CURAGEN CORP, S-1/A, 1998-03-13

CURAGEN CORP
S-1/A, 1998-03-13
COMMERCIAL PHYSICAL & BIOLOGICAL RESEARCH

Previous: METRIKA SYSTEMS CORP, 10-K, 1998-03-13

Next: CURAGEN CORP, 8-A12G/A, 1998-03-13

<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 13, 1998

REGISTRATION NO. 333-38051
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 7

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

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

CURAGEN CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

DELAWARE 8731 06-1331400
(STATE OR OTHER (PRIMARY STANDARD (I.R.S. EMPLOYER
JURISDICTION OF INDUSTRIAL CLASSIFICATION IDENTIFICATION NO.)
INCORPORATION OR CODE NUMBER)
ORGANIZATION)

555 LONG WHARF DRIVE, 11TH FLOOR
NEW HAVEN, CONNECTICUT 06511
(203) 401-3330
(203) 401-3333 FACSIMILE
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)

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

JONATHAN M. ROTHBERG, PH.D.
CHIEF EXECUTIVE OFFICER, PRESIDENT AND
CHAIRMAN OF THE BOARD
CURAGEN CORPORATION
555 LONG WHARF DRIVE, 11TH FLOOR
NEW HAVEN, CONNECTICUT 06511
(203) 401-3330
(203) 401-3333 FACSIMILE
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

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

COPIES TO:

JONATHAN L. KRAVETZ, ESQ. KEITH F. HIGGINS, ESQ.
STANFORD N. GOLDMAN, JR., ESQ. ROPES & GRAY
MINTZ, LEVIN, COHN, FERRIS, ONE INTERNATIONAL PLACE
GLOVSKY AND POPEO, P.C. BOSTON, MASSACHUSETTS 02110
ONE FINANCIAL CENTER (617) 951-7000
BOSTON, MASSACHUSETTS 02111 (617) 951-7050 FACSIMILE
(617) 542-6000
(617) 542-2241 FACSIMILE

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (Subject to Completion)

Issued March 13, 1998

2,750,000 Shares

LOGO
CuraGen Corporation

COMMON STOCK

----------

ALL OF THE 2,750,000 SHARES OF COMMON STOCK ARE BEING SOLD BY CURAGEN
CORPORATION (THE "COMPANY"). PRIOR TO THIS OFFERING, THERE HAS BEEN NO
PUBLIC MARKET FOR THE COMMON STOCK OF THE COMPANY. IT IS CURRENTLY
ESTIMATED THAT THE INITIAL PUBLIC OFFERING PRICE PER SHARE WILL BE
BETWEEN $10.00 AND $12.00. SEE "UNDERWRITERS" FOR A DISCUSSION
OF THE FACTORS TO BE CONSIDERED IN DETERMINING THE INITIAL
PUBLIC OFFERING PRICE.

BIOGEN, INC. ("BIOGEN") AND GENENTECH, INC. ("GENENTECH"), TWO OF THE
COMPANY'S COLLABORATIVE PARTNERS AND EXISTING STOCKHOLDERS, HAVE AGREED
TO PURCHASE AN AGGREGATE OF $10,000,000 OF THE COMPANY'S COMMON
STOCK IN PRIVATE PLACEMENTS CONCURRENT WITH THIS OFFERING AT A
PRICE PER SHARE EQUAL TO THE PRICE TO PUBLIC BELOW. THE
SALE OF SUCH SHARES OF COMMON STOCK WILL NOT BE
REGISTERED IN THIS OFFERING. SEE "BUSINESS--
RESEARCH COLLABORATIONS."

----------

THE COMMON STOCK HAS BEEN APPROVED FOR QUOTATION ON THE NASDAQ
NATIONAL MARKET UNDER THE TRADING SYMBOL "CRGN."

----------

THIS OFFERING INVOLVES A HIGH DEGREE OF RISK. SEE "RISK FACTORS"
BEGINNING ON PAGE 8 OF THIS PROSPECTUS.

----------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

----------

PRICE $ A SHARE

----------

<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC COMMISSIONS(1) COMPANY(2)
-------- -------------- -----------
<S> <C> <C> <C>
Per Share................................... $ $ $
Total(3).................................... $ $ $
</TABLE>
- -----
(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended.
(2) Before deducting expenses payable by the Company estimated at $1,100,000.
(3) The Company has granted to the Underwriters an option, exercisable within
30 days of the date hereof, to purchase up to an aggregate of 412,500
additional Shares at the price to public less underwriting discounts and
commissions for the purpose of covering over-allotments, if any. If the
Underwriters exercise such option in full, the total price to public,
underwriting discounts and commissions and proceeds to Company will be
$ , $ and $ , respectively. See "Underwriters."

----------

The Shares are offered, subject to prior sale, when, as and if accepted by
the Underwriters named herein and subject to approval of certain legal matters
by Ropes & Gray, counsel for the Underwriters. It is expected that delivery of
the Shares will be made on or about , 1998 at the office of Morgan Stanley
& Co. Incorporated, New York, N.Y., against payment therefor in immediately
available funds.

----------

MORGAN STANLEY DEAN WITTER

LEHMAN BROTHERS

BEAR, STEARNS & CO. INC.

, 1998
<PAGE>

[GRAPHICAL DEPICTION OF THE COMPANY'S GENOMICS TECHNOLOGY PLATFORM]

THE COMPANY'S TECHNOLOGIES AND DATABASES ARE STILL IN EARLY STAGES OF DEVELOP-
MENT. THE COMPANY HAS RECENTLY BEGUN TO GENERATE REVENUE FROM ITS
GENECALLING(TM) AND PATHCALLING(TM) TECHNOLOGIES. THE HITCALLING(TM) TECHNOL-
OGY IS NOT EXPECTED TO BE AVAILABLE FOR COMMERCIALIZATION UNTIL LATER IN 1998
AND HAS NOT BEGUN TO GENERATE REVENUE. THERE CAN BE NO ASSURANCE THAT THE COM-
PANY WILL SUCCEED IN COMMERCIALIZING ITS TECHNOLOGIES, PROCESSES AND INFORMA-
TION SYSTEMS.
<PAGE>

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR BY ANY UNDERWRITER.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON STOCK OFFERED
HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY PERSON IN ANY JURISDICTION
IN WHICH IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION TO SUCH PERSON.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE HEREBY
SHALL UNDER ANY CIRCUMSTANCE IMPLY THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

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

UNTIL , 1998 (25 DAYS AFTER THE COMMENCEMENT OF THIS OFFERING), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................. 4
Risk Factors........................ 8
Use of Proceeds..................... 21
Dividend Policy..................... 21
Capitalization...................... 22
Dilution............................ 23
Selected Financial Data............. 24
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 25
Business............................ 30
</TABLE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Management.......................... 53
Certain Transactions................ 61
Principal Stockholders.............. 63
Description of Capital Stock........ 65
Shares Eligible for Future Sale..... 69
Underwriters........................ 71
Legal Matters....................... 72
Experts............................. 72
Additional Information.............. 73
Glossary............................ 74
Index to Financial Statements....... F-1
</TABLE>

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

The Company intends to furnish to its stockholders annual reports containing
audited financial statements and an opinion thereon expressed by independent
accountants and quarterly reports for the first three quarters of each fiscal
year containing interim financial information.

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

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THIS OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS."

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

In this Prospectus, the terms the "Company" or "CuraGen" shall mean CuraGen
Corporation. The Company's corporate headquarters are located at 555 Long
Wharf Drive, New Haven, Connecticut 06511, and its telephone number is (203)
401-3330.

GeneScape(R) and OGI(R) are trademarks of the Company which have been
registered with the United States Patent and Trademark Office.
GeneCalling(TM), PathCalling(TM), HitCalling(TM), CuraTools(TM), CuraShop(TM),
QEA(TM), MIM(TM), CombiGen(TM), Niagara(TM), (Greek Mu)Niagara(TM),
MicroNiagara(TM) and NanoNiagara(TM) are trademarks or service marks of the
Company for which registration applications have been filed with the United
States Patent and Trademark Office. All other trademarks or trade names
referred to in this Prospectus are the property of their respective owners.

3
<PAGE>

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information, including "Risk Factors" and the Financial Statements and Notes
thereto, appearing elsewhere in this Prospectus. This Prospectus contains
forward-looking statements which involve risks and uncertainties. The Company's
actual results could differ materially from those anticipated in these forward-
looking statements as a result of certain factors, including those set forth
under "Risk Factors" and elsewhere in this Prospectus. A Glossary of technical
terms used in this Prospectus appears at page 74 of this Prospectus.

THE COMPANY

CuraGen Corporation ("CuraGen" or the "Company") is pioneering the systematic
application of genomics to accelerate the discovery and development of
therapeutic and agricultural products. CuraGen's fully-integrated genomics
technologies, processes and information systems are designed to generate
rapidly comprehensive information about gene expression, biological pathways
and the potential drugs that affect these pathways, each on a scale not
previously undertaken. The Company believes that it can overcome the
limitations of competing technologies, processes and databases and can condense
key steps in gene-based drug discovery and development.

The Company's drug discovery platform has three primary systems: the
GeneCalling system for comprehensive gene expression analysis and gene
discovery; the PathCalling system for discovery of the roles of genes and the
proteins they encode in biological pathways; and the HitCalling system for
identification of small molecule drug candidates. The GeneCalling, PathCalling
and HitCalling systems are designed to use proprietary technologies to overcome
current limitations of gene-based drug discovery. In contrast to other gene
expression methods used to identify disease-related genes that may not detect
previously undiscovered genes or genes expressed at low levels, GeneCalling has
been designed to measure 95% of the genes expressed in any cell, including
novel genes and those expressed at the level of a single copy per cell.
GeneCalling generates multiple fragments per gene for enhanced reproducibility,
precision and fault-tolerance. In order to validate proteins as drug targets,
the Company has designed PathCalling to replace cumbersome protein-by-protein
research methods with a process that tests simultaneously for interactions
between billions of combinations of proteins. PathCalling assembles these
interactions into a database of biological pathways to link a disease-related
protein with its biological role. HitCalling is being designed to screen
thousands of these proteins simultaneously against hundreds of thousands of
potential drugs, building a database of targets and drug candidates to
accelerate drug discovery. The Company has unified its GeneCalling and
PathCalling technologies, processes and databases under its GeneScape
bioinformatics operating system to integrate all aspects of process management,
data analysis and visualization. GeneScape provides an easy-to-use, web-based
interface to the Company's technology platform. Customers can access the
GeneScape interface via the internet, using any standard web-browser, such as
Netscape Navigator or Microsoft Internet Explorer. GeneScape's architecture
allows researchers interactive, remote access to the Company's genomics
databases and technologies to meet their individual discovery and development
needs. GeneScape also includes CuraTools, a full-featured bioinformatics
software suite for further gene and protein characterization.

CuraGen believes its technology platform will facilitate the discovery and
development of highly specific and effective drugs aimed at a variety of
complex diseases such as cardiovascular disease, stroke, cancer and metabolic
disorders. In addition, the Company believes its GeneCalling and PathCalling
systems are well-positioned to predict the efficacy and safety of drug
candidates currently in pharmaceutical development pipelines and to review the
performance and side effects of drugs already on the market. This
pharmacogenomics approach can aid in the development of more effective, safer
drugs and identify more appropriate patient populations.

4
<PAGE>

the information generated. The GeneCalling and PathCalling systems are
currently operational, and the Company has already begun to populate the
GeneCalling and PathCalling databases from internal research programs and
research collaborations, as well as from publicly available databases. The
HitCalling system is expected to be operational later in 1998 and incorporated
into the Company's GeneScape operating system at that time. This database is
expected to be available as a commercial product in 1999. The Company has
designed the three systems as an integrated platform to enable gene discovery,
drug target validation and high-throughput screening of drug candidates in a
highly efficient and cost-effective manner.

CuraGen's goal is to establish its fully-integrated technologies and
GeneScape operating system as the preferred platform for genomics and to
pursue, both internally and through collaborations, a broad portfolio of
research programs for drug discovery, drug development and pharmacogenomics.
During the next five years, the Company intends to analyze systematically the
genetic basis of many common diseases in order to identify potential
therapeutic proteins, targets and small molecule drug candidates. CuraGen is
marketing its genomics technology and information to pharmaceutical,
biotechnology and agricultural companies through research collaborations and
database subscriptions. Research collaborations will generally involve the
application of CuraGen's technologies to a collaborator's projects and will
include support services required to characterize gene and target discoveries.
Other research collaborations may provide access to complementary technologies.
Database subscriptions will provide subscribers with access to CuraGen's
GeneCalling, PathCalling and HitCalling databases. The Company believes these
collaborations and subscription arrangements will establish milestone and
royalty-based revenues from products emerging from the drug development
programs of multiple partners, as well as additional product development
opportunities. The Company's databases are in early stages of development,
however, and there can be no assurance that the Company will succeed in
commercializing its databases or that collaborators or subscription partners
will be successful in using the Company's technologies and information to
develop and commercialize new drugs.

To date, CuraGen has entered into agreements with Pioneer Hi-Bred
International, Inc. ("Pioneer Hi-Bred"), Biogen, Genentech and ArQule, Inc.
("ArQule"). In May 1997, CuraGen and Pioneer Hi-Bred established a research
collaboration agreement. Pioneer Hi-Bred made a $7.5 million investment in the
Company and, subject to certain conditions, may fund up to $18.5 million in
research at the Company to use GeneCalling to identify genes responsible for
agricultural seed product performance. In October 1997, CuraGen and Biogen
established a research collaboration and database subscription arrangement to
discover novel genes and therapeutics. Biogen agreed to purchase $5 million of
Common Stock (the "Biogen Shares") in a private placement at the initial public
offering price and to provide a $10 million loan facility, convertible at
CuraGen's option into Common Stock. Biogen may, subject to certain conditions,
provide up to $18.5 million in research funding and subscription payments under
the agreement. Biogen will provide milestone payments of up to $18.5 million
for each therapeutic product that attains certain development and
commercialization milestones and will pay royalties based on future product
sales. In November 1997, CuraGen and Genentech established a research
collaboration and database subscription arrangement to discover novel genes and
therapeutics. Genentech agreed to purchase $5 million of Common Stock (the
"Genentech Shares") in a private placement at the initial public offering price
and, subject to certain conditions, may provide up to $26 million in the form
of a loan facility, convertible at CuraGen's option into CuraGen Non-Voting
Common Stock (subject to certain limitations). Genentech may provide up to $24
million in research funding and subscription payments under the agreement.
Genentech will provide milestone payments for each product that is developed
under a license and attains development and commercialization milestones and
will pay royalties based on future product sales. In addition, in January 1998,
the Company and ArQule entered into a research collaboration for the discovery
of novel therapeutics. Under the collaborative agreement, ArQule's libraries of
diverse, small organic, compounds will be screened against protein targets
using CuraGen's CombiGen technology to identify hits and to populate the
HitCalling database.

