performed by Lessor as hereinbefore set forth in Paragraph 3 above and
        as set forth in the Amendment; provided, however, that if Lessor shall
        be delayed in substantially completing said work as a result of:

        a.      Lessee's failure to approve the plans and specifications in
                accordance with Paragraph 2 hereof; or



        b.      Lessee's failure to furnish interior finish specifications,
                i.e., paint colors, carpet selection, etc., to Lessor by the
                fifth (5th) working day after Lessor has approved the plans and
                specifications submitted by Lessee referred to in Paragraph 2
                hereof; or

        c.      Lessee's request for materials, finishes or installations other
                than Lessor's Building Standard; or

        d.      Lessee's changes in The Work; or

        e.      The performance of a person, firm, partnership or corporation
                employed by Lessee and the completion of the said work by said
                person, firm, partnership or corporation;

        then the Effective Date of the term of said Lease shall be accelerated
        by the number of days of such delay and Lessee's obligation to pay Fixed
        Basic Rent and Additional Rent shall commence as of such earlier date.
        As to matters described in clauses (a) - (e) above, Lessor shall advise
        Lessee of any delay that Lessor knows is reasonably likely to occur as a
        result of the matter described, within a reasonable time after Lessor
        becomes aware of such likelihood. If Lessee causes any delay in the
        Effective Date by reason of any act and/or omission of Lessor or its
        agents, then such delay by Lessee shall not result in an acceleration of
        the Effective Date as set forth above.

13.     Lessor shall permit Lessee and its agents to enter the Expansion
        Premises prior to the Commencement Date in order that Lessee may perform
        through its own non-union contractors (or union contractor if required
        by Lessor) such other work and decorations as Lessee may desire at the
        same time Lessor's contractors are working in the Expansion Premises.
        The foregoing license to enter prior to the Commencement Date, however,
        is conditioned upon:

        a.      Lessee's workmen and mechanics working in harmony and not
                interfering with the labor employed by Lessor, Lessor's
                mechanics or contractors or by any other Lessee or its mechanics
                or contractors; and

        b.      Lessee providing Lessor with evidence of Lessee's contractors
                and subcontractors carrying such worker's compensation, general
                liability, personal and property insurance as required by law
                and in amounts no less than the amounts set forth in Article 30
                of the Lease. If at any time such entry shall cause disharmony
                or interference therewith, this license may be withdrawn by
                Lessor upon forty-eight (48) hours written notice to Lessee.
                Such entry shall be deemed controlled by all of the terms,
                covenants, provisions and conditions of said Lease, except as to
                the covenant to pay Fixed Basic Rent and Additional Rent. Lessor
                shall not be liable in any way for any injury, loss or damage
                which may occur to any of Lessee's decorations or installations
                so made prior to the Effective Date, the same being solely at
                Lessee's risk.

14.     No part of the Expansion Premises shall be deemed unavailable for
        occupancy by the Lessee, nor shall any work which the Lessor is
        obligated to perform in such part of the Expansion Premises be deemed
        incomplete for the purpose of any adjustment of Fixed Basic Rent payable
        hereunder, solely due to the non-completion of details of construction,
        decoration or mechanical adjustments which are minor in character and
        the non-completion of which does not materially interfere with the
        Lessee's use of such part of the Expansion Premises.

15.     Lessee is responsible for all costs related to the repairs and
        maintenance of any additional or supplemental HVAC systems, appliances
        and equipment installed to meet Lessee's specific requirements. Lessee
        shall purchase a service contract for this equipment so that the
        equipment is covered by such service contract each year of the term of
        the Lease and shall forward a copy of such contract to Lessor.

16.     If construction is to occur in a space occupied by Lessee's employees,
        Lessee shall be liable for all costs associated with a delay if Lessee
        shall fail to comply with a submitted construction schedule to relocate
        personnel, furniture, or equipment. These costs shall include, but not
        be limited to the following:

        a.      cost of construction workers time wasted; and



        b.      cost of any overtime work necessary to meet schedule deadlines;
                and

        c.      any other costs associated with delays in final completion.

17.     This workletter is based on the quantities and specifications listed
        herein. Any change to these specifications shall require the
        recalculation of the construction costs. Such recalculation shall not
        negate any other section of this Lease.

18.     All sums payable by Lessee to Lessor in connection with this Exhibit B
        and any other work to be performed by Lessor within the Expansion
        Premises and billable to Lessee shall be deemed Additional Rent.

19.     With respect to the construction work being conducted in or about the
        Expansion Premises, each party agrees to be bound by the approval and
        actions of their respective construction representatives. Unless changed
        by written notification, the parties hereby designate the following
        individuals as their respective construction representatives:

        FOR LESSOR:                           FOR LESSEE:

        JIM CORRIGAN                          Dave Mitchell
        c/o Mack-Cali Realty Corporation      The Medicines Company
        6 CAMPUS DRIVE                        8 Campus Drive, Parsippany, NJ
        PASIPPANY, NJ                         (973) 647-6069

EX-10.17

                                                                   Exhibit 10.17

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.


                                   10 April, 2003


The Medicines Company
8 Campus Drive
Parsippany
New Jersey 07054
United States

Att: Clive Meanwell
Executive Chairman

RE:  OPTION AGREEMENT REGARDING CLEVIDIPINE ENTERED INTO BY AND BETWEEN
     ASTRAZENECA AB ("ASTRAZENECA") AND THE MEDICINES COMPANY, ON 5 MARCH 2002,
     WITH SUBSEQUENT AMENDMENTS DATED 31 JULY 2002 AND 20 NOVEMBER 2002, (THE
     "OPTION AGREEMENT")

Dear Mr. Meanwell,

(Each term used herein and defined in the Option Agreement shall have the
meaning so defined therein.)

We would hereby like to confirm our mutual decision for the License Agreement to
enter into effect. Hence, despite the fact that the Final Report has yet not
been received by AstraZeneca, and regardless of whether the Trigger has been met
or will be met, License Agreement Notice shall be deemed to have been given by
The Medicines Company. As a consequence hereof the License Agreement shall be
deemed to have entered into force. 28 March 2003 shall constitute the License
Agreement Effective Date.

AstraZeneca would appreciate payment of [**] U.S. Dollars (USD [**]) in
accordance with Article 6.1.1 of the License Agreement to be made by wire
transfer to the following account of AstraZeneca.

Bank name:     [**]
Account No.:   [**]
Swift:         [**]



If the above correctly reflects our agreement please sign both originals of this
Letter Agreement where indicated below and return one signed original to Dr.
Anders Waas at the following address: AstraZeneca R&D Molndal, Global Licensing,
SE-431 83 Molndal Sweden.


Yours sincerely,                             Agreed and accepted

ASTRAZENECA AB (publ)                        Date:

     [illegible]                             THE MEDICINES COMPANY
- ----------------------------                 /s/ Clive Meanwell
Name:                                        -----------------------------------
                                             Name: Clive Meanwell


cc:       Steven D. Singer
          Hale and Dorr
          60 State Street
          Boston, MA 02109
          United States



                                LICENSE AGREEMENT



                                TABLE OF CONTENTS

ARTICLE



                                                                                         Page
                                                                                         ----
                                                                                    
1.       Definitions                                                                       2
2.       Grant of License                                                                 11
3.       Development and Commercialisation                                                14
4.       Supply Matters                                                                   23
5.       Exchange of Information                                                          25
6.       Consideration                                                                    28
7.       Intellectual Property - Prosecution and Maintenance                              35
8.       Claims Regarding Infringement and Invalidity                                     37
9.       Trademark                                                                        42
10.      Indemnity                                                                        45
11.      Confidentiality                                                                  47
12.      Adverse Events                                                                   49
13.      Representation and Warranty                                                      50
14.      Term and Termination                                                             53
15.      Consequences of Termination                                                      55
16.      Force Majeure                                                                    58
17.      General Provisions                                                               59
              - Assignment                                                                59
              - Severance                                                                 60
              - Notices                                                                   60
              - Contact Information                                                       61
              - Agency, Partnership or Joint Venture Excluded                             62
              - Entire Agreement                                                          62
              - Agreement to Supersede earlier Agreements                                 62
              - Amendments                                                                62
              - Publicity and Announcements                                               62
              - Waiver                                                                    63
              - No Benefit to Third Parties                                               63
18.      Governing Law and Arbitration                                                    63


                                        i


                                LICENSE AGREEMENT

This Agreement is entered into on the License Agreement Effective Date


by and between

ASTRAZENECA AB, a company incorporated under the laws of Sweden with its
registered office at S-151 85 Sodertalje, Sweden ("ASTRAZENECA") and

THE MEDICINES COMPANY, a company incorporated under the laws of Delaware with
its registered office at One Cambridge Center, Cambridge, Massachusetts 02142,
United States ("TMC");


                                   WITNESSETH

WHEREAS, ASTRAZENECA performs research, development and marketing of
pharmaceutical compounds and products inter alia in the cardiovascular therapy
area; and

WHEREAS, ASTRAZENECA has developed the intravenous product Clevidipine for
indications such as the control of blood pressure; and

WHEREAS, TMC performs development of pharmaceutical compounds and marketing of
pharmaceutical products particularly in the cardiovascular therapy area; and

WHEREAS, ASTRAZENECA has expressed an interest to license Clevidipine to TMC and
TMC has expressed an interest to license said compound; and

WHEREAS, it is a mutual objective of the Parties to maximise the sales of the
Product.

NOW THEREFORE, the Parties hereto agree to the following.

1.       DEFINITIONS

When used in this Agreement the following expressions shall have the meanings
defined herein. The singular form of the defined expression shall include the
plural form thereof and vice versa.

                                       ii


1.1.     "Adverse Event" shall mean the development of an undesirable medical
condition or the deterioration of a pre-existing medical condition following or
during exposure to a pharmaceutical product whether or not considered causally
related to such product.

1.2.     "ANDA Act" shall have the meaning defined in Article 8.3.1(a).

1.3.     "Affiliate" with respect to a Person shall mean any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person. For the purposes of
this Article 1.3 only, "control" and, with correlative meanings, the terms
"controlled by" and "under common control with", shall mean (a) the possession,
directly or indirectly, of the power to direct the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, and/or (b) the ownership, directly or indirectly, of more than fifty
percent (50%) of the voting securities or other ownership interest of a Person.

1.4.     "Agreement" shall mean this document including any and all schedules,
appendices and other addenda to it as may be changed, added and/or amended from
time to time in accordance with the provisions of this Agreement.

1.5.     "ASTRAZENECA IP" shall mean the ASTRAZENECA Patent Rights, the
ASTRAZENECA Know-How and, subject to what is stated in Article 9.1, the
ASTRAZENECA Trademark.

1.6.     "ASTRAZENECA Indemnified Party" shall have the meaning defined in
Article 10.1.1.

1.7.     "ASTRAZENECA Know-How" shall mean any Know-How relating to the Compound
and/or the Product, developed, acquired or licensed by ASTRAZENECA prior to the
License Agreement Effective Date and in ASTRAZENECA's possession at the License
Agreement Effective Date.

1.8.     "ASTRAZENECA Patent Rights" shall mean the patents and patent
applications as set out in Schedule A and any Patent Rights claiming priority
thereto.

1.9.     "ASTRAZENECA Trademark" shall mean the trademark Clevelox(TM) which
ASTRAZENECA as of the License Agreement Effective Date has registered for the
Product in the countries set forth in Schedule B.

1.10.    "Combination Product" shall mean any pharmaceutical product in a
finished dosage form which comprises the Compound and at least one other active
pharmaceutical ingredient.

1.11.    "Commercially Reasonable Efforts" shall mean with respect to the
efforts to be expended by a Party with respect to any objective, the use of
reasonable, diligent, good faith efforts to accomplish such objective as such
Party would normally use to accomplish a similar objective under similar
circumstances, it being understood and agreed that with respect to the research,
development or commercialisation of Product, such efforts shall be substantially
equivalent to those efforts and resources commonly used by a Party for a product
owned by it or to which it has rights, which product is at a similar stage in
its development or product life and is of similar market potential taking into
account efficacy, safety, Regulatory Authority-approved labelling, the
competitiveness of alternative products in the marketplace, the patent and other
proprietary position of the Product, the likelihood of

                                        2


regulatory approval given the regulatory structure involved, the profitability
of the Product taking into account the royalties payable to licensors of patent
or other intellectual property rights, alternative products and other relevant
commercial factors. Commercially Reasonable Efforts shall be determined on a
country-by-country basis for the Product, and it is anticipated that the level
of effort will change over time (including, to the extent appropriate, the
reduction or cessation of active promotional efforts), reflecting changes in the
status of the Product and the market(s) involved

1.12.    "Compound" shall mean ASTRAZENECA's proprietary compound named
Clevidipine with the chemical structure as shown in Schedule C, attached hereto,
including all salts, esters, complexes, chelates, hydrates, isomers,
stereoisomers, crystalline and amorphous forms, prodrugs, solvates, metabolites
and metabolic precursors (whether active or inactive) thereof.

1.13.    "Confidential Information" shall mean (i) in the case of TMC being the
receiving Party, ASTRAZENECA IP, and (ii) in the case of ASTRAZENECA being the
receiving Party TMC IP, and (iii) in the case of either Party being the
receiving Party, data generated by either or both Parties hereunder and trade
secrets and/or confidential information relating to technology, including but
not limited to compound(s), composition(s), formulation(s) and/or manufacturing
information, and/or relating to the business affairs, including but not limited
to commercial forecasts, plans, programs, customers, assets, financial
projections, costs and customer lists and/or finances of the Disclosing Party,
supplied or otherwise made available to the Receiving Party or coming into
Receiving Party's possession in relation to the performance of this Agreement.

1.14.    "Disclosing Party" shall mean the Party which discloses Confidential
Information to the other Party.

1.15.    "Documents" shall mean reports, research notes, charts, graphs,
comments, computations, analyses, recordings, photographs, paper, notebooks,
books, files, ledgers, records, tapes, discs, diskettes, CD-ROM, computer
programs and documents thereof, computer information storage means, samples of
material, other graphic or written data and any other media on which Know-How
can be permanently or temporarily stored.

1.16.    "European Union" shall mean the countries that are, whether at the
License Agreement Effective Date or at any time thereafter, members of the
European Union.

1.17.    "European Economic Area" shall mean the European Union plus Norway,
Iceland and Liechtenstein.

1.18.    "FDA" shall mean the United States Food and Drug Administration or any
successor agency thereto.

1.19.    "FTE Day" shall mean the equivalent of one person employed by
ASTRAZENECA or TMC, as applicable, or their respective Affiliates full time for
one day.

1.20.    "Filing of an NDA" shall mean the date of acceptance for review by the
competent registration body in a given country of an NDA.

1.21.    "Force Majeure" shall mean any cause preventing either Party from
performing any or all of its obligations which arises from or is attributable to
acts, events, omissions or

                                        3


accidents beyond the reasonable control of the Party so prevented, act of God,
war, riot, civil commotion, malicious damage, accident, breakdown of plant or
machinery, fire, flood or storm.

1.22.    "Fresenius" shall mean Fresenius Kabi Nutrition AB, S-751 74 Uppsala,
Sweden.

1.23.    "Launch" or "Launched" shall mean the first invoiced commercial sale by
TMC, its Affiliates, sub-licensees or distributors, however not including sales
made by one such entity to another such entity, of the Product in a country
following NDA Approval in such country.

1.24.    "Know-How" shall mean technical and other information, which is not
subject to published patent rights and which is not in the public domain,
including, but not limited to, information comprising or relating to concepts,
discoveries, data, designs, formulae, ideas, inventions, methods, models,
assays, research plans, procedures, designs for experiments and tests and
results of experimentation and testing, including results of research or
development, processes, including manufacturing processes, specifications and
techniques, laboratory records, chemical, pharmacological, toxicological,
clinical, analytical and quality control data, trial data, case report forms,
data analyses, reports, manufacturing data or summaries and information
contained in submissions to and information from ethical committees and
regulatory authorities. Know-How includes Documents containing Know-How,
including but not limited to any rights including trade secrets, copyright,
database or design rights protecting such Know-How. The fact that an item is
known to the public shall not be taken to preclude the possibility that a
compilation including the item, and/or a development relating to the item, is
not known to the public.

1.25.    "License Agreement Effective Date" shall have the meaning defined in
the Option Agreement.

1.26.    "Major Market" shall mean each of [**] and [**]. Further [**] shall
constitute one Major Market.

1.27.    "NDA" shall mean a fully completed marketing license application
comparable to a New Drug Application filed with the FDA, including all
supporting documentation and data required for such application to be accepted
for review by the competent health regulatory authorities for any country
requesting approval for commercialisation of the Product for a particular
indication in such country. NDA as herein defined shall for this purpose include
applications for pricing or reimbursement approval where appropriate.

1.28.    "NDA Approval" shall mean the approval by the competent registration
body for a given country of an NDA.

1.29.    "Net Sales" shall mean the gross sales of Product by a Party or its
Affiliates, and, regarding sales in the United States, its sub-licensees or
distributors, to Third Parties after deduction of:

               a)  [**] and/or [**];

               b)  amounts [**] determined in good faith;

               c)  [**] such sales; and

                                        4


               d)  [**] the Product.

         In the event the Product is sold as part of a Combination Product, the
         Net Sales from the Combination Product, for the purposes of determining
         royalty payments, shall be determined by multiplying the Net Sales of
         the Combination Product (as defined in the standard Net Sales
         definition), during the applicable royalty reporting period, by the
         fraction, A/A+B, where A is the average sale price of the Product when
         sold separately in finished form and B is the average sale price of the
         other product(s) included in the Combination Product when sold
         separately in finished form, in each case during the applicable royalty
         reporting period or, if sales of both the Product and the other
         product(s) did not occur in such period, then in the most recent
         royalty reporting period in which sales of both occurred, as adjusted,
         as necessary, for inflation from the date when both the Product and all
         other product(s) last were sold and the date of determination of Net
         Sales under this Article 1.29. In the event that such average sale
         price cannot be determined for both the Product and all other
         products(s) included in the Combination Product, Net Sales for the
         purposes of determining royalty payments shall be calculated by
         multiplying the Net Sales of the Combination Product by the fraction of
         C/C+D where C is the fair market value of the Product and D is the fair
         market value of all other pharmaceutical product(s) included in the
         Combination Product. In such event, the selling Party shall in good
         faith make a determination of the respective fair market values of the
         Product and all other pharmaceutical products included in the
         Combination Product, and shall notify the other Party of such
         determination and provide the other Party with data to support such
         determination. The other Party shall have the right to review such
         determination and supporting data, and to notify the selling Party if
         it disagrees with such determination. If the other Party does not agree
         with such determination and if the Parties are unable to agree in good
         faith as to such respective fair market values, then such matter shall
         be referred to arbitration pursuant to Article 18.1.

         Net Sales shall exclude (i) the transfer of a commercially reasonable
         quantity of free samples of Product to be given out to customers for
         promotional purposes; (ii) the transfer of Product for use in clinical
         trials; and (iii) the sales or transfers of Product among a Party and
         its Affiliates, and, in the United States, its sub-licensees or
         distributors, unless the receiver is the consumer or user of the
         Product; however, the resale or transfer of such Product to a Third
         Party shall be included in Net Sales.

         Product sold or otherwise transferred (x) in other than an arms length
         transaction or for other property (e.g. barter); or (y) where no
         separate price has been decided for the Product but a price is decided
         jointly for the Product plus at least one other product, shall be
         deemed invoiced at its fair market price in the country of sale or
         transfer.

         It is acknowledged that sub-licensees of a Party or its Affiliates and
         conventional distributors whose function is to purchase and resell
         Product, will be considered Third Parties when referring to Product
         sold outside the United States. The Parties agree further that for the
         purpose of the first

                                        5


         paragraph of this Article 1.29 the Net Sales of the Product outside the
         United States by TMC or its Affiliates to such sub-licensees and
         distributors shall be the Net Sales received by TMC or its Affiliates
         from such sub-licensee or distributor for the Product or [**] percent
         ([**]%) of the actual gross sales, less deductions under subsections
         (a) through (d) above, of the Product by such sublicensee or
         distributor, whichever amount is the higher.

                                        6


1.30.    "Option Agreement" shall mean the Study and Exclusive Option Agreement
entered into by and between the Parties on 5 March 2002.

1.31.    "Party" or "Parties" shall mean TMC and/or ASTRAZENECA.

1.32.    "Patent Rights" shall mean patent applications and patents, utility
models, utility certificates, certificates of addition and all foreign
counterparts of them in all countries, including any divisional applications and
patents, refilings, renewals, continuations, continuations-in-part, patents of
addition, extensions (including patent term extensions), reissues,
substitutions, confirmations, registrations, revalidations, pipeline and
administrative protections and additions, and any equivalents of the foregoing
in any and all countries of or to any of them, as well as any supplementary
protection certificates and equivalent protection rights in respect of any of
them.

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

1.34.    "Procedure" shall have the meaning defined in Article 3.5.1.

1.35.    "Product" shall mean any pharmaceutical formulation or product for
intravenous application containing the Compound as the sole active ingredient in
a finished dosage form suitable for administration to patients. Apart from in
this Article 1.35, and unless the context clearly requires otherwise in this
Agreement, when mentioned in this Agreement Product shall be deemed to include
Combination Product.

1.36.    "Phase III Clinical Trial" shall mean a large scale, pivotal
multicentre, human clinical trial to be conducted in a number of patients
estimated to be sufficient to establish safety or efficacy in the particular
claim and indication and at a standard suitable to obtain NDA Approval.

1.37.    "Receiving Party" shall mean the Party which receives Confidential
Information from the other Party.

1.38.    "Results" shall have the meaning defined in Article 7.8.

1.39.    "Supply Agreement" shall have the meaning described in Article 4.3.1.

1.40.    "TMC IP" shall mean TMC Know-How and TMC Patent Rights.

1.41.    "TMC Indemnified Party" shall have the meaning defined in
Article 10.2.1.

1.42.    "TMC Know-How" shall mean any Know-How relating directly to the
Compound and/or the Product developed, acquired or licensed by TMC during the
term of this Agreement.

1.43.    "TMC Patent Rights" shall mean any Patent Rights directly relating to
the Compound and/or the Product developed, acquired or licensed by TMC during
the term of this Agreement.

                                        7


1.44.    "TMC Trademark" shall have the meaning defined in Article 9.1.

1.45.    "Territory" shall mean any country in the world except Japan.

1.46.    "Third Party" shall mean any Person not including the Parties or the
Parties' respective Affiliates.

2.       GRANT OF LICENSE

2.1.     LICENSE GRANT. ASTRAZENECA hereby grants to TMC an exclusive license in
the Territory under the ASTRAZENECA IP to perform research on, have research
performed on, develop, have developed, use, have used, make, have made, import,
have imported, market, have marketed, sell and have sold the Compound and the
Product for all indications. Notwithstanding the foregoing, TMC's license to the
ASTRAZENECA Trademark included in the license now granted shall be subject to
what is stated in Article 9.1.

2.2.     GRANT TO TMC'S AFFILIATES. TMC's Affiliates shall have the benefit and
burden of the licenses and rights set out in Article 2.1 for the same purposes
and under the same conditions as set forth herein, provided that TMC shall
remain fully responsible for the compliance by such Affiliates with the terms
and conditions of this Agreement as if such Affiliates were TMC hereunder.

2.3.     RIGHT TO SUBLICENSE. TMC shall have the right to grant sub-licenses to
the rights granted under Article 2.1, provided that TMC shall notify ASTRAZENECA
of each such sublicense without unreasonable delay following any such grant of
sub-license. TMC shall ensure that all of its sub-licensees will comply with all
terms and conditions of this Agreement and TMC shall remain fully responsible
for the compliance by such sub-licensees with the terms and conditions of this
Agreement as if such sub-licensees were TMC hereunder.

2.4.     RIGHT TO APPOINT DISTRIBUTORS. TMC shall also have the right to appoint
distributors in the Territory for the sale of the Product. TMC shall at all
times ensure that its distributors act fully in compliance with the terms and
conditions of this Agreement.

2.5.     DURATION OF LICENSE GRANT. The licenses set out in Article 2.1 shall
continue in accordance with what is stated therein on a country-by-country basis
until royalty payment is no longer due in the country concerned in accordance
with what is stated in Article 6.4, except for the license to the ASTRAZENECA
Trademark which shall be governed by what is stated in Article 6.5. The licenses
set out in Article 2.1 shall, subject again to what is stated in Article 6.5
regarding the license to the ASTRAZENECA Trademark, thereafter continue on a
non-exclusive basis and become fully paid up and royalty-free in the country
concerned.

2.6.     FIRST RIGHT OF REFUSAL OF TMC REGARDING JAPAN. Should ASTRAZENECA
within its sole discretion at any time determine that ASTRAZENECA will not
Launch the Product in Japan and/or that ASTRAZENECA will not license, transfer
or otherwise dispose of its interest in the ASTRAZENECA IP regarding Japan, then
ASTRAZENECA shall offer to TMC, by providing written notice, the first right to
negotiate a license on exclusive rights to commercially exploit the Compound and
the Product under the ASTRAZENECA IP in Japan on terms similar to those under
this Agreement. Should TMC wish to exercise such right, then TMC shall notify
ASTRAZENECA hereof in writing no later than ninety (90) days upon receipt of
ASTRAZENECA's notice. In reasonable connection with such notice the Parties

                                        8


shall enter into good faith negotiations using their reasonable endeavours to
reach a mutually acceptable agreement providing for such TMC's commercial
exploitation as mentioned in this Article 2.6.

2.7.     TMC GRANT OF RIGHTS TO ASTRAZENECA REGARDING JAPAN.

2.7.1.   In consideration of the rights granted by ASTRAZENECA hereunder, TMC
hereby grants to ASTRAZENECA, at no cost or remuneration, a sub-licensable
non-exclusive license under the TMC IP to perform research on, have research
performed on, develop, have developed, use, have used, make, have made, import,
have imported, market, have marketed, sell and have sold the Compound and the
Product for all indications in Japan.

2.7.2.   TMC shall for the purpose of the license granted in Article 2.7.1 make
available to ASTRAZENECA, upon ASTRAZENECA's request, any Filings of an NDA in
the Territory, any NDA Approvals obtained in the Territory and any related
documents and any TMC's correspondence with any regulatory authorities in the
Territory regarding any such Filing of an NDA, NDA Approval or related issues,
and shall allow ASTRAZENECA to make cross-references to any such Filing of an
NDA or NDA Approval in the Territory. For any services or assistance performed
by TMC pursuant to this Article 2.7.2, ASTRAZENECA shall reimburse TMC for TMC's
out-of-pocket costs for such activities plus [**]U.S. Dollars ($[**]) per FTE
Day.

2.7.3.   Should TMC have selected the TMC Trademark in the Territory, then the
license under Article 2.7.1 shall include an exclusive right and license for
ASTRAZENECA to utilize the TMC Trademark in Japan. Should ASTRAZENECA use the
TMC Trademark in connection with the sales and marketing of Product in Japan,
then ASTRAZENECA shall pay to TMC a running royalty of [**]percent ([**]%) on
the annual Net Sales of the Product in Japan.

2.8.     SECTION 365(n) OF TITLE 11. All rights and licenses granted under or
pursuant to any section of this Agreement, including amendments hereto, are, for
all purposes of Section 365(n) of Title 11 of the United States Bankruptcy Code
("Title 11"), licenses of rights to "intellectual property" as defined in Title
11. The Parties shall retain and may fully exercise all of their respective
rights under this Agreement pursuant to Title 11. Rejection of this Agreement
pursuant to Section 365 of Title 11 constitutes a material breach of this
Agreement and entitles the aggrieved Party to terminate this Agreement for
material breach upon written notice. Upon bankruptcy of either Party, the
non-bankrupt Party shall further be entitled to a complete duplicate of (or
complete access to, as appropriate) any such intellectual property, and such, if
not already in its possession, shall be promptly delivered to the non-bankrupt
Party, unless the bankrupt Party elects to continue, and continues, to perform
all of its obligations under this Agreement.

3.       DEVELOPMENT AND COMMERCIALIZATION

3.1.     TRANSFER OF ASTRAZENECA KNOW-HOW. Without unreasonable delay following
the License Agreement Effective Date, ASTRAZENECA shall make available and
transfer to TMC the following ASTRAZENECA Know-How.

                    a)   a description of the process used by ASTRAZENECA for
               the manufacturing of the Compound intended for Phase III

                                        9


               Clinical Trials and a summary report of the development of such
               process;

                    b)   a description of the process, available to AstraZeneca
               at the License Agreement Effective Date, for the manufacture of
               the [**] to be used for the manufacturing of the Compound;

                    c)   a description of the analytical methods and validation
               reports for the starting materials and intermediates to be used
               in the manufacturing of the Compound.

               It is acknowledged that at the License Agreement Effective Date
               some of those analytical methods are not fully developed and
               validated, and such development and validation will not be
               continued or completed by ASTRAZENECA. ASTRAZENECA will, however,
               provide a summary report of the status of these methods at the
               License Agreement Effective Date;

                    d)   the description of the tentative test-methods used by
               ASTRAZENECA for validating the bulk Compound manufactured, and a
               brief summary of the validation done thereon by ASTRAZENECA;

                    e)   to the extent available to ASTRAZENECA at the License
               Agreement Effective Date, reference and analytical standard
               compounds to be used as reference material in the conduct of
               comparative analyses in relation to the manufacturing process
               with the Compound. It is explicitly understood that no such
               compound may be used for any other purpose than the purpose now
               stated;

                    f)   a description of all ASTRAZENECA Know-How relating to
               clinical trials conducted by ASTRAZENECA using the Product prior
               to the License Agreement Effective Date.

                    g)   reports, the names of which are set forth in Schedule
               D, containing ASTRAZENECA Know-How relating to the manufacturing
               of the Compound.

Any documents contemplated by this Article 3.1 shall be in English when
transferred to TMC.

3.2.     THIRD PARTY MANUFACTURERS.

3.2.1.   It is acknowledged that TMC may present the ASTRAZENECA Know-How
described under Article 3.1 to Third Party manufacturers for the purposes
permitted under Article 11.2.4. TMC shall notify ASTRAZENECA in writing
regarding the date of submission of such information to any such Third Party
manufacturer(s). ASTRAZENECA shall in this connection assist TMC to address
questions raised about such ASTRAZENECA Know-How by no more than three (3) of
such Third Party manufacturer(s) selected by TMC, during a period of three (3)
months from the date of presentation of such ASTRAZENECA Know-How to the Third
Party manufacturer concerned. ASTRAZENECA shall also provide TMC with advice on
the technical merits of proposals regarding manufacturing of the

                                       10


Compound brought forward by such Third Party manufacturer(s). Any assistance
provided under this Article 3.2.1 may be given by telephone or e-mail or by
other appropriate means as agreed by the Parties.