CuraGen has also used its GeneCalling and PathCalling systems in its internal
programs in areas including cardiovascular disease, stroke, cancer and
metabolic disorders, has discovered thirteen disease-related genes and has
filed five patent applications relating to these discoveries.

5
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company...... 2,750,000 shares
Common Stock to be outstanding after this
offering................................ 12,621,986 shares(1)
Use of Proceeds.......................... The Company plans to use approxi-
mately $10 million of the net pro-
ceeds for capital expenditures and
$1,750,000 (plus dividends of ap-
proximately $200,000) to redeem all
of the Series B Preferred Stock. The
balance of the net proceeds will be
used for research and development,
including internal discovery pro-
grams, the further development of
the Company's GeneCalling,
PathCalling and HitCalling data-
bases, and working capital and gen-
eral corporate purposes. See "Use of
Proceeds."
Nasdaq National Market Symbol............ CRGN
</TABLE>

- --------
(1) Based on 8,871,987 shares of Common Stock outstanding on December 31, 1997
and assuming the issuance of the 454,545 Biogen Shares, the 454,545
Genentech Shares and 90,909 shares of Common Stock to be issued to the
University of Florida Research Foundation, Inc. (the "University of
Florida Shares") at an assumed initial public offering price of $11.00 per
share. Excludes 1,663,884 and 1,583,866 shares of Common Stock reserved
for issuance upon the exercise of stock options and warrants,
respectively, outstanding on December 31, 1997, at weighted average
exercise prices of $4.18 and $4.12 per share, respectively. Also excludes
an aggregate of 20,000 shares of Common Stock issuable upon the exercise
of stock options granted to non-employee directors after December 31,
1997, at the initial public offering price.

Unless otherwise indicated, all share and per share data in this Prospectus
have been adjusted to reflect: (i) the amendment and restatement of the
Company's Certificate of Incorporation (as amended and restated, the "Restated
Certificate"), to be filed and effective upon the closing of this offering, to,
among other things, (a) increase the number of authorized shares of Common
Stock from 25,000,000 shares to 50,000,000 shares, (b) decrease the number of
authorized shares of Preferred Stock from 7,500,000 to 5,000,000 shares and
(c) authorize 3,000,000 shares of Non-Voting Common Stock; (ii) the conversion
upon the closing of this offering of all outstanding shares of the Company's
Series A Convertible Preferred Stock, Series C Convertible Preferred Stock,
Series D Convertible Preferred Stock and Series E Convertible Preferred Stock
into an aggregate of 3,418,635 shares of Common Stock (the "Automatic
Conversion"); (iii) the redemption upon the closing of this offering of all of
the 175,000 outstanding shares of the Company's Series B Redeemable Preferred
Stock (the "Series B Preferred Stock"); (iv) the termination upon the closing
of this offering of certain redemption rights relating to 291,875 shares of
Redeemable Common Stock (the "Redeemable Common Stock") described in Note 6 of
Notes to Financial Statements; and (v) the issuance in private placements of
the 454,545 Biogen Shares, the 454,545 Genentech Shares and the 90,909
University of Florida Shares at an assumed initial public offering price of
$11.00 per share. Except as otherwise indicated, the information in this
Prospectus assumes no exercise of the Underwriters' over-allotment option. The
number of shares of Common Stock issuable upon the Automatic Conversion is
subject to a de minimis increase under certain circumstances. See "Description
of Capital Stock--Preferred Stock." As used in this Prospectus, references to
"Biogen" include Biogen, Inc. and its wholly-owned subsidiary, Biotech
Manufacturing Limited.

6
<PAGE>

SUMMARY FINANCIAL DATA

The summary financial data set forth below should be read in conjunction
with, and are qualified by reference to, "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and the Company's audited
Financial Statements and related notes appearing elsewhere in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1995 1996(1) 1997
----------- ---------- -----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenue................................. $ 1,581,175 $4,422,947 $ 5,896,543
Operating expenses:
Grant research........................ 1,122,158 3,065,140 4,615,886
Collaborative research and
development.......................... 344,217 450,895 5,126,660
General and administrative............ 961,815 1,140,325 3,481,251
----------- ---------- -----------
Total operating expenses............ 2,428,190 4,656,360 13,223,797
----------- ---------- -----------
Loss from operations.................... (847,015) (233,413) (7,327,254)
Other income (expenses), net............ (241,590) (355,722) 105,244
----------- ---------- -----------
Net loss................................ (1,088,605) (589,135) (7,222,010)
Preferred dividends..................... -- (17,106) (68,424)
----------- ---------- -----------
Net loss attributable to common stock-
holders................................ $(1,088,605) $ (606,241) $(7,290,434)
=========== ========== ===========
Net loss per share attributable to com-
mon stockholders....................... $ (0.22) $ (0.12) $ (0.92)
=========== ========== ===========
Weighted average number of common shares
outstanding(2)......................... 4,915,087 5,097,073 7,888,383
=========== ========== ===========
Pro forma net loss per share
attributable to common
stockholders(2)........................ $ (0.12)
==========
Pro forma weighted average number of
common shares outstanding(2)........... 5,099,598
==========
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, 1997
----------------------------
ACTUAL AS ADJUSTED(3)
------------ --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents.......................... $ 17,417,161 $ 53,530,219
Total assets....................................... 26,519,029 61,548,836
Total long-term liabilities........................ 4,375,125 4,375,125
Redeemable Common Stock............................ 3,940,312 --
Series B Preferred Stock........................... 1,459,196 --
Accumulated deficit................................ (10,511,023) (10,511,023)
Stockholder's equity............................... 13,682,175 53,277,294
</TABLE>

- --------
(1) During the year ended December 31, 1996, the Company completed its
development stage activities with the signing of its first collaborative
research agreement and commenced its planned principal operations.
(2) For an explanation of the calculation of weighted average number of common
shares outstanding and pro forma weighted average number of common shares
outstanding, see Note 1 of Notes to Financial Statements.
(3) As adjusted to reflect the pro forma capitalization of the Company, giving
effect to the redemption of the 175,000 outstanding shares of Series B
Preferred Stock, the termination of certain redemption rights relating to
291,875 shares of Redeemable Common Stock and the sale of the 2,750,000
shares of Common Stock offered by the Company hereby, the Biogen Shares,
the Genentech Shares and the University of Florida Shares at an assumed
initial public offering price of $11.00 per share and the receipt of the
estimated net proceeds therefrom.

7
<PAGE>

RISK FACTORS

An investment in the shares of Common Stock offered hereby involves a high
degree of risk. The following factors, in addition to the other information
contained in this Prospectus, should be carefully considered in evaluating the
Company and its business before purchasing the shares of Common Stock offered
hereby. This Prospectus contains forward-looking statements. For this purpose,
any statements contained herein that are not statements of historical fact may
be deemed to be forward-looking statements. Without limiting the foregoing,
the words "believes," "anticipates," "plans," "expects," "intends" and similar
expressions are intended to identify forward-looking statements. There are a
number of important factors that could cause the Company's actual results to
differ materially from those indicated by such forward-looking statements.
These factors include, without limitation, those set forth below and elsewhere
in this Prospectus.

EARLY STAGE OF DEVELOPMENT; HISTORY OF OPERATING LOSSES; UNCERTAINTY OF FUTURE
PROFITS

The Company has had a limited operating history and is at an early stage of
development. For the years ended December 31, 1997, 1996 and 1995, the Company
had net losses attributable to common stockholders of $7,290,434, $606,241 and
$1,088,605 respectively, and as of December 31, 1997, the Company had an
accumulated deficit of $10,511,023. To date, a significant portion of the
Company's revenue has come from United States government grants. The
development of the Company's technologies, including the Company's expansion
of its GeneCalling and PathCalling database development efforts, together with
the development of its HitCalling database, will require substantial increases
in expenditures over the next several years. In addition, the Company expects
to incur substantial increases in expenditures in connection with its internal
research programs. As a result, the Company currently expects to incur
operating losses at least through 2000 and the Company may never achieve
significant revenues or profitability. The Company's ability to achieve
significant revenues or profitability will depend upon its ability to obtain
research collaborators and subscribers for its GeneCalling, PathCalling and
HitCalling databases and related products and services. The Company currently
has four research collaborations, two of which include database subscription
arrangements, and there can be no assurance that the Company will be able to
obtain any additional research collaborations or enter into any additional
subscription arrangements for such databases and related products and
services.

The Company's technologies and databases are still in the early stages of
development and the HitCalling technology is not expected to be available for
commercialization until later in 1998. There can be no assurance that the
Company's technologies will continue to be successfully developed or
commercialized or that any therapeutic, agricultural or diagnostic products
discovered or developed through the utilization of such technologies will
prove to be commercially useful, meet applicable regulatory standards in a
timely manner or at all, successfully compete with other technologies and
products, avoid infringing the proprietary rights of others, be manufactured
in sufficient quantities or at reasonable costs or be marketed successfully.
The Company expects that it will be a number of years, if ever, before the
Company will recognize revenue from therapeutic, agricultural or diagnostic
product sales or royalties.

TECHNOLOGICAL UNCERTAINTY AND PRODUCT DEVELOPMENT RISK

The Company has developed and intends to continue to develop its
GeneCalling, PathCalling and HitCalling databases and related technology for
the identification of novel genes, biological pathways and drug candidates
useful for the discovery and development of therapeutic, agricultural and
diagnostic products. These technologies involve new and unproven approaches.
Failure to identify genes, biological pathways and drug candidates useful for
the discovery and development of therapeutic, agricultural and diagnostic
products could have a material adverse effect on the Company. The Company's
technology and development focus is primarily directed toward complex diseases
as well as agronomic traits. There is limited scientific understanding
generally relating to the role of genes in these diseases and traits, and few
products based on gene discoveries have been developed and commercialized.
Accordingly, even if the Company is successful in identifying genes,
biological pathways or drug candidates associated with specific diseases or in
identifying genes associated with certain agronomic traits,

8
<PAGE>

there can be no assurance that these discoveries will lead to the development
of therapeutic, agricultural or diagnostic products. To date, the Company has
not developed or commercialized any such products based on its technological
methods.

In addition, the success of the Company's GeneCalling, PathCalling and
HitCalling databases and its related products and services will depend upon
the Company's ability to generate data concerning gene expression, biological
pathways and drug candidates using software tools. The Company's database
products are complex and sophisticated and could contain design defects or
software errors that are difficult to detect. There can be no assurance that
errors will not be found in the Company's current and future products, if any.

The Company's strategy of using a systematic analysis of the genome to
discover and develop novel therapeutic, agricultural and diagnostic products
is unproven. The Company's GeneCalling, PathCalling and HitCalling databases
and related products and services represent a business for which there is
little precedent. There can be no assurance that the Company's methods,
processes and related services will be accepted. To date, the Company has
entered into research collaborations with Pioneer Hi-Bred and ArQule and
research collaboration and database subscription arrangements with Biogen and
Genentech. There can be no assurance that the Company will be able to
establish any additional research collaborations or subscription arrangements.
The Company's ability to achieve and sustain profitability depends on
attracting additional collaborators and subscribers for its databases and
related products and services. In addition, the Company has limited experience
in providing software-based products or services. The specialized nature and
price of the Company's databases and related products and services are such
that there are a limited number of pharmaceutical, biotechnology and
agricultural companies that are potential customers for such products and
services. Additional factors that may affect demand for the Company's products
and services include the extent to which the Company's potential collaborators
and subscribers determine to conduct in-house gene research, the success of
competitors offering similar services at competitive prices, the ability of
the Company to service satisfactorily its collaborators and subscribers, the
extent to which the gene expression analyses, as well as the identification of
biological pathways, drug candidates and related information contained in the
Company's databases, are made public by or are the subject of patents issued
to others, and the emergence of technological innovations that are more
advanced than those used by and available to the Company.

The building of the Company's GeneCalling and PathCalling databases is still
in the early stages. In addition, the Company has not yet completed the
development of its CombiGen technology to enable it to conduct high-throughput
screening of protein targets, and has not yet started to populate its
HitCalling database. There can be no assurance that the Company will be able
to populate its GeneCalling and PathCalling databases in a timely manner or
develop its CombiGen technology or its HitCalling database successfully or
that, if completed or developed successfully, such technology or database will
be accepted by, or useful to, the Company's collaborators or subscribers.

FUTURE CAPITAL REQUIREMENTS; UNCERTAINTY OF ADDITIONAL FUNDING

The Company's comprehensive approach to developing therapeutic products
through the application of genomics has required it to establish a substantial
scientific infrastructure. The Company has used substantial amounts of cash to
date and expects capital and operating expenditures to increase over the next
several years as it expands its infrastructure and its research and
development activities, including the completion of its PathCalling database
and the development of its HitCalling database and CombiGen technology. The
Company's future capital requirements will depend on many factors, including
progress of its research programs, the number and breadth of these programs,
the ability of the Company to attract collaborators for or subscribers to its
products and services, achievement of milestones under certain of the
Company's existing collaborations, the ability of the Company to establish and
maintain additional collaborations, and the progress of the Company's
collaborators. These factors also include the level of the Company's
activities relating to commercialization rights it has retained in its
collaborations, competing technological and market developments, the costs
involved in enforcing patent claims and other intellectual property rights and
the costs and timing of regulatory approvals. The Company expects that it will
require significant additional financing in the future, which it may seek to
raise

9
<PAGE>

through public or private equity offerings, debt financings or additional
collaborations and licensing arrangements. There can be no assurance that
additional financing will be available when needed, or, if available, that
such financing will be obtained on terms favorable to the Company or its
stockholders. To the extent that the Company raises additional capital by
issuing equity securities, ownership dilution to stockholders will result. To
the extent that the Company raises additional funds through collaborations and
licensing arrangements, the Company may be required to relinquish rights to
certain of its technologies or product candidates, or to grant licenses on
terms that are not favorable to the Company, either of which could have a
material adverse effect on the Company's business, financial condition and
results of operations. In the event that adequate funds are not available, the
Company's business, financial condition and results of operations would be
materially, adversely affected. See "Use of Proceeds" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations--
Liquidity and Capital Resources."

RELIANCE ON RESEARCH COLLABORATIONS

The Company's strategy for development and commercialization of therapeutic,
agricultural and diagnostic products based upon its discoveries depends upon
the formation of various research collaborations and licensing arrangements.
To date, the Company has four research collaborations. The Company and Pioneer
Hi-Bred have entered into a research collaboration, which Pioneer Hi-Bred has
the right to terminate at any time upon a breach by the Company and on three
months' written notice, at any time after May 2000. The Company and Biogen
have entered into a research collaboration that Biogen has the right, at any
time after October 1999, to terminate, at its sole discretion, on six months'
written notice. The Company and Genentech have also entered into a research
collaboration that Genentech has the right to terminate, at its sole
discretion, on one month's prior written notice (i) in May 1999 subject to its
payment of a termination fee or forgiveness of the portion of the loan
facility outstanding on such termination date and (ii) on or after November
2000. The Company and ArQule entered into a research collaboration in January
1998, for an initial term of six months, which will be automatically extended
for successive six-month terms until terminated by either party on at least 30
days' notice prior to the end of a term. There can be no assurance that these
collaborations will not be terminated at such times or earlier upon a material
breach by the Company. Any such termination could have a material adverse
effect on the Company's business, financial condition and results of
operation. There can be no assurance that the Company will be able to maintain
or expand existing collaborations or establish additional research
collaborations or licensing arrangements necessary to develop and
commercialize therapeutic, agricultural or diagnostic products resulting from
the Company's technology, that any such collaborations or licensing
arrangements will be on terms favorable to the Company or that the current or
any future collaborations or licensing arrangements ultimately will be
successful. Under the Company's current strategy, and for the foreseeable
future, the Company does not expect to develop or market therapeutic,
agricultural or diagnostic products on its own. As a result, the Company will
be dependent on collaborators for the preclinical study and clinical
development of therapeutics and for regulatory approval, manufacturing and
marketing of therapeutic, agricultural and diagnostic products resulting from
the application of the Company's technology. The agreements with collaborators
typically will allow them significant discretion in electing whether to pursue
such activities. The Company cannot control the amount and timing of resources
its collaborators devote to the Company's programs or potential products. If
any of the Company's collaborators were to breach or terminate its agreement
with the Company or otherwise fail to conduct collaborative activities
successfully and in a timely manner, the preclinical or clinical development
or commercialization of product candidates or research programs would be
delayed or terminated. Any such delay or termination could have a material
adverse effect on the Company's business, financial condition and results of
operations.

The Company's agreements with its collaborators generally have been
structured and the Company intends to continue to structure such agreements so
that, after a period of initial exclusivity and unless a collaborator elects
to pay for an extended period of exclusivity, the research data developed
during the collaboration will become available for subscribers to the
Company's general databases. There can be no assurance that any additional
collaborators of the Company will agree to such provisions. If the Company is
unable to obtain rights to this data, it may have to change its collaboration
strategy and rely more heavily on its own internal discovery programs to fill
its subscription databases.

10
<PAGE>

The Company intends to rely on certain of its collaborators for significant
funding in support of its research efforts. If funding from one or more of its
collaborative programs were reduced or terminated, the Company would be
required to devote additional internal resources to product development, scale
back or terminate certain research development programs or seek alternative
collaborators. See "--Future Capital Requirements; Uncertainty of Additional
Funding" and "Business--Research Collaborations." Disputes may arise in the
future with respect to the ownership of rights to any technology developed
with collaborators. These and other possible disagreements between
collaborators and the Company could lead to delays in the collaborative
research, development or commercialization of certain therapeutic,
agricultural or diagnostic products, or could require or result in litigation
or arbitration to resolve. Any such event could have a material adverse effect
on the Company's business, financial condition and results of operations.

COMPETITION

The Company faces, and will continue to face, intense competition from
pharmaceutical, biotechnology and diagnostic companies, as well as academic
and research institutions and government agencies. The Company is subject to
significant competition from organizations that are pursuing technologies and
products that are the same as or similar to the Company's technology and
products. Many of the organizations competing with the Company have greater
capital resources, research and development staffs and facilities and
marketing capabilities than the Company. In addition, research in the field of
genomics generally is highly competitive. Competitors of the Company in the
genomics area include, among others, public companies such as Affymetrix,
Inc., Human Genome Sciences, Inc., Incyte Pharmaceuticals, Inc. and Millennium
Pharmaceuticals, Inc., as well as private companies and major pharmaceutical
companies. Universities and other research institutions, including those
receiving funding from the federally funded Human Genome Project, also compete
with the Company. The Company's future success will depend in large part on
its maintaining a competitive position in the genomics field. Rapid
technological development by the Company or others may result in products or
technologies becoming obsolete before the Company recovers the expenses it
incurs in connection with their development. Products offered by the Company
could be made obsolete by less expensive or more effective technologies. There
can be no assurance that the Company will be able to make the enhancements to
its technology necessary to compete successfully with newly emerging
technologies. See "Business--Competition."

A number of competitors are attempting to rapidly identify and patent genes
and gene fragments sequenced at random, typically without specific knowledge
of the function of such genes or gene fragments. The Company's competitors may
discover or characterize important genes or gene fragments in advance of the
Company, which events could have a material adverse effect on any related
disease research program of the Company. The Company expects competition to
intensify in genomics research as technical advances are made and become more
widely known. See "Business--Background" and "--Technology Platform."

PATENTS AND PROPRIETARY RIGHTS; THIRD PARTY RIGHTS

The Company's business and competitive position are dependent upon its
ability to protect its GeneCalling, PathCalling and HitCalling proprietary
databases, proprietary software and other proprietary methods and technology.
Despite the Company's efforts to protect its proprietary rights, unauthorized
parties may attempt to obtain and use information that the Company regards as
proprietary. The Company relies on patent, trade secret and copyright law and
nondisclosure and other contractual arrangements to protect such proprietary
information. The Company has filed patent applications for its proprietary
methods and devices for gene expression analysis, and for discovery of
biological pathways and for drug screening for pharmaceutical product
development. As of March 1, 1998, the Company had 21 patent applications
pending covering its technology with the United States Patent and Trademark
Office (the "USPTO"), and had filed several corresponding international and
foreign patent applications. To date, no patents have been issued to the
Company with respect to its technology and there can be no assurance that any
patents will issue. There can be no assurance that others will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to the Company's proprietary information,
that such information will not be disclosed or that the Company can
effectively protect its rights to unpatented trade secrets or other
proprietary information.

11
<PAGE>

The Company's commercial success will also depend in part on obtaining
patent protection on gene and protein discoveries for which it or its
collaborators or subscribers discover utility and on products, methods and
services based on such discoveries. The Company has applied for patent
protection on novel mutants of known genes and their uses, partial sequences
of novel proteins and their gene sequences and uses, and novel uses for
previously identified genes discovered by third parties. The Company has
sought and intends to continue to seek patent protection for novel uses for
genes and proteins which may have been patented by third parties. In such
cases, the Company would need a license from the holder of the patent with
respect to such gene or protein in order to make, use or sell such gene or
protein for such use. There can be no assurance that the Company will be able
to acquire such licenses on commercially reasonable terms, if at all. The
Company's patent application filings that result from the identification of
genes associated with the cause or effect of a particular disease generally
seek to protect the genes and encoded proteins if these genes and encoded
proteins are, among other things, novel and non-obvious, as well as
therapeutic, diagnostic and drug screening methods and products, and other
subject matter based upon a gene and its indication. Where information is
discovered on the specific biological pathway in which the protein encoded by
the gene participates, the Company also seeks to protect the newly identified
protein complex as well as the methods for identifying intervention
strategies. Each application typically contains multiple genes discovered for
a particular disease system.

The patent positions of pharmaceutical, biopharmaceutical and biotechnology
companies, including the Company, are generally uncertain and involve complex
legal and factual questions. There can be no assurance that any of the
Company's pending patent applications will result in issued patents, that the
Company will develop additional proprietary technologies that are patentable,
that any patents issued to the Company or its collaborative customers will
provide a basis for commercially viable products or will provide the Company
with any competitive advantages or will not be challenged or circumvented or
invalidated by third parties, or that the patents of others will not have an
adverse effect on the ability of the Company to do business. In addition,
patent law relating to the scope of claims in the technology fields in which
the Company operates is still evolving. The degree of future protection for
the Company's proprietary rights is uncertain. Furthermore, there can be no
assurance that others will not independently develop similar or alternative
technologies, duplicate any of the Company's technologies, or, if patents are
issued to the Company, design around the patented technologies developed by
the Company. In addition, the Company could incur substantial costs in
litigation if it is required to defend itself in patent suits brought by third
parties or if it initiates such suits.

There can be no assurance that patents for the Company's products or methods
will be obtained, or that, if issued, such patents will provide substantial
protection or be of commercial benefit to the Company. The issuance of a
patent is not conclusive as to its validity or enforceability, nor does it
provide the patent holder with freedom to operate without infringing the
patent rights of others. A patent could be challenged by litigation and, if
the outcome of such litigation were adverse to the patent holder, competitors
could be free to use the subject matter covered by the patent, or the patent
holder may license the technology to others in settlement of such litigation.
The invalidation of key patents owned by or licensed to the Company or non-
approval of pending patent applications could increase competition, and result
in a material adverse effect on the Company's business, financial condition
and results of operations. In addition, there can be no assurance that any
application or exploitation of the Company's technology will not infringe
patents or proprietary rights of others or that licenses that might be
required as a result of such infringement would be available on commercially
reasonable terms, if at all. A third party has indicated that it believes the
Company may be required to obtain a license in order to perform certain
processes that the Company uses in the conduct of its business. The Company
believes that if required, such license would be available on commercially
reasonable terms. However, there is no assurance that such license could be
obtained on terms acceptable to the Company or at all.

The Company cannot predict whether its or its competitors' patent
applications will result in the issuance of valid patents. Litigation, which
could result in substantial cost to the Company, may also be necessary to
enforce the Company's patent and proprietary rights and/or to determine the
scope and validity of others' proprietary rights. The Company may participate
in interference proceedings that may in the future be declared by the USPTO to
determine priority of invention, which could result in substantial cost to the
Company. There can be

12
<PAGE>

no assurance that the outcome of any such litigation or interference
proceedings will be favorable to the Company, that the Company will be able to
obtain licenses to technology that it may require or that, if obtainable,
such technology can be licensed at a reasonable cost.

The public availability of expressed sequence tags ("ESTs") or other
sequence information prior to the time the Company applies for patent
protection on a corresponding full-length or partial gene could adversely
affect the Company's ability to obtain patent protection with respect to such
gene or gene sequences. In addition, certain other groups are attempting to
rapidly identify and characterize genes through the use of gene expression
analysis and other technologies. To the extent any patents issue to other
parties on such partial or full-length genes or uses for such genes, the risk
increases that the sale of potential products, including therapeutics, or
processes developed by the Company or its collaborators may give rise to
claims of patent infringement. Others may have filed and in the future are
likely to file patent applications covering genes or gene products that are
similar or identical to those of the Company. No assurance can be given that
any such patent application will not have priority over patent applications
filed by the Company. Any legal action against the Company or its
collaborators claiming damages and seeking to enjoin commercial activities
relating to the affected products and processes could, in addition to
subjecting the Company to potential liability for damages, require the Company
or its collaborators to obtain a license in order to continue to manufacture
or market the affected products and processes or could enjoin the Company from
continuing to manufacture or market the affected products and processes. There
can be no assurance that the Company or its collaborators would prevail in any
such action or that any license required under any such patent would be made
available on commercially acceptable terms, if at all. The Company believes
that there may be significant litigation in the industry regarding patent and
other intellectual property rights. If the Company becomes involved in such
litigation, it could consume a substantial portion of the Company's managerial
and financial resources.

There is substantial uncertainty concerning the extent to which supportive
data will be required for issuance of patents for human therapeutics. If data
additional to that available to the Company is required, the Company's ability
to obtain patent protection could be delayed or otherwise adversely affected.
Although the USPTO issued new utility guidelines in July 1995 that address the
requirements for demonstrating utility for biotechnology inventions,
particularly for inventions relating to human therapeutics, there can be no
assurance that the USPTO examiners will follow such guidelines or that the
USPTO's position will not change with respect to what is required to establish
utility for gene sequences and products and methods based on such sequences.
Furthermore, the enactment of the legislation implementing the General
Agreement on Tariffs and Trade has resulted in certain changes to United
States patent laws that became effective on June 8, 1995. Most notably, the
term of patent protection for patent applications filed on or after June 8,
1995 is no longer a period of seventeen years from the date of grant. The new
term of United States patents will commence on the date of issuance and
terminate twenty years from the earliest filing date in the United States to
which priority is claimed for the application. Because the time from filing to
issuance of biotechnology patent applications is often more than three years,
a twenty-year term from the claimed United States priority date may result in
a substantially shortened term of patent protection, which may adversely
affect the Company's patent position. If this change results in a shorter
period of patent coverage, the Company's business could be adversely affected
to the extent that the duration and level of the royalties it is entitled to
receive from its strategic partners is based on the existence of a valid
patent.