3.2.2.   ASTRAZENECA undertakes to participate in no more than one (1) meeting
in person with one Third Party manufacturer, selected by TMC, to outline details
of the manufacturing synthesis regarding the Compound, provided that such
meeting shall take place at ASTRAZENECA's manufacturing site in Sodertalje,
Sweden.

3.2.3.   ASTRAZENECA further undertakes, should TMC not have exercised its right
under Article 2.9 of the Option Agreement, upon having received written notice
from TMC, for a period of three (3) months starting sixty (60) days upon
ASTRAZENECA's receipt of such notice, to assist TMC, by telephone, e-mail or
other appropriate means as agreed by the Parties, in TMC's discussions with
Fresenius in connection with Fresenius' restart of the formulation program
regarding the Product. The Parties agree, however, that TMC may not give such
notice contemplated above in this Article 3.2.3 later than eight (8) months of
the License Agreement Effective Date.

3.2.4.   ASTRAZENECA agrees to provide reasonable assistance to the Third Party
manufacturer selected by TMC, by telephone, e-mail or other appropriate means as
agreed by the Parties, in connection with the start-up of manufacturing
operations for the Product for a period of twelve (12) months following
commencement of process development by such contract manufacturer or fifteen
(15) months of the License Agreement Effective Date, whichever is the earliest
to occur.

3.3.     DURATION OF AND COMPENSATION FOR ASSISTANCE BY ASTRAZENECA.

3.3.1.   The Parties agree that any assistance to be provided by ASTRAZENECA
under Articles 3.1, 3.2 and 3.5.1 shall be given to an extent necessary and
reasonable and shall be given only within the first four (4) years of the
License Agreement Effective Date and shall not in total exceed [**]. It is
acknowledged that ASTRAZENECA may at its discretion carry out any such
assistance for up to [**] percent ([**]%) of such [**] by using Third Party
consultants.

3.3.2.   For any services or assistance performed by ASTRAZENECA pursuant to
Article 3.3.1, TMC shall reimburse ASTRAZENECA for ASTRAZENECA's out-of-pocket
costs for such activities plus [**]U.S. Dollars ($[**]) [**]. Should ASTRAZENECA
use a Third Party consultant(s) for carrying out assistance for a certain FTE
Day, or part thereof, then, for the avoidance of doubt, the FTE Day rate now
stated shall apply thereon, and the out-of-pocket costs for consultants, if any,
as indicated above in this paragraph, shall apply only to costs for consultants
which would typically have been incurred should the assistance have been
actually carried out by an employee(s) of ASTRAZENECA or its Affiliates.

3.3.3.   ASTRAZENECA shall invoice TMC for all assistance during each relevant
time period within thirty (30) days of the expiration of each calendar
half-year.

3.4.     DEVELOPMENT OF PRODUCT.

3.4.1.   TMC shall, subject to the obligations stated in this Article 3 and in
Article 5, carry out the development work permitted hereunder within its sole
discretion and at its own cost and expense.

                                       11


3.4.2.   TMC shall use Commercially Reasonable Efforts to develop Product up
until the stage of Filing of an NDA in each country of the Territory.

3.5.     REGULATORY FILINGS.

3.5.1.   TMC shall be responsible for the preparation, submission and
prosecution of all Filings of an NDA in each country in which TMC, its
Affiliates, sub-licensees or distributors will sell Product. TMC, its
Affiliates, sub-licensees or distributors shall be the owner and party of record
for all such filings, applications and approvals. ASTRAZENECA agrees to provide
assistance requested by TMC as reasonably necessary for preparation and
prosecution of such filings and applications in the European Union (it being
contemplated that such filings and applications will be done by using the then
most efficient centralised procedure for applying for and obtaining
multi-country NDAs in the European Union (the "Procedure")), and in the United
States. TMC shall reimburse ASTRAZENECA for any costs and expenses incurred in
such assistance. TMC shall be responsible for any costs associated with
preparation, submission and prosecution of all such Filing of an NDA and NDA
Approvals required.

3.5.2.   TMC shall, at its own expense, use Commercially Reasonable Efforts in
Filing of an NDA and prosecution thereof and in obtaining NDA Approvals in its
own name or in the name of its Affiliate(s) in each Major Market and other
country of the Territory.

3.5.3.   Regarding any country in the European Union where TMC makes a Filing
of an NDA, TMC shall for such purpose use the Procedure, unless TMC can clearly
establish that Filing of an NDA regarding one or more separate countries within
the European Union would be more advantageous to the Product from a regulatory
or commercial perspective.

3.5.4.   TMC shall promptly inform ASTRAZENECA in writing of any Filing of an
NDA and of any NDA Approval, and shall in immediate connection therewith provide
ASTRAZENECA with a written summary of any such Filing of an NDA and NDA
Approval, or with a copy thereof, whichever ASTRAZENECA may elect.

3.5.5.   Following NDA Approval in a certain Major Market or other country of
the Territory TMC shall use its Commercially Reasonable Efforts to Launch the
Product in such Major Market or other country

3.6.     MARKETING AND SALES OF PRODUCT.

3.6.1.   Regarding any country of the Territory where the Product is Launched,
TMC shall promptly inform ASTRAZENECA writing of the occurrence of such Launch.

3.6.2.   TMC shall, in each Major Market or other country of the Territory where
the Product has been Launched, at its own expense, or the expense of its
Affiliates, sub-licensees or distributors, use Commercially Reasonable Efforts
to market and sell the Product.

3.6.3.   For the avoidance of doubt, what is stated regarding the obligations of
TMC in this Article 3 or elsewhere in this Agreement shall always be subject to
what is stated in Articles 2.2 and 2.3, such that any of TMC's obligations may
be performed by one or more of TMC's Affiliates or sublicensees. Further, in
accordance with what is stated in Article 2.4, any of TMC's obligations under
this Article 3.6 and under Article 3.7 may be performed by one or more of TMC's
distributors.

                                       12


3.7.     SPECIFIC TIME LIMITS FOR PERFORMANCE. Notwithstanding what is stated in
Articles 3.4.2, 3.5.2, 3.5.5 and 3.6.2, and without limiting the general
performance criteria stated therein, the following performance criteria stated
in this Article 3.7 shall apply to the situations herein described.

3.7.1.   Time Limit for entering into Phase III Clinical Trials. TMC shall no
later than [**] have made the first dosing of a patient in a Phase III Clinical
Trial regarding the Compound.

3.7.2.   Time Limit for Filing of an NDA.

                    (a) TMC shall no later than [**] have made a Filing of an
                    NDA in the United States.

                    (b) TMC shall no later than [**] or [**] after having made a
                    Filing of an NDA in the United States, whichever is the
                    earlier, have made a Filing of an NDA in at least three (3)
                    additional Major Markets, provided, however, that if such
                    Filing of an NDA has been made in the European Union then
                    such one (1) Major Market shall be sufficient.

                    (c) TMC shall no later than [**] or [**] after having made
                    the last Filing of an NDA under Article 3.7.2(b), whichever
                    is the earlier, have made a Filing of an NDA in all Major
                    Markets.

3.7.3.   TIME LIMIT FOR LAUNCH OF THE PRODUCT

TMC shall no later than [**] following NDA Approval in any Major Market Launch
the Product in the country(ies) concerned.

3.8.   REMEDY FOR FAILURE.

3.8.1. NON-COMPLIANCE.

Should TMC at any time not comply with the applicable criteria of performance as
set forth in Articles 3.4.2, 3.5.2, 3.5.5, 3.6.2, 3.7.1, 3.7.2 or 3.7.3, then
TMC shall promptly so notify ASTRAZENECA in writing.

              (i)   In case of non-compliance with the performance criteria set
                    forth in Articles 3.4.2 or 3.7.1 ASTRAZENECA shall have the
                    right, by giving ninety (90) days written notice to TMC, to
                    require the license granted hereunder to terminate regarding
                    the Compound and the Product, subject to Article 3.8.3.

              (ii)  In case of non-compliance with the performance criteria set
                    forth in Articles 3.5.2, 3.5.5, 3.6.2, 3.7.2 (a) or 3.7.3,
                    ASTRAZENECA shall have the right, by giving ninety (90) days
                    written notice to TMC, to require the license granted
                    hereunder to terminate regarding the Compound and the
                    Product in the Major Market or other country concerned,
                    subject to Article 3.8.3.

              (iii) In case of non-compliance with the performance criteria set
                    forth in Article or 3.7.2 (b) or (c), ASTRAZENECA shall have
                    the right, by giving ninety (90) days written notice to TMC,
                    to require the license

                                       13

                    granted hereunder to terminate regarding the Compound and
                    the Product in any Major Market(s) other than the Major
                    Market(s) regarding which the performance criteria concerned
                    was fulfilled (and, in the case of non-compliance with
                    Article 3.7.2 (c), the Major Market(s) regarding which such
                    criteria had been fulfilled under Article 3.7.2 (b)),
                    subject to Article 3.8.3.

              (iv)  If ASTRAZENECA makes a request under (i), (ii) or (iii)
                    above, and provided that TMC has not remedied the default
                    concerned within the ninety-days period stated, then,
                    provided that ASTRAZENECA notifies TMC in writing hereof
                    within thirty (30) days upon the expiration of such
                    ninety-days period, the license regarding the Major Market
                    or other country contemplated by such notice for the
                    Compound and the Product shall terminate and what is stated
                    in Article 15.1 shall apply regarding such Major Market or
                    other country subject to Article 3.8.3.

3.8.2.   NON-COMPLIANCE REGARDING THE EUROPEAN UNION

Should TMC have failed to comply with any such criteria of performance referred
to under Article 3.8.1, and should such non-compliance relate to the European
Union, then TMC shall anyway be considered to have fulfilled such performance
criteria provided always that the countries within the European Union to which
such non-compliance relate are less than five (5). Notwithstanding what is
stated in Article 1.16, European Union for the purpose of this Article 3.8.2
shall constitute only those countries being members of European Union at the
License Agreement Effective Date.

3.8.3.   REASONABLE DELAY OR OTHER NON-COMPLIANCE.

         a)    Should TMC upon receipt of notice from ASTRAZENECA according to
Article 3.8.1 (i) through (iii) be able to show that the delay or other
non-compliance in the country(ies) concerned is justifiable from a clinical,
scientific or regulatory perspective, then the Parties shall meet and consult
whether the situation so occurred could be reasonably solved. Should the
Parties, despite such consultations, not be able to find a mutually acceptable
solution within three (3) months upon having entered into such consultations,
then ASTRAZENECA may terminate the license regarding the country(ies) concerned
by giving TMC a notice of same in writing, whereupon the license regarding such
country(ies) shall immediately terminate and what is stated in Article 15.1
shall apply regarding such country(ies).

         b)    Should, following the initiation of the consultations pursuant to
the first paragraph of this Article 3.8.3, either Party reasonably believe that
a solution to the situation arisen may be solved through such consultations, but
not within the initial three-month timeframe, then such Party may notify the
other Party hereof; and the three-months period provided for in Article 3.8.3 a)
shall be extended with a time-period as requested by such Party in such notice
but with no more than three (3) months from the date of the notice.

3.9.     The remedies stated in Article 3.8 shall be ASTRAZENECA's sole remedy
in case of any failure by TMC to comply with what is stated in this Article 3.

                                       14


4.       SUPPLY MATTERS

4.1.     TRANSFER OF BULK COMPOUND TO TMC. ASTRAZENECA undertakes to supply to
TMC [**] approximately ten (10) kilograms of bulk Compound no later than ninety
(90) days after the License Agreement Effective Date. The transport of such
entire quantity of bulk Compound shall be entirely at TMC's risk and expense. It
is explicitly understood that this quantity of Compound was manufactured by
ASTRAZENECA at an earlier date, and was not made for the purpose of the supply
now stated, and that ASTRAZENECA gives no guarantee whatsoever as to the
characteristics of the Compound or the Compound's fitness for any particular
purpose.

4.2.     ASSIGNMENT OF AGREEMENT WITH FRESENIUS. Unless such Contract has been
assigned or terminated in accordance with what is stated in Article 2.8 of the
Option Agreement, Astra Hassle AB, subsequently merged into ASTRAZENECA, and
Fresenius are at the License Agreement Effective Date parties to a Development
and Commercial Supply Contract of 28 December 1995 providing for the supply by
Fresenius to ASTRAZENECA of Product. Should Fresenius agree with TMC on the
supply of Product to TMC and with ASTRAZENECA to release ASTRAZENECA from any
obligation under said Contract, then ASTRAZENECA will, provided always that the
release or termination of such Contract or TMC's entering into any such
arrangement will not incur any expenses or liability on ASTRAZENECA, agree to
assign its rights under the Contract to TMC, or to terminate the Contract with
Fresenius, whichever TMC desires and notifies ASTRAZENECA in writing of.

It is explicitly understood and agreed by the Parties that ASTRAZENECA shall
have no obligations whatsoever to transfer or supply, other than as explicitly
provided under Article 4.1, any quantity of Compound or Product to TMC.

 4.3.    SUPPLY OF COMPOUND AND PRODUCT BY TMC.

4.3.1.   TMC undertakes to supply ASTRAZENECA's Affiliate in Japan, AstraZeneca
KK, at TMC's [**], AstraZeneca KK's entire need of Product for clinical trials,
sale, promotion and marketing in Japan, pursuant to the Supply Agreement between
TMC and AstraZeneca KK, attached hereto, subject to what is stated in Article
4.3.3, as a Schedule E.

4.3.2.   TMC further undertakes to supply ASTRAZENECA, subject to Article 15.1
(i), at TMC's [**] and otherwise under terms to be as consistent as possible
with those under the Supply Agreement, ASTRAZENECA's entire need of Product for
clinical trials, sale, promotion and marketing in any country where the license
granted under Article 2 has been terminated pursuant to Article 3.8; provided
always that such TMC's obligation shall not become effective unless and until
TMC has Launched the Product in at least with one (1) country of the Territory.

4.3.3.   The Supply Agreement may not have been entered into on the License
Agreement Effective Date due to the Parties' desire to expeditiously enter into
the Option Agreement, not delaying such procedure by awaiting the completion of
the Supply Agreement. The parties acknowledge the substantial need for
ASTRAZENECA to rely on TMC for its supply of the Product for the countries
mentioned in Articles 4.3.1 and 4.3.2 and that entering into the Supply
Agreement is a substantial prerequisite to ASTRAZENECA for entering into the
Option Agreement. Should regardless hereof the Supply Agreement not have been
concluded within six (6) months of the License Agreement Effective Date for
other reasons than ASTRAZENECA's lack of good faith in conducting such
negotiations or unnecessary delays

                                       15


caused by ASTRAZENECA, then ASTRAZENECA shall have the right to terminate this
Agreement forthwith by giving written notice to TMC.

Should ASTRAZENECA have failed, however, to provide to TMC in accordance with
what is stated in Article 2.10 of the Option Agreement a first draft of the
Supply Agreement, then, notwithstanding what is stated in the first paragraph of
this Article 4.3.3, ASTRAZENECA shall not have the right to terminate this
License Agreement.

5.       EXCHANGE OF INFORMATION

5.1.     OBLIGATION OF TMC TO SHARE INFORMATION. In addition to the obligations
specifically requiring TMC to inform ASTRAZENECA regarding particular events,
TMC undertakes to keep ASTRAZENECA informed about the progress of the
development work regarding the Compound hereunder. For this purpose:

5.1.1.   the Parties will, up until the date when Filing of an NDA has been made
in the last Major Market, meet at least once a year to review TMC's progress and
efforts in the development work contemplated herein. Such meeting will take
place on a location to be agreed by the Parties, or, should the Parties not be
able to agree, alternately with each Party at a site to be determined by the
Party hosting the meeting. In advance of such meeting, TMC will provide
ASTRAZENECA a reasonable written summary of such development work, including,
without limitation, summaries of protocol designs of any clinical trials
conducted or to be conducted, any changes to same and any Results developed
during the period concerned;

5.1.2.   TMC shall further in advance of such meeting provide ASTRAZENECA in
writing a timetable for the expected Filings of an NDA, expected NDA Approvals
and expected Launches during the one-year period, or other shorter applicable
period, to come. In connection therewith TMC shall provide to ASTRAZENECA in
writing, for the same period of time, a non-binding marketing plan and sales
forecast for the Product in any Major Market where the Product by that time has
been Launched or is expected to be Launched during the applicable period
immediately to come;

5.1.3.   TMC shall notify ASTRAZENECA forthwith and provide particulars of any
halt or substantial delay in any development program or clinical trial, any
obstacles in the Product reaching the market and any substantial changes
anticipated in the sales potential of the Product;

5.1.4.   TMC shall notify ASTRAZENECA forthwith regarding, and provide copies
of, any correspondence with the regulatory authorities in the Territory that
could reasonably be of any significance regarding the possibility, time frame or
scope of any Filing of an NDA or any NDA Approval by ASTRAZENECA in Japan or
which may otherwise relate to such Filing of an NDA or NDA Approval.

5.2.     OBLIGATION OF ASTRAZENECA TO SHARE INFORMATION. ASTRAZENECA shall keep
TMC informed about the progress of the clinical trials, sale, promotion and
marketing of Product in any country in which ASTRAZENECA has rights to sell
Product. For this purpose:

5.2.1.   ASTRAZENECA shall at least once each year provide TMC in writing a
timetable for the expected Filings of an NDA, expected NDA Approvals and
expected Launches during the one-year period to come.

                                       16


5.2.2.   ASTRAZENECA shall notify TMC forthwith regarding, and provide copies
of, any correspondence with the regulatory authorities in any Major Market that
could reasonably be of any significance regarding the possibility, time frame or
scope of any Filing of an NDA or any NDA Approval by TMC in any country for
which TMC has yet to file an NDA or receive NDA Approval.

6.       CONSIDERATION

In consideration of the rights granted hereunder TMC shall pay to ASTRAZENECA
the remuneration stated in this Article 6.

6.1.     MILESTONE PAYMENTS.

6.1.1.   Within thirty (30) days of the License Agreement Effective Date TMC
shall pay to ASTRAZENECA the amount of One Million U.S. Dollars (U.S.
$1,000,000).

6.1.2.   Within thirty (30) days of the date of TMC's Filing of an NDA in the
first Major Market, TMC shall pay to ASTRAZENECA the amount of [**] U.S. Dollars
(U.S. $[**]).

6.1.3.   Within thirty (30) days of TMC's receipt of NDA Approval in the first
Major Market TMC shall pay to ASTRAZENECA the amount of [**] U.S. Dollars (U.S.
$[**]).

6.1.4.   Within thirty (30) days of the TMC's receipt of NDA Approval in the
second Major Market, TMC shall pay to ASTRAZENECA the amount of [**] U.S.
Dollars (U.S. $[**]).

6.1.5.   Within thirty (30) days of the TMC's receipt of NDA Approval in the
third Major Market, TMC shall pay to ASTRAZENECA a final milestone payment in
the amount of [**] U.S. Dollars (U.S. $[**]).

6.2.     ROYALTY RATE.

6.2.1.   Following Launch of the Product, on a country-by-country basis for the
period set out in Article 6.4 TMC shall pay to ASTRAZENECA, subject to what is
stated in Article 6.2.2, a running royalty on the annual Net Sales of the
Product as follows:



                        Annual Net Sales                     Royalty Rate
                                                   
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]
               [**]                                   [**]


         The relevant royalty rate so stated shall apply to the amount of annual
         Net Sales within the applicable layer only.

                                       17


         For convenience of example only and without limiting the above, the
         royalty rate of [**]% shall apply to the amount of annual Net Sales
         under $[**]and should the annual Net Sales exceed $[**]then the royalty
         rate of [**]% shall apply only to the amount of annual Net Sales
         exceeding $[**] (and up to $[**]).

6.2.2.   Notwithstanding the royalty rates set forth in Article 6.2.1, on the
Net Sales of the Product during the time period starting on the License
Agreement Effective Date and ending on December 31, 2007, the running royalty
rate shall be reduced to [**] percent ([**]%) of the rate otherwise stated in
Article 6.2.1.

6.2.3.   For the purpose of Article 6.2.1 the term "annual" shall refer to
calendar years, provided, however, that for the purpose of determining what
royalty rates to apply during the first or last calendar year of the royalty
payment period pursuant to Article 6.4, which parts may not constitute a full
calendar year, the following shall apply.

               a) The applicable royalty rate under each of items (a) through
               (i) of Article 6.1.1, subject to what is stated in Article 6.2.2,
               shall apply to the Net Sales exceeding the amount "A" in the
               following formula.

                                   NM
                    TA x ---- = A
                                   12

               where "NM" is the "number of full months" of sales attracting
               royalty hereunder, regardless of the number of countries in which
               sales are being made, during the calendar year concerned; and
               where "TA" is the applicable "threshold amount" under the
               respective items (a) through (i) of Article 6.2.1.

               b) For convenience of example only and without limiting the above
               standing, the following calculation shows the application of the
               provision stated.

               If Launch occurs in the first country three months before the end
               of the calendar year, the formula will read, regarding the
               royalty rate of [**]% under 6.2.1(a): $[**] x 3/12 = $[**]. The
               royalty rate of [**]% under 6.2.1(b) will then become applicable
               on any Net Sales exceeding $[**] (and up to $[**]) and a royalty
               rate of [**]% will be applicable on any Net Sales up to and
               including $[**]. Notwithstanding the foregoing, as this example
               is with respect to sales in the first country in which Launch
               occurs, the above stated royalty rates may be reduced by [**]
               percent ([**]%) pursuant to Article 6.2.2.

6.3.     MINIMUM ROYALTY. Notwithstanding what is stated in Article 6.2, during
the second through fourth full calendar years following Launch in the first
Major Market the aggregate annual royalty amount due by TMC to ASTRAZENECA for
sales of the Product shall, regardless of the actual Net Sales amount accrued
during such calendar year, not go below the following amounts during the years
specified.

6.3.1.   Second full calendar year following Launch: [**] U.S. Dollars ($[**]);

                                       18


6.3.2.   Third full calendar year following Launch: [**] U.S. Dollars ($[**])

6.3.3.   Fourth full calendar year following Launch: [**]U.S. Dollars ($[**])

6.3.4.   Should the Net Sales by TMC for any calendar year not generate the
relevant royalty amount indicated under this Article 6.3, then TMC shall pay the
difference between the minimum royalty amount stated and the amount actually
generated within thirty (30) days after the date when the royalty payment for
the last full quarter of the calendar year concerned is due according to Article
6.6.1.

6.4.     DURATION OF ROYALTY PAYMENTS. Royalties under Article 6.2 shall be
payable on a country by country basis for the longer of :

               a) the life of ASTRAZENECA Patent Rights which are necessary to
               continue to manufacture, use or sell the Product in such country;
               or

               b) a period of [**] years from Launch in that country
               (provided always that in the case of a country within the
               European Economic Area such [**] years period shall run from
               the date of Launch anywhere in the European Economic Area);

6.5.     ASTRAZENECA TRADEMARK ROYALTY. Unless the license to the ASTRAZENECA
Trademark has been reverted pursuant to Article 9.1, TMC shall, following
expiration of the period indicated under Article 6.4 on a country-by-country
basis, and for as long as TMC sells the Product in any country in the Territory,
in consideration of the exclusive license in the Territory to use the
ASTRAZENECA Trademark in connection with the sales and marketing of the Product
pay to ASTRAZENECA an annual running royalty on the Net Sales of the Product of
[**] percent ([**]%).

6.6.     REPORTS.

6.6.1.   TMC shall deliver to ASTRAZENECA within sixty (60) days after the end
of each calendar quarter ending March 31, June 30, September 30 and December 31,
a written report showing its computation of the remuneration due to ASTRAZENECA
under this Agreement during such calendar quarter including (i) the quantity of
the Product sold by or on behalf of TMC during such calendar quarter; and (ii)
the total remuneration due in respect thereof and at the same time make the
payment of the remuneration due. Any payment to be made hereunder shall be made
in U.S. Dollars. Each such report mentioned in this Article 6.6.1 shall include
the rates of exchange used for conversion to U.S. Dollars from the currency in
which such sales were made.

6.6.2.   In the event that ASTRAZENECA, its Affiliates or sublicenses sells
Product pursuant to Article 2.7.3, then ASTRAZENECA shall deliver to TMC within
sixty (60) days after the end of each calendar quarter ending March 31, June 30,
September 30 and December 31, a written report showing its computation of the
remuneration due to TMC under this Agreement during such calendar quarter
including (i) the quantity of the Product sold by or on behalf of ASTRAZENECA
during such calendar quarter; and (ii) the total remuneration due in respect
thereof and at the same time make the payment of the remuneration due. Any
payment to be made hereunder shall be made in U.S. Dollars. Each such report
mentioned in this Article 6.6.2 shall include the rates of exchange used for
conversion to U.S. Dollars from the currency in which such sales were made.

                                       19


6.7.     TAXES.

6.7.1.   The payments to be made hereunder by either Party shall be net payments
i.e. without deduction of any bank or transfer charges.

6.7.2.   ASTRAZENECA shall pay any and all taxes levied on account of, or
measured exclusively by, all payments it receives under this Agreement,
including without limitation Swedish Value Added Tax ("mervardesskatt"). Amounts
payable from TMC to ASTRAZENECA under this Agreement shall be paid by TMC
without deduction for any tax, provided however that TMC may withhold income tax
as required by internal laws of any applicable jurisdiction. In the case of such
withholding being applicable, ASTRAZENECA may apply for the reduction of rate of
withholding tax (including under the U.S./Sweden tax treaty) with the assistance
of TMC and provided evidence of acceptance of this claim is submitted to TMC,
TMC shall apply this rate accordingly. If applicable laws require that taxes be
withheld, TMC will deduct those taxes from the remittable payments, make timely
payment of the taxes to the proper taxing authority and send proof of such
payment to ASTRAZENECA within sixty (60) days following that payment.

6.7.3.   TMC shall pay any and all taxes levied on account of, or measured
exclusively by, all payments it receives under this Agreement. Amounts payable
from ASTRAZENECA to TMC under this Agreement shall be paid by ASTRAZENECA
without deduction for any tax, provided however that ASTRAZENECA may withhold
income tax as required by internal laws of any applicable jurisdiction. In the
case of such withholding being applicable, TMC may apply for the reduction of
rate of withholding tax (including under the U.S./Sweden tax treaty) with the
assistance of ASTRAZENECA and provided evidence of acceptance of this claim is
submitted to ASTRAZENECA, ASTRAZENECA shall apply this rate accordingly. If
applicable laws require that taxes be withheld, ASTRAZENECA will deduct those
taxes from the remittable payments, make timely payment of the taxes to the
proper taxing authority and send proof of such payment to TMC within sixty (60)
days following that payment.

                                       20


6.8.     EXCHANGE RATES.  For the purpose hereof, the rate of exchange to be
used for conversion hereunder to U.S. Dollars shall be the average rate of
exchange for the period to which the payment relates, as published by the Wall
Street Journal.

6.9.     BOOKS AND AUDIT. Each Party shall keep complete and accurate books and
records with respect to its sale of the Product and remuneration payable
hereunder. Each Party shall have the right to have such pertinent books and
records of the other Party inspected and examined once each calendar year for
the purpose of determining the accuracy of payments made hereunder. Such
inspection and examination shall be conducted by an independent, certified,
public accountant selected by the Party requesting such examination. Such
accountant shall not disclose to such Party any information except for
information necessary to verify the accuracy of the records and payments made
pursuant to this Agreement. The charges of the independent, certified, public
accountant shall be paid by the Party requesting examination except if the
payments pursuant to this Agreement have been understated by more than five
percent (5%) in which case the Party who has underpaid will bear the cost and
pay the shortfall in payment pursuant to this Agreement with interest to the
other Party. Should instead the payments have been overstated the Party who has
overpaid may deduct any such amount from the royalty payments due hereunder
until such amount has been recovered by such Party.

6.10.    WIRE TRANSFER INSTRUCTIONS.

6.10.1.  Unless otherwise instructed by ASTRAZENECA, all payments by TMC
hereunder shall be made from the United States by wire transfer in the requisite
amount to the following account of ASTRAZENECA.

         Bank Name:    [**]
         Account No:   [**]
         Swift:        [**]

6.10.2.  Unless otherwise instructed by TMC, all payments by ASTRAZENECA
hereunder shall be made from Sweden by wire transfer in the requisite amount to
the following account of TMC.

         Bank Name:    [**]
         Account No:   [**]
         Bank Code:    [**]

6.10.2.1.      INTEREST. If any sum payable pursuant to this Agreement shall not
have been paid to a Party by the due date then (without prejudice to any other
claim or remedy of such Party) the Party owing such sum shall pay interest
thereon to the other Party at an annual rate of LIBOR + three percent (3%) from
time to time published in respect of the period starting on the due date of
payment and ending on the actual date of payment.

 "LIBOR" shall mean the thirty (30) days US dollar BBA London Interbank Offered
Rate as published by Reuter.

7.       INTELLECTUAL PROPERTY - PROSECUTION AND MAINTENANCE

7.1.     Any and all ASTRAZENECA IP vested in ASTRAZENECA shall as between
ASTRAZENECA and TMC remain vested in ASTRAZENECA.

                                       21


7.2.     Any and all TMC IP vested in TMC shall as between TMC and ASTRAZENECA
remain vested in TMC.

7.3.     ASTRAZENECA shall, during the term of this Agreement be responsible for
the filing, prosecution and maintenance of the ASTRAZENECA Patent Rights and the
ASTRAZENECA Trademark in the Territory. Should registration of the ASTRAZENECA
Trademark be necessary or appropriate in any country, then ASTRAZENECA shall be
responsible for obtaining such registration.

TMC shall reimburse ASTRAZENECA for any out-of-pocket expenses (including fees
to outside counsel and consultants) incurred by ASTRAZENECA in relation to any
action taken by ASTRAZENECA pursuant to this Article 7.3.

7.4.     TMC shall have the right to give comments and recommendations as to the
overall strategy regarding the filing, prosecution and maintenance of the
ASTRAZENECA Patent Rights and the ASTRAZENECA Trademark; and before taking any
significant step in the filing, prosecution or maintenance of the ASTRAZENECA
Patent Rights or the ASTRAZENECA Trademark, ASTRAZENECA shall allow TMC to
comment on the action proposed to be taken and ASTRAZENECA shall consider any
such comments.

7.5.     In the event that ASTRAZENECA should decide to permit any pending
patent application or any patent included in the ASTRAZENECA Patent Rights to
lapse by any action, inaction or failure to take any action or to pay any fee
when due, ASTRAZENECA shall promptly inform TMC of such decision, but no later
than fifteen (15) days prior to such action, inaction or failure to pay,
provided that such period is available to ASTRAZENECA, so that TMC might, for
the avoidance of doubt at TMC's expense, seek such patent protection or prevent
any such lapse.

7.6.     ASTRAZENECA shall not be liable to TMC in contract, tort, negligence,
breach of statutory duty or otherwise for any economic loss or other loss of
turnover, profits, savings, business or goodwill or any loss, damage, costs or
expenses of any nature whatsoever incurred or suffered by TMC because of
ASTRAZENECA's actions pursuant to or as a consequence of this Article 7.

         PATENT TERM EXTENSIONS

7.7.     Should ASTRAZENECA not be able to lawfully apply for patent term
extensions, including, but not limited to, Supplementary Protection
Certificates, relating to the ASTRAZENECA Patent Rights in the Territory in its
own name, or should ASTRAZENECA otherwise require, TMC shall co-operate with
ASTRAZENECA in any issue regarding the gaining of such patent term extension by
assisting ASTRAZENECA with any actions or documents needed for such purpose.

Should in any country in the Territory any decision have to be made as to what
product, claim or otherwise to apply for such patent term extension regarding,
then ASTRAZENECA shall have the right to make such decision at its own
discretion.

7.8.     RIGHTS TO THE RESULTS. Any patents and other intellectual property
rights, information, ideas, knowledge, data or know-how relating solely to the
Compound, and/or the Product

                                       22


developed during the term of this Agreement (hereinafter referred to as
"Result(s)") shall as between TMC and ASTRAZENECA be TMC IP and the sole
property of TMC. TMC shall have the sole management of, and shall bear the cost
of, any Results. ASTRAZENECA shall be given the reasonable opportunity to
comment on important aspects of the prosecution of any patent applications, and
shall use its reasonable endeavours to assist TMC in the prosecution of any
patent applications.

8.       CLAIMS REGARDING INFRINGEMENT AND INVALIDITY

8.1.     NOTIFICATION OF CLAIM. If a Third Party notifies ASTRAZENECA or TMC, or
their respective Affiliates or sub-licensees, that any act by TMC, or its
Affiliates or sub-licensees, utilizing the ASTRAZENECA IP allegedly infringes in
the Territory any Patent Rights or other intellectual property rights owned by
or licensed to the Third Party, ASTRAZENECA or TMC shall promptly notify the
other in writing.

8.2.     DEFENCE OF CLAIMED INFRINGEMENT.

8.2.1.   ASTRAZENECA shall have no obligation to defend or settle any claim by a
Third Party that the manufacture, sale or other use of the Product by TMC
resulting from the use or exercise of the license granted hereunder under the
ASTRAZENECA IP infringes any Patent Rights or other intellectual property rights
owned by or licensed to a Third Party, subject to the provisions of Article 10.

8.2.2.   If a Third Party makes an infringement claim or files an infringement
action against ASTRAZENECA, its Affiliates or sub-licensees, or TMC, its
Affiliates or sub-licensees, arising out of TMC's, its Affiliates' or
sub-licensees' manufacture, sale or other use of the Product in the Territory,
or if a Third Party challenges any of the ASTRAZENECA IP, then TMC shall defend
or settle the claim or action at its expense, subject to the provisions of
Article 10.

8.2.3.   ASTRAZENECA may join such proceedings mentioned under sub-section 8.2.2
voluntarily, subject always to TMC's, its Affiliates' or sub-licensees', right
to decide the conduct over such litigation. Any such joining of the proceedings
shall be at ASTRAZENECA's cost and expense. ASTRAZENECA shall for such purpose
have the right to independently retain legal counsel and consultants, at its
sole cost and expense.

8.2.4.   It is understood between the Parties that any proposed settlement will
be subject to ASTRAZENECA's prior written approval, which approval shall not be
unreasonably withheld. Such approval might be withheld primarily on the grounds
that ASTRAZENECA reasonably determines that the settlement proposed is overly
burdensome, financially or strategically, that ASTRAZENECA determines that TMC's
conduct of the defence has a reasonable chance of succeeding or that ASTRAZENECA
intends to continue such defence itself.

Should ASTRAZENECA withhold such approval, then ASTRAZENECA shall have the
right, but not the obligation (other than in the case that ASTRAZENECA has
announced to TMC its intention to continue such defence itself), to continue the
defence of the claim or action at its own expense. In such case TMC, its
Affiliates or sub-licensees shall, at ASTRAZENECA's request and at ASTRAZENECA's
expense for TMC's, its Affiliates' or sub-licensees' costs and expenses, assist
in the prosecution of such action, including, but not limited to, consenting to
being joined in such action as a voluntary plaintiff.

                                       23


8.2.5.   Should TMC reasonably believe that the Third Party rights contemplated
by Article 8.2.1 are valid in a certain country(ies) and that infringement is
likely to be occurring in such country(ies), TMC may seek and enter into a
licence thereto from such Third Party on appropriate commercial terms, whereby
any remuneration and any costs and expenses (including but not limited to
reasonable external legal costs) for such license shall be shared equally
between TMC and ASTRAZENECA according to the following.

TMC may deduct an amount equivalent to [**] percent ([**]%) of TMC's payments to
such Third Party pursuant to such arrangement as indicated in the first
paragraph of this Article 8.2.5 from the royalty payments to be made by TMC to
ASTRAZENECA on the Net Sales in the country concerned pursuant to Article 6.2 to
cover ASTRAZENECA's obligation to carry [**] percent ([**]%) of such payments
and costs. This deduction shall be subject to the proviso that the royalty
payments due to ASTRAZENECA shall not be reduced in total by more than [**]
percent ([**]%) in any calendar year, and any residue not offset may be carried
forward by TMC until such time as it has recovered ASTRAZENECA's [**] per cent
([**]%) share of such costs and expenses, or until the royalty payment
obligations of TMC hereunder expire, whichever is the earlier.

8.3.     THIRD PARTY INFRINGEMENT.  If a Third Party shall, in the reasonable
opinion of either Party, infringe any ASTRAZENECA Patent Rights or ASTRAZENECA
Trademark in the Territory, then the Party having such opinion shall promptly
notify the other Party.

8.3.1.   Further, each Party shall within five (5) working days or as soon as
reasonably possible thereafter advise the other Party of receipt of any notice
of:

                    a) any certification filed under the U.S. "Drug Price
                    Competition and Patent Term Restoration Act of 1984" ("ANDA
                    Act"), claiming that any ASTRAZENECA Patent Rights are
                    invalid or claiming that the ASTRAZENECA Patent Rights will
                    not be infringed by the manufacture, use or sale of a
                    product for which an application under the ANDA Act is filed
                    or;

                    b) any equivalent or similar certification or notice in any
                    other jurisdiction.

8.3.2.   TMC, its Affiliates or sub-licensees shall have the initial sole right
to commence an action for infringement in the Territory against the Third Party,
in its own name, together with the right to enforce and collect any judgement
thereon. ASTRAZENECA may join such proceedings voluntarily, subject always to
TMC's, its Affiliates' or sub-licensees' right to decide the conduct over such
litigation. Any such joining of the proceedings shall be at ASTRAZENECA's cost
and expense. ASTRAZENECA shall for such purpose have the right to independently
retain legal counsel and consultants, at its sole cost and expense.

8.3.3.   Any monetary recovery (whether by settlement or judgement) in
connection with an infringement action commenced by TMC, its Affiliates or
sub-licensees shall be applied first to reimburse TMC, its Affiliates or
sub-licensees for their out-of-pocket expenses (including reasonable attorneys
fees) incurred in prosecuting such action and the expenses of ASTRAZENECA borne
by TMC hereunder. Any balance remaining shall be allocated among ASTRAZENECA and
TMC in a manner reasonably calculated to correspond to the distribution of
profits, in accordance with what would normally be provided for under this
Agreement, on the sales of Product to which such recovery pertains.

                                       24


8.3.4.   Should neither TMC, nor its Affiliates or sub-licensees, take
appropriate and diligent action with respect to any such infringement or
challenge as contemplated in this Article 8.3 within forty-five (45) days, or,
in the case of a certification filed under the ANDA Act or similar certification
or notice as contemplated under Article 8.3.1, within twenty (20) days, after
receiving notice of any infringement or possible infringement or challenge, then
ASTRAZENECA shall have the right, but not the obligation, to take such action,
at its own expense, in its own name, and the right to enforce and collect any
judgement thereon.

                    a) Should ASTRAZENECA elect to take such action then TMC,
                    its Affiliates or sub-licensees, shall, at ASTRAZENECA's
                    request and at ASTRAZENECA's expense for TMC's, its
                    Affiliates' or sub-licensees', costs and expenses, assist in
                    the prosecution of such action, including, but not limited
                    to, consenting to being joined in such action as a voluntary
                    plaintiff.

                    b) If the recovery of such action as contemplated in this
                    Article 8.3.4 exceeds ASTRAZENECA'>s out-of-pocket expenses
                    (including reasonable attorneys fees) for prosecuting the
                    action, then such excess recovery shall be shared by the
                    Parties on a [**] basis.

8.3.5.   ASTRAZENECA, its Affiliates or sub-licensees shall have the sole right
to commence an action for infringement of the ASTRAZENECA IP in Japan or in any
other country in which the license granted to TMC hereunder has reverted to
ASTRAZENECA pursuant to Article 3.8 against the Third Party, in its own name,
together with the right to enforce and collect any judgement thereon. TMC may
join such proceedings voluntarily, subject always to ASTRAZENECA's, its
Affiliates' or sub-licensees' right to decide the conduct over such litigation.
Any such joining of the proceedings shall be at TMC's cost and expense. TMC
shall for such purpose have the right to independently retain legal counsel and
consultants, at its sole cost and expense. Any monetary recovery (whether by
settlement or judgement) in connection with an infringement action commenced by
ASTRAZENECA shall be retained by ASTRAZENECA.

9.       TRADEMARK

9.1.     Should TMC not within twelve (12) months of the License Agreement
Effective Date notify ASTRAZENECA that TMC wishes to maintain its exclusive
license to the ASTRAZENECA Trademark as granted under Article 2.1, or should TMC
within such twelve-months period notify ASTRAZENECA in writing that TMC does not
wish to maintain such exclusive license to the ASTRAZENECA Trademark, then upon
the expiration of such twelve-months period or the date of such written notice,
whichever is the earlier,

               (a)  the exclusive license insofar as it relates to the
                    ASTRAZENECA Trademark under Article 2.1 shall immediately
                    cease and the ASTRAZENECA Trademark shall cease to be a part
                    of the ASTRAZENECA IP for all purposes of this Agreement;

               (b)  all rights so granted in the ASTRAZENECA Trademark to TMC
                    shall revert to ASTRAZENECA;

               (c)  TMC shall immediately return to ASTRAZENECA any ASTRAZENECA
                    Know-How relating to the ASTRAZENECA Trademark and grant to

                                       25


                    ASTRAZENECA a non-exclusive, perpetual, remuneration-free
                    and world-wide license to use any Know-How developed by TMC
                    relating to the ASTRAZENECA Trademark for the purpose of
                    commercialising the Product.

Should the rights have been so reverted, then TMC shall select a trademark of
its own, not being confusingly similar to the ASTRAZENECA Trademark, to use in
connection with the sales, marketing and distribution of the Product and shall
be the owner and party of record of such trademark (the "TMC Trademark"). TMC
shall have sole responsibility for clearance and registration of said TMC
Trademark. TMC shall be responsible for all decisions and costs relating to
selection, clearance, registration, defence and maintenance of the TMC
Trademark.

9.2.     UTILISATION OF THE ASTRAZENECA TRADEMARK

9.2.1.   Unless the license to the ASTRAZENECA Trademark has been reverted
pursuant to Article 9.1, TMC shall, as soon as reasonably possible upon
completion of the item concerned, but no later than one (1) year prior to the
estimated Launch in each country, notify ASTRAZENECA in a clearly visible manner
how TMC intends to utilise the ASTRAZENECA Trademark in connection with the
marketing, sales and distribution of the Product in the country concerned,
including but not limited to showing the shape, size and colour of the intended
logo containing the ASTRAZENECA Trademark, the intended packages of the Product
and the intended promotional materials regarding the Product in such country.
TMC may not utilise the ASTRAZENECA Trademark in any context without
ASTRAZENECA's prior written approval, such approval not to be unreasonably
withheld.

9.2.2.   Should ASTRAZENECA not approve such TMC's proposal, or part thereof,
under Article 9.2.1, then ASTRAZENECA shall submit to TMC a proposal, within
sixty (60) days of having received TMC's proposal, on how to utilise the
ASTRAZENECA Trademark in this regard.

9.2.3.   Should TMC not accept ASTRAZENECA's proposal, or part thereof, provided
under Article 9.2.2, then TMC may notify ASTRAZENECA of a new proposal on the
utilisation of the ASTRAZENECA Trademark, or such part thereof, in such way as
set forth in Article 9.2.1; such proposal to be noticeably different from all
previous proposals. Should ASTRAZENECA not approve such proposal, then what is
stated in Article 9.2.2. shall apply.

9.2.4.   Should ASTRAZENECA not within forty-five (45) days of such notice as
stated in Article 9.2.1 have notified TMC that it objects all or in part to such
TMC's proposal, or should ASTRAZENECA after having not approved a proposal, or
part thereof, fail to present a proposal as stated under Article 9.2.2, then the
proposal presented by TMC shall be considered to have been approved by
ASTRAZENECA.

9.3.     TMC shall use the ASTRAZENECA Trademark in accordance with applicable
laws in any country where TMC markets, sells or distributes the Product
utilising the ASTRAZENECA Trademark. Unless the rights to the ASTRAZENECA
Trademark have been reverted pursuant to Article 9.1, TMC undertakes to use the
ASTRAZENECA Trademark at any time when the Product is sold, marketed or
distributed in the Territory and not to use any trademark other than the
ASTRAZENECA Trademark in connection with the sales, marketing and distribution
of the Product. TMC further undertakes not to use any

                                       26


trademark being confusingly similar to the ASTRAZENECA Trademark in connection
with marketing, sales and distribution of any other product.

9.4.     Should in any country of the Territory TMC by legal, regulatory or
similar reasons be prevented from using the ASTRAZENECA Trademark or should
usage of the ASTRAZENECA Trademark in connection with the sales, marketing and
distribution of the Product prove to be commercially unreasonable in such
country because of such legal, regulatory or similar reasons, then TMC shall
immediately notify ASTRAZENECA hereof in writing and TMC shall not have the
obligation to use the ASTRAZENECA Trademark for the marketing, sales and
distribution of the Product in the country concerned. The Parties shall in such
case meet and in good faith endeavour to find a new trademark as similar to the
ASTRAZENECA Trademark as possible. Such new trademark selected for the country
concerned shall for all purposes of this Agreement be considered an ASTRAZENECA
Trademark.

TMC shall carry all costs and expenses for the development and creation of such
new trademark, provided always that should such costs be disproportionately high
in relation primarily to the estimated value of the Product then TMC may offer
ASTRAZENECA to carry all or part of such costs, or, should ASTRAZENECA notify
TMC in writing that it declines to do so, notify ASTRAZENECA that it does not
wish to maintain the license to the ASTRAZENECA Trademark for the country
concerned; whereupon what is stated in Articles 9.1. (a) through (c) shall apply
regarding such country.

9.5.     TMC undertakes, should ASTRAZENECA so require in writing, to mention on
all packages, package inserts and promotional and advertising materials for the
Product "Licensed from AstraZeneca AB" or the equivalent wording in the major
language(s) of the country in which the Product is sold, or, should legal,
regulatory or similar reasons prevent the use of that wording, such other
wording as close as possible to the wording herein stated.

10.      INDEMNITY

10.1.    INDEMNITY BY TMC.

10.1.1.  TMC shall be responsible for and shall indemnify ASTRAZENECA, its
Affiliates and its and its Affiliates' directors, officers, other employees,
agents and consultants (collectively the "ASTRAZENECA Indemnified Party")
against any and all liability, loss, damage, cost and expense (including legal
costs) incurred or suffered by the ASTRAZENECA Indemnified Party as a result of
any claim brought against an ASTRAZENECA Indemnified Party by a Third Party (i)
arising out of the testing, manufacture, sale, use or promotion by TMC, its
Affiliates or sub-licensees of any Compound or Product hereunder; (ii) arising
out of any theory of product liability (including, but not limited to, actions
in the form of tort, warranty or strict liability) based on Compounds or
Products developed by TMC hereunder; or (iii) arising out of any other
activities to be carried out by TMC, its Affiliates or sub-licensees pursuant to
this Agreement to the extent not included in (i) and (ii) above, except where
such liability, loss, damage, cost and expense has been incurred or suffered as
a result of a material breach of warranty or representation of ASTRAZENECA set
out in Article 13 or by gross negligence or misconduct on the part of
ASTRAZENECA.

10.1.2.  An ASTRAZENECA Indemnified Party that intends to claim indemnification
under Article 10.1.1 shall notify TMC promptly of any such liability, loss,
damage, cost and expense and permit TMC to control the defence and disposition
thereof and further agrees to

                                       27


reasonably cooperate at TMC's expense with TMC in the handling thereof. The
ASTRAZENECA Indemnified Party shall not compromise or settle such claim. TMC
agrees to keep ASTRAZENECA informed of the progress in the defence and
disputation of such claims and to consult with ASTRAZENECA with regard to any
settlement thereof which TMC proposes to enter into and will provide ASTRAZENECA
with suitable information regarding the same.

10.1.3.  TMC will maintain appropriate liability insurance against such product
and other liability as contemplated under Article 10.1.1 at levels appropriate
for products and activities of the relevant type.

10.2.    INDEMNITY BY ASTRAZENECA.

10.2.1.  ASTRAZENECA shall be responsible for and shall indemnify TMC, its
Affiliates and its and its Affiliates' directors, officers, other employees,
agents and consultants (collectively the "TMC Indemnified Party") against any
and all liability, loss, damage, cost and expense (including legal costs)
incurred or suffered by the TMC Indemnified Party as a result of any claim
brought against the TMC Indemnified Party by a Third Party (i) arising out of
the testing, manufacture, sale, use or promotion by ASTRAZENECA, its Affiliates
or sub-licensees, of any Compound or Product hereunder; (ii) arising out of any
theory of product liability (including, but not limited to, actions in the form
of tort, warranty or strict liability) based on Compounds or Products sold by
ASTRAZENECA hereunder; or (iii) which arises as a result of a breach of a
warranty or representation of ASTRAZENECA set out in Article 13, except where
such liability, loss, damage, cost and expense has been incurred or suffered as
a result of a material breach of TMC's obligations under this Agreement or by
gross negligence or misconduct on the part of TMC.

10.2.2.  A TMC Indemnified Party that intends to claim indemnification under
Article 10.2.1 shall notify ASTRAZENECA promptly of any such liability, loss,
damage, cost and expense and permit ASTRAZENECA to control the defence and
disposition thereof and further agrees to reasonably cooperate at ASTRAZENECA's
expense with ASTRAZENECA in the handling thereof. The TMC Indemnified Party
shall not compromise or settle such claim. ASTRAZENECA agrees to keep TMC
informed of the progress in the defence and disputation of such claims and to
consult with TMC with regard to any settlement thereof which ASTRAZENECA
proposes to enter into and will provide TMC with suitable information regarding
the same.

10.2.3.  ASTRAZENECA will either maintain appropriate liability insurance or be
self insured against such liability as contemplated under Article 10.2.1.

                                       28


11.      CONFIDENTIALITY

11.1.    CONFIDENTIAL INFORMATION. At all times during the term of this
Agreement and for a period of five (5) years following termination or expiration
hereof, each Party shall, and shall cause its officers, directors, employees and
agents to, keep confidential and not publish or otherwise disclose and not use,
directly or indirectly, for any purpose, any Confidential Information provided
to it by the other Party, PROVIDED, THAT, each Party may disclose and use the
Confidential Information of the other Party to the extent such disclosure or use
is expressly permitted by the terms of this Agreement, including without
limitation those purposes set forth in Article 11.2, or is otherwise reasonably
necessary for the performance of this Agreement.

11.2.    PERMITTED USE AND DISCLOSURE. The Receiving Party may use and/or
disclose Confidential Information to the extent that such disclosure is:

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

11.2.2.  made by the Receiving Party to a regulatory authority as required in
connection with any Filing of an NDA; provided, however, that reasonable
measures will be taken to assure confidential treatment of such information;

11.2.3.  made by the Receiving Party to a patent authority as required in
connection with any filing or application for Patent Rights; or

11.2.4.  made by the Receiving Party to Third Parties as may be necessary or
useful in connection with the development, manufacturing, marketing, use and
sale of the Compound or the Product as contemplated by this Agreement, including
subcontracting, sublicensing and distribution transactions in connection
therewith, provided that any such Third Party has undertaken confidentiality
obligation with respect to the Confidential Information disclosed by the
Receiving Party to it and the results of any such activities. Regardless hereof,
TMC may not disclose to such Third Party which compound(s), other than the
Compound, that [**] may be used as a manufacturing starting material, or
intermediate, for.

11.3.    RELEASE FROM RESTRICTIONS. Notwithstanding the foregoing, Confidential
Information shall not include any information that, as determined by competent
written proof:

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

11.3.2.  can be demonstrated by documentation or other competent proof to have
been in the Receiving Party's possession prior to disclosure by the Disclosing
Party;

                                       29


11.3.3.  is subsequently received by the Receiving Party from a Third Party who
is not bound by any obligation of confidentiality with respect to the said
information;

11.3.4.  is generally made available to Third Parties by the Disclosing Party
without restriction on disclosure; or

11.3.5.  is independently developed by or for the Receiving Party without
reference to the Disclosing Party's Confidential Information.

12.      ADVERSE EVENTS

12.1.    REPORTING OF ADVERSE EVENTS.

12.1.1.  TMC shall be fully responsible for reporting to the relevant regulatory
or other competent authorities in the Territory any Adverse Event(s) which are
or might be attributed to the use or application of the Compound or the Product.
At ASTRAZENECA's request in writing TMC shall inform ASTRAZENECA of any Adverse
Event in the country(ies) contemplated, and during the time period contemplated,
by such notice.

12.1.2.  ASTRAZENECA shall be fully responsible for reporting to the relevant
regulatory or other competent authorities in any country outside the Territory
or for which the license to TMC hereunder has been terminated any Adverse
Event(s) which are or might be attributed to the use or application of the
Compound or the Product. At TMC's request in writing ASTRAZENECA shall inform
TMC of any Adverse Event in the country(ies) contemplated, and during the time
period contemplated, by such notice. For the avoidance of doubt ASTRAZENECA may
appoint any Affiliate(s) or sub-licensee(s) carrying out the marketing of the
Product in the country concerned to fulfil any such obligation as stated
hereunder.

12.1.3.  Without limiting what is stated in Article 12.1, the Parties shall at
an appropriate point of time during development of the Product jointly establish
any such Adverse Event reporting procedures, including, but not limited to, any
agreement regarding safety data exchange, as may be required or useful.

13.      REPRESENTATION AND WARRANTY

13.1.    REPRESENTATIONS AND WARRANTIES OF ASTRAZENECA. ASTRAZENECA represents
and warrants to TMC as follows:

                    a) as of the License Agreement Effective Date it is the sole
                    and exclusive owner of the ASTRAZENECA Patent Rights and
                    ASTRAZENECA Trademark; all of which is free and clear of any
                    liens, charges and encumbrances; and

                    b) as of the License Agreement Effective Date ASTRAZENECA
                    has not previously assigned, transferred, licensed, conveyed
                    or otherwise encumbered its right, title and interest in the
                    ASTRAZENECA Patent Rights or the ASTRAZENECA Trademark; and

                    c) as of the License Agreement Effective Date and to the
                    best of ASTRAZENECA's knowledge, no Person other than
                    ASTRAZENECA or any of its Affiliates, has or shall have any
                    claim of ownership with respect

                                       30


                    to ASTRAZENECA Patent Rights or the ASTRAZENECA Trademark;
                    and

                    d) as of the License Agreement Effective Date and to the
                    best of ASTRAZENECA's knowledge, the manufacture, use and
                    sale of the Compound does not infringe upon any intellectual
                    property rights of any Third Party, although it is expressly
                    acknowledged by TMC that ASTRAZENECA has made no particular
                    searches or investigations to determinate whether such
                    infringement occurs; and

                    e) as of the License Agreement Effective Date there are no
                    claims, judgements or settlements against or owed by
                    ASTRAZENECA or pending or threatened claims or litigation
                    relating to the ASTRAZENECA Patent Rights or the ASTRAZENECA
                    Trademark; and

                    f) except as insofar relating to any kind of formulation, or
                    work or development related thereto, of the Product, there
                    are no other Patent Rights or Know-How owned or licensed by
                    ASTRAZENECA required to develop and/or commercialise the
                    Product, and ASTRAZENECA shall not assert against TMC any
                    Patent Rights or other intellectual property owned or
                    licensed by ASTRAZENECA as of the License Agreement
                    Effective Date or at any time thereafter which are or may be
                    infringed by the Compound or the Product; and

                    g) as of the License Agreement Effective Date ASTRAZENECA
                    has disclosed to TMC any known interference with the
                    ASTRAZENECA Patent Rights or re-examination or reissue
                    proceeding concerning such ASTRAZENECA Patent Rights; and

                    h) as of the License Agreement Effective Date ASTRAZENECA
                    has no knowledge from which it can reasonably be inferred
                    that the granted ASTRAZENECA Patent Rights or the
                    ASTRAZENECA Trademark are invalid or that the applications
                    for ASTRAZENECA Patent Rights or ASTRAZENECA Trademark will
                    not proceed to grant.

13.2.    ACKNOWLEDGEMENT OF TMC. TMC is aware that the ASTRAZENECA Patent Rights
or the ASTRAZENECA Know-How may not sufficiently enable TMC to manufacture or
conduct any other operational or manufacturing-related activities with respect
to the formulation of the Product, and it is explicitly understood by TMC that
TMC will have to independently conduct any analysis, evaluation and
investigation regarding what intellectual property, techniques, routes,
equipment or other help or assistance that will be required for such purpose and
it will be entirely at TMC's risk to find such intellectual property,
techniques, routes, equipment or other help or assistance in order to conduct
such activities.

13.3.    REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each Party represents
and warrants to the other Party that it is a duly organized and validly existing
corporation under the laws of its jurisdiction of incorporation, and has taken
all required corporate action to authorize the execution, delivery and
performance of this Agreement; it has the full right, power and authority to
enter into this Agreement and perform all of its obligations hereunder; the
execution and delivery of this Agreement and the transactions contemplated
herein do not violate, conflict with, or constitute a default under its Articles
of Association or similar

                                       31


organization document, its by-laws or the terms or provisions of any material
agreement or other instrument to which it is a party or by which it is bound, or
any order, award, judgement or decree to which it is a party or by which it is
bound; and upon execution and delivery, this Agreement will constitute the
legal, valid and binding obligation of it.

13.4.    LIMITATIONS. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT
ASTRAZENECA EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS WARRANTIES AND
MAKES NO EXPRESS OR IMPLIED WARRANTY, STATUTORY OR OTHERWISE, OF ANY KIND,
INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE REGARDING THE COMPOUND, ASTRAZENECA'S CONFIDENTIAL INFORMATION,
DOCUMENTS, ASTRAZENECA KNOW-HOW, ASTRAZENECA PATENT RIGHTS, OR PRODUCTS.

14.      TERM AND TERMINATION

14.1.    TERM. This Agreement shall become effective on the License Agreement
Effective Date and shall expire when TMC ceases to sell the Product in the last
country of the Territory or otherwise terminates this Agreement as set forth in
Article 14.2.

14.2.    TERMINATION BY TMC. Should TMC determine that it does no longer
consider it viable to continue to exercise the rights under this Agreement, then
TMC may give written notice to ASTRAZENECA, whereupon this Agreement shall
terminate thirty (30) days of such notice, unless ASTRAZENECA, within twenty
(20) days of having received such notice, requests TMC in writing to enter into
good faith discussions to see whether TMC's concerns could be reasonably
overcome. However, upon TMC having given such notice TMC shall not be liable for
any payments under Articles 6.1.2 through 6.1.5 or for any payments under
Articles 6.3.1 unless corresponding to the royalty amounts actually due, which
become due after the expiration of the 30-days period mentioned above in this
Article 14.2.

Should the Parties not within three (3) months of the date of commencement of
such good faith discussions mentioned above in this Article 14.2 have managed to
reach a mutually acceptable solution to TMC's concerns, then TMC may terminate
this Agreement by giving ninety (90) days written notice.

14.3.    TERMINATION FOR BREACH. In the event that either Party (the "Breaching
Party") shall be in significant default in the performance of any of its
material obligations under this Agreement, in addition to any other right and
remedy the other Party (the "Complaining Party") may have, the Complaining Party
may terminate this Agreement by sixty (60) days prior written notice (the
"Notice Period") to the Breaching Party, specifying the breach and its claim of
right to terminate, provided always that the termination shall not become
effective at the end of the Notice Period if the Breaching Party cures the
breach complained about during the Notice Period.

14.4.    SURVIVAL OF OBLIGATIONS. Termination or expiration of this Agreement
shall not relieve either Party from any obligation incurred hereunder prior
thereto.

14.5.    SURVIVAL OF PROVISIONS UPON TERMINATION AND/OR EXPIRATION. Subject to
what is stated in Article 15, the provisions of Articles 1, 7.1, 7.2, 10, 11,
12, 13, 14.5, 15, 17 and 18 shall survive termination or expiration of this
Agreement. The provisions of Article 2.5 shall

                                       32


survive only upon expiration of this Agreement. The provisions of Article 11
shall survive termination or expiration of this Agreement and shall continue to
be in force for a period of five (5) years after termination or expiration of
this Agreement.

15.      CONSEQUENCES OF TERMINATION

15.1.    TERMINATION AND HANDBACK OF LICENSE

In addition to any remedy either Party may have in law, tort or in contract,
subject to what is stated in Article 3.9, upon termination of the Agreement or
the license in a certain country, the following shall apply.

Upon termination of this Agreement by TMC pursuant to Article 14.2 or by
ASTRAZENECA pursuant to Article 14.3, or by ASTRAZENECA in a certain country
pursuant to Article 3.8, the license granted under Article 2.1 regarding the
country(ies) contemplated by the termination concerned shall cease, and TMC
shall, regarding the Territory or the country concerned, whichever is
applicable:

               (a)  at the option of ASTRAZENECA, grant to ASTRAZENECA a
                    non-exclusive, world-wide or for the country concerned,
                    whichever is applicable, sub-licensable licence under the
                    TMC IP to develop, have developed, make, have made, use,
                    have used, import, have imported, market, have marketed,
                    sell and have sold the Compound and the Product for any
                    indications. The term of such non-exclusive licence shall
                    continue on a country by country basis for the longer of the
                    life of the TMC Patent Rights, or for ten (10) years from
                    first commercial sale of any resultant product in such
                    country by ASTRAZENECA, its Affiliates, sub-licensees or
                    nominees, whichever is the longer. TMC shall do all such
                    acts and things as may reasonably be necessary to fulfil
                    this obligation. The licence set out in this Article 15.1
                    (a) shall be royalty-free and free from any other
                    remuneration.