The Company also relies upon trade secret protection for some of its
confidential and proprietary information that is not subject matter for which
patent protection is being sought. The Company believes that it has developed
proprietary technology, processes and information systems for use in gene
expression and biological pathway discovery, as well as in the identification
of molecular targets for pharmaceutical development, including proprietary
biological protocols, instrumentation, robotics and automation, software and
an integrated bioinformatics system. In addition, the Company has developed a
database of proprietary gene expression patterns and biological pathways which
it updates on an ongoing basis and which can be accessed over the Internet.
The Company has taken security measures to protect its proprietary
technologies, processes, information systems and data and continues to explore
ways to enhance such security. There can be no assurance, however, that such
measures will provide adequate protection for the Company's trade secrets or
other proprietary information. While the Company requires employees, academic
collaborators and consultants to enter into confidentiality and/or non-

13
<PAGE>

disclosure agreements where appropriate, there can be no assurance that
proprietary information will not be disclosed, that others will not
independently develop substantially equivalent proprietary information and
techniques or otherwise gain access to the Company's trade secrets or disclose
such technology, or that the Company can meaningfully protect its trade
secrets. See "Business--Intellectual Property."

UNCERTAINTIES RELATING TO COMMERCIALIZATION RIGHTS

In the Company's research collaborations, the Company will seek to retain
commercialization rights for the development and marketing of certain
pharmaceutical, agricultural and diagnostic products or services. There can be
no assurance that the Company will be successful in retaining such rights and
no such pharmaceutical, agricultural or diagnostic products or services have
been developed to date by the Company. The Company may seek to commercialize
any such retained rights, as well as any products developed in its internal
development programs, directly or through collaborations with others. To date,
the Company has not initiated significant activities with respect to the
exploitation of any of its retained commercialization rights or any products
developed in its internal development programs. The value of these rights and
products, if any, will be largely derived from the Company's gene expression,
biological pathway and drug screening efforts, the success of which is also
uncertain. See "--Technological Uncertainty and Product Development Risk."
Even if the Company identifies and characterizes relevant disease-related
genes, biological pathways and/or drug candidates, the commercialization of
retained rights and products developed internally requires, in addition to
capital resources, technological, product development, manufacturing,
regulatory, marketing and sales resources that the Company does not currently
possess. There can be no assurance that the Company will be able to develop or
obtain such resources. To the extent that the Company is required to rely on
third parties for these resources, failure to establish and maintain such
relationships could have a material adverse effect on the Company's ability to
realize value from its retained commercialization rights and products
developed internally. If the Company seeks to commercialize retained rights
and products developed internally through joint ventures or research
collaborations, it may be required to relinquish material rights on terms that
may not be favorable to the Company. No agreements concerning any such
arrangements currently exist, and there can be no assurance that the Company
will be able to enter into any such agreements on acceptable terms, if at all,
or that the Company will be able to realize any value from any retained
commercialization rights and products developed internally. See "Business--
CuraGen's Strategy" and "--Research Collaborations."

GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL

14
<PAGE>

upon a new therapeutic approach, such products may be subject to substantial
additional review by various government regulatory authorities and, as a
result, regulatory approvals may be obtained more slowly than for products
using more conventional technologies.

Even if regulatory approval is obtained, a marketed product and its
manufacturer are subject to continuing review. Discovery of previously unknown
problems with a product may have adverse effects on the Company's business,
financial condition and results of operations, including withdrawal of the
product from the market. Violations of regulatory requirements at any stage,
including preclinical studies and clinical trials, the approval process or
post-approval, may result in various adverse consequences to the Company,
including the FDA's delay in approval or refusal to approve a product,
withdrawal of an approved product from the market or the imposition of
criminal penalties against the manufacturer and NDA or PLA holder. The Company
has not submitted an investigational new drug application ("IND") for any
product candidate, and no product candidate has been approved for
commercialization in the United States or elsewhere. The Company intends to
rely primarily on its collaborators to file INDs and generally direct the
regulatory approval process. No assurance can be given that the Company or any
of its collaborators will be able to conduct clinical testing or obtain the
necessary approvals from the FDA or other regulatory authorities for any
products. Failure to obtain required governmental approvals will delay or
preclude the Company's collaborators from marketing drugs or diagnostic
products developed by the Company or limit the commercial use of such products
and could have a material adverse effect on the Company's business, financial
condition and results of operations.

The Company's research and development activities involve the controlled use
of hazardous materials and chemicals. The Company is subject to federal, state
and local laws and regulations governing the use, storage, handling and
disposal of such materials and certain waste products. Although the Company
believes that its safety procedures for handling and disposing of such
materials comply with the standards prescribed by federal, state and local
laws and regulations, the risk of accidental contamination or injury from
these materials cannot be completely eliminated. In the event of such an
accident, the Company could be held liable for any damages that result and any
liability could exceed the resources of the Company. See "Business--Government
Regulation."

ATTRACTION AND RETENTION OF KEY EMPLOYEES

The Company is highly dependent on the principal members of its management
and scientific staff, including Dr. Jonathan Rothberg, its Chief Executive
Officer, President and Chairman of the Board, Dr. Gregory Went, its Executive
Vice President. The loss of services of any of these personnel could have a
material adverse effect on the Company's business, financial condition and
results of operations. The Company has not entered into employment agreements
with Dr. Rothberg, Dr. Went or any of the other principal members of its
management and scientific staff that bind any of them to a specific term of
employment. The Company maintains key person life insurance on the lives of
each of Drs. Rothberg and Went in the amount of $2,000,000. The Company's
future success also will depend in part on the continued services of its key
scientific and management personnel and its ability to attract, hire and
retain additional personnel. There is intense competition for such qualified
personnel and there can be no assurance that the Company will be able to
continue to attract and retain such personnel. Failure to attract and retain
key personnel could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Management."

EXPANSION OF OPERATIONS; MANAGEMENT OF GROWTH

The Company has recently experienced significant growth in the number of its
employees, the extent of its genomics efforts and database development, its
research programs and collaborations and the scope of its operations. This
growth has placed, and may continue to place, a significant strain on the
Company's management and operations. The Company's ability to manage
effectively such growth will depend upon its ability to strengthen its
management team and its ability to attract and retain skilled employees. The
Company's success will also depend on the ability of its officers and key
employees to continue to implement and improve its operational, management
information and financial control systems and to expand, train and manage its
work force. In addition, the Company must continue to take steps to provide
resources to supports its collaborative

15
<PAGE>

customers and subscribers as their numbers increase. The Company's inability
to manage growth effectively could have a material adverse effect on the
Company's business, financial condition and results of operations. See
"Business--Employees" and "--Facilities."

DEPENDENCE UPON LICENSED TECHNOLOGIES; GOVERNMENT RIGHTS TO FUNDED
TECHNOLOGIES

Certain components of the Company's technologies have been acquired or
licensed from third parties. Changes in such third party agreements, or
termination thereof, could materially adversely affect the Company's research
and development activities. There can be no assurance that the Company will be
able to acquire from third parties or develop new technologies, either alone
or with others. Failure to license or otherwise acquire necessary technologies
could have a material adverse effect on the Company's business, financial
condition and results of operation. In addition, certain of such licenses
impose an obligation on the Company to market the licensed technology to third
parties. A breach by the Company of any such license or other failure by the
Company to maintain rights to such technology could have a material adverse
effect on the Company's business, financial condition and results of
operation.

Under the Company's government grants and agreements, the government has a
statutory right to practice or have practiced and, under certain circumstances
(including inaction on the part of the Company or its licensees to achieve
practical application of the invention or a need to alleviate public health or
safety concerns not reasonably satisfied by the Company or its licensees), to
grant to other parties licenses under, any inventions first reduced to
practice under the government grants and agreements.

DEPENDENCE ON ACADEMIC COLLABORATORS AND SCIENTIFIC ADVISORS

The Company has relationships with collaborators and consultants at academic
and other institutions who conduct research at the Company's request. Such
collaborators and consultants are not employees of the Company. Substantially
all of the Company's collaborators and consultants are employed by employers
other than the Company and may have commitments to, or consulting or advisory
contracts with, other entities that may limit their availability to the
Company. As a result, the Company has limited control over their activities
and, except as otherwise required by its collaboration and consulting
agreements, can expect only limited amounts of their time to be dedicated to
the Company's activities. The Company's ability to discover genes and
biological pathways involved in human disease and commercialize products based
on those discoveries may depend in part on continued collaborations with
researchers at academic and other institutions. There can be no assurance that
the Company will be able to negotiate additional acceptable collaborations
with collaborators or consultants at academic and other institutions or that
its existing collaborations will be successful.

The Company's academic collaborators, consultants and scientific advisors
may have relationships with other commercial entities, some of which could
compete with the Company. The academic collaborators, consultants and
scientific advisors sign agreements which provide for confidentiality of the
Company's proprietary information and of the results of studies. There can be
no assurance that the Company will be able to maintain the confidentiality of
its technology and other confidential information in connection with every
academic collaboration or advisory arrangement, and any unauthorized
dissemination of the Company's confidential information could have a material
adverse effect on the Company's business, financial condition and results of
operations. Further, there can be no assurance that any such collaborator,
consultant or advisor may not enter into an employment or consulting
arrangement with a competitor of the Company. See "Business--CuraGen Internal
Programs."

LENGTHY SALES CYCLE

The ability of the Company to obtain collaborators and subscribers for its
products and services depends in significant part upon the perception that
such products and services can help accelerate drug discovery and development
efforts. The sales cycle is typically lengthy due to the education effort that
is required as well as the need to effectively sell the benefits of the
Company's products and services to a variety of constituencies within
potential collaborators and subscribers, including research and development
personnel and key management. In addition, each subscription and collaboration
will involve the negotiation of agreements containing terms that may be unique
to each subscriber or collaborator. The Company may expend substantial funds
and management effort with no assurance that a database subscription or a
collaboration will result.

16
<PAGE>

VARIATION IN QUARTERLY OPERATING RESULTS

The Company's results of operations historically have fluctuated on a
quarterly basis and can be expected to continue to be subject to quarterly
fluctuations. The Company expects that losses will fluctuate from quarter to
quarter and the such fluctuations may be substantial. Quarterly operating
results can fluctuate as a result of a number of factors, including the
commencement, delay, cancellation or completion of contracts; the timing of
option, license and milestone payments under the Company's agreements; the mix
of services provided; the timing of start-up expenses for new services and
facilities; the timing and integration of acquisitions and changes in
regulations related to the products and services of the Company. The Company
believes that quarterly comparisons of its financial results are not
necessarily meaningful and should not be relied upon as an indication of
future performance. In addition, fluctuations in quarterly results could
affect the market price of the Common Stock in a manner unrelated to the
longer term operating performance of the Company. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

RISKS ASSOCIATED WITH COMMERCIALIZATION OF PROPRIETARY PRODUCTS

Although the Company is not currently developing any potential
pharmaceutical products, should the Company choose to do so, any such products
will require significant research and development and preclinical testing, and
will require extensive clinical testing prior to submission of any regulatory
application for commercial use. Such activities, if undertaken without the
collaboration of others, would require the expenditure of significant funds.
Such potential pharmaceutical products will be subject to the risks of failure
inherent in the development of pharmaceutical products based on new
technologies. These risks include the possibilities that such potential
pharmaceutical products will be found to be unsafe or ineffective or otherwise
fail to receive necessary regulatory clearances; that the products, if safe
and effective, will be difficult to manufacture on a large scale or
uneconomical to market; that proprietary rights of third parties will preclude
the Company or its partners from marketing such products; or that third
parties will market superior or equivalent products. As a result, there can be
no assurance that the Company's research and development activities will
result in any commercially viable products. Clinical trials or marketing of
any such potential pharmaceutical products may expose the Company to liability
claims from the use of such pharmaceutical products. There can be no assurance
that the Company will be able to obtain product liability insurance or, if
obtained, that sufficient coverage can be acquired at a reasonable cost. In
addition, should the Company choose to develop pharmaceutical products
internally, it will have to make significant investments in pharmaceutical
product development, marketing, sales and regulatory compliance resources, and
it will have to establish or contract for the manufacture of products under
the Good Manufacturing Practices of the FDA. There can be no assurance that
the Company will be able to develop or commercialize successfully any
potential pharmaceutical products. Any potential products developed by the
Company's licensees will be subject to the same risks. See "Business--
Government Regulation."

UNCERTAINTY OF PHARMACEUTICAL PRICING, REIMBURSEMENT AND RELATED MATTERS

The Company's business, financial condition and results of operations may be
materially adversely affected by the continuing efforts of government and
third party payors to contain or reduce the costs of health care through
various means. In certain foreign markets, pricing and profitability of
prescription pharmaceuticals are subject to government control. In the United
States, the Company expects that there will continue to be a number of federal
and state proposals to implement similar government control. In addition,
increasing emphasis on managed care in the United States will continue to put
pressure on the pricing of pharmaceutical and diagnostic products. Cost
control initiatives could decrease the price that the Company or any of its
subscribers and collaborators receives for any products in the future and may
have a material adverse effect on the Company's business, financial condition
and results of operations. Further, to the extent that cost control
initiatives have a material adverse effect on the Company's subscribers or
collaborators, the Company's ability to commercialize its products and to
realize royalties could be adversely affected.

The ability of the Company and any subscriber or collaborative customer to
commercialize pharmaceutical or diagnostic products may depend in part on the
extent to which reimbursement for the products will be available from
government and health administration authorities, private health insurers and
other third party

17
<PAGE>

payors. Significant uncertainty exists as to the reimbursement status of newly
approved health care products. Third party payors, including Medicare,
increasingly are challenging the prices charged for medical products and
services. Government and other third party payors are increasingly attempting
to contain health care costs by limiting both coverage and the level of
reimbursement for new therapeutic products and by refusing in some cases to
provide coverage for uses of approved products for disease indications for
which the FDA has not granted labeling approval. There can be no assurance
that any third party insurance coverage will be available to patients for any
products discovered and developed by the Company or its subscribers or
collaborators. If adequate coverage and reimbursement levels are not provided
by government and other third party payors for the Company's products, the
market acceptance of these products may be reduced. Any such reduction may
have a material adverse effect on the Company's business, financial condition,
results of operations and cash flows.