               (b)  return to ASTRAZENECA any ASTRAZENECA Know-How and deliver
                    to ASTRAZENECA a copy of any TMC Know-How;

               (c)  deliver to ASTRAZENECA any and all quantities of Product in
                    its possession, power, custody or control subject always to
                    TMC's right to dispose of Product which is the subject of
                    pre-termination date orders pursuant to Article 15.1 (h).
                    For the avoidance of doubt, should this Article 15.1 (c)
                    become applicable because of termination regarding a certain
                    country or countries pursuant to Article 3.8, then the
                    quantities of Product referred to herein shall mean only
                    those quantities clearly designated, by marking, labelling
                    or similar, for the country or countries concerned and which
                    could only be used for the country or countries concerned;

               (d)  ensure that its patent attorneys transfer to ASTRAZENECA a
                    copy of the patent files relating to the TMC Patent Rights
                    which TMC has been prosecuting and maintaining and
                    ASTRAZENECA shall be entitled to prosecute and shall
                    maintain such TMC Patent Rights at its own cost and expense
                    on terms similar to those set out in Article 7.3 and to deal
                    with infringers on terms similar to those set out in
                    Article 8.2 and 8.3.

                                       33


                    TMC further undertakes to take any action and produce any
                    documents so as to enable ASTRAZENECA to apply for patent
                    term extensions, including, but not limited to,
                    Supplementary Protection Certificates, relating to the TMC
                    Patent Rights in ASTRAZENECA's name.

               (e)  Should this Article 15.1 become applicable because of the
                    termination of the license regarding a certain country or
                    countries pursuant to Article 3.8, then TMC shall,
                    notwithstanding the license granted under Article 15.1 (a),
                    on the request by ASTRAZENECA continue to prosecute,
                    maintain and defend the TMC Patent Rights.

               (f)  commensurate with legislative and regulatory requirements,
                    transfer to ASTRAZENECA or its nominee all NDA Approvals,
                    and regulatory filings for the Compound or Product
                    (including, without limitation, all information and
                    documentation used in the Filings of an NDA and NDA
                    approvals referred to in Article 3.5.2 and 3.5.4). In the
                    event that in any country such a transfer is not possible,
                    TMC shall use reasonable endeavours to ensure that
                    ASTRAZENECA has the benefit of the relevant NDA Approvals,
                    NDAs and other related regulatory filings and approvals and,
                    to this end, consents to any regulatory authority
                    cross-referencing to the data and information on file with
                    any regulatory authority as may be necessary to facilitate
                    the granting of second NDA Approvals to and permit Filings
                    of an NDA by ASTRAZENECA, and TMC agrees to complete
                    whatever other procedures that are reasonably necessary in
                    relation to the same to enable ASTRAZENECA (either itself or
                    in conjunction with a Third Party) freely to develop and
                    sell the Product in substitution for TMC;

               (g)  if applicable, assign the TMC Trademark or grant a
                    royalty-free exclusive licence to ASTRAZENECA to use the TMC
                    Trademark for the marketing, sales and distribution of the
                    Product;

               (h)  not after the date of termination itself take any further
                    action to develop, manufacture, have manufactured, use,
                    market, distribute or sell the Compound or Product during
                    the life of the TMC Patent Rights or the ASTRAZENECA Patent
                    Rights, whichever is the longer, except that TMC has the
                    right to dispose of that part of its inventory of Product on
                    hand as of the effective date of termination which is the
                    subject of orders for Product accepted prior to the date of
                    notice of termination for a period of three (3) months after
                    the effective date of termination, and, within thirty (30)
                    days after disposition of such inventory pursuant to the
                    fulfilment of such orders, TMC will forward to ASTRAZENECA a
                    final report and pay all royalties due on the Net Sales of
                    Product during such period; and

               (I)  PROVIDE ASTRAZENECA, SHOULD ASTRAZENECA SO REQUIRE, WITH
                    REASONABLE ASSISTANCE IN RELATION TO ASTRAZENECA'S
                    APPOINTMENT OF A THIRD PARTY MANUFACTURER OF PRODUCT.

                                       34


Upon such termination as stated in this Article 15.1, ASTRAZENECA shall have the
right to disclose Confidential Information, to Third Parties for the purpose
only of, and only to the extent necessary for, enabling such Third Party to
evaluate the financial and scientific status of the Compound or Product for the
purpose of making a financial offer to ASTRAZENECA on the licensing or
acquisition of the rights returned to ASTRAZENECA and the rights licensed to
ASTRAZENECA under this Article 15.1, and, if such licensing or acquisition
occurs, as necessary to exploit or enforce such rights.

15.2.    TERMINATION FOLLOWED BY CONTINUED LICENSE

Upon the termination of this Agreement by TMC pursuant to Article 14.3,
ASTRAZENECA's licences granted to TMC under Article 2 shall continue, provided
that TMC continues to make payments pursuant to Article 6 as if the Agreement
was still in effect.

16.      FORCE MAJEURE

16.1.    If either Party is prevented or delayed in the performance of any of
its obligations under this Agreement by Force Majeure, that Party shall
forthwith serve notice in writing on the other Party specifying the nature and
extent of the circumstances giving rise to Force Majeure, and shall subject to
service of such notice and to Article 16.3 have no liability in respect of the
performance of such of its obligations as are prevented by the Force Majeure
event during the continuation of such events, and for such time after they cease
as is necessary for that Party, using all reasonable endeavours, to recommence
its affected operations in order for it to perform its obligations.

16.2.    If either Party is prevented from performance of its obligations, due
to Force Majeure, for a continuous period in excess of six (6) months, the other
Party may terminate this Agreement forthwith on service of written notice upon
the Party so prevented. In the event of termination under this Article 16.2 the
provisions of Article 15 shall not apply immediately and the Parties shall meet
to discuss the ASTRAZENECA IP and TMC IP and agree on a process for arrangements
upon termination.

16.3.    The Party claiming to be prevented or delayed in the performance of any
of its obligations under this Agreement by reason of Force Majeure shall use its
reasonable endeavours to bring the Force Majeure event to a close or to find a
solution by which the Agreement may be performed despite the continuation of the
Force Majeure event.

17.      GENERAL PROVISIONS

17.1.    ASSIGNMENT.

17.1.1.  Subject to Articles 17.1.2 and 17.1.3, neither Party shall without the
prior written consent of the other Party assign, transfer, charge or deal in any
other manner with this Agreement or any of its rights under it.

17.1.2.  Each Party shall be entitled to assign its rights under this Agreement
to an acquiror of all or substantially all of its capital stock or assets
related to the pharmaceutical business described in this Agreement, whether
through purchase, merger, consolidation or otherwise.

                                       35


17.1.3.  Each Party shall be entitled to assign its rights under this Agreement
to an Affiliate provided that such Party shall require that any such Affiliate
to whom it assigns any of its rights under this Agreement shall assign such
rights back to the assigning Party immediately prior to it ceasing to be an
Affiliate of the assigning Party.

17.2.    SEVERANCE.

17.2.1.  If any provision of this Agreement shall be found by any court or
administrative body of competent jurisdiction to be invalid or unenforceable,
such invalidity or unenforceability shall not, provided that the general content
of the Agreement remains substantially the same as prior to such invalidity or
unenforceability, affect the other provisions of this Agreement which shall
remain in full force and effect.

17.2.2.  The Parties agree, in the circumstances referred to in Article 17.2.1,
to attempt to substitute for any invalid or unenforceable provision a valid or
enforceable provision which achieves to the greatest extent possible the same
effect as would have been achieved by the invalid or unenforceable provision.

17.3.    NOTICES.

17.3.1.  All notices and other communications given or made in relation to this
Agreement;

17.3.2.  shall be in English and in writing;

17.3.3.  shall be delivered by hand or sent by first class registered post or
facsimile;

17.3.4.  shall be delivered or sent to the Party concerned at the relevant
address or facsimile number, shown in Article 17.4 subject to such amendments as
may be notified from time to time in accordance with this Article by the
relevant Party to the other Party by no less than three business days notice;
and

17.3.5.  shall be deemed to have been duly given or made if addressed in the
aforesaid manner;

17.3.6.  if delivered by hand, upon delivery;

17.3.7.  if posted by first class registered post, four (4) business days after
posting;

17.3.8.  if sent by facsimile, when a complete and legible copy of the
communication has been received at the appropriate address

17.4.    CONTACT INFORMATION. Initial details for the purposes of Article 17.3
are:

         For ASTRAZENECA

         Address: AstraZeneca AB, S-151 85 Sodertalje, Sweden
         Facsimile: +46-8 553 290 00
         For the attention of: President & CEO

         For TMC

         Address: The Medicines Company, 5 Sylvan Way, Parsippany,

                                       36


         New Jersey 07054, United States
         Facsimile: +1-973-656-9898
         For the attention of: Clive Meanwell, Executive Chairman

               with a copy to

         Steven D. Singer
         Hale and Dorr, LLP
         60 State Street
         Boston MA 02109
         United States

17.5.    AGENCY, PARTNERSHIP OR JOINT VENTURE EXCLUDED.

17.5.1.  Nothing in this Agreement shall be construed so as to constitute either
Party to be the agent of the other.

17.5.2.  Nothing in this Agreement and no action taken by the Parties pursuant
to this Agreement shall constitute a partnership or joint venture of any kind
between the Parties.

17.6.    ENTIRE AGREEMENT. Each of the Parties acknowledges and agrees that in
entering into this Agreement, and the documents referred to in it, it does not
rely on, and shall have no remedy in respect of, any statement, representation,
warranty or understanding (whether negligently or innocently made) of any Person
(whether party to this Agreement or not) other than as expressly set out in this
Agreement as a warranty. Nothing in this Article shall either operate to limit
or exclude any liability for fraud.

17.7.    AGREEMENT TO SUPERSEDE EARLIER AGREEMENTS. The Confidential Disclosure
Agreement entered into by and between the Parties on 9 April 2001 ceases to have
effect from the date of this Agreement, except such termination does not affect
a Party's accrued rights and obligations at the date of termination.

17.8.    AMENDMENTS. No amendment to or variation of this Agreement shall be
valid unless it is in writing and signed by or on behalf of each of the Parties.

17.9.    PUBLICITY AND ANNOUNCEMENTS.

17.9.1.  Subject to Article 17.9.2 no press release, announcement or any other
communication to any Third Party concerning the transaction contemplated by this
Agreement, the financial terms of this Agreement, the subject matter of this
Agreement or any ancillary matters shall be made or permitted or authorized to
be made by either Party without the prior written approval of the other, such
approval not to be unreasonably withheld or delayed and such approval to be
given by an authorized representative of the Party in question.

17.9.2.  Either Party may make an announcement concerning the transaction
contemplated by this Agreement or any ancillary matter if required by law,
existing contractual obligations or any securities exchange or Regulatory
Authority or governmental body to which either Party is subject or submits,
wherever situated, provided that the Party required to make such announcement
notifies the other Party of the details of the announcement prior to making such
announcement and in sufficient time for the other Party to consider and comment
on the

                                       37


announcement, and takes advantage of all provisions to keep confidential
as many terms of the Agreement as possible.

17.10.   WAIVER. Failure or delay by either Party to exercise any right or
remedy under this Agreement shall not be deemed to be a waiver of that right or
remedy, or prevent it from exercising that or any other right or remedy on that
occasion or on any other occasion.

17.11.   NO BENEFIT TO THIRD PARTIES. No Third Party shall be deemed a third
party beneficiary under this Agreement for any purpose. Without limiting the
foregoing, the Contracts (Rights of Third Parties) Act 1999 and any legislation
amending or replacing such Act shall not apply in relation to this Agreement or
any agreement, arrangement, understanding, liability or obligation arising under
or in connection with this Agreement.

18.      GOVERNING LAW AND ARBITRATION

18.1.    ARBITRATION. The Parties shall use their reasonable efforts to settle
amicably any dispute arising out of or in connection with this Agreement. In
case the Parties are not able to settle such dispute between themselves, such
dispute shall be finally resolved by arbitration in accordance with the Rules of
the International Chamber of Commerce. The arbitration proceedings shall be held
in London. Any proceedings shall be held in the English language.

18.2.    GOVERNING LAW. The validity, construction and interpretation of this
Agreement and any determination of the performance which it requires shall be
governed by the laws of England.


IN WITNESS WHEREOF this License Agreement has entered into force on the License
Agreement Effective Date.

ASTRAZENECA AB                                      THE MEDICINES COMPANY

(publ)

                                       38


                                   Schedule A

                            ASTRAZENECA Patent Rights

                                        0


PATENT FAMILY LIST

Family         :   A1262
App./Propr     :   Astra AB
Title          :   Short acting dihydropyridines
Inventors      :   ANDERSSON, Kjell
                   NORDLANDER, Margareta
                   WESTERLUND, Christer



Country             SN     F   App No            App Date        Pat No.           Grant Dt.       Exp. Dt        Status
- -----------------   ----   --  ----------------  --------------  ----------------  --------------  -------------  ----------
                                                                                          
Argentina           1          329878            24.10.1994      253845            13.12.1999      13.12.2014     Granted
Argentina           2          980104360         01.09.1998                                                       Filed
Austria             1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Australia           1      P   81196/94          03.11.1994      685532            07.05.1998      03.11.2014     Granted
Belgium             1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Brazil              2          PI110048-7        06.05.1997                                                       Filed
Canada              1      P   2174969           03.11.1994                                                       Filed
Switzerland         1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
China P.R.          1      P   94194500.6        03.11.1994      94194500.6        20.11.1999      03.11.2014     Granted
Czech Republ        1      P   PV1273/96         03.11.1994      285691            17.08.1999      03.11.2014     Granted
Germany             1      X   95900347.6        03.11.1994      6942515.2         05.07.2000      03.11.2014     Granted
Denmark             1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Estonia             1      P   P9600051          03.11.1994      03230             20.10.1999      03.11.2014     Granted
Egypt               1          689/94            02.11.1994      20539             31.07.1999      03.11.2004     Granted
European Pat        1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Spain               1      X   95900347.6        03.11.1994      ES2150544         05.07.2000      03.11.2014     Granted
Finland             1      P   961914            03.11.1994                                                       Filed
France              1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Great Britain       1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Greece              1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Hong Kong           1          98114638.2        02.12.1998      1013292           08.12.2000      03.11.2014     Granted
Hungary             1      P   P9601187          03.11.1994      215591            04.12.1998      03.11.2014     Granted
Indonesia           1          P-941873          02.11.1994      ID0004550         06.12.1999      02.11.2014     Granted
Ireland             1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Israel              1          111127            03.10.1994      111127            22.02.2001      03.10.2014     Granted
Iceland             1          4218              30.09.1994      1674              31.12.1997      30.09.2014     Granted
Italy               1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Korea South         1      P   96/702346         03.11.1994                                                       Filed
Lithuania           1      X   95900347.6                                                                         Docketed
Luxembourg          1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Latvia              1      E                                                                                      Docketed
Monaco              1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Mexico              1          948392            28.10.1994      196540            22.05.2000      28.10.2014     Granted
Malaysia            1          PI94002934        04.11.1994      MY111770A         30.12.2000      30.12.2015     Granted
Netherlands         1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Norway              1      P   961776            03.11.1994      305656            05.07.1999      03.11.2014     Granted


                                        1


                                                                                          
New Zealand         1      P   275915            03.11.1994      275915            29.09.1997      03.11.2014     Granted
Philippines         1          49112             04.10.1994      1-1994-49112      28.04.2000      28.04.2017     Granted
Poland              1      P   P314128           03.11.1994                                                       Filed
Portugal            1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Russian Fed         1      P   96112152          03.11.1994      2139278           10.10.1999      03.11.2014     Granted
Saudi Arabia        1          94150250          19.10.1994                                                       Filed
Sweden              1          9303657-2         05.11.1993                                                       Inactive
Sweden              1      X   95900347.6        03.11.1994      0726894           05.07.2000      03.11.2014     Granted
Slovak Repub        1      P   PV0559/96         03.11.1994      281467            10.01.2001      03.11.2014     Granted
Thailand            1          024372            04.11.1994                                                       Filed
Taiwan              1          83108995          29.09.1994      NI-078831         15.10.1996      29.09.2014     Granted
Ukraine             1      P   96041753          03.11.1994                                                       Filed
United States       1      P   356224            03.11.1994      5856346           05.01.1999      05.01.2016     Granted
South Africa        1          94/7570           28.09.1994      94/7570           26.07.1995      28.09.2014     Granted



                                        2


PATENT FAMILY LIST

Family         :   A1279
App./Propr     :   Astra AB
Title          :   Pharmaceutical emulsion
Inventors      :   ANDERSSON, Kjell
                   BYROD, Eva
                   NORDLANDER, Margareta
                   WESTERLUND, Christer
                   HANSSON, Anna-Carin



Country             SN     F   App No            App Date        Pat No.           Grant Dt.       Exp. Dt        Status
- -----------------   ----   --  ----------------  --------------  ----------------  --------------  -------------  ----------
                                                                                          
Argentina           1          330005            04.111994       255314            01.11.2001      01.11.2016     Granted
Argentina           2          990105741         11.11.1999                                                       Filed
Austria             1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Australia           1      P   10371/95          03.11.1994      678650            25.09.1997      03.11.2014     Granted
Belgium             1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Brazil              1      P                                                                                      Inactive
Canada              1      P   2176360           03.11.1994                                                       Filed
Switzerland         1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
China P.R.          1      P   94194111.6        03.11.1994      94194111.6        11.08.2001      03.11.2014     Granted
Czech Republ        1      P   PV1338/96         03.11.1994                                                       Filed
Germany             1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Denmark             1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Estonia             1      P   P9600052          03.11.1994      03223             20.10.1999      03.11.2014     Granted
Egypt               1          710/94            09.11.1994      20764             31.01.2000      09.11.2014     Granted
European Pat        1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Spain               1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Finland             1      P   961999            03.11.1994                                                       Filed
France              1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Great Britain       1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Greece              1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Hong Kong           1          98114639.1        22.12.1998                                                       Filed
Hungary             1      P   P9601268          03.11.1994                                                       Filed
Indonesia           1          P-941957          11.11.1994      ID0004476         01.11.1999      11.11.2014     Granted
Ireland             1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Israel              1          111345            20.10.1994      111345            03.12.2000      20.10.2014     Granted
Iceland             1          4224              21.10.1994                                                       Filed
Italy               1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Korea South         1      P   96/702485         03.11.1994                                                       Filed
Liechtenstei        1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Lithuania           1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Luxembourg          1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Latvia              1      E                                                                                      Docketed
Monaco              1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Mexico              1          948732            10.11.1994                                                       Filed


                                        3


                                                                                          
Malaysia            1          PI94003029        14.11.1994                                                       Filed
Netherlands         1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Norway              1      P   961898            03.11.1994                                                       Filed
New Zealand         1      P   276197            03.11.1994      276197            18.09.1997      03.11.2014     Granted
Philippines         1          49235             25.10.1994                                                       Filed
Poland              1      P   P314263           03.11.1994      181462            31.07.2001      03.11.2014     Granted
Portugal            1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Russian Fed         1      P   96112112          03.11.1994      2144358           20.01.2000      03.11.2014     Granted
Saudi Arabia        1          94150314          13.11.1994                                                       Filed
Sweden              1      X   95900965.5        03.11.1994      0727997           13.02.2002      03.11.2014     Granted
Slovak Repub        1      P   PV0597/96         03.11.1994                                                       Filed
Thailand            1          024457            11.11.1994                                                       Filed
Ukraine             1      P   96051803          03.11.1994      40633             15.08.2001      03.11.2014     Granted
United States       1      P   08/364953         03.11.1994      5739152           14.04.1998      14.04.2015     Granted
South Africa        1          94/8180           18.10.1994      94/8180           26.07.1995      18.10.2014     Granted



                                        4


PATENT FAMILY LIST

Family         :   A2004
Appl./Propr    :   AstraZeneca AB
Title          :   NEW MANUFACTURING PROCESS



Country             SN     F   App No            App Date        Pat No.           Grant Dt.       Exp. Dt        Status
- -----------------   ----   --  ----------------  --------------  ----------------  --------------  -------------  ----------
                                                                                          
Australia           1      P   20105/00          22.11.1999                                                       Filed
Canada              1      P   2349195           22.11.1999                                                       Filed
European Pat        1      X   99963732.5        22.11.1999                                                       Filed
Hong Kong           1          [**]              [**]                                                             Filed
New Zealand         1      P   511503            22.11.1999                                                       Filed
United States       1      P   09/508260         22.11.1999                                                       Filed
South Africa        1      P   2001/3434         22.11.1999                                                       Filed


                                        5


                                   Schedule B

                             Trademark Registrations

                                        1


                             Trademark Family Report

TRADEMARK                :  CLEVELOX

TM Family Number         :  A02243
TM Attorney              :  MST
Project Resp. RPT        :  MST
Project Description      :  Clevidipine
Project Number           :  20298
Project Cost Centre      :  20298
Therapeutic Area         :  Cardio vascular
Owner                    :



Country                      SN     Appl De            Reg. Dt        Reg No            Expir. Dt               Status
- ---------------------------  -----  -----------------  -------------  ----------------  ----------------------  --------------
                                                                                              
United Arab Emi              1                                                                                  Inactive
Argentina                    1      05.12.1997                                                                  Inactive
Austria                      1      24.11.1997         06.02.1998     173947            29.02.2008              Registered
Australia                    1      26.11.1997         26.11.1997     749529            26.11.2007              Registered
Brazil                       1                                                                                  Inactive
Benelux                      1      21.11.1997         21.11.1997     622377            21.11.2007              Registered
Canada                       1      16.12.1997                                                                  Filed
Switzerland                  1      21.11.1997         02.04.1998     450528            21.11.2007              Registered
China P.R.                   1      28.11.1997         14.02.1999     1246211           14.02.2009              Registered
Colombia                     1      03.12.1997                                                                  Filed
Czech Repub                  1      03.12.1997         27.05.1999     217843            03.12.2007              Registered
Germany                      1      22.11.1997         30.01.1998     39756082          30.11.2007              Registered
Denmark                      1      21.11.1997         15.09.1998     199802513         15.09.2008              Registered
Egypt                        1      01.12.1997                                                                  Filed
Spain                        1      26.11.1997         20.05.1998     2128403           26.11.2007              Registered
Finland                      1      21.11.1997         13.11.1998     211790            13.11.2008              Registered
France                       1      24.11.1997         24.11.1997     97705657          24.11.2007              Registered
Great Britian                1      21.11.1997         21.11.1997     2151563           21.11.2007              Registered
Greece                       1      17.11.1997         17.11.1999     135252            17.11.2007              Registered
Hong Kong                    1      08.12.1997         08.12.1997     3239/99           08.12.2004              Registered
Hungary                      1      27.11.1997         08.02.1999     155530            27.11.2007              Registered
Indonesia                    1      12.12.1997         12.12.1997     427623            12.12.2007              Registered
Ireland                      1      30.10.1997         21.11.1997     208749            21.11.2007              Registered
Israel                       1      24.11.1997         07.02.1999     116095            24.11.2004              Registered
India                        1      26.11.1997                                                                  Filed
Iceland                      1      24.11.1997         28.01.1998     210/1998          28.01.2008              Registered
Italy                        1      25.11.1997         18.05.2000     813581            25.11.2007              Registered
Japan                        1      09.01.1998         02.04.1999     4257306           02.04.2009              Registered
Japan                        2      17.04.2000         07.09.2001     4504229           07.09.2011              Registered
South Korea                  1      27.11.1997         27.11.1998     431337            27.11.2008              Registered
Mexico                       1      04.12.1997         04.12.1997     568689            04.12.2007              Registered
Malaysia                     1      28.11.1997                                                                  Filed
Norway                       1      21.11.1997         18.06.1998     190954            18.06.2008              Registered
New Zealand                  1      25.11.1997         25.11.1997     285223            25.11.2004              Registered


                                        2


                                                                                              
Pakistan                     1      25.11.1997                                                                  Filed
Poland                       1      25.11.1997         06.03.2001     123629            25.11.2007              Registered
Portugal                     1      25.11.1997         15.05.1998     327385            15.05.2008              Registered
Romania                      1      05.12.1997         05.12.1997     33325             05.12.2007              Registered
Russian Federat              1      03.12.1997         24.02.1999     172676            03.12.2007              Registered
Saudi Arabia                 1      12.01.1998         12.01.1998     474/30            22.09.2007              Registered
Sweden                       1      21.11.1997         06.08.1999     332270            06.08.2009              Registered
Singapore                    1      15.12.1997                                                                  Filed
Slovak Republic              1      25.11.1997         14.12.1999     188597            25.11.2007              Registered
Thailand                     1      09.12.1997         09.12.1997     80071             09.12.2007              Registered
Turkey                       1      26.12.1997         26.12.1997     195964            26.12.2007              Registered
Taiwan                       1      04.12.1997         16.10.1998     820735            16.10.2008              Registered
United States                1      21.11.1997                                                                  Inactive
United States                2      19.04.2001                                                                  Filed
Vietnam                      1      05.01.1998         07.05.1999     30808             05.01.2008              Registered
South Africa                 1      01.12.1997         01.12.1997     97/18422          01.12.2007              Registered



                                        3


                                   Schedule C

                                    Compound

                                        1


SCHEDULE C,  COMPOUND


CHEMICAL STRUCTURE, CHEMICAL NAME AND MOLECULAR FORMULA

CHEMICAL STRUCTURE


Figure 1. Chemical structure of clevidipine


CHEMICAL NAME

Butyroxymethyl methyl
4-(2',3'-dichlorophenyl)-1,4-dihydro-2,6-dimethyl-3,5-pyridinedicarboxylate.

MOLECULAR WEIGHT

456.3 g/mol.

MOLECULAR FORMULA

C SUB(21)H SUB(23)Cl SUB(2)NO SUB(6)

                                        2


                                   Schedule D

                                     Reports


REPORTS TO BE TRANSLATED AND SENT TO TMC



REPORT                            PAGES               COMMENT
                                                
[**]                              7
[**]                              10+6
[**]                              12
[**]                              15
[**]                              21
[**]                              9
[**]                              2
[**]                              2
[**]                              2
[**]                              24
[**]                              15                  Written in English
[**]                              7
[**]                              17
[**]                              15
[**]                              6
[**]                              33
[**]                              6
[**]                              17                  Written in
                                                      English
[**]                              5                   Written in
                                                      English
[**]                              22                  Clevidipine,
                                                      delivered batch
                                                      401/97
[**]                              26
[**]                              28
[**]                              23
[**]                              10-20


                                        1


                                   Schedule E

                                Supply Agreement

                                      - i -


                              THE MEDICINES COMPANY

February 13, 2004


Anders Buren
AstraZeneca AB
S-151 85 Sodertalje
Sweden

Facsimile No.:  46 8 553 233 00

Re:      License Agreement regarding Clevidipine, effective as of March 28, 2003

Dear Anders:

         This is to advise AstraZeneca AB, pursuant to Section 9.1 of the
License Agreement, effective as of March 28, 2003 (the "License Agreement"),
between AstraZeneca AB and The Medicines Company ("TMC") that TMC wishes to
maintain its exclusive license to the ASTRAZENECA Trademark, Clevelox, granted
to TMC under Article 2.1 of the License Agreement.

Sincerely,

/s/ Clive A. Meanwell

Clive A. Meanwell, M.D.
Executive Chairman


cc:      Dr. Margareta Nordlander
         Dr. Anders Waas

                                     - ii -



                                  CONFIRMATION

This Confirmation sets forth the Parties' mutual understanding of the
interpretation of Article 6.2.1 of the License Agreement effective as of 28
March 2003 (the "License Agreement") entered into by and between AstraZeneca AB,
with its registered office at SE-151 85 Sodertalje, Sweden ("ASTRAZENECA"), and
The Medicines Company, with its registered office at 8 Campus Drive, Parsippany,
New Jersey 07054, United States ("TMC").

Any term with capital initial letter and defined in the License Agreement shall
when used in this Confirmation document have the meaning ascribed to it in the
License Agreement. The Parties hereby confirm that it is their mutual
understanding that the annual Net Sales mentioned in Article 6.2.1 refers to the
annual Net Sales in the whole Territory.

The Parties confirm that the Agreement shall remain in full force and effect in
accordance with its terms and conditions.

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

IN WITNESS WHEREOF, the Parties have executed this Confirmation document in two
(2) original copies.

ASTRAZENECA AB (publ)                        THE MEDICINES COMPANY


/s/ Gunner Olsson                            /s/ Clive Meanwell
- ----------------------------------------     ----------------------------------
Name:  Gunner Olsson                         Name:  Clive Meanwell
Title: VP & Head of CV TA                    Title: Executive Chairman

December 19, 2003


         8 Campus Drive Parsippany, New Jersey 07054 Tel: (973) 656-1616
                               Fax (973) 656-9898

EX-10.18

                                                                   EXHIBIT 10.18

          Confidential Materials omitted and filed separately with the
         Securities and Exchange Commission. Asterisks denote omissions.


                                LICENSE AGREEMENT


                 Entered into by and between AstraZeneca AB and
           The Medicines Company as of the 18th day of December, 2003



                                TABLE OF CONTENTS

                                                                        
1.       DEFINITIONS...........................................................2

2.       GRANT OF LICENSE.....................................................11

3.       DEVELOPMENT AND COMMERCIALIZATION....................................15

4.       SUPPLY MATTERS.......................................................25

5.       EXCHANGE OF INFORMATION..............................................27

6.       CONSIDERATION........................................................29

7.       INTELLECTUAL PROPERTY - PROSECUTION AND MAINTENANCE..................39

8.       CLAIMS REGARDING INFRINGEMENT AND INVALIDITY.........................42

9.       TRADEMARK............................................................46

10.      INDEMNITY............................................................47

11.      CONFIDENTIALITY......................................................49

12.      ADVERSE EVENTS.......................................................51

13.      REPRESENTATIONS, WARRANTIES AND COVENANTS............................52

14.      TERM AND TERMINATION.................................................55

15.      CONSEQUENCES OF TERMINATION..........................................57

16.      FORCE MAJEURE........................................................60

17.      GENERAL PROVISIONS...................................................61

18.      GOVERNING LAW AND ARBITRATION........................................65



                                       -i-


                                                                               1

                                LICENSE AGREEMENT


This Agreement is entered into as of the 18th day of December, 2003 (the
"Effective Date")

by and between

ASTRAZENECA AB, a company incorporated under the laws of Sweden with its
registered office at SE-151 85 Sodertalje, Sweden ("ASTRAZENECA") and

THE MEDICINES COMPANY, a company incorporated under the laws of Delaware with
its registered office at 8 Campus Drive, Parsippany, New Jersey 07054, United
States ("TMC").

                                   WITNESSETH

WHEREAS, ASTRAZENECA performs research, development and marketing of
pharmaceutical compounds and products inter alia in the cardiovascular therapy
area; and

WHEREAS, ASTRAZENECA has developed an intravenous pharmaceutical compound
designated AR-C69931MX for the selective inhibition of ADP-induced platelet
activation and aggregation; and

WHEREAS, TMC performs development of pharmaceutical compounds and marketing of
pharmaceutical products particularly in the cardiovascular therapy area; and

WHEREAS, ASTRAZENECA has expressed an interest to license AR-C69931MX to TMC
[**] for intravenous administration [**], and TMC has expressed an interest
to license said compound; and

WHEREAS, it is a mutual objective of the Parties to maximise the sales of the
Product.

NOW THEREFORE, the Parties hereto agree to the following.

                    License Agreement - The Medicines Company



                                                                               2

1.             DEFINITIONS


When used in this Agreement the following expressions shall have the meanings
defined herein. The singular form of the defined expression shall include the
plural form thereof and vice versa.


1.1.           "ANDA Act" shall have the meaning defined in Article 8.3.1(a).

1.2.           "[**]" shall mean ASTRAZENECA's proprietary compound with the
               chemical structure as shown in Schedule E.

1.3.           "Adverse Event" shall mean the development of an undesirable
               medical condition or the deterioration of a pre-existing medical
               condition following or during exposure to a pharmaceutical
               product whether or not considered causally related to such
               product.

1.4.           "Affiliate" with respect to a Person shall mean any other Person
               that directly, or indirectly through one or more intermediaries,
               controls, is controlled by or is under common control with such
               Person. For the purposes of this Article 1.4 only, "control" and,
               with correlative meanings, the terms "controlled by" and "under
               common control with", shall mean (a) the possession, directly or
               indirectly, of the power to direct the management or policies of
               a Person, whether through the ownership of voting securities, by
               contract or otherwise, and/or (b) the ownership, directly or
               indirectly, of more than fifty percent (50%) of the voting
               securities or other ownership interest of a Person.

1.5.           "Agreement" shall mean this document including any and all
               schedules, appendices and other addenda to it as may be changed,
               added and/or amended from time to time in accordance with the
               provisions of this Agreement.

                    License Agreement - The Medicines Company



                                                                               3

1.6.           "ASTRAZENECA IP" shall mean the ASTRAZENECA Patent Rights and the
               ASTRAZENECA Know-How.

1.7.           "ASTRAZENECA Indemnified Party" shall have the meaning defined in
               Article 10.1.1.

1.8.           "ASTRAZENECA Know-How" shall mean any Know-How relating to the
               Compound for intravenous administration [**] and/or the Product,
               developed, acquired or licensed by ASTRAZENECA prior to the
               Effective Date and in ASTRAZENECA's possession at the Effective
               Date.

1.9.           "ASTRAZENECA Patent Rights" shall mean the patents and patent
               applications as set out in Schedule A, and any Patents Rights
               derived therefrom.

1.10.          "Baseline Quarter" shall mean the Quarter preceding the Quarter
               in which ASTRAZENECA receives NDA Approval of an [**] Product.

               The definition "NDA Approval" shall, for the purpose of this
               Article 1.10 (and Articles 1.43 and 6.2.3) only, be deemed to
               refer to [**] Product instead of Product.

1.11.          "Combination Product" shall mean any pharmaceutical product which
               has only an intravenous route of administration, and [**], in a
               finished dosage form which comprises the Compound and at least
               one other active pharmaceutical ingredient.

1.12.          "Commercially Reasonable Efforts" shall mean with respect to the
               efforts to be expended by a Party with respect to any objective,
               the use of reasonable, diligent, good faith efforts to accomplish
               such objective as such Party would normally use to accomplish a
               similar objective under similar circumstances, it being
               understood and agreed that with respect to the research,
               development or commercialisation of Product, such efforts shall
               be

                    License Agreement - The Medicines Company



                                                                               4

               substantially equivalent to those efforts and resources commonly
               used by a Party for a product owned by it or to which it has
               rights, which product is at a similar stage in its development or
               product life and is of similar market potential taking into
               account efficacy, safety, regulatory authority-approved
               labelling, the competitiveness of alternative products in the
               marketplace, the patent and other proprietary position of the
               Product, the likelihood of regulatory approval given the
               regulatory structure involved, the profitability of the Product
               taking into account the royalties payable to licensors of patent
               or other intellectual property rights, alternative products and
               other relevant commercial factors. Commercially Reasonable
               Efforts shall be determined on a country-by-country basis for the
               Product, and it is anticipated that the level of effort will
               change over time (including, to the extent appropriate, the
               reduction or cessation of active promotional efforts), reflecting
               changes in the status of the Product and the market(s) involved.

1.13.          "Compound" shall mean ASTRAZENECA's proprietary compound named
               AR-C69931MX with the chemical structure as shown in Schedule C,
               attached hereto, including all salts, esters, complexes,
               chelates, hydrates, isomers, stereoisomers, crystalline and
               amorphous forms and solvates thereof.

1.14.          "Confidential Information" shall mean (i) in the case of TMC
               being the Receiving Party, ASTRAZENECA IP, and (ii) in the case
               of ASTRAZENECA being the Receiving Party TMC IP, and (iii) in the
               case of either Party being the Receiving Party, data generated by
               either or both Parties hereunder and trade secrets and/or
               confidential information relating to technology, including but
               not limited to compound(s), composition(s), formulation(s) and/or
               manufacturing information, and/or relating to the business
               affairs, including but not limited to commercial forecasts,
               plans, programs, customers, assets, financial projections, costs
               and customer lists and/or finances of the Disclosing Party,
               supplied or otherwise made available to the Receiving Party or
               coming into Receiving Party's possession in relation to the
               performance of this Agreement.

                    License Agreement - The Medicines Company



                                                                               5

1.15.          "Disclosing Party" shall mean the Party which discloses
               Confidential Information to the other Party.

1.16.          "Documents" shall mean reports, research notes, charts, graphs,
               comments, computations, analyses, recordings, photographs, paper,
               notebooks, books, files, ledgers, records, tapes, discs,
               diskettes, CD-ROM, computer programs and documents thereof,
               computer information storage means, samples of material, other
               graphic or written data and any other media on which Know-How can
               be permanently or temporarily stored.

1.17.          "Drug Product" shall mean the Compound in such formulation and
               associated primary packaging of dosage forms for intravenous
               administration as has been developed by ASTRAZENECA as of the
               Effective Date, used for, or intended for use in, human clinical
               trials, as described in the Product Master File, the table of
               contents of which is attached as Schedule B (the "PMF").

1.18.          "Excluded Countries" shall mean [**].

1.19.          "European Union" shall mean the countries that are, whether at
               the Effective Date or at any time thereafter, members of the
               European Union.

1.20.          "European Economic Area" shall mean the European Union plus
               Norway, Iceland and Liechtenstein.

1.21.          "FDA" shall mean the United States Food and Drug Administration
               or any successor agency thereto.

1.22.          "FTE Day" shall mean the equivalent of one person employed by
               ASTRAZENECA or TMC, as applicable, or their respective Affiliates
               full time for one day.

1.23.          "Filing of an NDA" shall mean the date of acceptance for review
               by the competent registration body in a given country of an NDA.

                    License Agreement - The Medicines Company



                                                                               6

1.24.          "Force Majeure" shall mean any cause preventing either Party from
               performing any or all of its obligations which arises from or is
               attributable to acts, events, omissions or accidents beyond the
               reasonable control of the Party so prevented, act of God, war,
               riot, civil commotion, malicious damage, accident, breakdown of
               plant or machinery, fire, flood or storm.

1.25.          "[**]" shall mean any of ASTRAZENECA's proprietary compounds
               [**], including all salts, esters, complexes, chelates, hydrates,
               isomers, stereoisomers, crystalline and amorphous forms,
               solvates, metabolites and prodrugs of any such compound.

1.26.          "[**] Product" shall mean any pharmaceutical formulation or
               product which has [**] containing [**] as the sole active
               ingredient in a finished dosage form suitable for administration
               to patients.

1.27.          "Know-How" shall mean technical and other information, which is
               not subject to published patent rights and which is not in the
               public domain, including, but not limited to, information
               comprising or relating to concepts, discoveries, data, designs,
               formulae, ideas, inventions, methods, models, assays, research
               plans, procedures, designs for experiments and tests and results
               of experimentation and testing, including results of research or
               development, processes, including manufacturing processes,
               specifications and techniques, laboratory records, chemical,
               pharmacological, toxicological, clinical, analytical and quality
               control data, trial data, case report forms, data analyses,
               reports, manufacturing data or summaries and information
               contained in submissions to and information from ethical
               committees and regulatory authorities. Know-How includes
               Documents containing Know-How, including but not limited to any
               rights including trade secrets, copyright, database or design
               rights protecting such Know-How. The fact that an item is known
               to the public shall not be taken to preclude the possibility that
               a compilation including the item, and/or a development relating
               to the item, is not known to the public.

                    License Agreement - The Medicines Company



                                                                               7

1.28.          "Launch" or "Launched" shall mean the first invoiced commercial
               sale by TMC, its Affiliates, sub-licensees or distributors,
               however not including sales made by one such entity to another
               such entity, of the Product in a country following NDA Approval
               in such country.

1.29.          "Major Market" shall mean each of [**].

1.30.          "NDA" shall mean a fully completed marketing license application
               comparable to a New Drug Application filed with the FDA,
               including all supporting documentation and data required for such
               application to be accepted for review by the competent health
               regulatory authorities for any country requesting approval for
               commercialisation of the Product for a particular indication in
               such country. NDA as herein defined shall for this purpose
               include applications for pricing or reimbursement approval where
               appropriate.

1.31.          "NDA Approval" shall mean the approval by the competent
               registration body for a given country of an NDA.

1.32.          "Net Sales" shall mean (i) the gross sales of Product by a Party
               or its Affiliates, or, regarding sales in the United States, its
               sub-licensees or distributors, to Third Parties, and (ii)
               royalties or other revenues, to the extent not included under
               (i), received by such Party or its Affiliates from its
               sub-licensees of the rights granted hereunder, or from its
               distributors, for sales of the Product outside the United States,
               after deduction of:

               a)   [**] and/or [**];

               b)   amounts [**] determined in good faith;

               c)   [**] such sales; and

               d)   [**] the Product.

                    License Agreement - The Medicines Company



                                                                               8

               In the event the Product is sold as part of a Combination
               Product, the Net Sales from the Combination Product, for the
               purposes of determining royalty payments, shall be determined by
               multiplying the Net Sales of the Combination Product (as defined
               in the standard Net Sales definition), during the applicable
               royalty reporting period, by the fraction, A/(A+B), where A is
               the average sales price of the Product when sold separately in
               finished form and B is the average sale price of the other
               product(s) included in the Combination Product when sold
               separately in finished form, in each case during the applicable
               royalty reporting period or, if sales of both the Product and the
               other product(s) did not occur in such period, then in the most
               recent royalty reporting period in which sales of both occurred,
               as adjusted, as necessary, for inflation from the date when both
               the Product and all other product(s) last were sold and the date
               of determination of Net Sales under this Article 1.32. In the
               event that such average sales price cannot be determined for both
               the Product and all other products(s) included in the Combination
               Product, Net Sales for the purposes of determining royalty
               payments shall be calculated by multiplying the Net Sales of the
               Combination Product by the fraction of C/(C+D) where C is the
               fair market value of the Product and D is the fair market value
               of all other pharmaceutical product(s) included in the
               Combination Product. In such event, the selling Party shall in
               good faith make a determination of the respective fair market
               values of the Product and all other pharmaceutical products
               included in the Combination Product, and shall notify the other
               Party of such determination and provide the other Party with data
               to support such determination. The other Party shall have the
               right to review such determination and supporting data, and to
               notify the selling Party if it disagrees with such determination.
               If the other Party does not agree with such determination and if
               the Parties are unable to agree in good faith as to such
               respective fair market values, then such matter shall be referred
               to arbitration pursuant to Article 18.1.

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                                                                               9

               Net Sales shall exclude (i) the transfer of a commercially
               reasonable quantity of free samples of Product to be given out to
               customers for promotional purposes; (ii) the transfer of Product
               for use in clinical trials; and (iii) the sales or transfers of
               Product among a Party and its Affiliates, and, in the United
               States, its sub-licensees or distributors, unless the receiver is
               the consumer or user of the Product; however, the resale or
               transfer of such Product to a Third Party shall be included in
               Net Sales.

               Product sold or otherwise transferred (x) in other than an arms
               length transaction or for other property (e.g. barter); or (y)
               where no separate price has been decided for the Product but a
               price is decided jointly for the Product plus at least one other
               product, shall be deemed invoiced at its fair market price in the
               country of sale or transfer.

               It is acknowledged that sub-licensees of a Party or its
               Affiliates and conventional distributors whose function is to
               purchase and resell Product, will be considered Third Parties
               when referring to Product sold outside the United States. The
               Parties agree further that for the purpose of the first paragraph
               of this Article 1.32 the Net Sales of the Product outside the
               United States by TMC or its Affiliates to such sub-licensees and
               distributors shall be the Net Sales received by TMC or its
               Affiliates from such sub-licensee or distributor for the Product
               or [**] percent ([**]%) of the actual gross sales, less
               deductions under subsections (a) through (d) above, of the
               Product by such sublicensee or distributor, whichever amount is
               the higher.

1.33.          "PMF" shall have the meaning defined in Article 1.17.

1.34.          "Party" or "Parties" shall mean TMC and/or ASTRAZENECA.

1.35.          "Patent Rights" shall mean patent applications and patents,
               utility models, utility certificates, certificates of addition
               and all foreign counterparts of them in all countries, including
               any divisional applications and patents, refilings, renewals,
               continuations, continuations-in-part, patents of addition,

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                                                                              10

               extensions (including patent term extensions and patent term
               restorations), reissues, substitutions, confirmations,
               registrations, revalidations, re-examinations, pipeline and
               administrative protections and additions, and any equivalents of
               the foregoing in any and all countries of or to any of them, as
               well as any supplementary protection certificates and equivalent
               protection rights in respect of any of them.

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

1.37.          "Phase III Clinical Trial" shall mean a large scale, pivotal
               multicentre, human clinical trial to be conducted in a number of
               patients estimated to be sufficient to establish safety or
               efficacy in the particular claim and indication and at a standard
               suitable to obtain NDA Approval.

1.38.          "Procedure" shall have the meaning defined in Article 3.5.1.

1.39.          "Product" shall mean any pharmaceutical formulation or product
               which has only an intravenous route of administration, and [**],
               containing the Compound as the sole active ingredient in a
               finished dosage form suitable for administration to patients.
               Apart from in this Article 1.39, and unless the context clearly
               requires otherwise in this Agreement, when used in this
               Agreement, the term "Product" shall be deemed to include
               "Combination Product".

1.40.          "Quarter" shall mean a calendar quarter ending March 31, June 30,
               September 30 or December 31.

1.41.          "Receiving Party" shall mean the Party which receives
               Confidential Information from the other Party.

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                                                                              11

1.42.          "Results" shall have the meaning defined in Article 7.8.

1.43.          "Subsequent Quarter" shall mean the Quarter in which ASTRAZENECA
               receives NDA Approval of an [**] Product or any subsequent
               Quarter.

               The definition "NDA Approval" shall, for the purpose of this
               Article 1.43 (and Articles 1.10 and 6.2.3) only, be deemed to
               refer to [**] Product instead of Product.

1.44.          "Supply Agreement" shall have the meaning described in Article
               4.2.1.

1.45.          "TMC IP" shall mean TMC Know-How, TMC Patent Rights and the TMC
               Trademark.

1.46.          "TMC Indemnified Party" shall have the meaning defined in Article
               10.2.1.

1.47.          "TMC Know-How" shall mean any Know-How relating directly to the
               Compound and/or the Product developed, acquired or licensed by
               TMC during the term of this Agreement.

1.48.          "TMC Patent Rights" shall mean any Patent Rights directly
               relating to the Compound and/or the Product developed, acquired
               or licensed by TMC during the term of this Agreement.

1.49.          "TMC Trademark" shall have the meaning defined in Article 9.1.

1.50.          "Territory" shall mean every country in the world, except the
               Excluded Countries.

1.51.          "Third Party" shall mean any Person not including the Parties or
               the Parties' respective Affiliates.

2.             GRANT OF LICENSE

2.1.           LICENSE GRANT.

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                                                                              12

2.1.1.         ASTRAZENECA hereby grants to TMC, subject to what is stated in
               Article 2.1.2, an exclusive license in the Territory under the
               ASTRAZENECA IP to perform research on, have research performed
               on, develop, have developed, use, have used, make, have made,
               import and have imported the Compound for intravenous
               administration [**], and to perform research on, have research
               performed on, develop, have developed, use, have used, make, have
               made, import, have imported, market, have marketed, sell and have
               sold the Product for all indications [**].

2.1.2.         The license granted under Article 2.1.1 shall not apply to the
               Compound or the Product in relation to any formulation or product
               which contains both the Compound and one or more [**] as active
               ingredients, whether or not such formulation or product contains
               active ingredients in addition to the Compound and the [**], and
               such rights shall, for the avoidance of doubt, be retained by
               ASTRAZENECA.

2.2.           GRANT TO TMC'S AFFILIATES. TMC's Affiliates shall have the
               benefit and burden of the licenses and rights set out in Article
               2.1 for the same purposes and under the same conditions as set
               forth herein, provided that TMC shall remain fully responsible
               for the compliance by such Affiliates with the terms and
               conditions of this Agreement as if such Affiliates were TMC
               hereunder.

2.3.           RIGHT TO SUB-LICENSE. TMC shall have the right to grant
               sub-licenses to the rights granted under Article 2.1, provided
               that TMC shall notify ASTRAZENECA of each such sub-license
               without unreasonable delay following any such grant of a
               sub-license. TMC shall ensure that all of its sub-licensees will
               comply with all terms and conditions of this Agreement and TMC
               shall remain fully responsible for the compliance by such
               sub-licensees with the terms and conditions of this Agreement as
               if such sub-licensees were TMC hereunder.

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                                                                              13

2.4.           RIGHT TO APPOINT DISTRIBUTORS. TMC shall also have the right to
               appoint distributors in the Territory for the sale of the
               Product. TMC shall at all times ensure that its distributors act
               fully in compliance with the terms and conditions of this
               Agreement.

2.5.           DURATION OF LICENSE GRANT. The licenses set out in Article 2.1
               shall continue in accordance with what is stated therein on a
               country-by-country basis until royalty payment is no longer due
               in the country concerned in accordance with what is stated in
               Article 6.4. The licenses set out in Article 2.1 shall thereafter
               continue on a non-exclusive basis and become fully paid up and
               royalty-free in the country concerned.

2.6.           FIRST RIGHT OF REFUSAL OF TMC REGARDING THE EXCLUDED COUNTRIES.
               Should ASTRAZENECA within its sole discretion at any time
               determine that ASTRAZENECA will not Launch the Product in one or
               more Excluded Countries and/or that ASTRAZENECA will not license,
               transfer or otherwise dispose of its interest in the ASTRAZENECA
               IP regarding one or more Excluded Countries, then ASTRAZENECA
               shall offer to TMC, by providing written notice, the first right
               to negotiate a license on exclusive rights to commercially
               exploit the Compound and the Product under the ASTRAZENECA IP in
               the Excluded Country(ies) concerned on terms similar to those
               under this Agreement. Should TMC wish to exercise such right,
               then TMC shall notify ASTRAZENECA hereof in writing no later than
               ninety (90) days upon receipt of ASTRAZENECA's notice. In
               reasonable connection with such notice the Parties shall enter
               into good faith negotiations using their reasonable endeavours to
               reach a mutually acceptable agreement providing for such TMC's
               commercial exploitation as mentioned in this Article 2.6.

2.7.           TMC GRANT OF RIGHTS TO ASTRAZENECA REGARDING THE EXCLUDED
               COUNTRIES.

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                                                                              14

2.7.1.         In consideration of the rights granted by ASTRAZENECA hereunder,
               TMC hereby grants to ASTRAZENECA, at no cost or remuneration, a
               sub-licensable non-exclusive license under the TMC IP to perform
               research on, have research performed on, develop, have developed,
               use, have used, make, have made, import, have imported, market,
               have marketed, sell and have sold the Compound and the Product
               for all indications in the Excluded Countries.

2.7.2.         TMC shall for the purpose of the license granted in Article 2.7.1
               make available to ASTRAZENECA, upon ASTRAZENECA's request, any
               Filings of an NDA in the Territory, any NDA Approvals obtained in
               the Territory and any related documents and any TMC's
               correspondence with any regulatory authorities in the Territory
               regarding any such Filing of an NDA, NDA Approval or related
               issues, and shall allow ASTRAZENECA to make cross-references to
               any such Filing of an NDA or NDA Approval in the Territory. For
               any services or assistance performed by TMC pursuant to this
               Article 2.7.2, ASTRAZENECA shall reimburse TMC for TMC's
               out-of-pocket costs for such activities plus USD [**] ($[**]) per
               FTE Day.

2.7.3.         The license under Article 2.7.1 shall include an exclusive right
               and license for ASTRAZENECA to utilize the TMC Trademark in the
               Excluded Countries. Should ASTRAZENECA use the TMC Trademark in
               connection with the sales and marketing of Product in an Excluded
               Country, then ASTRAZENECA shall pay to TMC a running royalty of
               [**] percent ([**]%) on the annual Net Sales of the Product in
               such Excluded Country.

               In each Excluded Country where ASTRAZENECA utilises, and for as
               long as ASTRAZENECA utilises, the license granted under this
               Article 2.7.3, ASTRAZENECA shall reimburse TMC its reasonable
               costs for maintaining the TMC Trademark in such Excluded Country.
               Such reimbursement shall be made within thirty (30) days of the
               expiration of each calendar year during which ASTRAZENECA has
               utilised such license.

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                                                                              15

2.8.           SECTION 365(n) OF TITLE 11. All rights and licenses granted under
               or pursuant to any section of this Agreement, including
               amendments hereto, are, for all purposes of Section 365(n) of
               Title 11 of the United States Bankruptcy Code ("Title 11"),
               licenses of rights to "intellectual property" as defined in Title
               11. The Parties shall retain and may fully exercise all of their
               respective rights under this Agreement pursuant to Title 11.
               Rejection of this Agreement pursuant to Section 365 of Title 11
               constitutes a material breach of this Agreement and entitles the
               aggrieved Party to terminate this Agreement for material breach
               upon written notice. Upon bankruptcy of either Party, the
               non-bankrupt Party shall further be entitled to a complete
               duplicate of (or complete access to, as appropriate) any such
               intellectual property, and such, if not already in its
               possession, shall be promptly delivered to the non-bankrupt
               Party, unless the bankrupt Party elects to continue, and
               continues, to perform all of its obligations under this
               Agreement.

3.             DEVELOPMENT AND COMMERCIALIZATION

3.1.           TRANSFER OF ASTRAZENECA KNOW-HOW.

3.1.1.         TRANSFER OF ASTRAZENECA KNOW-HOW. Without unreasonable delay
               following the Effective Date, ASTRAZENECA shall make available
               and transfer to TMC the following ASTRAZENECA Know-How.

               a)   a description of the process used by ASTRAZENECA for the
                    manufacturing of the Compound intended for Phase III
                    Clinical Trials and a summary report of the development of
                    such process;

               b)   a description of the process, available to ASTRAZENECA at
                    the Effective Date, for the manufacture of all intermediates
                    to be used for the manufacturing of the Compound;

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                                                                              16

               c)   a description of the analytical methods and validation
                    reports, available to ASTRAZENECA at the Effective Date, for
                    the starting materials and intermediates to be used in the
                    manufacturing of the Compound.

                    It is acknowledged that at the Effective Date some of those
                    analytical methods are not fully developed and validated,
                    and such development and validation will not be continued or
                    completed by ASTRAZENECA. ASTRAZENECA will, however, provide
                    a summary report of the status of these methods at the
                    Effective Date.

               d)   the description of the tentative test-methods used by
                    ASTRAZENECA for validating the bulk Compound manufactured,
                    and a brief summary of the validation done thereon by
                    ASTRAZENECA;

               e)   to the extent available to ASTRAZENECA at the Effective
                    Date, reference and analytical standard compounds to be used
                    as reference material in the conduct of comparative analyses
                    in relation to the manufacturing process with the Compound.
                    It is explicitly understood that no such compound may be
                    used for any other purpose than the purpose now stated;

               f)   a description of the formula and manufacturing process used
                    by ASTRAZENECA for the manufacturing of the Drug Product
                    intended for Phase III Clinical Trials. Where available,
                    ASTRAZENECA will provide TMC with summary reports of the
                    development of such processes;

                    As a prerequisite of ASTRAZENECA providing the ASTRAZENECA
                    Know-How contemplated under this sub-section f) TMC shall
                    notify ASTRAZENECA in writing of the vial strengths and
                    batch size that TMC initially intends to manufacture the
                    Drug Product in and

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                                                                              17

                    ASTRAZENECA's obligations under this sub-section f) shall
                    apply only in relation to such strengths and size.

               g)   a description of the analytical methods used by ASTRAZENECA
                    in the testing and stability assessment of the Drug Product;

                    It is acknowledged that at the Effective Date some of those
                    analytical methods are not fully developed and validated,
                    and such development and validation will not be continued or
                    completed by ASTRAZENECA. ASTRAZENECA will, however, provide
                    a summary report of the status of these methods at the
                    Effective Date.

               h)   stability data and shelf-life recommendations for the Drug
                    Product used in previous clinical trials;

               i)   a description of the Drug Product formulations and processes
                    used in previous clinical trials. This information will be
                    contained within existing reports available at the Effective
                    Date.

               j)   specifications on the Compound and Drug Product used in
                    clinical trials conducted by ASTRAZENECA prior to the
                    Effective Date.

               k)   project-related reports and documentation, which are
                    designated with an asterisk in Schedule D, containing
                    ASTRAZENECA Know-How relating to the manufacturing of the
                    Compound. Additional reports contained in Schedule D will be
                    made available by ASTRAZENECA to TMC upon request by TMC to
                    ASTRAZENECA in writing.

               l)   the PMF and, upon request by TMC to ASTRAZENECA in writing,
                    other relevant reports, if available to ASTRAZENECA,
                    containing ASTRAZENECA Know-How relating to the
                    manufacturing of the Drug Product.

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                                                                              18

               Any documents contemplated by this Article 3.1 shall be in
               English when transferred to TMC.

3.1.2.         Any activities to be carried out by ASTRAZENECA under Article
               3.1.1 shall be made to an extent necessary and reasonable and
               ASTRAZENECA shall not be obligated to devote more than the
               equivalent of [**] FTE Days thereon and under no circumstances to
               carry out such activities beyond the date [**] months from the
               Effective Date. It is acknowledged that ASTRAZENECA may at its
               discretion carry out assistance under Article 3.1.1 for up to
               [**] percent ([**]%) of such FTE Days by using Third Party
               consultants.

3.2.           THIRD PARTY MANUFACTURERS.

3.2.1.         It is acknowledged that TMC may present the ASTRAZENECA Know-How
               described under Article 3.1.1 to Third Party manufacturers for
               the purposes permitted under Article 11.2.4. TMC shall notify
               ASTRAZENECA in writing regarding the date of submission of such
               information to any such Third Party manufacturer(s). ASTRAZENECA
               shall in this connection assist TMC to address questions raised
               about such ASTRAZENECA Know-How by no more than three (3) of such
               Third Party manufacturer(s) of the Compound and no more than
               three Third Party manufacturers of the Drug Product selected by
               TMC, during a period of three (3) months from the date of
               presentation of such ASTRAZENECA Know-How to the Third Party
               manufacturer concerned. ASTRAZENECA shall also provide TMC with
               advice on the technical merits of proposals regarding
               manufacturing of the Compound brought forward by such Third Party
               manufacturer(s). Any assistance provided under this Article 3.2.1
               may be given by telephone or e-mail or by other appropriate means
               as agreed by the Parties.

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3.2.2.         ASTRAZENECA undertakes to participate in no more than one (1)
               meeting in person with one Third Party manufacturer, selected by
               TMC, to outline details of the manufacturing synthesis regarding
               the Compound, provided that such meeting, at ASTRAZENECA's sole
               discretion, shall take place either at ASTRAZENECA's Charnwood
               site at Loughborough, UK, or at the Third Party manufacturer's
               site.

3.2.3.         ASTRAZENECA undertakes to participate in no more than one (1)
               meeting in person with one Third Party manufacturer, selected by
               TMC, to outline details of the manufacture of the Drug Product.
               Such meeting shall, at ASTRAZENECA's sole discretion, take place
               either at ASTRAZENECA's Charnwood site at Loughborough, UK, or at
               the Third Party manufacturer's site.

3.2.4.         ASTRAZENECA further undertakes, upon having received written
               notice from TMC, for a period of three (3) months starting sixty
               (60) days upon ASTRAZENECA's receipt of such notice, to assist
               TMC, by telephone, e-mail or other appropriate means as agreed by
               the Parties, in TMC's discussions with Drug Product contractors
               in connection with the formulation program regarding the Product.
               The Parties agree, however, that TMC may not give such notice
               contemplated above in this Article 3.2.4 later than eight (8)
               months after the Effective Date.

3.2.5.         ASTRAZENECA agrees to provide reasonable assistance to the Third
               Party manufacturer selected by TMC, by telephone, e-mail or other
               appropriate means as agreed by the Parties, in connection with
               the start-up of manufacturing operations for the Product for a
               period of twelve (12) months following commencement of process
               development by such contract manufacturer or fifteen (15) months
               after the Effective Date, whichever is the earliest to occur.

3.3.           DURATION OF AND COMPENSATION FOR ASSISTANCE BY ASTRAZENECA.

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3.3.1.         The Parties agree that any assistance to be provided by
               ASTRAZENECA under Articles 3.2 and 3.5.1 shall be given to an
               extent necessary and reasonable and shall be given only within
               the first [**] years after the Effective Date and shall not in
               total exceed [**] FTE Days. It is acknowledged that ASTRAZENECA
               may at its discretion carry out any such assistance for up to
               [**] percent ([**]%) of such [**] FTE Days by using Third Party
               consultants.