RELIANCE ON UNITED STATES GOVERNMENT FUNDING

To date, the Company's primary source of revenue has been payments under
United States government grants. The government's obligation to make payments
under these grants is subject to annual appropriation by the United States
Congress. It is possible that Congress or the government agencies that
administer the Company's grants will determine to curtail or terminate these
programs. As a result of the Company's existing capital resources and the
expected proceeds of this offering, the Company does not anticipate relying to
a significant extent on United States government grants as a future source of
revenue. However, if the Company's strategy of pursuing strategic
collaborations and database subscriptions is unsuccessful, the failure of
Congress or governmental agencies to fund the Company's grants could have a
material adverse effect on the Company's business, financial condition and
results of operations.

CONTROL BY EXISTING STOCKHOLDERS

Following completion of this offering, the Company's directors, executive
officers and principal stockholders and certain of their affiliates will
beneficially own approximately 67% of the Common Stock. Accordingly, they
collectively will have the ability to determine the election of all of the
Company's directors and to determine the outcome of most corporate actions
requiring stockholder approval, including the merger of the Company with or
into another company, a sale of substantially all of the Company's assets and
amendments to the Company's Certificate of Incorporation. See "Principal
Stockholders."

POTENTIAL ADVERSE EFFECT OF ANTI-TAKEOVER PROVISIONS

The Company's Board of Directors is authorized to issue up to 5,000,000
shares of Preferred Stock and to determine the price, rights, preferences and
privileges of those shares without any further vote or action by the Company's
stockholders. The rights of the holders of Common Stock will be subject to,
and may be adversely affected by, the rights of the holders of any shares of
Preferred Stock that may be issued in the future. While the Company has no
present intention to issue shares of Preferred Stock, such issuance, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of the
Company. In addition, such Preferred Stock may have other rights, including
economic rights senior to the Common Stock, and, as a result, the issuance
thereof could have a material adverse effect on the market value of the Common
Stock. The Restated Certificate provides for a classified Board of Directors
and members of the Board of Directors may be removed only for cause upon the
affirmative vote of holders of at least a majority of the shares of capital
stock of the Company entitled to vote. Furthermore, the Company is subject to
the anti-takeover provisions of Section 203 of the Delaware General
Corporation Law (the "DGCL"), which prohibits the Company from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which such person first becomes an
"interested stockholder," unless the business combination is approved in a
prescribed manner. The application of these provisions could have the effect
of delaying or preventing a change of control of the Company. Certain other
provisions of the Restated Certificate and the Company's Amended and Restated
Bylaws (the "Restated Bylaws") could also have the effect of delaying or
preventing changes of control or management of the Company, which could
adversely affect the market price of the Company's Common Stock. See
"Description of Capital Stock--Preferred Stock" and "--Delaware Laws and
Certain Charter and Bylaw Provisions."

18
<PAGE>

NO PRIOR TRADING MARKET FOR COMMON STOCK; POSSIBLE VOLATILITY OF STOCK PRICE

Prior to this offering, there has been no public market for the Company's
Common Stock and there can be no assurance that an active public market for
the Common Stock will develop or be sustained after this offering. The initial
public offering price will be determined by negotiations between the Company
and the representatives of the Underwriters and may not be indicative of
future market prices. See "Underwriting" for a discussion of the factors to be
considered in determining the initial public offering price. The trading price
of the Company's Common Stock could be subject to significant fluctuations in
response to announcements of results of research activities, technological
innovations or new commercial products by the Company or its competitors,
changes in government regulations, regulatory actions, changes in patent laws,
developments concerning proprietary rights, quarterly variations in operating
results, litigation or other events. The stock market has from time to time
experienced extreme price and volume fluctuations that have affected
particularly the market prices for biotechnology companies and that often have
been unrelated to the operating performance of such companies. These broad
market fluctuations may adversely affect the market price of the Company's
Common Stock. See "Underwriters."

SHARES ELIGIBLE FOR FUTURE SALE; POSSIBLE ADVERSE EFFECT ON FUTURE MARKET
PRICE

Sales of Common Stock (including Common Stock issued upon the exercise of
outstanding options and warrants) in the public market after this offering
could materially adversely affect the market price of the Common Stock. These
sales also might make it more difficult for the Company to sell equity
securities or equity-related securities in the future at a time and price that
the Company's management deems acceptable, or at all. Upon the completion of
this offering, the Company will have 12,621,986 shares of Common Stock
outstanding, assuming no exercise of options or warrants and assuming no
exercise of the Underwriters' over-allotment option. Of these outstanding
shares of Common Stock, the 2,750,000 shares sold in this offering will be
freely tradeable, without restriction under the Securities Act of 1933, as
amended (the "Securities Act"), unless purchased by "affiliates" of the
Company, as that term is defined in Rule 144 under the Securities Act. The
remaining 9,871,986 shares of Common Stock held by existing stockholders are
"restricted securities" as that term is defined in Rule 144 under the
Securities Act and were issued and sold by the Company in reliance on
exemptions from the registration requirements of the Securities Act. These
shares may be resold in the public market only if registered or pursuant to an
exemption from registration, such as Rule 144 under the Securities Act. All
officers, directors and certain holders of Common Stock beneficially owning,
in the aggregate, 8,053,235 shares of Common Stock and options and warrants to
purchase 1,318,151 shares of Common Stock, have agreed, pursuant to certain
lock-up agreements, that they will not offer, sell, contract to sell, grant
any option to sell, pledge, hypothecate or otherwise dispose of, directly or
indirectly, any shares of Common Stock owned by them, or that could be
purchased by them through the exercise of options or warrants to purchase
Common Stock of the Company, for a period of 180 days after the date of this
Prospectus without the prior written consent of Morgan Stanley & Co.
Incorporated. Upon expiration of the lock-up agreements, all shares of Common
Stock currently outstanding will be immediately eligible for resale, subject
to the requirements of Rule 144. Immediately following the completion of this
offering, holders of 4,327,725 shares of Common Stock and warrants to purchase
388,005 shares of Common Stock will be entitled to certain registration
rights. The Company will also have the obligation to promptly register for
resale on Form S-3 any shares issued to Biogen and Genentech pursuant to the
conversion of their loan facilities. However, pursuant to the lock-up
agreements, 4,242,401 of these shares of Common Stock and warrants to purchase
388,005 shares of Common Stock may not be sold for 180 days after the date of
this Prospectus without the prior written consent of Morgan Stanley & Co.
Incorporated. See "Shares Eligible for Future Sale" and "Description of
Capital Stock--Registration Rights." If such holders, by exercising their
demand rights, cause a large number of shares to be registered and sold on the
public market, such sales could have a material adverse effect on the market
price of the Company's Common Stock. The Company intends to file a
registration statement covering the 3,098,884 shares of Common Stock issued or
reserved for issuance under its stock plans and, upon filing, any shares
subsequently issued under such plans will be eligible for sale in the public
market, subject to compliance with Rule 144 in the case of affiliates of the
Company. The Company is unable to predict the effect that sales may have on
the then prevailing market price of the Common Stock. See "Management--Stock
Option Plans," "Description of Capital Stock" and "Shares Eligible for Future
Sale."

19
<PAGE>

DILUTION

Purchasers in this offering will experience immediate and substantial
dilution in the net tangible book value of the Common Stock from the initial
public offering price. Additional dilution is likely to occur upon exercise of
options and warrants granted by the Company. See "Dilution." The Company's
collaboration agreements with both Biogen and Genentech are structured such
that amounts borrowed by the Company from Biogen and Genentech are, at the
Company's option, convertible into shares of Common Stock and Non-Voting
Common Stock, respectively, based upon a formula that approximates the
prevailing market price of the Common Stock at the time of such conversion.
The Non-Voting Common Stock is convertible into Common Stock (i) at any time,
at Genentech's option, or (ii) upon the sale or the transfer of the Non-Voting
Common Stock to a non-affiliated third party. If the Company borrows money
under these agreements and converts or is forced to convert such amounts into
shares of Common Stock or Non-Voting Common Stock at a time when the market
price of the Common Stock is lower than the initial public offering price, the
Company's stockholders could experience substantial dilution. See "Business--
Research Collaborations."

ABSENCE OF DIVIDENDS

The Company has never paid dividends on its Common Stock and does not intend
to pay any cash dividends on its Common Stock for the foreseeable future. See
"Dividend Policy."

20
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,750,000 shares of
Common Stock offered by the Company hereby are estimated to be $27,032,500
($31,252,375 if the Underwriters' over-allotment option is exercised in full),
assuming an initial public offering price of $11.00 per share (the midpoint of
the range set forth on the cover page of this Prospectus) and after deducting
the underwriting discounts and commissions and estimated offering expenses
payable by the Company.

The Company expects to use approximately $10 million of the net proceeds for
capital expenditures such as the expansion of research facilities, as well as
the purchase of additional laboratory automation equipment, production
equipment and computer equipment; and $1,750,000 (plus dividends of
approximately $200,000) to redeem, upon the closing of this offering, all of
the 175,000 outstanding shares of the Series B Preferred Stock. See
"Description of Capital Stock--Preferred Stock." The Company expects to use
the balance of the net proceeds for research and development, including
internal discovery programs, the further development of its GeneCalling,
PathCalling and HitCalling databases and working capital and general corporate
purposes. The amounts actually expended for each purpose, other than the
amount expended for the redemption of the Series B Preferred Stock, may vary
significantly depending upon numerous factors, including progress of the
Company's internal programs and research and development projects, the number
and breadth of these programs, achievement of milestones under collaborative
arrangements, the ability of the Company to establish and maintain research
collaborations and database subscriptions, and the progress of the development
efforts of the Company's collaborators and subscribers. These factors also
include the level of the Company's activities relating to commercialization of
rights it has retained in its collaborative arrangements, competing
technological and market developments, the costs involved in the defense,
prosecution and enforcement of patent claims and other intellectual property
rights and the costs and timing of regulatory approvals.

From time to time in the ordinary course of business, the Company evaluates
the acquisition of products, businesses and technologies that complement the
Company's business, for which a portion of the net proceeds may be used.
Currently, however, the Company does not have any understandings, commitments
or agreements with respect to any such acquisitions.

Pending use of the net proceeds for the above purposes, the Company intends
to invest such funds in short- term, interest-bearing, investment-grade
securities.

DIVIDEND POLICY

The Company has never paid dividends on its Common Stock and does not plan
to pay any cash dividends on its Common Stock for the foreseeable future. The
Company currently intends to retain earnings, if any, to finance the
development of its business.

21
<PAGE>

CAPITALIZATION

The following table sets forth, as of December 31, 1997, the actual
capitalization of the Company and the capitalization of the Company as
adjusted to reflect (i) the filing of the Restated Certificate, (ii) the
redemption of the 175,000 outstanding shares of Series B Preferred Stock,
(iii) the termination of certain redemption rights relating to 291,875 shares
of Redeemable Common Stock, (iv) the sale by the Company of the Biogen Shares,
the Genentech Shares and the University of Florida Shares, based upon an
assumed initial public offering price of $11.00 per share, and application of
the net proceeds thereof, and (v) the sale by the Company of 2,750,000 shares
of Common Stock offered hereby, based upon an assumed initial public offering
price of $11.00 per share and after deducting underwriting discounts and
commissions and estimated offering expenses, and application of the estimated
net proceeds thereof. This table should be read in conjunction with the
Company's audited financial statements, including the notes thereto, which
appear elsewhere in this Prospectus.

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997
------------------------
ACTUAL AS ADJUSTED
----------- -----------
<S> <C> <C>
Obligations under capital leases, including current
portion............................................. $ 5,513,049 $ 5,513,049
Other long-term liabilities.......................... 248,972 248,972
----------- -----------
5,762,021 5,762,021
----------- -----------
Redeemable Common Stock(1)........................... 3,940,312 --
----------- -----------
Stockholders' equity(1)(2)(3):
Preferred Stock, $0.01 par value; 7,500,000 shares
authorized, 175,000 shares issued and outstanding
actual; 5,000,000 shares authorized, no shares
issued and outstanding as adjusted................ 1,459,196 --
Common Stock, $0.01 par value; 25,000,000 shares
authorized, 8,580,112 shares issued and
outstanding actual; 50,000,000 shares authorized,
12,621,986 shares issued and outstanding as
adjusted.......................................... 85,801 126,220
Non-Voting Common Stock, $0.01 par value; no shares
authorized or issued and outstanding actual;
3,000,000 shares authorized, no shares issued and
outstanding as adjusted........................... -- --
Additional paid-in capital......................... 23,861,665 64,875,561
Accumulated deficit................................ (10,511,023) (10,511,023)
Unamortized stock-based compensation............... (1,213,464) (1,213,464)
----------- -----------
Total stockholders' equity........................ 13,682,175 53,277,294
----------- -----------
Total capitalization............................. $23,384,508 $59,039,315
=========== ===========
</TABLE>
- --------
(1) See Notes 4 and 6 of Notes to Financial Statements.
(2) See Note 1 of Notes to Financial Statements.
(3) Excludes 1,663,884 and 1,583,866 shares of Common Stock reserved for
issuance upon the exercise of stock options and warrants, respectively,
outstanding on December 31, 1997, at weighted average exercise prices of
$4.18 and $4.12 per share, respectively. Also excludes an aggregate of
20,000 shares of Common Stock issuable upon the exercise of stock options
granted to non-employee directors after December 31, 1997, at the initial
public offering price.