3.3.2.         For any services or assistance performed by ASTRAZENECA pursuant
               to Articles 3.1.2 and 3.3.1, TMC shall reimburse ASTRAZENECA for
               ASTRAZENECA's out-of-pocket costs for such activities plus USD
               [**] ($[**]) per FTE Day. Should ASTRAZENECA use a Third Party
               consultant(s) for carrying out assistance for a certain FTE Day,
               or part thereof, then, for the avoidance of doubt, the FTE Day
               rate now stated shall apply thereon, and the out-of-pocket costs
               for consultants, if any, as indicated above in this paragraph,
               shall apply only to costs for consultants which would typically
               have been incurred should the assistance have been actually
               carried out by an employee(s) of ASTRAZENECA or its Affiliates.

3.3.3.         ASTRAZENECA shall invoice TMC for all assistance during each
               relevant time period within thirty (30) days of the expiration of
               each calendar half-year.

3.4.           DEVELOPMENT OF PRODUCT.

3.4.1.         TMC shall, subject to the obligations stated in this Article 3
               and in Article 5, carry out the development work permitted
               hereunder within its sole discretion and at its own cost and
               expense.

3.4.2.         TMC shall use Commercially Reasonable Efforts to develop Product
               up until the stage of Filing of an NDA in each country of the
               Territory.

3.5.           REGULATORY FILINGS.

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3.5.1.         TMC shall be responsible for the preparation, submission and
               prosecution of all Filings of an NDA in each country in which
               TMC, its Affiliates, sub-licensees or distributors will sell
               Product. TMC, its Affiliates, sub-licensees or distributors shall
               be the owner and party of record for all such filings,
               applications and approvals. ASTRAZENECA agrees to provide
               assistance requested by TMC as reasonably necessary for
               preparation and prosecution of such filings and applications in
               the European Union (it being contemplated that such filings and
               applications will be done by using the then most efficient
               centralised procedure for applying for and obtaining
               multi-country NDAs in the European Union (the "Procedure")), and
               in the United States. TMC shall reimburse ASTRAZENECA in
               accordance with Article 3.3 for any costs and expenses incurred
               in such assistance. TMC shall be responsible for any costs
               associated with preparation, submission and prosecution of all
               such Filing of an NDA and NDA Approvals required.

3.5.2.         TMC shall, at its own expense, use Commercially Reasonable
               Efforts in Filing of an NDA and prosecution thereof and in
               obtaining NDA Approvals in its own name or in the name of its
               Affiliate(s), sub-licensee(s) or distributors in each country of
               the Territory.

3.5.3.         Regarding any country in the European Union where TMC makes a
               Filing of an NDA, TMC shall for such purpose use the Procedure,
               unless TMC can clearly establish that Filing of an NDA regarding
               one or more separate countries within the European Union would be
               more advantageous to the Product from a regulatory or commercial
               perspective.

3.5.4.         TMC shall promptly inform ASTRAZENECA in writing, and by
               facsimile in accordance with Article 17.4.2, of any Filing of an
               NDA and of any NDA Approval, and shall in immediate connection
               therewith provide ASTRAZENECA with a written summary of any such
               Filing of an NDA and NDA Approval, or with a copy thereof,
               whichever ASTRAZENECA may elect.

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3.5.5.         Following NDA Approval in a country of the Territory TMC shall
               use its Commercially Reasonable Efforts to Launch the Product in
               such country.

3.6.           MARKETING AND SALES OF PRODUCT.

3.6.1.         Regarding any country of the Territory where the Product is
               Launched, TMC shall promptly inform ASTRAZENECA in writing of the
               occurrence of such Launch.

3.6.2.         TMC shall, in each country of the Territory where the Product has
               been Launched, at its own expense, or the expense of its
               Affiliates, sub-licensees or distributors, use Commercially
               Reasonable Efforts to market and sell the Product.

3.6.3.         For the avoidance of doubt, what is stated regarding the
               obligations of TMC in this Article 3 or elsewhere in this
               Agreement shall always be subject to what is stated in Articles
               2.2 and 2.3, such that any of TMC's obligations may be performed
               by one or more of TMC's Affiliates or sublicensees. Further, in
               accordance with what is stated in Article 2.4, any of TMC's
               obligations under this Article 3.6 and under Article 3.7 may be
               performed by one or more of TMC's distributors.

3.7.           SPECIFIC TIME LIMITS FOR PERFORMANCE. Notwithstanding what is
               stated in Articles 3.4.2, 3.5.2, 3.5.5 and 3.6.2, and without
               limiting the general performance criteria stated therein, the
               following performance criteria stated in this Article 3.7 shall
               apply to the situations herein described.

3.7.1.         TIME LIMIT FOR ENTERING INTO PHASE III CLINICAL TRIALS.

               TMC shall no later than [**] have made the first dosing of a
               patient in a Phase III Clinical Trial regarding the Compound.

3.7.2.         TIME LIMIT FOR FILING OF AN NDA.

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               a)   TMC shall no later than [**] have made a Filing of an NDA
                    [**].

               b)   TMC shall no later than [**] or [**] after having made a
                    Filing of an NDA in the United States, whichever is the
                    earlier, have made a Filing of an NDA [**].

               c)   TMC shall no later than [**] or [**] after having made the
                    last Filing of an NDA under Article 3.7.2 (b), whichever is
                    the earlier, have made a Filing of an NDA [**].

3.7.3.         Notwithstanding what is stated in Article 3.7.2 c), TMC shall not
               be obligated to make a Filing of an NDA in [**]  until the
               [**] patent application no. [**] is granted insofar it
               relates to the Compound to the extent licensed to TMC under this
               Agreement. For the avoidance of doubt, such exemption from those
               obligations now stated shall not relieve TMC from its obligations
               under Article 3.7.2 b).

3.7.4.         TIME LIMIT FOR LAUNCH OF THE PRODUCT

               TMC shall no later than [**] following NDA Approval in any Major
               Market Launch the Product in the Major Market in which such NDA
               Approval was obtained.

3.8.           REMEDY FOR FAILURE.

3.8.1.         NON-COMPLIANCE.

               Should TMC at any time not comply with the applicable criteria of
               performance as set forth in Articles 3.4.2, 3.5.2, 3.5.5, 3.6.2,
               3.7.1, 3.7.2 or 3.7.4, then TMC shall promptly so notify
               ASTRAZENECA in writing.

               a)   In case of non-compliance with the performance criteria set
                    forth in Article 3.7.1, ASTRAZENECA shall have the right, by
                    giving ninety (90) days written notice to TMC, to require
                    the license granted

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                                                                              24

                    hereunder to terminate regarding the Compound and the
                    Product, subject to Article 3.8.2.

               b)   In case of non-compliance with the performance criteria set
                    forth in Articles 3.4.2, 3.5.2, 3.5.5, 3.6.2, 3.7.2 (a) or
                    3.7.4, ASTRAZENECA shall have the right, by giving ninety
                    (90) days written notice to TMC, to require the license
                    granted hereunder to terminate regarding the Compound and
                    the Product in the Major Market or other country concerned,
                    subject to Article 3.8.2.

               c)   In case of non-compliance with the performance criteria set
                    forth in Article or 3.7.2 (b) or (c), ASTRAZENECA shall have
                    the right, by giving ninety (90) days written notice to TMC,
                    to require the license granted hereunder to terminate
                    regarding the Compound and the Product in any Major
                    Market(s) other than the Major Market(s) regarding which the
                    performance criteria concerned was fulfilled (and, in the
                    case of non-compliance with Article 3.7.2 (c), the Major
                    Market(s) regarding which such criteria had been fulfilled
                    under Article 3.7.2 (b) or that was exempted under Article
                    3.7.3), subject to Article 3.8.2.

               d)   If ASTRAZENECA makes a request under (a), (b) or (c) above,
                    and provided that TMC has not remedied the default concerned
                    within the ninety-day period stated, then, provided that
                    ASTRAZENECA notifies TMC in writing hereof within thirty
                    (30) days after the expiration of such ninety-day period,
                    the license regarding the Compound and the Product shall
                    terminate for the Major Market or other country contemplated
                    by such notice and what is stated in Article 15.1 shall
                    apply regarding such Major Market or other country, subject
                    to Article 3.8.2.

3.8.2.         REASONABLE DELAY OR OTHER NON-COMPLIANCE.

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                                                                              25

               a)   Should TMC upon receipt of notice from ASTRAZENECA according
                    to Article 3.8.1 (a) through (c) be able to show that the
                    delay or other non-compliance in the country(ies) concerned
                    is justifiable from a clinical, scientific or regulatory
                    perspective, then the Parties shall meet and consult whether
                    the situation so occurred could be reasonably solved. Should
                    the Parties, despite such consultations, not be able to find
                    a mutually acceptable solution within three (3) months after
                    having entered into such consultations, then ASTRAZENECA may
                    terminate the license regarding the country(ies) concerned
                    by giving TMC a notice of same in writing, whereupon the
                    license regarding such country(ies) shall immediately
                    terminate and what is stated in Article 15.1 shall apply
                    regarding such country(ies).

               b)   Should, following the initiation of the consultations
                    pursuant to the first paragraph of this Article 3.8.2,
                    either Party reasonably believe that a solution to the
                    situation arisen may be solved through such consultations,
                    but not within the initial three-month timeframe, then such
                    Party may notify the other Party thereof; and the
                    three-month period provided for in Article 3.8.2 a) shall be
                    extended with a time-period as requested by such Party in
                    such notice but with no more than three (3) months from the
                    date of the notice.

3.9.           The remedies stated in Article 3.8 shall be ASTRAZENECA's sole
               remedy in case of any failure by TMC to comply with what is
               stated in this Article 3.

4.             SUPPLY MATTERS

4.1.           TRANSFER OF BULK COMPOUND TO TMC. ASTRAZENECA undertakes to
               supply to TMC [**] approximately [**] kilograms of bulk Compound
               no later than ninety (90) days after the Effective Date. The
               transport of such entire quantity of bulk Compound shall be
               entirely at TMC's risk and expense. It is explicitly understood
               that this quantity of Compound was

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                                                                              26

               manufactured by ASTRAZENECA at an earlier date, and was not made
               for the purpose of the supply now stated, and that ASTRAZENECA
               gives no guarantee whatsoever as to the characteristics of the
               Compound or the Compound's fitness for any particular purpose. It
               is explicitly understood and agreed by the Parties that
               ASTRAZENECA shall have no obligations whatsoever to transfer or
               supply, other than as explicitly provided under this Article 4.1,
               any quantity of Compound or Product to TMC.

4.2.           SUPPLY OF COMPOUND AND PRODUCT BY TMC.

4.2.1.         TMC undertakes to supply ASTRAZENECA and/or any of its
               Affiliates, at TMC's [**] ASTRAZENECA's and/or its Affiliates
               entire need of Product for clinical trials, sale, promotion and
               marketing in the Excluded Countries, pursuant to the Supply
               Agreement between TMC and ASTRAZENECA, attached hereto, subject
               to what is stated in Article 4.2.3, as Schedule F. In addition
               ASTRAZENECA will reimburse TMC for costs specifically pertaining
               to the development of a formulation necessary only for the
               purpose of enabling ASTRAZENECA to obtain NDA Approval in one or
               more of the Excluded Countries.

4.2.2.         TMC further undertakes to supply ASTRAZENECA, subject to Article
               15.1 (i), at [**] and otherwise under terms to be as consistent
               as possible with those under the Supply Agreement, ASTRAZENECA's
               entire need of Product for clinical trials, sale, promotion and
               marketing in any country where the license granted under Article
               2 has been terminated pursuant to Article 3.8; provided always
               that such TMC's obligation shall not become effective unless and
               until TMC has Launched the Product in at least one (1) country of
               the Territory.

4.2.3.         The Supply Agreement has not been entered into on the Effective
               Date due to the Parties' desire to expeditiously enter into this
               Agreement, not delaying such procedure by awaiting the completion
               of the Supply Agreement. The parties acknowledge the substantial
               need for

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                                                                              27

               ASTRAZENECA to rely on TMC for its supply of the Product for the
               countries mentioned in Articles 4.2.1 and 4.2.2 and that entering
               into the Supply Agreement is a substantial prerequisite for
               ASTRAZENECA entering into this Agreement. Should regardless
               hereof the Supply Agreement not have been concluded within six
               (6) months of the Effective Date for other reasons than
               ASTRAZENECA's lack of good faith in conducting such negotiations
               or unnecessary delays caused by ASTRAZENECA, then ASTRAZENECA
               shall have the right to terminate this Agreement forthwith by
               giving written notice to TMC.

5.             EXCHANGE OF INFORMATION

5.1.           OBLIGATION OF TMC TO SHARE INFORMATION. In addition to the
               obligations specifically requiring TMC to inform ASTRAZENECA
               regarding particular events, TMC undertakes to keep ASTRAZENECA
               informed about the progress of the development work regarding the
               Compound hereunder. For this purpose:

5.1.1.         the Parties will, up until the date when Filing of an NDA has
               been made in the last Major Market, meet at least once a year to
               review TMC's progress and efforts in the development work
               contemplated herein. Such meeting will take place on a location
               to be agreed by the Parties, or, should the Parties not be able
               to agree, alternately with each Party at a site to be determined
               by the Party hosting the meeting. In advance of such meeting, TMC
               will provide ASTRAZENECA a reasonable written summary of such
               development work, including, without limitation, summaries of
               protocol designs of any clinical trials conducted or to be
               conducted, any changes to same and any Results developed during
               the period concerned;

5.1.2.         TMC shall further in advance of such meeting provide ASTRAZENECA
               in writing a timetable for the expected Filings of an NDA,
               expected NDA Approvals and expected Launches during the one-year
               period, or other shorter applicable period, to come. In
               connection therewith TMC shall

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                                                                              28

               provide to ASTRAZENECA in writing, for the same period of time, a
               non-binding marketing plan and sales forecast for the Product in
               any Major Market where the Product by that time has been Launched
               or is expected to be Launched during the applicable period
               immediately to come;

5.1.3.         TMC shall notify ASTRAZENECA forthwith and provide particulars of
               any halt or substantial delay in any development program or
               clinical trial, any obstacles in the Product reaching the market
               and any substantial changes anticipated in the sales potential of
               the Product;

5.1.4.         TMC shall notify ASTRAZENECA forthwith regarding, and provide
               copies of, any correspondence with the regulatory authorities in
               the Territory that could reasonably be of any significance
               regarding the possibility, time frame or scope of any Filing of
               an NDA or any NDA Approval.

5.2.           OBLIGATION OF ASTRAZENECA TO SHARE INFORMATION. ASTRAZENECA shall
               keep TMC informed about the progress of the clinical trials,
               sale, promotion and marketing of Product in any country in which
               ASTRAZENECA has rights to sell Product. For this purpose:

5.2.1.         ASTRAZENECA shall at least once each year provide TMC in writing
               a timetable for the expected Filings of an NDA, expected NDA
               Approvals and expected Launches during the one-year period to
               come.

5.2.2.         ASTRAZENECA shall notify TMC forthwith regarding, and provide
               copies of, any correspondence with the regulatory authorities in
               any Major Market that could reasonably be of any significance
               regarding the possibility, time frame or scope of any Filing of
               an NDA or any NDA Approval by TMC in any country for which TMC
               has yet to file an NDA or receive NDA Approval.

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                                                                              29

6.             CONSIDERATION

In consideration of the rights granted hereunder TMC shall pay to ASTRAZENECA
the remuneration stated in this Article 6.

6.1.           MILESTONE PAYMENTS.

6.1.1.         Within thirty (30) days after the Effective Date TMC shall pay to
               ASTRAZENECA the amount of USD [**] ($[**]).

6.1.2.         Within thirty (30) days of TMC's receipt of NDA Approval in the
               first Major Market TMC shall pay to ASTRAZENECA the amount of USD
               [**] ($[**]).

6.1.3.         Within thirty (30) days of TMC's receipt of NDA Approval in the
               second Major Market, TMC shall pay to ASTRAZENECA the amount of
               USD [**] ($[**]).

6.2.           ROYALTY RATE.

6.2.1.         Following Launch of the Product, on a country-by-country basis
               for the period set out in Article 6.4, TMC shall pay to
               ASTRAZENECA, subject to what is stated in Articles 6.2.2 and
               6.2.3, a running royalty on the annual Net Sales of the Product
               in the Territory as follows:



                   Annual Net Sales in the Territory            Royalty Rate
                                                        
               a)   up to USD [**]                         [**] percent ([**]%)
                    ($ [**])

               b)   above USD [**]                         [**] percent ([**]%)
                    ($ [**]) and up to USD [**]
                     ($[**])


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                                                                              30

                                         
               c)   above USD [**]                         [**] percent ([**]%)
                    ($ [**]) and up to USD [**]
                    ($ [**])

               d)   above USD [**]                         [**] percent ([**]%)
                    ($ [**]) and up to USD [**]
                    ($ [**])

               e)   above USD [**]                         [**] percent ([**]%)
                    ($ [**])

               

               The relevant royalty rate so stated shall apply to the amount of
               annual Net Sales within the applicable layer only.

               For convenience of example only and without limiting the above,
               the royalty rate of [**]% shall apply to the amount of annual Net
               Sales under $ [**] and should the annual Net Sales exceed $ [**]
               then the royalty rate of [**]% shall apply only to the amount of
               annual Net Sales exceeding $ [**] (and up to $ [**]).

6.2.2.         Notwithstanding the royalty rates set forth in Article 6.2.1, the
               running royalty rate on the Net Sales of the Product during the
               time period starting on the Effective Date and ending on the date
               which is one (1) year after the date of the Launch of the Product
               in the first country in which the Product is Launched, shall be
               reduced to [**] percent ([**]%) of the rate otherwise stated in
               Article 6.2.1.

6.2.3.         In the event that in a country in the Territory ASTRAZENECA
               receives NDA Approval of an [**] Product, and TMC's Net Sales in
               such country for a certain Subsequent Quarter is less than TMC's
               Net Sales in such country in the Baseline Quarter for such
               country, the royalty payable to ASTRAZENECA by TMC under Article
               6.2.1 with respect to Net Sales in such country in the Subsequent
               Quarter concerned shall be reduced by (i), if such reduction in
               Net Sales is [**] percent ([**]%) or less compared to the

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                                                                              31

               Net Sales in the Baseline Quarter for such country, a percentage
               equal to such reduction in Net Sales expressed in percent, or
               (ii), if such reduction in Net Sales exceeds [**] percent ([**]%)
               compared to the Net Sales in the Baseline Quarter for such
               country, [**] percent ([**]%). The calculation of the reduction
               in Net Sales under this Article 6.2.3 shall, in case Net Sales in
               such country is not denominated in USD, be conducted in local
               currency. The percentage of each Net Sales reduction contemplated
               in this Article 6.2.3 shall be determined by the fraction (A-B)/A
               multiplied by 100 where A is TMC's Net Sales during the Baseline
               Quarter and B is TMC's Net Sales during the Subsequent Quarter
               concerned.

               The definition "NDA Approval" shall, for the purpose of this
               Article 6.2.3 (and Articles 1.10 and 1.43) only, be deemed to
               refer to [**] Product instead of Product.

               For convenience of example only and without limiting the above
               standing, the following calculation shows the application of the
               provision stated.

               a)   If TMC's Net Sales in country A are $[**] in the
                    Baseline Quarter for such country and $[**] in a
                    Subsequent Quarter the reduction of the royalty payable to
                    ASTRAZENECA would be determined as follows.


                    The reduction in Net Sales is [**]% (($ [**]) /
                    $ [**] = [**]%) and hence the royalty payable to ASTRAZENECA
                    with respect to Net Sales in country A in the Subsequent
                    Quarter concerned shall be reduced by [**]%.

               b)   If TMC's Net Sales in country A are $[**] in the
                    Baseline Quarter for such country and $[**] in a
                    Subsequent Quarter the reduction of the royalty payable to
                    ASTRAZENECA would be determined as follows.

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                                                                              32

                    The reduction in Net Sales is [**]% (($[**]) / $ [**]=
                    [**]%) and hence the royalty payable to ASTRAZENECA with
                    respect to Net Sales in country A in the Subsequent Quarter
                    concerned shall be reduced by [**]%.


               For the purpose of determining what royalty rate to apply with
               respect to Net Sales in one specific country, the following shall
               apply.


               The applicable royalty rate under each of items (a) through (e)
               of Article 6.2.1 shall apply to TMC's Net Sales in one specific
               country exceeding the amount "C" in the following formula.

                                    TA   x   NS   =   C
                                             --
                                            aNS


               where "NS" is TMC's Net Sales in the specific country during the
               calendar year concerned; and where "aNS" is TMC's annual Net
               Sales in the Territory during such calendar year; and where "TA"
               is the applicable "threshold amount" under the respective items
               (a) through (e) of Article 6.2.1.

6.2.4.         For the purpose of Article 6.2.1 the term "annual" shall refer to
               calendar years, provided, however, that for the purpose of
               determining what royalty rates to apply during the first or last
               calendar year of the royalty payment period pursuant to Article
               6.4, which parts may not constitute a full calendar year, the
               following shall apply.

               a)   The applicable royalty rate under each of items (a) through
                    (e) of Article 6.2.1, subject to what is stated in Article
                    6.2.2 and 6.2.3, shall apply to the Net Sales exceeding the
                    amount "A" in the following formula.

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                                                                              33

                                    TA     x    NM    =     A
                                                --
                                                12

                    where "NM" is the "number of full months" of sales
                    attracting royalty hereunder, regardless of the number of
                    countries in which sales are being made, during the calendar
                    year concerned; and where "TA" is the applicable "threshold
                    amount" under the respective items (a) through (e) of
                    Article 6.2.1.

               b)   For convenience of example only and without limiting the
                    above standing, the following calculation shows the
                    application of the provision stated.

                    If Launch occurs in the first country three months before
                    the end of the calendar year, and Net Sales in such three
                    month period are $ [**], royalties payable would be
                    determined as follows:
                    (i)  the [**]% royalty rate under 6.2.1(a) would apply to
                         the first $ [**]of Net Sales ($[**]); and
                    (ii) the [**]% royalty rate under 6.2.1(b) would apply to
                         Net Sales above $ [**] ($[**]).
                    The foregoing notwithstanding, as this example is with
                    respect to sales in the year of first Launch, the above
                    stated royalty rates would be reduced by [**] percent
                    ([**]%) pursuant to Article 6.2.2.

6.3.           MINIMUM ROYALTY. Notwithstanding what is stated in Article 6.2,
               during the second through fourth full calendar years following
               Launch in the first Major Market, the aggregate annual royalty
               amount due by TMC to ASTRAZENECA for sales of the Product shall,
               regardless of the actual Net Sales amount accrued during such
               calendar year, not go below the following amounts during the
               years specified:

6.3.1.         Second full calendar year following Launch: USD [**]
               ($[**]);

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                                                                              34

6.3.2.         Third full calendar year following Launch: USD [**] ($[**])

6.3.3.         Fourth full calendar year following Launch: USD [**] ($[**])

6.3.4.         Should the Net Sales by TMC for any calendar year not generate
               the relevant royalty amount indicated under this Article 6.3,
               then TMC shall pay the difference between the minimum royalty
               amount stated and the amount actually generated within thirty
               (30) days after the date when the royalty payment for the last
               full quarter of the calendar year concerned is due according to
               Article 6.5.1.

6.4.           DURATION OF ROYALTY PAYMENTS.

               Royalties under Article 6.2 shall be payable on a country by
               country basis for the longer of :

               a)   the life of ASTRAZENECA Patent Rights which are necessary to
                    continue to manufacture, use or sell the Product in such
                    country; or

               b)   a period of [**] years from Launch in that country
                    (provided always that, in the case of a country within the
                    European Economic Area, such [**] year period shall run
                    from the date of Launch anywhere in the European Economic
                    Area).

6.5.           REPORTS.

6.5.1.         TMC shall deliver to ASTRAZENECA within sixty (60) days after the
               end of each Quarter, a written report showing its computation of
               the remuneration due to ASTRAZENECA under this Agreement during
               such Quarter including (i) the quantity of the Product sold by or
               on behalf of TMC during such Quarter; and (ii) the total
               remuneration due in respect thereof; and TMC shall at the same
               time make the payment of the remuneration due. Any payment to be
               made hereunder shall be made in U.S. Dollars. Each such report
               mentioned in this Article 6.5.1 shall include the

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                                                                              35

               rates of exchange used for conversion to U.S. Dollars from the
               currency in which such sales were made.

6.5.2.         In the event that ASTRAZENECA, its Affiliates or sublicensees
               sells Product pursuant to Article 2.7.3, then ASTRAZENECA shall
               deliver to TMC within sixty (60) days after the end of each
               Quarter, a written report showing its computation of the
               remuneration due to TMC under this Agreement during such Quarter
               including (i) the quantity of the Product sold by or on behalf of
               ASTRAZENECA during such Quarter; and (ii) the total remuneration
               due in respect thereof and at the same time make the payment of
               the remuneration due. Any payment to be made hereunder shall be
               made in U.S. Dollars. Each such report mentioned in this Article
               6.5.2 shall include the rates of exchange used for conversion to
               U.S. Dollars from the currency in which such sales were made.

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                                                                              36

6.6.           TAXES.

6.6.1.         The payments to be made hereunder by either Party shall be net
               payments i.e. without deduction of any bank or transfer charges.

6.6.2.         ASTRAZENECA shall pay any and all taxes levied on account of, or
               measured exclusively by, all payments it receives under this
               Agreement. Amounts payable from TMC to ASTRAZENECA under this
               Agreement shall be paid by TMC without deduction for any tax,
               provided however that TMC may withhold income tax as required by
               internal laws of any applicable jurisdiction. In the case of such
               withholding being applicable, ASTRAZENECA may apply for the
               reduction of rate of withholding tax (including under the
               U.S./Sweden tax treaty) with the assistance of TMC and provided
               evidence of acceptance of this claim is submitted to TMC, TMC
               shall apply this rate accordingly. If applicable laws require
               that taxes be withheld, TMC will deduct those taxes from the
               remittable payments, make timely payment of the taxes to the
               proper taxing authority and send proof of such payment to
               ASTRAZENECA within sixty (60) days following that payment.

6.6.3.         TMC shall pay any and all taxes levied on account of, or measured
               exclusively by, all payments it receives under this Agreement.
               Amounts payable from ASTRAZENECA to TMC under this Agreement
               shall be paid by ASTRAZENECA without deduction for any tax,
               provided however that ASTRAZENECA may withhold income tax as
               required by internal laws of any applicable jurisdiction. In the
               case of such withholding being applicable, TMC may apply for the
               reduction of rate of withholding tax (including under the
               U.S./Sweden tax treaty) with the assistance of ASTRAZENECA and
               provided evidence of acceptance of this claim is submitted to
               ASTRAZENECA, ASTRAZENECA shall apply this rate accordingly. If
               applicable laws require that taxes be withheld, ASTRAZENECA will
               deduct those taxes from the remittable payments,

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                                                                              37

               make timely payment of the taxes to the proper taxing authority
               and send proof of such payment to TMC within sixty (60) days
               following that payment.

6.6.4.         For the avoidance of doubt, TMC shall be responsible and liable
               for all import duties and levies payable on bulk Compound
               imported to the US and to all related import clearance
               requirements. The value for customs purposes of this material
               provided free of charge should be the manufacturing cost to
               ASTRAZENECA.

6.6.5.         The parties shall cooperate fully to ensure that where legally
               possible no import duties are paid by TMC in respect of Product
               supplied to ASTRAZENECA for sale in the Excluded Countries.

6.6.6.         All payments under this Agreement shall be exclusive of Value
               Added Tax where applicable.

6.7.           EXCHANGE RATES. For the purpose hereof, the rate of exchange to
               be used for conversion hereunder to U.S. Dollars shall be the
               average rate of exchange for the period to which the payment
               relates, as published by the Wall Street Journal.

6.8.           BOOKS AND AUDIT. Each Party shall keep complete and accurate
               books and records with respect to its sale of the Product and
               remuneration payable hereunder. Each Party shall have the right
               to have such pertinent books and records of the other Party
               inspected and examined once each calendar year for the purpose of
               determining the accuracy of payments made hereunder. Such
               inspection and examination shall be conducted by an independent,
               certified, public accountant selected by the Party requesting
               such examination. Such accountant shall not disclose to such
               Party any information except for information necessary to verify
               the accuracy of the records and payments made pursuant to this
               Agreement. The charges of the independent, certified, public
               accountant shall be paid by the Party

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                                                                              38

               requesting examination except if the payments pursuant to this
               Agreement have been understated by more than five percent (5%) in
               which case the Party who has underpaid will bear the cost and pay
               the shortfall in payment pursuant to this Agreement with interest
               to the other Party. Should instead the payments have been
               overstated the Party who has overpaid may deduct any such amount
               from the royalty payments due hereunder until such amount has
               been recovered by such Party.

6.9.           WIRE TRANSFER INSTRUCTIONS.

6.9.1.         Unless otherwise instructed by ASTRAZENECA, all payments by TMC
               hereunder shall be made from the United States by wire transfer
               in the requisite amount to the following account of ASTRAZENECA.

               Bank Name:   AstraZeneca AB
               Account No:  [**]
               Bank:        [**]
               Swift:       [**]
               Corr bank:   [**]

6.9.2.         Unless otherwise instructed by TMC, all payments by ASTRAZENECA
               hereunder shall be made from Sweden by wire transfer in the
               requisite amount to the following account of TMC.

               Bank Name:   Comerica Bank - California
               Account No:  [**]
               Bank Code:   121137522

6.10.          INTEREST. If any sum payable pursuant to this Agreement shall not
               have been paid to a Party by the due date then (without prejudice
               to any other claim or remedy of such Party) the Party owing such
               sum shall pay interest thereon to the other Party at an annual
               rate of LIBOR + three percent (3%) from

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                                                                              39

               time to time published in respect of the period starting on the
               due date of payment and ending on the actual date of payment.

               "LIBOR" shall mean the thirty (30) days U.S. Dollar BBA London
               Interbank Offered Rate as published by Reuter.

7.             INTELLECTUAL PROPERTY - PROSECUTION AND MAINTENANCE

7.1.           Any and all ASTRAZENECA IP vested in ASTRAZENECA and/or its
               Affiliates shall as between ASTRAZENECA and TMC remain vested in
               ASTRAZENECA and/or its Affiliates.

7.2.           Any and all TMC IP vested in TMC shall as between TMC and
               ASTRAZENECA remain vested in TMC.

7.3.           ASTRAZENECA or its agent shall, during the term of this Agreement
               be responsible for the filing, prosecution and maintenance of the
               ASTRAZENECA Patent Rights (including, without limitation, subject
               to Article 7.7, patent term extension rights).