22
<PAGE>

DILUTION

As of December 31, 1997, the pro forma net tangible book value per share of
Common Stock, assuming the redemption of the Series B Preferred Stock and the
termination of certain redemption rights relating to 291,875 shares of
Redeemable Common Stock, was $1.76. After giving effect to the sale by the
Company of (i) the Biogen Shares, the Genentech Shares and the University of
Florida Shares, based upon an assumed initial public offering price of $11.00
per share, and application of the net proceeds thereof, and (ii) 2,750,000
shares of Common Stock offered hereby, based upon an assumed initial public
offering price of $11.00 per share and after deducting underwriting discounts
and commissions and estimated offering expenses, the pro forma net tangible
book value of the Company at December 31, 1997 would have been $53,217,339, or
$4.22 per share, representing an immediate $6.78 dilution per share to new
investors purchasing shares in this offering. The following table illustrates
such per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................ $11.00
------
Pro forma net tangible book value per share before this
offering(1)................................................. $1.76
Increase per share attributable to new investors............. 2.46
-----
Pro forma net tangible book value per share after this
offering...................................................... 4.22
------
Dilution per share to new investors(2)......................... $ 6.78
======
</TABLE>
- --------
(1) Pro forma net tangible book value per share of Common Stock is determined
by dividing the Company's pro forma net tangible book value at December
31, 1997 of $15,630,969, by the pro forma number of shares of Common Stock
outstanding, in each case assuming the redemption of the Series B
Preferred Stock and the termination of certain redemption rights relating
to 291,875 shares of Redeemable Common Stock.
(2) Dilution per share to new investors is determined by subtracting pro forma
net tangible book value per share after this offering from the assumed
initial public offering price per share.

The following table sets forth on a pro forma basis as of December 31, 1997,
assuming the redemption of the Series B Preferred Stock and the termination of
certain redemption rights relating to 291,875 shares of Redeemable Common
Stock, the number of shares of Common Stock purchased from the Company, the
total consideration paid and the average price per share paid by existing
stockholders and to be paid by new investors, based on an assumed initial
public offering price of $11.00 per share and before deducting underwriting
discounts and commissions and estimated offering expenses payable by the
Company:

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE PRICE
------------------ ------------------- -------------
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders...... 8,871,987 70.2% $25,309,328 38.0% $ 2.87
New investors.............. 3,749,999 29.8 41,249,989 62.0 $11.00
---------- ----- ----------- -----
Total.................... 12,621,986 100.0% $66,559,317 100.0%
========== ===== =========== =====
</TABLE>

The foregoing tables assume no exercise of any outstanding stock options or
warrants to purchase Common Stock. At December 31, 1997, there were
outstanding options and warrants to purchase 1,663,884 shares and 1,583,866
shares of Common Stock, respectively, at weighted average exercise prices of
$4.18 and $4.12 per share, respectively. The foregoing tables also exclude an
aggregate of 20,000 shares of Common Stock issuable upon the exercise of stock
options granted to non-employee directors after December 31, 1997, at the
initial pubic offering price. To the extent such options and warrants are
exercised, there will be further dilution to the new investors. See
"Capitalization," "Management--Stock Option Plans," "Description of Capital
Stock" and Note 6 of Notes to Financial Statements.

<PAGE>

SELECTED FINANCIAL DATA

The selected financial data set forth below for each of the three years in
the period ended December 31, 1997 are derived from the Company's balance
sheets as of December 31, 1996 and 1997 and the related audited statements of
operations, of stockholders' equity (deficiency) and of cash flows for the
three years ended December 31, 1995, 1996 and 1997 and notes thereto, which
appear elsewhere in this Prospectus, as audited by Deloitte & Touche LLP,
independent auditors. The selected financial data as of December 31, 1995 and
1994 and for the year ended December 31, 1994 have been derived from the
related financial statements of the Company, which have also been audited by
Deloitte & Touche LLP, independent auditors and which have not been included
in this prospectus. The selected financial data as of December 31, 1993 and
for the year ended December 31, 1993 have been derived from the Company's
unaudited financial statements, which have not been included in this
Prospectus. The selected financial data set forth below should be read in
conjunction with, and are qualified by reference to, "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and the
Company's audited financial statements and related notes appearing elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------------------------------
1993 1994 1995 1996(1) 1997
--------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenue:
Grant revenue.......... $ 21,903 $ 257,536 $ 1,581,175 $4,047,947 $ 3,079,994
Collaboration revenue.. -- -- -- 375,000 2,816,549
--------- ----------- ----------- ---------- -----------
Total revenue.......... 21,903 257,536 1,581,175 4,422,947 5,896,543
--------- ----------- ----------- ---------- -----------
Operating expenses:
Grant research......... 41,121 170,115 1,122,158 3,065,140 4,615,886
Collaborative research
and development....... 268,230 477,525 344,217 450,895 5,126,660
General and
administrative........ 250,729 525,671 961,815 1,140,325 3,481,251
--------- ----------- ----------- ---------- -----------
Total operating
expenses.............. 560,080 1,173,311 2,428,190 4,656,360 13,223,797
--------- ----------- ----------- ---------- -----------
Loss from operations.... (538,177) (915,775) (847,015) (233,413) (7,327,254)
Other income (expenses):
Interest income........ 2,786 20,544 12,306 20,848 789,781
Interest expense....... (22,484) (146,275) (253,896) (376,570) (684,537)
--------- ----------- ----------- ---------- -----------
Total other income
(expenses)............ (19,698) (125,731) (241,590) (355,722) 105,244
--------- ----------- ----------- ---------- -----------
Net loss................ (557,875) (1,041,506) (1,088,605) (589,135) (7,222,010)
Preferred dividends..... -- -- -- (17,106) (68,424)
--------- ----------- ----------- ---------- -----------
Net loss attributable to
common stockholders.... $(557,875) $(1,041,506) $(1,088,605) $ (606,241) $(7,290,434)
========= =========== =========== ========== ===========
Net loss per share
attributable to common
stockholders........... $ (0.16) $ (0.22) $ (0.22) $ (0.12) $ (0.92)
========= =========== =========== ========== ===========
Weighted average number
of common shares
outstanding(2)......... 3,488,071 4,681,256 4,915,087 5,097,073 7,888,383
========= =========== =========== ========== ===========
Pro forma net loss per
share attributable to
common
stockholders(2)........ $ (0.12)
==========
Pro forma weighted
average number of
common shares
outstanding(2)......... 5,099,598
==========
<CAPTION>
DECEMBER 31,
------------------------------------------------------------
1993 1994 1995 1996 1997
--------- ----------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash
equivalents............ $ 368,458 $ 276,890 $ 9,129 $3,298,642 $17,417,161
Working capital
(deficiency)........... 231,511 285,386 (625,015) 2,474,038 14,738,672
Total assets............ 722,898 795,161 1,006,816 5,653,391 26,519,029
Total long-term
liabilities............ 74,583 622,591 897,691 1,908,915 4,375,125
Redeemable Common
Stock.................. -- -- -- -- 3,940,312
Series A Preferred
Stock.................. -- -- -- 1,800,000 --
Series B Preferred
Stock.................. -- -- -- 1,390,772 1,459,196
Accumulated deficit..... (569,767) (1,611,272) (2,699,878) (3,289,013) (10,511,023)
Stockholders' equity
(deficiency)........... 528,233 (147,996) (1,091,382) 2,117,801 13,682,175
</TABLE>
- --------
(1) During the year ended December 31, 1996, the Company completed its
development stage activities with the signing of its first collaborative
research agreement and commenced its planned principal operations.
(2) For an explanation of the calculation of weighted average number of common
shares outstanding and pro forma weighted average number of common shares
outstanding, see Note 1 of Notes to Financial Statements.

24
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This Prospectus contains certain statements of a forward-looking nature
relating to future events or the future financial performance of the Company.
Prospective investors are cautioned that such statements are only predictions
and that actual events or results may differ materially. In evaluating such
statements, prospective investors should specifically consider the various
factors identified in this Prospectus, including the matters set forth under
the caption "Risk Factors," which could cause actual results to differ
materially from those indicated by such forward-looking statements.

OVERVIEW

The Company is a biotechnology company focusing on the application of
genomics to the systematic discovery of genes, biological pathways and drug
candidates in order to accelerate the discovery and development of the next
generation of therapeutic, agricultural and diagnostic products. The Company
was incorporated in November 1991 and, until March 1993, was engaged primarily
in organizational activities, research and development of the Company's
technology, grant preparation and obtaining financing. The Company has
incurred losses since inception, principally as a result of research and
development and general and administrative expenses in support of its
operations. As of December 31, 1997, the Company had an accumulated deficit of
$10,511,023. The Company anticipates incurring additional losses over at least
the next several years as it expands its internal and collaborative gene
discovery efforts, continues development of its technology and expands its
operations. The Company expects that losses will fluctuate from quarter to
quarter and that such fluctuations may be substantial.

In June 1996, the Company entered into a pilot collaborative agreement with
Genentech to evaluate the application of the Company's gene expression
technology to Genentech, pursuant to which the Company recorded $200,000 in
collaboration revenue. Based on its successful pilot, in December 1996, the
Company commenced an additional collaborative agreement to provide research
services to Genentech during 1997. For the year ended December 31, 1997, the
Company recorded revenues from Genentech of $667,000 or 11% of total revenues.
In connection with the execution of the pilot agreement, Genentech made an
equity investment in the Company of $1,800,000. See "Business--Research
Collaborations."

Effective June 1, 1997, the Company entered into a collaborative research
and development agreement with Pioneer Hi-Bred, whereby the Company is to
perform agricultural research that will be funded by Pioneer Hi-Bred. In
conjunction with the execution of this agreement, Pioneer Hi-Bred made an
equity investment of $7,500,000. In addition, Pioneer Hi-Bred agreed to pay
the Company a minimum annual fee of $2,500,000 based on an established number
of CuraGen employees devoted to Pioneer Hi-Bred research, with specified
funding increases after three years in order to avoid the Company's right to
terminate the agreement. For the year ended December 31, 1997, the Company
recorded revenues from Pioneer Hi-Bred of $1,458,333, or 25% of total
revenues. The agreement also includes provisions for payments based on
potential milestones, licensing of discoveries and royalties. See "Business--
Research Collaborations."

In October 1997, CuraGen and Biogen entered into a research collaboration
and database subscription arrangement to discover novel genes and
therapeutics. Under the terms of the agreement, Biogen agreed to invest $5
million in the Company to purchase the Biogen Shares at the initial public
offering price and to provide a $10 million interest-bearing loan facility. At
any time during the term of the agreement, the loan is convertible at the
Company's option into Common Stock based upon a formula that approximates its
prevailing market price. Biogen will additionally provide payments over five
years to support a research collaboration to generate project-specific
GeneCalling and PathCalling databases and for database subscription fees.
Payments could reach $18.5 million if the research collaboration and database
subscription arrangement both continue for the full five-year term. The
agreement also provides for payments based on exclusive licenses for
discoveries, potential milestones and royalties. For the year ended December
31, 1997, the Company recorded revenues related to this agreement

25
<PAGE>

of $375,000, or 6% of total revenues. See "Business--Research Collaborations"
and "Business--Database Subscriptions."

In November 1997, CuraGen and Genentech entered into a research
collaboration and database subscription arrangement to discover novel genes
and therapeutics. Under the terms of the agreement, Genentech has agreed to
purchase $5 million of Common Stock in a private placement at the initial
public offering price. Genentech has also agreed to provide the Company with
an interest-bearing loan facility, which could in the aggregate reach $26
million if the research program continues beyond its initial three year term.
The loan facility contains annual borrowing limits and the outstanding
principal and interest under the loan facility are payable five years from the
date of the agreement. Subject to certain limitations, during the term of the
agreement, and after the end of the first year, the drawn-down portion of the
loan is convertible at the Company's option into Non-Voting Common Stock based
upon a formula that approximates the prevailing market price of the Company's
Common Stock. If issued, the Non-Voting Common Stock is convertible into
Common Stock (i) at any time, at Genentech's option, or (ii) upon the sale or
transfer of the Non-Voting Common Stock to a non-affiliated third party.
Genentech will additionally provide funding of up to $24 million over five
years if the database subscription arrangement is not terminated, the research
collaboration continues for the full five-year term and Genentech elects to
retain licenses to its discoveries. The agreement also provides for payments
based on licenses for discoveries, potential milestones and royalties. See
"Business--Research Collaborations" and "Business--Database Subscriptions."

In November 1997, CuraGen and the University of Florida Research Foundation,
Inc. entered into a stock purchase agreement. Under the terms of the
agreement, the University of Florida Research Foundation, Inc. agreed to
invest $1 million in the Company to purchase the University of Florida Shares
at the initial public offering price. Upon the closing of the offering, after
purchase of the University of Florida Shares, the University of Florida
Research Foundation, Inc. will be the beneficial owner of less than one
percent of the outstanding shares of Common Stock. The Company leases
laboratory space from the University of Florida Research Foundation, Inc.

In January 1998, CuraGen and ArQule entered into a research collaboration,
pursuant to which ArQule's libraries of diverse, small organic, compounds will
be screened against protein targets using the Company's CombiGen technology to
identify hits and to populate the HitCalling database. Under the agreement,
the Company will have the option to negotiate a research collaboration and
license agreement with ArQule to optimize, develop and commercialize leads
identified using CombiGen and HitCalling. The contemplated terms of such
collaborations include equal rights to participate in the development,
preclinical and clinical testing of lead compounds, with equal sharing of
commercialization revenues. See "Business--Research Collaborations."

The Company's revenue to date has primarily consisted of government grants
and ongoing payments for research and development under collaborative
agreements. Grant revenue is recognized as the related costs qualifying under
the terms of the grants are incurred. Under collaborative agreements, any
revenue is recognized based upon work performed or upon the attainment of
certain benchmarks specified in the related agreement. Payments under
collaborative agreements that are received in advance, and are in excess of
amounts earned, are classified as deferred revenue.

The Company anticipates that collaborations will become an increasingly
important element of its business strategy and future revenues. The Company
also expects that in future years government grant revenues will decrease,
both in actual dollar amounts and as a percentage of revenues. Therefore, the
loss of revenues from existing collaborations would have a material adverse
effect on the Company's business, financial condition and results of
operations. The Company's ability to generate revenue growth and become
profitable is dependent, in part, on the ability of the Company to enter into
additional collaborative arrangements, and on the ability of the Company and
its collaborative partners to successfully commercialize products
incorporating, or based on, the Company's technologies. There can be no
assurance that the Company will be able to maintain or expand existing
collaborations, enter into future collaborations to develop applications of
its GeneCalling, PathCalling or HitCalling technologies on terms satisfactory
to the Company, if at all, or that any such collaborative arrangements will be
successful.

26
<PAGE>

Failure of the Company to successfully develop and market additional
products over the next several years, or to realize existing product revenues,
would have a material adverse effect on the Company's business, financial
condition and results of operations. Royalties or other revenue generated from
commercial sales of products developed by using the Company's technologies are
not expected for at least several years, if at all.

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1997 AND 1996

Revenue for the year ended December 31, 1997 was $5,896,543, representing an
increase of $1,473,596, or 33%, compared to $4,422,947 in 1996. The increase
was largely due to additional collaboration revenue of $2,441,549 recorded in
1997, primarily under the Company's arrangements with Pioneer Hi-Bred,
Genentech and Biogen. The collaboration revenue increase was offset by a
decrease in grant revenue during 1997 of $967,953 as the Company changed its
revenue focus from federal grants to collaborative research. Interest income
increased from $20,848 in 1996 to $789,781 in 1997, primarily as a result of
interest received on funds from sales of the Company's Preferred Stock and
warrants, and from research collaborations.

Grant research expenses for the year ended December 31, 1997 were
$4,615,886, an increase of $1,550,746, or 51%, compared to 1996. Collaborative
research and development expenses for the year ended December 31, 1997 were
$5,126,660, an increase of $4,675,765, or 1037%, compared to 1996. The
increase in grant research expenses was primarily attributable to increased
personnel costs in support of the Company's obligations under its federal
grants. The increase in collaborative research and development expenses was
primarily attributable to increased personnel expenses as the Company hired
additional research and development personnel, increased purchases of
laboratory supplies, increased equipment depreciation and increased facilities
expenses in connection with the expansion of the Company's internal and
collaborative research efforts. Future collaborative research and development
expenses are expected to increase as additional personnel are hired and
research and development facilities are expanded to accommodate the Company's
strategic collaborations and internal research.

General and administrative expenses for 1997 were $3,481,251, an increase of
$2,340,926 or 205%, compared to $1,140,325 for 1996. The increase was
primarily attributable to the hiring of additional personnel, the expansion of
administration facilities and the incurrence of related depreciation expense
as the Company increased its executive and administrative staffing in
anticipation of future revenue growth. Over the next several years, the
Company anticipates that increases in general and administrative expenses will
become more proportionate to percentage increases in revenue and research and
development expenses. Interest expense for the year ended December 31, 1997 of
$684,537 increased $307,967, or 81%, compared to $376,570 for 1996. This
increase was due to additional capital lease obligations entered into during
the year, which enabled the Company to support research and development
activities primarily through equipment acquisitions. This increase was also
due to the additional interest expense incurred in connection with the CII
Note. See Notes 3, 4 and 6 of Notes to Financial Statements.

As of December 31, 1997, the Company had accumulated losses of $10,511,023
since inception and, therefore, has not paid any federal income taxes.
Realization of deferred tax assets is dependent on future earnings, if any,
the timing and amount of which are uncertain. Accordingly, valuation
allowances in amounts equal to the deferred income tax assets have been
established to reflect these uncertainties in all periods presented. See Note
7 of Notes to Financial Statements.

YEARS ENDED DECEMBER 31, 1996 AND 1995

Revenue for the year ended December 31, 1996 was $4,422,947, an increase of
$2,841,772, or 180%, over 1995. The increase was primarily due to $2,466,772
of increased grant revenue as the Company achieved specific research
objectives under certain federal grants, and $375,000 of collaboration revenue
recorded in 1996 of which $200,000 was associated with the pilot collaborative
agreement with Genentech. Interest income increased

27
<PAGE>

by $8,542 to $20,848, or 69%, in 1996, from $12,306 in 1995, primarily as a
result of interest earned on funds received from private placements of the
Company's preferred stock and warrants and from research collaborations.

Grant research expenses for the year ended December 31, 1996 were
$3,065,140, an increase of $1,942,982, or 173%, over 1995. Collaborative
research and development expenses for the year ended December 31, 1996, were
$450,895, an increase of $106,678, or 31%, over 1995. The increases in both
grant research expenses and collaborative research and development expenses
were primarily attributable to increased personnel expenses as the Company
hired additional research and development personnel, increased purchases of
laboratory supplies, increased equipment depreciation and increased facilities
expenses in connection with the expansion of the Company's grant and
collaborative research efforts.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash and cash equivalents totaled $17,417,161 at December 31,
1997. The Company has financed its operations since inception primarily
through private placements of equity securities, government grants,
collaborative research and development agreements and capital leases. As of
December 31, 1997, the Company had recognized $12,180,104 of cumulative
sponsored research revenues from government grants and collaborative research
agreements. The sale by the Company of equity securities has provided the
Company with gross proceeds of approximately $26,500,000, including $7,500,000
from Pioneer Hi-Bred, $1,800,000 from Genentech and $1,000,000 from Biogen. To
date inflation has not had a material effect on the Company's business.

The Company's investing activities, other than purchases and sales of cash
equivalent securities, have consisted entirely of acquisitions of equipment
and expenditures for leasehold improvements. At December 31, 1997, the
Company's gross investment in equipment and leasehold improvements since
inception was $8,656,032. At December 31, 1997 equipment with a gross book
value of $6,593,064 secures the Company's equipment financing facility. The
Company had no material commitments for capital expenditures at December 31,
1997. However, the Company anticipates that the net proceeds from this
offering and its other sources of capital will enable it to increase capital
expenditures over the next several years to expand its facilities and purchase
additional equipment in support of additional collaborations and increased
internal research and development.

Net cash used in operating activities was $2,946,349 for the year ended
December 31, 1997, compared to net cash provided by operating activities of
$13,898 in 1996. The increase of $2,960,247 resulted from an increase in the
Company's net loss, offset by increases in depreciation and amortization, non-
monetary compensation, accounts payable, accrued expenses, deferred revenue
and deferred rent.

As of December 31, 1997, the Company had net operating loss carryforwards of
approximately $9,000,000 to offset federal and state income taxes. If not
utilized, the federal and state net operating loss carryforwards will begin to
expire in 2008 and 1998, respectively. The Company also had research and
development tax credit carryforwards at December 31, 1997, estimated to be
approximately $498,000 and $1,519,000 for federal and state income tax
purposes, respectively. The consummation of this offering will not result in
any additional limitation on the future utilization of these operating loss
and tax credit carryforwards.

The Company expects its cash requirements will increase significantly in
future periods because of planned expansion of its operations and its
technology platform. The planned expansion will be in support of expected
growth in collaborative agreements, database subscriptions and internal
research and development programs. The Company believes that the net proceeds
from this offering, together with existing cash and cash equivalents, and
anticipated cash flows from its current collaboration agreements, will be
sufficient to support the Company's operations through at least 1999. The
Company's belief is based on its current operating plan, which could change in
the future and require additional funding sooner than anticipated. Even if the
Company has sufficient cash for its current operating plan, it may seek to
raise additional capital because of favorable market conditions

28
<PAGE>

or other strategic factors. The Company can offer no assurance that it will be
able to establish additional collaborations or retain existing collaborators,
or that such collaborations will produce sufficient revenues, which together
with cash and cash equivalents will be adequate to fund the Company's cash
requirements. Except for the loan facilities from Biogen and Genentech, the
Company has no credit facility or other sources of committed capital. Each of
these loan facilities was established in conjunction with the research
collaboration and database subscription arrangements entered into by the
Company during the fourth quarter of 1997. See "Business--Research
Collaborations."

The Company's future capital requirements depend on numerous factors,
including: (i) the receipt of payments and the achievement of milestones under
existing and possible future research collaborations; (ii) the availability of
government research grant payments; (iii) the progress of internal research
and development projects; (iv) defense and enforcement of patent claims or
other intellectual property; (v) the purchase of additional capital equipment;
(vi) investments in complementary technologies; (vii) the development of
manufacturing, sales and marketing capabilities; and (viii) competing
technological and market demands.

The Company expects that it will require significant additional financing in
the future, which it may seek to raise, at any time, through public or private
equity offerings, debt financing or additional collaborations and licensing
arrangements. No assurance can be given that additional financing or
collaborations and licensing arrangements will be available when needed, or
that if available, such financing will be obtained on terms favorable to the
Company or its stockholders. If adequate funds are not available when needed,
the Company may have to curtail operations or attempt to raise funds on
unattractive terms. See "Risk Factors--Future Capital Requirements;
Uncertainty of Additional Funding."

RECENTLY ENACTED PRONOUNCEMENTS

Statement of Financial Accounting Standards No. 130, Reporting Comprehensive
Income, was issued in June 1997 and is effective for fiscal years beginning
after December 15, 1997. This pronouncement establishes standards for
reporting and display of comprehensive income and its components in a full set
of general-purpose financial statements. The Company will adopt this
pronouncement in 1998 and does not expect its implementation will have a
material effect on the Company's financial statements as currently presented.

Statement of Financial Accounting Standards No. 131, Disclosures About
Segments of an Enterprise and Related Information, was also issued in June
1997 and is effective for fiscal periods beginning after December 15, 1997.
This pronouncement establishes the way in which publicly held business
enterprises report information about operating segments in annual financial
statements and interim reports to stockholders. As the Company operates in a
single business segment the implementation of this standard is not expected to
significantly impact the Company's financial statements as currently
presented.

29
<PAGE>

BUSINESS

CuraGen is pioneering the systematic application of genomics to accelerate
the discovery and development of therapeutic and agricultural products.
CuraGen's fully-integrated genomics technologies, processes and information
systems are designed to rapidly generate comprehensive information about gene
expression, biological pathways and the potential drugs that affect these
pathways, each on a scale not previously undertaken. The Company believes that
it can overcome the limitations of competing technologies, processes and
databases and can condense key steps in gene-based drug discovery and
development. CuraGen believes its technology platform will facilitate the
discovery and development of highly specific and effective drugs aimed at a
variety of complex diseases such as cardiovascular disease, stroke, cancer and
metabolic disorders.

In addition to accelerating the discovery of new drug candidates, the
Company believes its GeneCalling and PathCalling systems are well-positioned
to predict the efficacy and safety of drug candidates currently in
pharmaceutical development pipelines and to review the performance and side
effects of drugs already on the market. This pharmacogenomics approach can aid
in the development of more effective, safer drugs and identify more
appropriate patient populations.

Each of the GeneCalling, PathCalling and HitCalling systems consists of a
proprietary enabling technology, a high-throughput, automated process using
the technology to generate information, and a database containing the
information generated. The GeneCalling and PathCalling systems are currently
operational, and the Company has already begun to populate the GeneCalling and
PathCalling databases from internal research programs and research
collaborations, as well as from publicly available databases. The HitCalling
system is expected to be operational later in 1998 and incorporated into the
Company's Genescape operating system at that time. This database is expected
to be available as a commercial product in 1999. The Company has designed the
three systems as an integrated platform to enable gene discovery, drug target
validation and high-throughput screening of drug candidates in a highly
efficient and cost-effective manner.

BACKGROUND

Successful treatment of disease is often limited by a lack of understanding
of its initiation and progression at the level of genes, proteins and
biological pathways. Technologies and processes that have been used
successfully in the past to discover treatments for diseases with relatively
simple causes have been less effective against complex diseases that arise
through a combination of multiple genetic and environmental factors.
Cardiovascular disease, cancer, stroke and metabolic disorders are examples of
prevalent complex diseases. Treating these complex diseases requires an
understanding of how the body uses its genetic information, how disruptions in
this information can lead to disease and, in turn, how drugs can arrest or
reverse disease progression. As scientific advances improve our understanding
of the genetic basis of disease, the Company believes that the methods the
pharmaceutical industry uses to develop new drugs will undergo a fundamental
transformation. Companies that can anticipate this transformation and develop
and apply new technologies may have a unique opportunity to develop the next
generation of therapeutic products for important complex diseases.

30
<PAGE>

In recent years, scientists have begun to analyze large portions of the
genetic information contained within the human genome. This discipline, termed
genomics, employs large-scale efforts catalyzed by the Human Genome Project.
By understanding the role of genes in the control and function of biological
pathways and cellular processes, scientists seek to understand more fully the
genetic basis of disease and develop more effective treatments. To date,
however, neither the pharmaceutical nor the agricultural industries have used
genomics extensively to develop new product opportunities. These industries
have used genomics to a limited extent for three primary reasons: technologies
have been inadequate; inefficient, non-automated discovery processes have
incompletely evaluated the influence of genetic and environmental factors; and
uniform information systems to drive the discovery process have been
unavailable.

Treatment of complex diseases remains a major technical challenge and will
require an integrated set of genomic technologies and processes. CuraGen
believes that knowledge of genes, proteins, biological pathways and their
interplay with the environment, together with information systems to use this
knowledge, will accelerate drug discovery and development. CuraGen has
developed its technologies, processes and information systems to provide this
knowledge and is applying its integrated platform towards the discovery and
development of the next generation of genomics-based therapeutic, diagnostic
and agricultural products.

GENES, PATHWAYS AND DISEASE

The GENOME is the complete set of genetic information within each cell of an
organism. The information in the genome is stored in chromosomes, which are
long molecules of DNA. Sections of DNA contain discrete units of hereditary
information called GENES, each of which contains a set of instructions for the
cell to produce a particular protein. In GENE EXPRESSION, the instructions
encoded in the DNA are used by a cell to make a protein molecule. Initially,
the genetic information in the DNA is copied to a complementary molecule
called messenger RNA (MRNA). The information in the mRNA is then translated
into a PROTEIN with a precise sequence of AMINO ACID building blocks which
determine its structure and function. Although all genes are present in all
cells, each cell normally expresses only those genes it needs for the specific
functions it performs. The level of mRNA expressed for each gene dictates its
activity and the number of protein molecules produced.