               TMC shall reimburse ASTRAZENECA or its agent for any
               out-of-pocket expenses (including fees to outside counsel and
               consultants) incurred by ASTRAZENECA or its agent in relation to
               any action taken by ASTRAZENECA or its agent pursuant to this
               Article 7.3.

7.4.           TMC shall have the right to give comments and recommendations as
               to the overall strategy regarding the filing, prosecution and
               maintenance of the ASTRAZENECA Patent Rights; and before taking
               any significant step in the filing or prosecution of the
               ASTRAZENECA Patent Rights, ASTRAZENECA or its agent shall allow
               TMC to comment on the action proposed to be taken and ASTRAZENECA
               or its agent shall consider any such comments. For purposes of
               this Article 7.4 only, significant step means the filing of a
               dependent application (including but not limited to divisional

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                                                                              40

               or continuation applications); filing for patent term extension;
               or any step taken during an appeal, re-examination, re-issue or
               opposition procedure, provided, however, that no such action now
               mentioned is a response to an office action. Notwithstanding the
               foregoing, ASTRAZENECA or its agent may, at its own discretion,
               ask for TMC's input in relation to such office action.

7.5.           In the event that ASTRAZENECA should decide to permit any pending
               patent application or any patent included in the ASTRAZENECA
               Patent Rights to lapse by any action, inaction or failure to take
               any action or to pay any fee when due, ASTRAZENECA or its agent
               shall promptly inform TMC of such decision, but no later than
               thirty (30) days prior to the date by which such action, inaction
               or failure to pay will result in lapse of the patent application
               or the patent, provided that such period is available to
               ASTRAZENECA, so that TMC might, for the avoidance of doubt at
               TMC's expense, seek such patent protection or prevent any such
               lapse.

7.6.           ASTRAZENECA shall not be liable to TMC in contract, tort,
               negligence, breach of statutory duty or otherwise for any
               economic loss or other loss of turnover, profits, savings,
               business or goodwill or any loss, damage, costs or expenses of
               any nature whatsoever incurred or suffered by TMC because of
               ASTRAZENECA's or its agent's actions pursuant to or as a
               consequence of Articles 7.3 and 7.4.

7.7.           Should ASTRAZENECA not be able to lawfully apply for patent term
               extensions, including, but not limited to, Supplementary
               Protection Certificates, relating to the ASTRAZENECA Patent
               Rights in the Territory in its own name, or should ASTRAZENECA
               otherwise require, TMC shall co-operate with ASTRAZENECA or its
               agent in any issue regarding the gaining of such patent term
               extension by assisting ASTRAZENECA or its agent with any actions
               or documents needed for such purpose.

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                                                                              41

               Should in any country in the Territory any decision have to be
               made as to what product, claim or otherwise to apply for such
               patent term extension regarding, then ASTRAZENECA or its agent
               shall have the right to make such decision at its own reasonable
               discretion and provided that ASTRAZENECA or its agent shall allow
               TMC to comment on the action proposed to be taken and ASTRAZENECA
               or its agent shall consider any such comments.

7.8.           RIGHTS TO THE RESULTS. Any patents and other intellectual
               property rights, information, ideas, knowledge, data or know-how
               relating solely to the Compound and/or the Product and that;

               (i)  relate solely to an intravenous route of administration; and

               (ii) do not have [**]; and

               (iii)do not relate to any formulation or product which contain(s)
                    both the Compound and one or more [**]as active ingredients,
                    whether or not such formulation or product contain(s) active
                    ingredients in addition to the Compound and the [**]

               developed during the term of this Agreement (hereinafter referred
               to as "Result(s)") shall as between TMC and ASTRAZENECA be TMC IP
               and the sole property of TMC. TMC shall have the sole management
               of, and shall bear the cost of, any Results. ASTRAZENECA shall be
               given the reasonable opportunity to comment on important aspects
               of the prosecution of any patent applications, and shall use its
               reasonable endeavours to assist TMC in the prosecution of any
               patent applications.

               Any patents and other intellectual property rights, information,
               ideas, knowledge, data or know-how falling outside any or all of
               (i) through (iii) above in this Article 7.8 and relating to the
               Compound and/or the Product

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               shall, as between TMC and ASTRAZENECA, be the sole property of
               ASTRAZENECA.

8.             CLAIMS REGARDING INFRINGEMENT AND INVALIDITY

8.1.           NOTIFICATION OF CLAIM. If a Third Party notifies ASTRAZENECA or
               TMC, or their respective Affiliates or sub-licensees, that any
               act by TMC, or its Affiliates or sub-licensees, utilizing the
               ASTRAZENECA IP allegedly infringes in the Territory any Patent
               Rights or other intellectual property rights owned by or licensed
               to the Third Party, ASTRAZENECA or TMC shall promptly notify the
               other in writing.

8.2.           DEFENCE OF CLAIMED INFRINGEMENT.

8.2.1.         ASTRAZENECA shall have no obligation to defend or settle any
               claim by a Third Party that the manufacture, sale or other use of
               the Product by TMC resulting from the use or exercise of the
               license granted hereunder under the ASTRAZENECA IP infringes any
               Patent Rights or other intellectual property rights owned by or
               licensed to a Third Party, subject to the provisions of Article
               10.

8.2.2.         If a Third Party makes an infringement claim or files an
               infringement action against ASTRAZENECA, its Affiliates or
               sub-licensees, or TMC, its Affiliates or sub-licensees, arising
               out of TMC's, its Affiliates' or sub-licensees' manufacture, sale
               or other use of the Product in the Territory, or if a Third Party
               challenges any of the ASTRAZENECA IP, then TMC shall defend or
               settle the claim or action at its expense, subject to the
               provisions of Article 10.

8.2.3.         ASTRAZENECA may join such proceedings mentioned under sub-section
               8.2.2 voluntarily, subject always to TMC's, its Affiliates' or
               sub-licensees' right to decide the conduct over such litigation.
               Any such joining of the proceedings shall be at ASTRAZENECA's
               cost and expense.

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               ASTRAZENECA shall for such purpose have the right to
               independently retain legal counsel and consultants, at its sole
               cost and expense.

8.2.4.         It is understood between the Parties that any proposed settlement
               will be subject to ASTRAZENECA's prior written approval, which
               approval shall not be unreasonably withheld. Such approval might
               be withheld primarily on the grounds that ASTRAZENECA reasonably
               determines that the settlement proposed is overly burdensome,
               financially or strategically, to ASTRAZENECA or that ASTRAZENECA
               intends to continue such defence itself.

               Should ASTRAZENECA withhold such approval, then ASTRAZENECA shall
               have the right, but not the obligation other than in the case
               that ASTRAZENECA has announced to TMC its intention to continue
               such defence itself, to continue the defence of the claim or
               action at its own expense. In such case TMC, its Affiliates or
               sub-licensees shall, at ASTRAZENECA's request and at
               ASTRAZENECA's expense for TMC's, its Affiliates' or
               sub-licensees' costs and expenses, assist in the prosecution of
               such action, including, but not limited to, consenting to being
               joined in such action as a voluntary defendant.

8.2.5.         Should TMC reasonably believe that the Third Party rights
               contemplated by Article 8.2.1 are valid in a certain country(ies)
               and that infringement is likely to be occurring in such
               country(ies), TMC may seek and enter into a licence thereto from
               such Third Party on appropriate commercial terms, whereby any
               remuneration and any costs and expenses (including but not
               limited to reasonable external legal costs) for such license
               shall be [**] between TMC and ASTRAZENECA according to the
               following.

               TMC may deduct an amount equivalent to [**] percent ([**]%) of
               TMC's payments to such Third Party pursuant to such arrangement
               as indicated in the first paragraph of this Article 8.2.5 from
               the royalty payments to be made by TMC to ASTRAZENECA on the Net
               Sales in the country

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                                                                              44

               concerned pursuant to Article 6.2 to cover ASTRAZENECA's
               obligation to carry [**] percent ([**]%) of such payments and
               costs. This deduction shall be subject to the proviso that the
               royalty payments due to ASTRAZENECA shall not be reduced in total
               by more than [**] percent ([**]%) in any calendar year, and any
               residue not offset may be carried forward by TMC until such time
               as it has recovered ASTRAZENECA's [**] per cent ([**]%) share of
               such costs and expenses, or until the royalty payment obligations
               of TMC hereunder expire, whichever is the earlier.

8.3.           THIRD PARTY INFRINGEMENT. If a Third Party shall, in the
               reasonable opinion of either Party, infringe any ASTRAZENECA
               Patent Rights in the Territory, then the Party having such
               opinion shall promptly notify the other Party.

8.3.1.         Further, each Party shall within five (5) working days or as soon
               as reasonably possible thereafter advise the other Party of
               receipt of any notice of:

               a)   any certification filed under the U.S. "Drug Price
                    Competition and Patent Term Restoration Act of 1984" ("ANDA
                    Act"), claiming that any ASTRAZENECA Patent Rights are
                    invalid or claiming that the ASTRAZENECA Patent Rights will
                    not be infringed by the manufacture, use or sale of a
                    product for which an application under the ANDA Act is filed
                    or;

               b)   any equivalent or similar certification or notice in any
                    other jurisdiction.

8.3.2.         TMC, its Affiliates or sub-licensees shall have the initial sole
               right to commence an action for infringement in the Territory
               against the Third Party, in its own name, together with the right
               to enforce and collect any judgement thereon. ASTRAZENECA may
               join such proceedings voluntarily, subject always to TMC's, its
               Affiliates' or sub-licensees' right to decide the conduct of such
               litigation. Any such joining of the proceedings

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               shall be at ASTRAZENECA's cost and expense. ASTRAZENECA shall for
               such purpose have the right to independently retain legal counsel
               and consultants, at its sole cost and expense.

8.3.3.         Any monetary recovery (whether by settlement or judgement) in
               connection with an infringement action commenced by TMC, its
               Affiliates or sub-licensees shall be applied first to reimburse
               TMC, its Affiliates or sub-licensees for their out-of-pocket
               expenses (including reasonable attorneys fees) incurred in
               prosecuting such action and the expenses of ASTRAZENECA borne by
               TMC hereunder. Any balance remaining shall be allocated among
               ASTRAZENECA and TMC in a manner reasonably calculated to
               correspond to the distribution of profits, in accordance with
               what would normally be provided for under this Agreement, on the
               sales of Product to which such recovery pertains.

8.3.4.         Should neither TMC, nor its Affiliates or sub-licensees, take
               appropriate and diligent action with respect to any such
               infringement or challenge as contemplated in this Article 8.3
               within forty-five (45) days, or, in the case of a certification
               filed under the ANDA Act or similar certification or notice as
               contemplated under Article 8.3.1, within twenty (20) days, after
               receiving notice of any infringement or possible infringement or
               challenge, then ASTRAZENECA shall have the right, but not the
               obligation, to take such action, at its own expense, in its own
               name, and the right to enforce and collect any judgement thereon.

               a)   Should ASTRAZENECA elect to take such action, then TMC, its
                    Affiliates or sub-licensees, shall, at ASTRAZENECA's request
                    and at ASTRAZENECA's expense for TMC's, its Affiliates' or
                    sub-licensees', costs and expenses, assist in the
                    prosecution of such action, including, but not limited to,
                    consenting to being joined in such action as a voluntary
                    plaintiff.

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               b)   If the recovery of such action as contemplated in this
                    Article 8.3.4 exceeds ASTRAZENECA's out-of-pocket expenses
                    (including reasonable attorneys fees) for prosecuting the
                    action, then such excess recovery shall be shared by the
                    Parties on a [**].

8.3.5.         ASTRAZENECA, its Affiliates or sub-licensees shall have the sole
               right to commence an action for infringement of the ASTRAZENECA
               IP in the Excluded Countries or in any other country in which the
               license granted to TMC hereunder has reverted to ASTRAZENECA
               pursuant to Article 3.8 against the Third Party, in its own name,
               together with the right to enforce and collect any judgement
               thereon. TMC may join such proceedings voluntarily, subject
               always to ASTRAZENECA's, its Affiliates' or sub-licensees' right
               to decide the conduct of such litigation. Any such joining of the
               proceedings shall be at TMC's cost and expense. TMC shall for
               such purpose have the right to independently retain legal counsel
               and consultants, at its sole cost and expense. Any monetary
               recovery (whether by settlement or judgement) in connection with
               an infringement action commenced by ASTRAZENECA under this
               Article 8.3.5 shall be retained by ASTRAZENECA.

9.             TRADEMARK

9.1.           TMC shall select a trademark to use in connection with the sales,
               marketing and distribution of the Product and shall be the owner
               and party of record of such trademark (the "TMC Trademark"). TMC
               shall have sole responsibility for clearance and registration of
               said TMC Trademark. TMC shall be responsible for all decisions
               and costs relating to selection, clearance, registration, defence
               and maintenance of the TMC Trademark.

9.2.           TMC undertakes, should ASTRAZENECA so require in writing, to
               mention on all packages, package inserts and promotional and
               advertising materials for the Product "Licensed from AstraZeneca
               AB" or the equivalent wording in the major language(s) of the
               country in which the Product is sold, or,

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               should legal, regulatory or similar reasons prevent the use of
               that wording, such other wording as close as possible to the
               wording herein stated.

10.            INDEMNITY

10.1.          INDEMNITY BY TMC.

10.1.1.        TMC shall be responsible for and shall indemnify ASTRAZENECA, its
               Affiliates and its and its Affiliates' directors, officers, other
               employees, agents and consultants (collectively the "ASTRAZENECA
               Indemnified Party") against any and all liability, loss, damage,
               cost and expense (including legal costs) incurred or suffered by
               the ASTRAZENECA Indemnified Party as a result of any claim
               brought against an ASTRAZENECA Indemnified Party by a Third Party
               (i) arising out of the testing, manufacture, sale, use or
               promotion by TMC, its Affiliates or sub-licensees of any Compound
               or Product hereunder; (ii) arising out of any theory of product
               liability (including, but not limited to, actions in the form of
               tort, warranty or strict liability) based on Compounds or
               Products developed by TMC hereunder; or (iii) arising out of any
               other activities to be carried out by TMC, its Affiliates or
               sub-licensees pursuant to this Agreement to the extent not
               included in (i) and (ii) above, except where such liability,
               loss, damage, cost and expense has been incurred or suffered as a
               result of a material breach of ASTRAZENECA's representations,
               warranties or obligations under this Agreement or by gross
               negligence or misconduct on the part of ASTRAZENECA.

10.1.2.        An ASTRAZENECA Indemnified Party that intends to claim
               indemnification under Article 10.1.1 shall notify TMC promptly of
               any such liability, loss, damage, cost or expense and permit TMC
               to control the defence and disposition thereof and further agrees
               to reasonably cooperate at TMC's expense with TMC in the handling
               thereof. The ASTRAZENECA Indemnified Party shall not compromise
               or settle such claim. TMC agrees to keep ASTRAZENECA informed of
               the progress in the defence and

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               disputation of such claims and to consult with ASTRAZENECA with
               regard to any settlement thereof which TMC proposes to enter into
               and will provide ASTRAZENECA with suitable information regarding
               the same.

10.1.3.        TMC will maintain appropriate liability insurance against such
               product and other liability as contemplated under Article 10.1.1
               at levels appropriate for products and activities of the relevant
               type.

10.2.          INDEMNITY BY ASTRAZENECA.

10.2.1.        ASTRAZENECA shall be responsible for and shall indemnify TMC, its
               Affiliates and its and its Affiliates' directors, officers, other
               employees, agents and consultants (collectively the "TMC
               Indemnified Party") against any and all liability, loss, damage,
               cost and expense (including legal costs) incurred or suffered by
               the TMC Indemnified Party as a result of any claim brought
               against the TMC Indemnified Party by a Third Party (i) arising
               out of the testing, manufacture, sale, use or promotion by
               ASTRAZENECA, its Affiliates or sub-licensees, of any Compound or
               Product hereunder; (ii) arising out of any theory of product
               liability (including, but not limited to, actions in the form of
               tort, warranty or strict liability) based on Compounds or
               Products sold by ASTRAZENECA hereunder; or (iii) which arises as
               a result of a material breach of ASTRAZENECA's representations,
               warranties or obligations under this Agreement, except where such
               liability, loss, damage, cost and expense has been incurred or
               suffered as a result of a material breach of TMC's
               representations, warranties or obligations under this Agreement
               or by gross negligence or misconduct on the part of TMC.

10.2.2.        A TMC Indemnified Party that intends to claim indemnification
               under Article 10.2.1 shall notify ASTRAZENECA promptly of any
               such liability, loss, damage, cost and expense and permit
               ASTRAZENECA to control the defence and disposition thereof and
               further agrees to reasonably cooperate at ASTRAZENECA's expense
               with ASTRAZENECA in the handling thereof. The TMC Indemnified
               Party shall not compromise or settle such

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               claim. ASTRAZENECA agrees to keep TMC informed of the progress in
               the defence and disputation of such claims and to consult with
               TMC with regard to any settlement thereof which ASTRAZENECA
               proposes to enter into and will provide TMC with suitable
               information regarding the same.

10.2.3.        ASTRAZENECA will either maintain appropriate liability insurance
               or be self insured against such liability as contemplated under
               Article 10.2.1.

11.            CONFIDENTIALITY

11.1.          CONFIDENTIAL INFORMATION. At all times during the term of this
               Agreement and for a period of five (5) years following
               termination or expiration hereof, each Party shall, and shall
               cause its officers, directors, employees and agents to, keep
               confidential and not publish or otherwise disclose and not use,
               directly or indirectly, for any purpose, any Confidential
               Information provided to it by the other Party, PROVIDED, THAT,
               each Party may disclose and use the Confidential Information of
               the other Party to the extent such disclosure or use is expressly
               permitted by the terms of this Agreement, including without
               limitation those purposes set forth in Article 11.2, or is
               otherwise reasonably necessary for the performance of this
               Agreement.

11.2.          PERMITTED USE AND DISCLOSURE. The Receiving Party may use and/or
               disclose Confidential Information to the extent that such
               disclosure is:

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

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               that information which is legally required to be disclosed in
               response to such court or governmental order;

11.2.2.        made by the Receiving Party to a regulatory authority as required
               in connection with any Filing of an NDA; provided, however, that
               reasonable measures will be taken to assure confidential
               treatment of such information;

11.2.3.        made by the Receiving Party to a patent authority as required in
               connection with any filing or application for Patent Rights; or

11.2.4.        made by the Receiving Party to Third Parties as may be necessary
               or useful in connection with the development, manufacturing,
               marketing, use and sale of the Compound, Drug Product or the
               Product as contemplated by this Agreement, including
               subcontracting, sublicensing and distribution transactions in
               connection therewith, provided that any such Third Party has
               undertaken confidentiality and non-use obligations in all
               material respects equal to those undertaken by the Receiving
               Party hereunder with respect to the Confidential Information
               disclosed by the Receiving Party to it and the results of any
               such activities.

11.3.          RELEASE FROM RESTRICTIONS. Notwithstanding the foregoing,
               Confidential Information shall not include any information that,
               as determined by competent written proof:

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

11.3.2.        can be demonstrated by documentation or other competent proof to
               have been in the Receiving Party's possession prior to disclosure
               by the Disclosing Party;

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11.3.3.        is subsequently received by the Receiving Party from a Third
               Party who is not bound by any obligation of confidentiality with
               respect to the said information;

11.3.4.        is generally made available to Third Parties by the Disclosing
               Party without restriction on disclosure; or

11.3.5.        is independently developed by or for the Receiving Party without
               reference to the Disclosing Party's Confidential Information.

12.            ADVERSE EVENTS

12.1.          REPORTING OF ADVERSE EVENTS.

12.1.1.        TMC shall be fully responsible for reporting to the relevant
               regulatory or other competent authorities in the Territory any
               Adverse Event(s) which are or might be attributed to the use or
               application of the Compound or the Product. At ASTRAZENECA's
               request in writing TMC shall inform ASTRAZENECA of any such
               Adverse Event in the country(ies) contemplated, and during the
               time period contemplated, by such notice.

12.1.2.        ASTRAZENECA shall be fully responsible for reporting to the
               relevant regulatory or other competent authorities in any country
               outside the Territory or for which the license to TMC hereunder
               has been terminated any Adverse Event(s) which are or might be
               attributed to the use or application of the Compound or the
               Product. At TMC's request in writing ASTRAZENECA shall inform TMC
               of any Adverse Event in the country(ies) contemplated, and during
               the time period contemplated, by such notice. For the avoidance
               of doubt ASTRAZENECA may appoint any Affiliate(s) or
               sub-licensee(s) carrying out the marketing of the Product in the
               country concerned to fulfil any such obligation as stated
               hereunder.

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12.2.          Without limiting what is stated in Article 12.1, the Parties
               shall at an appropriate point of time during development of the
               Product jointly establish any such Adverse Event reporting
               procedures, including, but not limited to, any agreement
               regarding safety data exchange, as may be required or useful.

13.            REPRESENTATIONS, WARRANTIES AND COVENANTS

13.1.          REPRESENTATIONS, WARRANTIES AND COVENANTS OF ASTRAZENECA.
               ASTRAZENECA represents and warrants to, and covenants with, TMC
               as follows:

               a)   as of the Effective Date ASTRAZENECA and/or its Affiliates
                    is the sole and exclusive owner of the ASTRAZENECA Patent
                    Rights; which to the extent covered by the license granted
                    hereunder is free and clear of any liens, charges and
                    encumbrances; and

               b)   as of the Effective Date ASTRAZENECA and/or its Affiliates
                    has not assigned, transferred, licensed, conveyed or
                    otherwise encumbered its right, title and interest in the
                    ASTRAZENECA Patent Rights to the extent covered by the
                    license granted hereunder, to a Third Party; and

               c)   as of the Effective Date ASTRAZENECA has the authority from
                    its Affiliates to grant to TMC the license specified in
                    Article 2.1 of this Agreement; and

               d)   as of the Effective Date and to the best of ASTRAZENECA's
                    knowledge, no Person other than ASTRAZENECA or any of its
                    Affiliates, has or shall have any claim of ownership with
                    respect to ASTRAZENECA Patent Rights; and

               e)   as of the Effective Date and to the best of ASTRAZENECA's
                    knowledge, the manufacture, use and sale of the Compound
                    does not

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                    infringe upon any intellectual property rights of any Third
                    Party, although it is expressly acknowledged by TMC that
                    ASTRAZENECA has made no particular searches or
                    investigations to determinate whether such infringement
                    occurs; and

               f)   as of the Effective Date there are no claims, judgements or
                    settlements against or owed by ASTRAZENECA or pending or
                    threatened claims or litigation relating to the ASTRAZENECA
                    Patent Rights; and

               g)   except as insofar relating to any kind of formulation, or
                    work or development related thereto, of the Product, there
                    are no other Patent Rights or Know-How owned or licensed by
                    ASTRAZENECA required to develop and/or commercialise the
                    Product, and ASTRAZENECA shall not assert against TMC any
                    Patent Rights or other intellectual property owned or
                    licensed by ASTRAZENECA as of the Effective Date or at any
                    time thereafter which are or may be infringed by TMC when
                    utilizing its rights under this Agreement; and

               h)   as of the Effective Date ASTRAZENECA has disclosed to TMC
                    any known interference with the ASTRAZENECA Patent Rights or
                    re-examination or reissue proceeding concerning such
                    ASTRAZENECA Patent Rights; and

               i)   as of the Effective Date ASTRAZENECA has no knowledge from
                    which it can reasonably be inferred that the granted
                    ASTRAZENECA Patent Rights are invalid or unenforceable or
                    that the applications for ASTRAZENECA Patent Rights will not
                    proceed to grant; and

               j)   the agreements in force on the Effective Date between
                    ASTRAZENECA or its Affiliates and Third Parties regarding
                    investigational use of the Compound in laboratory research
                    animals or for testing in vitro will, if possible to
                    ASTRAZENECA, be assigned to TMC by ASTRAZENECA. Regarding
                    those agreements that are not possible for ASTRAZENECA to
                    assign to TMC, ASTRAZENECA

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                    shall keep TMC informed about the results and publications
                    generated by the Third Part(ies) under the agreements
                    concerned. None of the Third Parties to the agreements
                    referred to in this Article 13.1 j) has any license or
                    ownership rights under such agreement(s) in the results of
                    their investigations, or in the Compound, the Product or the
                    ASTRAZENECA IP that will have any material impact on the
                    license granted to TMC under this Agreement.

13.2.          ACKNOWLEDGEMENT OF TMC.

               TMC is aware;


               a)   that the ASTRAZENECA Patent Rights or the ASTRAZENECA
                    Know-How may not sufficiently enable TMC to manufacture or
                    conduct any other operational or manufacturing-related
                    activities with respect to the formulation of the Product,
                    and it is explicitly understood by TMC that TMC will have to
                    independently conduct any analysis, evaluation and
                    investigation regarding what intellectual property,
                    techniques, routes, equipment or other help or assistance
                    that will be required for such purpose and it will be
                    entirely at TMC's risk to find such intellectual property,
                    techniques, routes, equipment or other help or assistance in
                    order to conduct such activities; and

               b)   that certain Third Parties have access to the Compound under
                    the agreements referred to in Article 13.1 j) in order to
                    conduct investigations regarding the Compound.

13.3.          REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each Party
               represents and warrants to the other Party that it is a duly
               organized and validly existing corporation under the laws of its
               jurisdiction of incorporation, and has taken all required
               corporate action to authorize the execution, delivery and
               performance of this Agreement; it has the full right, power and
               authority to enter into this Agreement and perform all of its
               obligations hereunder; the execution and delivery of this
               Agreement and the transactions contemplated

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                                                                              55

               herein do not violate, conflict with, or constitute a default
               under its Articles of Association or similar organization
               document, its by-laws or the terms or provisions of any material
               agreement or other instrument to which it is a party or by which
               it is bound, or any order, award, judgement or decree to which it
               is a party or by which it is bound; and upon execution and
               delivery, this Agreement will constitute the legal, valid and
               binding obligation of it.

13.4.          LIMITATIONS. EXCEPT AS OTHERWISE SET FORTH IN THIS AGREEMENT
               ASTRAZENECA EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED OR EXPRESS
               WARRANTIES AND MAKES NO EXPRESS OR IMPLIED WARRANTY, STATUTORY OR
               OTHERWISE, OF ANY KIND, INCLUDING ANY WARRANTIES OF
               MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE REGARDING
               THE COMPOUND, ASTRAZENECA'S CONFIDENTIAL INFORMATION, DOCUMENTS,
               ASTRAZENECA KNOW-HOW, ASTRAZENECA PATENT RIGHTS OR PRODUCTS.

14.            TERM AND TERMINATION

14.1.          TERM. This Agreement shall become effective on the Effective Date
               and shall expire when TMC ceases to sell the Product in the last
               country of the Territory or otherwise terminates this Agreement
               as set forth in Article 14.2.

14.2.          TERMINATION BY TMC. Should TMC determine that it does no longer
               consider it viable to continue to exercise the rights under this
               Agreement, then TMC may give written notice to ASTRAZENECA,
               whereupon this Agreement shall terminate thirty (30) days after
               such notice, unless ASTRAZENECA, within twenty (20) days of
               having received such notice, requests TMC in writing to enter
               into good faith discussions to see whether TMC's concerns could
               be reasonably overcome. However, upon TMC having given such
               notice TMC shall not be liable for any payments under Articles
               6.1.2 and 6.1.3 or for any payments under Article 6.3 unless

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               corresponding to the royalty amounts actually due, which become
               due after the expiration of the 30-day period mentioned above in
               this Article 14.2.

               Should the Parties not within three (3) months of the date of
               commencement of such good faith discussions mentioned above in
               this Article 14.2 have managed to reach a mutually acceptable
               solution to TMC's concerns, then TMC may terminate this Agreement
               by giving ninety (90) days written notice.

14.3.          TERMINATION FOR BREACH. In the event that either Party (the
               "Breaching Party") shall be in significant default in the
               performance of any of its material obligations under this
               Agreement, in addition to any other right and remedy the other
               Party (the "Complaining Party") may have, the Complaining Party
               may terminate this Agreement by sixty (60) days prior written
               notice (the "Notice Period") to the Breaching Party, specifying
               the breach and its claim of right to terminate, provided always
               that the termination shall not become effective at the end of the
               Notice Period if the Breaching Party cures the breach complained
               about during the Notice Period.

14.4.          SURVIVAL OF OBLIGATIONS. Termination or expiration of this
               Agreement shall not relieve either Party from any obligation
               incurred hereunder prior thereto.

14.5.          SURVIVAL OF PROVISIONS UPON TERMINATION AND/OR EXPIRATION.
               Subject to what is stated in Article 15, the provisions of
               Articles 1, 7.1, 7.2, 10, 12, 13, 14.5, 15, 17 and 18 shall
               survive termination or expiration of this Agreement. The
               provisions of Article 2.5 shall survive only upon expiration of
               this Agreement. The provisions of Article 11 shall survive
               termination or expiration of this Agreement and shall continue to
               be in force for a period of five (5) years after termination or
               expiration of this Agreement.

                    License Agreement - The Medicines Company



                                                                              57

15.            CONSEQUENCES OF TERMINATION

15.1.          TERMINATION AND HANDBACK OF LICENSE

               In addition to any remedy either Party may have in law, tort or
               in contract, subject to what is stated in Article 3.9, upon
               termination of the Agreement or the license in a certain country,
               the following shall apply.

               Upon termination of this Agreement by TMC pursuant to Article
               14.2 or by ASTRAZENECA pursuant to Article 14.3, or by
               ASTRAZENECA in a certain country pursuant to Article 3.8, the
               license granted under Article 2.1 regarding the country(ies)
               contemplated by the termination concerned shall cease, and TMC
               shall, regarding the Territory or the country concerned,
               whichever is applicable:

               a)   at the option of ASTRAZENECA, grant to ASTRAZENECA a
                    non-exclusive, world-wide or for the country concerned,
                    whichever is applicable, sub-licensable licence under the
                    TMC IP to develop, have developed, make, have made, use,
                    have used, import, have imported, market, have marketed,
                    sell and have sold the Compound and the Product for any
                    indications. The term of such non-exclusive licence shall
                    continue on a country by country basis for the longer of the
                    life of the TMC Patent Rights, or for ten (10) years from
                    first commercial sale of any resultant product in such
                    country by ASTRAZENECA, its Affiliates, sub-licensees or
                    nominees, whichever is the longer. TMC shall do all such
                    acts and things as may reasonably be necessary to fulfil
                    this obligation. The licence set out in this Article 15.1
                    (a) shall be [**].

               b)   return to ASTRAZENECA any ASTRAZENECA Know-How and deliver
                    to ASTRAZENECA a copy of any TMC Know-How;

               c)   deliver to ASTRAZENECA any and all quantities of Product in
                    its possession, power, custody or control subject always to
                    TMC's right to

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                                                                              58

                    dispose of Product which is the subject of pre-termination
                    date orders pursuant to Article 15.1 (h). For the avoidance
                    of doubt, should this Article 15.1 (c) become applicable
                    because of termination regarding a certain country or
                    countries pursuant to Article 3.8, then the quantities of
                    Product referred to herein shall mean only those quantities
                    clearly designated, by marking, labelling or similar, for
                    the country or countries concerned and which could only be
                    used for the country or countries concerned;

               d)   ensure that its patent attorneys transfer to ASTRAZENECA a
                    copy of the patent files relating to the TMC Patent Rights
                    which TMC has been prosecuting and maintaining and
                    ASTRAZENECA shall be entitled to prosecute and shall
                    maintain such TMC Patent Rights at its own cost and expense
                    on terms similar to those set out in Article 7.3 and to deal
                    with infringers on terms similar to those set out in
                    Articles 8.2 and 8.3. TMC further undertakes to take any
                    action and produce any documents so as to enable ASTRAZENECA
                    to apply for patent term extensions, including, but not
                    limited to, Supplementary Protection Certificates, relating
                    to the TMC Patent Rights in ASTRAZENECA's name.

               e)   Should this Article 15.1 become applicable because of the
                    termination of the license regarding a certain country or
                    countries pursuant to Article 3.8, then TMC shall,
                    notwithstanding the license granted under Article 15.1 (a),
                    on the request by ASTRAZENECA continue to prosecute,
                    maintain and defend the TMC Patent Rights.

               f)   commensurate with legislative and regulatory requirements,
                    transfer to ASTRAZENECA or its nominee all NDA Approvals,
                    and regulatory filings for the Compound or Product
                    (including, without limitation, all information and
                    documentation used in the Filings of an NDA and NDA
                    approvals referred to in Article 3.5.2 and 3.5.4) for the
                    Territory or the country concerned, to the extent
                    applicable. In the event that in

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                                                                              59

                    any country such a transfer is not possible, TMC shall use
                    reasonable endeavours to ensure that ASTRAZENECA has the
                    benefit of the relevant NDA Approvals, NDA's and other
                    related regulatory filings and approvals and, to this end,
                    consents to any regulatory authority cross-referencing to
                    the data and information on file with any regulatory
                    authority as may be necessary to facilitate the granting of
                    second NDA Approvals to and permit Filings of an NDA by
                    ASTRAZENECA, and TMC agrees to complete whatever other
                    procedures that are reasonably necessary in relation to the
                    same to enable ASTRAZENECA (either itself or in conjunction
                    with a Third Party) freely to develop and sell the Product
                    in substitution for TMC;

               g)   if applicable, assign the TMC Trademark or grant a
                    royalty-free exclusive licence to ASTRAZENECA to use the TMC
                    Trademark for the marketing, sales and distribution of the
                    Product;

               h)   not after the date of termination itself take any further
                    action for the Territory or the country concerned, to the
                    extent applicable, to develop, manufacture, have
                    manufactured, use, market, distribute or sell the Compound
                    or Product during the life of the TMC Patent Rights or the
                    ASTRAZENECA Patent Rights, whichever is the longer, except
                    that TMC has the right to dispose of that part of its
                    inventory of Product on hand as of the effective date of
                    termination which is the subject of orders for Product
                    accepted prior to the date of notice of termination for a
                    period of three (3) months after the effective date of
                    termination, and, within thirty (30) days after disposition
                    of such inventory pursuant to the fulfilment of such orders,
                    TMC will forward to ASTRAZENECA a final report and pay all
                    royalties due on the Net Sales of Product during such
                    period; and

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                                                                              60

               i)   provide ASTRAZENECA, should ASTRAZENECA so require, with
                    reasonable assistance in relation to ASTRAZENECA's
                    appointment of a Third Party manufacturer of Product.

               Upon such termination as stated in this Article 15.1, ASTRAZENECA
               shall have the right to disclose Confidential Information to
               Third Parties for the purpose of, and to the extent necessary
               for, enabling such Third Party to evaluate the financial and
               scientific status of the Compound or Product for the purpose of
               making a financial offer to ASTRAZENECA on the licensing or
               acquisition of the rights returned to ASTRAZENECA and the rights
               licensed to ASTRAZENECA under this Article 15.1, and, if such
               licensing or acquisition occurs, as necessary to exploit or
               enforce such rights.

15.2.          TERMINATION FOLLOWED BY CONTINUED LICENSE

               Upon the termination of this Agreement by TMC pursuant to Article
               14.3, ASTRAZENECA's licences granted to TMC under Article 2 shall
               continue, provided that TMC continues to make payments pursuant
               to Article 6 as if the Agreement was still in effect.

16.            FORCE MAJEURE

16.1.          If either Party is prevented or delayed in the performance of any
               of its obligations under this Agreement by Force Majeure, that
               Party shall forthwith serve notice in writing on the other Party
               specifying the nature and extent of the circumstances giving rise
               to Force Majeure, and shall subject to service of such notice and
               to Article 16.3 have no liability in respect of the performance
               of such of its obligations as are prevented by the Force Majeure
               event during the continuation of such events, and for such time
               after they cease as is necessary for that Party, using all
               reasonable endeavours, to recommence its affected operations in
               order for it to perform its obligations.

16.2.          If either Party is prevented from performance of its obligations,
               due to Force Majeure, for a continuous period in excess of six
               (6) months, the other Party

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                                                                              61

               may terminate this Agreement forthwith on service of written
               notice upon the Party so prevented. In the event of termination
               under this Article 16.2 the provisions of Article 15 shall not
               apply immediately and the Parties shall meet to discuss the
               ASTRAZENECA IP and TMC IP and agree on a process for arrangements
               upon termination.

16.3.          The Party claiming to be prevented or delayed in the performance
               of any of its obligations under this Agreement by reason of Force
               Majeure shall use its reasonable endeavours to bring the Force
               Majeure event to a close or to find a solution by which the
               Agreement may be performed despite the continuation of the Force
               Majeure event.

17.            GENERAL PROVISIONS

17.1.          ASSIGNMENT.

17.1.1.        Subject to Articles 17.1.2 and 17.1.3, neither Party shall
               without the prior written consent of the other Party assign,
               transfer, charge or deal in any other manner with this Agreement
               or any of its rights under it.

17.1.2.        Each Party shall be entitled to assign its rights under this
               Agreement to an acquiror of all or substantially all of its
               capital stock or assets related to the pharmaceutical business
               described in this Agreement, whether through purchase, merger,
               consolidation or otherwise.

17.1.3.        Each Party shall be entitled to assign its rights under this
               Agreement to an Affiliate provided that such Party shall require
               that any such Affiliate to whom it assigns any of its rights
               under this Agreement shall assign such rights back to the
               assigning Party immediately prior to it ceasing to be an
               Affiliate of the assigning Party.

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                                                                              62

17.2.          SEVERANCE.

17.2.1.        If any provision of this Agreement shall be found by any court or
               administrative body of competent jurisdiction to be invalid or
               unenforceable, such invalidity or unenforceability shall not,
               provided that the general content of the Agreement remains
               substantially the same as prior to such invalidity or
               unenforceability, affect the other provisions of this Agreement
               which shall remain in full force and effect.

17.2.2.        The Parties agree, in the circumstances referred to in Article
               17.2.1, to attempt to substitute for any invalid or unenforceable
               provision a valid or enforceable provision which achieves to the
               greatest extent possible the same effect as would have been
               achieved by the invalid or unenforceable provision.

17.3.          NOTICES.

17.3.1.        All notices and other communications given or made in relation to
               this Agreement;

17.3.2.        shall be in English and in writing;

17.3.3.        shall be delivered by hand or sent by first class registered post
               or facsimile;

17.3.4.        shall be delivered or sent to the Party concerned at the relevant
               address or facsimile number, shown in Article 17.4.1 subject to
               such amendments as may be notified from time to time in
               accordance with this Article by the relevant Party to the other
               Party by no less than three business days notice; and

17.3.5.        shall be deemed to have been duly given or made if addressed in
               the aforesaid manner;

               a)   if delivered by hand, upon delivery;

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                                                                              63

               b)   if posted by first class registered post, four (4) business
                    days after posting;

               c)   if sent by facsimile, when a complete and legible copy of
                    the communication has been received at the appropriate
                    address.

17.4.          CONTACT INFORMATION.


17.4.1.        Initial details for the purposes of Article 17.3 are:
               For ASTRAZENECA
               F Address: AstraZeneca AB, SE-151 85 Sodertalje, Sweden
               Facsimile: +46-8 553 290 00
               For the attention of: President & CEO

               For TMC
               Address: The Medicines Company, 8 Campus Drive, Parsippany,
               New Jersey 07054, United States
               Facsimile: +1-973-656-9898
               For the attention of: Clive Meanwell, Executive Chairman

17.4.2.        Any notice pursuant to Article 3.5.4 shall, in addition to being
               delivered in accordance with Articles 17.3 and 17.4.1, be
               delivered to the following address by facsimile.

               AstraZeneca AB,
               Global Intellectual Property,
               Sweden.
               Facsimile: +46 8 553 288 20
               For the attention of: Francis Tierney

               What is stated in Articles 17.3.1, 17.3.2, 17.3.4 and 17.3.5 c)
               shall apply to such notice as well.

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                                                                              64

17.5.          AGENCY, PARTNERSHIP OR JOINT VENTURE EXCLUDED.

17.5.1.        Nothing in this Agreement shall be construed so as to constitute
               either Party to be the agent of the other.

17.5.2.        Nothing in this Agreement and no action taken by the Parties
               pursuant to this Agreement shall constitute a partnership or
               joint venture of any kind between the Parties.

17.6.          ENTIRE AGREEMENT. Each of the Parties acknowledges and agrees
               that in entering into this Agreement, and the documents referred
               to in it, it does not rely on, and shall have no remedy in
               respect of, any statement, representation, warranty or
               understanding (whether negligently or innocently made) of any
               Person (whether party to this Agreement or not) other than as
               expressly set out in this Agreement as a warranty. Nothing in
               this Article shall either operate to limit or exclude any
               liability for fraud.

17.7.          AGREEMENT TO SUPERSEDE EARLIER AGREEMENTS. The Confidential
               Disclosure Agreement entered into by and between the Parties on
               27 February 2003 ceases to have effect from the Effective Date,
               except such termination does not affect a Party's accrued rights
               and obligations thereunder at the date of termination.

17.8.          AMENDMENTS. No amendment to or variation of this Agreement shall
               be valid unless it is in writing and signed by or on behalf of
               each of the Parties.

17.9.          PUBLICITY AND ANNOUNCEMENTS.

17.9.1.        Subject to Article 17.9.2 no press release, announcement or any
               other communication to any Third Party concerning the transaction
               contemplated by this Agreement, the financial terms of this
               Agreement, the subject matter of this Agreement or any ancillary
               matters shall be made or permitted or authorized to be made by
               either Party without the prior written approval of the other,
               such approval not to be unreasonably withheld or delayed and

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                                                                              65

               such approval to be given by an authorized representative of the
               Party in question.

17.9.2.        Either Party may make an announcement concerning the transaction
               contemplated by this Agreement or any ancillary matter if
               required by law, existing contractual obligations or any
               securities exchange or regulatory authority or governmental body
               to which either Party is subject or submits, wherever situated,
               provided that the Party required to make such announcement
               notifies the other Party of the details of the announcement prior
               to making such announcement and in sufficient time for the other
               Party to consider and comment on the announcement, and takes
               advantage of all provisions to keep confidential as many terms of
               the Agreement as possible.

17.10.         WAIVER. Failure or delay by either Party to exercise any right or
               remedy under this Agreement shall not be deemed to be a waiver of
               that right or remedy, or prevent it from exercising that or any
               other right or remedy on that occasion or on any other occasion.

17.11.         NO BENEFIT TO THIRD PARTIES. No Third Party shall be deemed a
               third party beneficiary under this Agreement for any purpose.
               Without limiting the foregoing, the Contracts (Rights of Third
               Parties) Act 1999 and any legislation amending or replacing such
               Act shall not apply in relation to this Agreement or any
               agreement, arrangement, understanding, liability or obligation
               arising under or in connection with this Agreement.

18.            GOVERNING LAW AND ARBITRATION

18.1.          ARBITRATION. The Parties shall use their reasonable efforts to
               settle amicably any dispute arising out of or in connection with
               this Agreement. In case the Parties are not able to settle such
               dispute between themselves, such dispute shall be finally
               resolved by arbitration in accordance with the Rules of the

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                                                                              66

               International Chamber of Commerce. The arbitration proceedings
               shall be held in London. Any proceedings shall be held in the
               English language.

18.2.          GOVERNING LAW. The validity, construction and interpretation of
               this Agreement and any determination of the performance which it
               requires shall be governed by the laws of England.

IN WITNESS WHEREOF this Agreement has entered into force on the Effective Date.


ASTRAZENECA AB (PUBL)                           THE MEDICINES COMPANY



Signature:/s/Martin Nicklasson                  Signature: /s/ Clive A. Meanwell

Name:  Martin Nicklasson                        Name:  Clive A. Meanwell
Title: EVP, Global Drug Development             Title: Executive Chairman

                    License Agreement - The Medicines Company



                                                                               1

                                   Schedule A

                            ASTRAZENECA Patent Rights



CASE       COUNTRY     APPLICATION NO.        APP. DATE          PATENT NO.            EXPIRY DATE
- --------------------------------------------------------------------------------------------------
                                                                        
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]


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[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]



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                                                                               3



CASE       COUNTRY     APPLICATION NO.        APP. DATE          PATENT NO.            EXPIRY DATE
- --------------------------------------------------------------------------------------------------
                                                                        
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]


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[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]



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                                                                               5



CASE       COUNTRY     APPLICATION NO.        APP. DATE          PATENT NO.            EXPIRY DATE
- ---------------------------------------------------------------------------------------------------
                                                                        
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]


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                                                                               6



CASE       COUNTRY     APPLICATION NO.        APP. DATE          PATENT NO.            EXPIRY DATE
- --------------------------------------------------------------------------------------------------
                                                                        
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]


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                                                                               7

                                                                        
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]
[**]       [**]        [**]                   [**]               [**]                  [**]



                    License Agreement - The Medicines Company



                                                                               8



CASE      COUNTRY     APPLICATION NO.         APP. DATE          PATENT NO.            EXPIRY DATE
- --------------------------------------------------------------------------------------------------
                                                                        
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]
[**]      [**]        [**]                    [**]               [**]                  [**]


                    License Agreement - The Medicines Company



                                                                               9



COUNTRY CODE               COUNTRY
- --------------------------------------
                        
AR                         Argentina
AT                         Austria
AU                         Australia
BD                         Bangladesh
BE                         Belgium
BR                         Brazil
BY                         Belarus
CA                         Canada
CH                         Switzerland
CO                         Colombia
CY                         Cyprus
CZ                         Czech Republic
DE                         Germany
DK                         Denmark
EE                         Estonia
EG                         Egypt
EP                         European Patent Office
ES                         Spain
FI                         Finland
FR                         France
GB                         United Kingdom
GR                         Greece
HU                         Hungary
ID                         Indonesia


                    License Agreement - The Medicines Company



                                                                              10

                        
IE                         Ireland
IL                         Israel
IN                         India
IS                         Iceland
IT                         Italy
LT                         Lithuania
LU                         Luxembourg
LV                         Latvia
MC                         Monaco
MK                         Macedonia
MX                         Mexico
MY                         Malaysia
NL                         Netherlands
NO                         Norway
NZ                         New Zealand
PH                         Philippines
PK                         Pakistan
PL                         Poland
PT                         Portugal
RO                         Romania
RU                         Russia
SA                         Saudi Arabia
SE                         Sweden
SG                         Singapore
SI                         Slovenia
SK                         Slovak Republic
TR                         Turkey
UA                         Ukraine
US                         USA
VE                         Venezuela



                    License Agreement - The Medicines Company



                                                                              11

                        
WO                         Patent Co-operation Treaty
ZA                         South Africa



                    License Agreement - The Medicines Company



                                                                               1

                                   Schedule B

                                      [**]

PRODUCT MASTER FILE


Product Monograph

This section represents the current status of the project


CONTENTS:

Clinical Supplies Strategies / Vial Strengths

Health and Safety - Assessment of health risks involved during manufacture


Composition

   - Description and intended use of product

   - Presentations and product numbers

   - Qualitative formulation

   - Quantitative formulation and formulation numbers


Manufacture

   - Manufacturer(s)

   - Manufacturing formula

   - Manufacturing process and filling

   - Equipment and manufacturing facilities

                    License Agreement - The Medicines Company



                                                                               2

   - Process flow diagram

   - Standard process instructions

   - In-process controls

   - Control of intermediates

   - Justification of specification for intermediates

   - Test methods for intermediates


Control Tests on Inactive Ingredients

   - Name and address of supplier

   - Specifications and test methods for inactive ingredients

   - Justification of specification for inactive ingredients

   - Test methods for inactive ingredients


Control Tests on Drug Substance

   - Name and address of suppliers and corresponding batch details

   - Statement of current route of synthesis

   - Drug substance specification

   - Product specific parameters


Control Tests on Product

   - Product specification

   - Product release specification

   - Justification for product specification

   - Test methods for product

   - Sampling plan


Packaging (Container / Closure / Device)

   - Description of packaging material and PCKs

   - Manufacturers of packaging materials

   - Specifications of packaging materials

   - Justification of specifications of packaging materials

                    License Agreement - The Medicines Company



                                                                               3

   - Test methods for packaging materials


Stability of Drug Substance

   - Shelf-life recommendations


Stability of Product

   - Shelf-life recommendation

   - Compatibility

   - Test methodology used for stability of product

   - Stability reports

Special Notes

Product Development Master Record


This section contains archived / superseded information (eg previous versions of
specifications) and is therefore the development history.


CONTENTS:

Health and Safety - Assessment of health risks involved during manufacture


Composition

   - Description and intended use of product

   - Presentations and product numbers

   - Qualitative formulation

   - Quantitative formulation and formulation numbers


Manufacture

   - Manufacturer(s)

   - Manufacturing formula

   - Standard process instructions

                    License Agreement - The Medicines Company



                                                                               4

Control Tests on Inactive Ingredients

   - Name and address of supplier

   - Specifications and test methods for inactive ingredients

   - Justification of specification for inactive ingredients

   - Test methods for inactive ingredients


Control Tests on Drug Substance

   - Drug substance specification


Control Tests on Product

   - Product specification

   - Product release specification

   - Justification for product specification

   - Test methods for product

   - Sampling plan


Packaging (Container / Closure / Device)

   - Description of packaging material and PCKs

   - Manufacturers of packaging materials

   - Specifications of packaging materials

   - Justification of specifications of packaging materials

   - Test methods for packaging materials


Stability of Drug Substance

   - Shelf-life recommendations


Stability of Product

   - Shelf-life recommendation

   - Test methodology used for stability of product

   - Stability reports

                    License Agreement - The Medicines Company



                                                                               5

Special Notes


Summary Reports

   - [**]

   - [**]


Placebo Monograph

Composition

   - Presentations and product numbers

   - Qualitative formulation

   - Quantitative formulation and formulation numbers


Manufacture

   - Manufacturer(s)

   - Manufacturing formula

   - Manufacturing process and filling

   - Equipment and manufacturing facilities

   - Process flow diagram

   - Standard process instructions

   - In-process controls

   - Control of intermediates

   - Justification of specification for intermediates

   - Test methods for intermediates


Control Tests on Inactive Ingredients

   - Name and address of supplier

   - Specifications and test methods for inactive ingredients

   - Justification of specification for inactive ingredients

                    License Agreement - The Medicines Company



                                                                               6

   - Test methods for inactive ingredients


Control Tests on Drug Substance

   - Not applicable

   - Name and address of suppliers and corresponding batch details

   - Statement of current route of synthesis

   - Drug substance specification

   - Product specific parameters


Control Tests on Product

   - Product specification

   - Product release specification

   - Justification for product specification

   - Test methods for product

   - Sampling plan


Packaging (Container / Closure / Device)

   - Description of packaging material and PCKs

   - Manufacturers of packaging materials

   - Specifications of packaging materials

   - Justification of specifications of packaging materials

   - Test methods for packaging materials


Stability of Drug Substance - Not applicable

   - Shelf-life recommendations


Stability of Product

   - Shelf-life recommendation

   - Compatibility

   - Test methodology used for stability of product

   - Stability reports

                    License Agreement - The Medicines Company



                                                                               7

Placebo Development Master Record

Contains archived / superseded information


PMF Appendices


Essentially this is the "working area" of the PMF containing:

   - Stability Protocols for Drug Substance

   - Stability Reports (front cover only

   - this references report number with all reports filed in archive)

   - Stability Protocols for Drug Product and Placebo Product

   - Stability Reports (main reports in full, others front cover only

   - this references report number with all reports filed in archive)

   - Protocols and Development Reports (all Investigational Protocols and
     Development Reports referenced)

   - Compatibility with Infusion Fluids and Giving Sets (all Reports / Studies
     referenced)

   - Product Design Report (all Reports referenced)

   - Regulatory Documents (CMC submissions referenced)

   - Cleaning Verification (Reports referenced)

   - Manufacturing Protocols (for clinical trial supplies manufacture at
     Sodertalje (Astra Liquid Production Facility)

   - Primary and Secondary Reference Standards

                                      [**]

                    License Agreement - The Medicines Company



                                                                               1

                                   Schedule C


CHEMICAL STRUCTURE [**]


                    [Diagram of proprietary compound deleted]

                    License Agreement - The Medicines Company



                                                                               1

                                   Schedule D



REPORT                          AUTHOR              REF      DUE OUT/DATED  CURRENT STATUS     FORMAT      CONTACT        SPINE
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                
[**]                                 [**]       [**]        [**]            [**]             Hard Copy   RAR/MP
[**]                                 [**]       [**]        [**]            [**]
[**]                                 [**]       [**]        [**]            [**]             Hard Copy   RAR/MP
[**]                                 [**]       [**]        [**]            [**]             e-copy      RAR/MP
[**]                                 [**]       [**]        [**]            [**]             e-copy      RAR/MP
[**]                                 [**]       [**]        [**]            [**]             e-copy      RAR/MP
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy
[**]                            *    [**]       [**]        [**]            [**]             e-copy


                    License Agreement - The Medicines Company


                                                                               2

                                                                                             
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Yellow
[**]                                 [**]       [**]        [**]            [**]             hard copy   GET
[**]                                 [**]       [**]        [**]            [**]             hard copy   GET
                                     [**]       [**]        [**]            [**]
[**]                                 [**]       [**]        [**]            [**]             hard copy   GET
[**]                                 [**]       [**]        [**]            [**]             hard copy   RAR/MP
[**]                            *    [**]       [**]        [**]            [**]             hard copy               White
[**]                                 [**]       [**]        [**]            [**]
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Blue
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Black-blue tag
[**]                            *    [**]       [**]        [**]            [**]             hard copy               White-blue tag
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Blue
[**]                                 [**]       [**]        [**]            [**]
[**]                                 [**]       [**]        [**]            [**]             hard copy   RAR/MP
[**]                                 [**]       [**]        [**]            [**]             hard copy   RAR/MP
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Green
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Green
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Green



                    License Agreement - The Medicines Company


                                                                               3

                                                                                             
[**]                                 [**]       [**]        [**]
[**]                                 [**]       [**]        [**]            [**]             hard copy   RAR/MP
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Black
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Black
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Black
[**]                                 [**]       [**]        [**]            [**]
[**]                            *    [**]       [**]        [**]            [**]             hard copy               Yellow
[**]                            *               [**]                                         hard copy   [**]
[**]
[**]
[**]
     Likely to be most relevant



                    License Agreement - The Medicines Company



                                                                               1

                                   Schedule E


                             [Diagram of proprietary
                                compound deleted]

                    License Agreement - The Medicines Company



                                                                               1

                                   Schedule F


                                Supply Agreement
              [To be provided upon completion -- See Section 4.2.3]

                    License Agreement - The Medicines Company

EX-21

                                                                      EXHIBIT 21

     The following is a list of the subsidiaries of The Medicines Company, all
of which are wholly owned:



     NAME OF SUBSIDIARY                    JURISDICTION OF INCORPORATION OR ORGANIZATION
     ------------------                    ---------------------------------------------
                                        
     The Medicines Company Limited         New Zealand

     The Medicines Company UK Limited      England and Wales

EX-23

                                                                     Exhibit 23

                         Consent of Independent Auditors

We consent to the incorporation by reference in the Registration Statements
(Forms S-8 No. 333-44884, 333-74612 and 333-98191) pertaining to the 1998 Stock
Incentive Plan, the 2000 Outside Director Stock Option Plan, the 2000 Employee
Stock Purchase Plan and the 2001 Non-Officer, Non-Director Employee Stock
Incentive Plan of The Medicines Company of our report dated February 10, 2004,
with respect to the consolidated financial statements and schedule of The
Medicines Company included in the Annual Report (Form 10-K) for the year ended
December 31, 2003.

                              /s/ Ernst & Young LLP

MetroPark, New Jersey
March 5, 2004

EX-31.1

                                                                    EXHIBIT 31.1

                                 CERTIFICATIONS

      I, Clive A. Meanwell, certify that:

1.       I have reviewed this Annual Report on Form 10-K of The Medicines
         Company;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the
         registrant and have:

         a)   Designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;

         b)   [Paragraph omitted in accordance with SEC transition instructions
              contained in SEC release 34-47986]

         c)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

         d)   Disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's fourth fiscal quarter that has materially affected,
              or is reasonably likely to materially affect, the registrant's
              internal control over financial reporting; and

5.       The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

         a)       All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         b)       Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.


                                         /s/ Clive A. Meanwell
                                         ---------------------------
Dated: March 5, 2004                     Clive A. Meanwell
                                         Executive Chairman

EX-31.2

                                                                    EXHIBIT 31.2

                                 CERTIFICATIONS

      I, David M. Stack, certify that:

1.       I have reviewed this Annual Report on Form 10-K of The Medicines
         Company;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the
         registrant and have:

         c)   Designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;

         d)   [Paragraph omitted in accordance with SEC transition instructions
              contained in SEC release 34-47986]

         c)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

         d)   Disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's fourth fiscal quarter that has materially affected,
              or is reasonably likely to materially affect, the registrant's
              internal control over financial reporting; and

5.       The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

         a)       All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         b)       Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.


                                   /s/ David M. Stack
                                   -----------------------------
Dated: March 5, 2004               David M. Stack
                                   President and Chief Executive Officer

EX-31.3

                                                                    EXHIBIT 31.3

                                 CERTIFICATIONS

      I, Steven H. Koehler, certify that:

1.       I have reviewed this Annual Report on Form 10-K of The Medicines
         Company;

2.       Based on my knowledge, this report does not contain any untrue
         statement of a material fact or omit to state a material fact necessary
         to make the statements made, in light of the circumstances under which
         such statements were made, not misleading with respect to the period
         covered by this report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations and cash flows
         of the registrant as of, and for, the periods presented in this report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the
         registrant and have:

         e)   Designed such disclosure controls and procedures, or caused such
              disclosure controls and procedures to be designed under our
              supervision, to ensure that material information relating to the
              registrant, including its consolidated subsidiaries, is made known
              to us by others within those entities, particularly during the
              period in which this report is being prepared;

         f)   [Paragraph omitted in accordance with SEC transition instructions
              contained in SEC release 34-47986]

         c)   Evaluated the effectiveness of the registrant's disclosure
              controls and procedures and presented in this report our
              conclusions about the effectiveness of the disclosure controls and
              procedures, as of the end of the period covered by this report
              based on such evaluation; and

         d)   Disclosed in this report any change in the registrant's internal
              control over financial reporting that occurred during the
              registrant's fourth fiscal quarter that has materially affected,
              or is reasonably likely to materially affect, the registrant's
              internal control over financial reporting; and

5.       The registrant's other certifying officer and I have disclosed, based
on our most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's board of
directors (or persons performing the equivalent functions):

         a)       All significant deficiencies and material weaknesses in the
                  design or operation of internal control over financial
                  reporting which are reasonably likely to adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial information; and

         b)       Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal control over financial reporting.


                                   /s/ Steven H. Koehler
                                   ------------------------------
Dated: March 5, 2004               Steven H. Koehler
                                   Chief Financial Officer

EX-32.1

                                                                    EXHIBIT 32.1


                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report on Form 10-K of The Medicines Company
(the "Company") for the period ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Clive
A. Meanwell, M.D., Executive Chairman of the Company, hereby certify, pursuant
to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:

     (1)       The Report fully complies with the requirements of Section 13(a)
               or 15(d) of the Securities Exchange Act of 1934; and

     (2)       The information contained in the Report fairly presents, in all
               material respects, the financial condition and results of
               operations of the Company.


                                   BY: /S/ CLIVE A. MEANWELL
                                      ----------------------------------
     Dated:  March 5, 2004            Clive A. Meanwell, M.D.
                                      Executive Chairman


     A signed original of this written statement required by Section 906 has
been provided to The Medicines Company and will be retained by The Medicines
Company and furnished to the SEC or its staff upon request

EX-32.2

                                                                    EXHIBIT 32.2


                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


     In connection with the Annual Report on Form 10-K of The Medicines Company
(the "Company") for the period ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, David
M. Stack, Chief Executive Officer of the Company, hereby certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

     (1)       The Report fully complies with the requirements of Section 13(a)
               or 15(d) of the Securities Exchange Act of 1934; and

     (2)       The information contained in the Report fairly presents, in all
               material respects, the financial condition and results of
               operations of the Company.


                                   BY: /S/ DAVID M. STACK
                                      --------------------------------
     Dated:  March 5, 2004            David M. Stack
                                      Chief Executive Officer


     A signed original of this written statement required by Section 906 has
been provided to The Medicines Company and will be retained by The Medicines
Company and furnished to the SEC or its staff upon request

EX-32.3

                                                                    EXHIBIT 32.3


                CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

                             AS ADOPTED PURSUANT TO

                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


        In connection with the Annual Report on Form 10-K of The Medicines
Company (the "Company") for the period ended December 31, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Steven
H. Koehler, Chief Financial Officer of the Company, hereby certify, pursuant to
18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:

          (1)  The Report fully complies with the requirements of Section 13(a)
               or 15(d) of the Securities Exchange Act of 1934; and

          (2)  The information contained in the Report fairly presents, in all
               material respects, the financial condition and results of
               operations of the Company.


                                   BY: /S/ STEVEN H. KOEHLER
                                      -----------------------------------------
      Dated:   March 5, 2004          Steven H. Koehler
                                      Chief Financial Officer


A signed original of this written statement required by Section 906 has been
provided to The Medicines Company and will be retained by The Medicines Company
and furnished to the SEC or its staff upon request