Proteins carry out the biological functions of cells through a series of
highly specific, organized cascades of interactions with other proteins, genes
and chemicals. These carefully regulated, complex networks of protein
interactions are termed BIOLOGICAL PATHWAYS. These pathways are generally
classified as metabolic pathways, responsible for cellular metabolism such as
the production of energy from glucose, and SIGNAL TRANSDUCTION PATHWAYS, which
use secreted proteins, cell-surface receptor proteins, and intracellular
proteins to allow cells to communicate, coordinate, and regulate their
activities. The activities of biological pathways have many levels of control
and redundancy, and thus can be affected by many genes within a pathway. In
addition to the effects of inherited genetic differences in the genome, a
biological pathway is also affected by the EXPRESSION LEVELS of its key genes
and proteins. Many of the genes at control points along a biological pathway
are expressed at levels as low as one mRNA molecule in 100,000. Therefore,
very small changes in the expression levels of these genes can produce
substantial changes in the operation of the biological pathways under their
control.

It is now recognized that essentially all stages of disease and its
progression are caused by a sequence of changes in the expression levels of
genes and the activities of specific proteins and pathways in affected cells.
Although some diseases are caused by defects in a single gene, many prevalent
diseases involve multiple genetic factors that either cause disease directly
or predispose an individual to disease in conjunction with environmental
factors. The genes and biological pathways involved in complex diseases,
however, remain largely uncharacterized. This lack of knowledge has limited
the development of drugs to treat these diseases.

GENE-BASED DRUG DISCOVERY AND DEVELOPMENT

Most treatments for disease rely on drugs that modify the activities of
biological pathways by interacting with proteins expressed by genes in the
affected cells and tissues. In the search for safer and more effective drugs

31
<PAGE>

to treat a wider range of diseases, pharmaceutical companies have begun to
explore the application of genomics to gene-based drug discovery and
development.

Modern gene-based drug discovery and development programs typically involve
the following steps: (i) GENE DISCOVERY, finding a disease-related gene; (ii)
TARGET IDENTIFICATION, ascertaining that the protein encoded by a disease-
related gene can potentially serve as a novel drug-discovery target; (iii)
TARGET VALIDATION, confirming that the potential target is at a control point
in a disease-related pathway and that a drug which interacts with the target
is expected to have a beneficial effect; (iv) ASSAY DEVELOPMENT, using the
target in a test that is designed to mimic aspects of the disease process; (v)
HIGH-THROUGHPUT SCREENING, using this assay to screen hundreds of thousands of
small organic compounds to identify compounds, or hits, which interact with
the target protein; and (vi) LEAD SELECTION AND OPTIMIZATION, identifying the
most promising hits as lead drug candidates according to expected efficacy,
safety and bioavailability. Typically, each step involves a laborious, time-
consuming process which must be completed before subsequent steps are
undertaken. In addition, several of the steps currently require highly skilled
personnel to perform non-automated, bench biology experiments on a single gene
or target at a time. Consequently, this has been a very costly and time-
consuming approach to drug discovery and development.

Gene Discovery. Gene discovery involves the identification of a gene related
to disease susceptibility, onset or progression. Although previous attempts to
identify disease-related genes have resulted in a better understanding of
certain diseases, they have discovered only a limited number of disease-
related genes and have led to relatively few new drugs due to limitations of
the technologies employed. The current methods for gene discovery include
genome sequencing, gene mapping, positional cloning and, more recently and
less widely used, gene expression.

GENOME SEQUENCING involves determining the sequence of large portions of
DNA. This technology identifies genes primarily at random, providing little
direct association of genes with disease. GENE MAPPING and POSITIONAL CLONING
are used together to identify disease-related genes. Gene mapping is a
laborious process that requires the extensive collection of tissue samples and
family histories in order to identify regions of the genome whose inheritance
correlates with the occurrence of disease. Positional cloning describes
efforts to find the gene within the region contributing to disease. Positional
cloning can take years to find the correct gene, is particularly difficult for
complex diseases, and has been limited in practice to identifying the genes
responsible for simple genetic disorders. Furthermore, gene mapping and
positional cloning do not directly identify additional proteins that are in
the same biological pathway as the disease-related gene and may be more
suitable targets for drugs.

GENE EXPRESSION methods are based upon comparisons of biological samples,
such as cells from human biopsies over the progression of a disease, to
identify genes whose expression levels correlate with the disease. The most
significant correlations involve genes that are expressed in disease-specific
tissues, change expression levels over the stages of a disease, and are
expressed at low levels consistent with the ability to regulate biological
pathways. In contrast to gene mapping and positional cloning, gene expression
can identify multiple disease-related genes. Even if these genes do not cause
disease directly, they are likely to encode proteins that participate in
disease-related biological pathways and can offer places to intervene in
disease progression. Some disease-related genes, such as secreted proteins,
can even serve directly as protein drugs.

CuraGen believes that gene expression methods will be the most efficient and
broadly applicable approach to identifying genes related to disease. To be
most useful, gene expression methods should be fault tolerant, measure the
expression levels for a majority of the expressed genes, including those
expressed at a single copy per cell, and be applicable to humans, animals,
plants and pathogens. Many current gene expression methods, however, face
significant limitations. Expression methods based on the repetitive sequencing
of small portions of mRNA molecules, termed expressed sequence tags (ESTS),
are inefficient. These methods cannot accurately measure genes expressed at
low levels and often miss genes that control important pathways.
Hybridization-based gene expression methods usually use portions of known
genes as probes to determine the expression levels of those genes in
biological samples. These methods are generally ineffective in discriminating
between genes

32
<PAGE>

with closely related sequences. Further, their application is limited to the
small set of known genes, often precluding their use for animal models which
are essential to human disease research. Methods such as differential display
generate patterns of fragments from expressed mRNA molecules, attempt to
detect changes in these patterns, and then attempt to identify the genes
responsible for these changes. These methods can be imprecise and inefficient
in measuring gene expression levels, are especially problematic when each gene
generates at most one gene fragment, and can require time-consuming steps to
confirm which genes are responsible for particular changes in the patterns.

Target Identification and Validation. After a disease-related gene has been
identified, the next step is to decide whether the protein it encodes can
serve as a target for a drug. Part of TARGET IDENTIFICATION is determining
whether the protein is related structurally to proteins that have served
successfully as targets, including receptors and other proteins in biological
pathways.

If a protein is not appropriate as a target, potential targets are then
sought among proteins in the same biological pathway as the disease-related
gene. Although other proteins in the same pathway can exhibit correlated
levels of gene expression, this information is often insufficient to sort
proteins into specific pathways or to show how proteins interact within a
pathway. Most research to understand biological pathways relies on non-
automated bench biology techniques able to identify only one protein at a
time. Despite the promise of this protein-by-protein approach, the associated
time, effort and expense have limited its use and, as a result, many
discoveries of disease-related genes have not led to suitable targets.

Once a protein target is identified, it must be validated in order to
provide evidence that it plays an important role in disease and that finding a
chemical compound that is active against it could lead to a drug. Alternative
techniques for TARGET VALIDATION can take months or years to complete because
it is not usually possible to view a given protein in the context of a
disease-related biological pathway.

Assay Development and High-Throughput Screening. Each validated target
usually requires the development of a specific assay or specialized
measurement technique to identify compounds that interact with it. Each assay
often requires months to develop. Potential drugs are identified by testing a
target against a chemical diversity library, usually comprising hundreds of
thousands of different small organic molecules, in HIGH-THROUGHPUT SCREENING.
Although screening a single target can be relatively rapid, screening multiple
targets can be time-consuming because most assays require that each target be
screened in a separate assay. The screening process often produces multiple
hits. To date, little progress has been made towards developing general assays
that do not require customization for each new disease-related gene and
validated target.

Drug Development. Hits that are suitable for development into potential
drugs are chosen for LEAD COMPOUND SELECTION AND OPTIMIZATION. Optimizing a
lead compound entails synthesizing and testing a series of closely related
organic compounds. The most promising leads are selected based on expected
efficacy, safety and bioavailability. This selection process typically does
not use detailed information of a candidate drug's MECHANISM OF ACTION, which
would show how a drug interacts with particular proteins and biological
pathways to achieve its desired therapeutic affect. The lack of information
often results in inaccurate predictions of efficacy and safety.

Following optimization, leads are entered into PRECLINICAL TRIALS to predict
their efficacy and safety based on animal testing. If preclinical trials are
promising, candidate drugs advance to CLINICAL TRIALS to determine their
efficacy and safety in human patients. Drug candidates have a high attrition
rate at this stage due to the lack of understanding of the mechanism of
action, poor predictions of efficacy and unexpected side effects. On average,
only one out of ten candidates that enter clinical trials gains FDA approval.
Failure at the later stages of drug development is especially significant as
it can account for half of the $360 million average cost to attain FDA
approval.

Pharmacogenomics. Even after a drug has been approved and marketed, there is
often limited knowledge of how it works. Consequently, many side effects are
observed only after use by a larger, more diverse population

<PAGE>

of patients who may not have been adequately represented in the original
trials, including patients taking additional medications which can cause
unanticipated adverse effects. The study of the genes that determine the
efficacy, pharmacology and toxicity of a drug is referred to as
PHARMACOGENOMICS. Unfortunately, previous technologies have lacked the ability
to show comprehensively what genes, proteins and biological pathways are
affected by a drug. This lack of information has led to failures and FDA
recalls of widely-prescribed drugs such as thalidomide and dexfenfluramine.

TECHNOLOGY INTEGRATION AND INFORMATION SYSTEMS

Biotechnology companies have attempted to overcome limitations in the gene-
based drug discovery by focusing on single, isolated technologies. Major
pharmaceutical firms have been left with the challenge to integrate these
disparate components into a cohesive discovery and development pipeline. This
has created a great need for sophisticated bioinformatics systems to manage
what is now a disjointed process.

CURAGEN'S APPROACH

CuraGen's integrated genomics technologies, processes and information
systems are designed to overcome significant technological limitations and
condense key steps in gene-based drug discovery and development. The Company
believes that its technology platform has the potential to rapidly generate
comprehensive information about gene expression, biological pathways and the
compounds affecting these pathways, each on a scale not previously undertaken.
CuraGen believes this will permit the comprehensive analysis of many diseases
and enable the discovery of disease-related genes, drug targets and potential
drugs.

[Graph showing the steps involved in both traditional gene-based drug discovery
and using CuraGen's approach to gene-based drug discovery]

CURAGEN'S APPROACH TO GENE-BASED DRUG DISCOVERY

GENE DISCOVERY (QEA AND GENECALLING)

CuraGen has developed its proprietary Quantitative Expression Analysis
("QEA") and GeneCalling technologies to overcome significant limitations of
existing gene discovery methods. QEA and GeneCalling

34
<PAGE>

enable the rapid, precise measurement of substantially all of the differences
in gene expression levels between biological samples in order to discover
disease-related genes. QEA and GeneCalling are designed to detect genes
expressed at the level of a single mRNA molecule per cell, to measure
comprehensively the expression levels of 95% of the genes expressed in any
species and to be integrated into an efficient, automated, high-throughput
process in order to rapidly generate large databases of gene expression
profiles. These technologies permit the Company to pursue research programs
for many disease systems, process many samples in parallel and potentially
discover and seek patent protection for commercially valuable disease-related
genes.

TARGET IDENTIFICATION AND VALIDATION (MIM AND PATHCALLING)

The Company has developed its proprietary Multiplexed Interaction Method
("MIM") and PathCalling technologies to reduce the time and cost of target
identification and validation. MIM is an automated, high-throughput process
that simultaneously tests for interactions between billions of combinations of
proteins. PathCalling is the Company's proprietary software and database that
assembles the protein-protein interactions discovered by the MIM system into
connected biological pathways. Although the PathCalling database is still at a
relatively early stage, the Company intends to continue to populate the
PathCalling database with as complete a set as possible of the protein-protein
interactions that constitute the pathways in humans and model organisms that
are relevant to disease. By identifying protein-protein interactions with MIM
and comparing them with pathways within the PathCalling database, the role of
these proteins within a given biological pathway can be elucidated and the
database further augmented. PathCalling is designed to permit disease-related
genes to be linked rapidly to specific biological pathways, providing valuable
biological context for gene discoveries and additional targets for therapeutic
intervention. The Company believes that its PathCalling database has the
potential to streamline target identification and validation into a single,
efficient, accelerated process. The Company further believes that the number
of pathway-related protein-protein interactions currently in its proprietary
PathCalling database is greater than the total number of interactions
previously described in the scientific literature.

ASSAY DEVELOPMENT AND HIGH-THROUGHPUT SCREENING (COMBIGEN AND HITCALLING)

The Company is developing its proprietary CombiGen technology and HitCalling
database and information system to accelerate the identification of hits by
screening protein targets in parallel against small molecule diversity
libraries. The Company has designed CombiGen to avoid any need to develop a
specialized assay for each new target. With the ability to screen thousands of
targets simultaneously, the Company believes that its automated, high-
throughput screening assays will have the potential to screen more
combinations of targets and compounds than any competing technology of which
it is aware. The Company believes that when development of the CombiGen
technology is completed this capacity will enable a new approach to drug
discovery. The Company intends to use CombiGen to screen every protein that it
discovers is involved in a protein-protein interaction, including proteins
both in disease-related pathways and in pathways not yet associated with
disease. The HitCalling database will store the identities of proteins and
hits. The Company anticipates that a newly-identified disease-related gene can
be linked into a pathway whose proteins have already been screened. The
identities of proteins and hits can then be retrieved from the HitCalling
database, reducing or eliminating the need for further target identification,
target validation, assay development or high-throughput screening and thereby
potentially accelerating a program by two to three years following the first
identification of a disease-related gene.

DRUG DEVELOPMENT AND PHARMACOGENOMICS (GENECALLING; PATHCALLING)

The Company believes that its GeneCalling and PathCalling technologies can
also be used to predict which drugs are more likely to succeed by analyzing
gene expression changes induced by drug treatment in humans and animal models
in preclinical and clinical trials. For drugs already on the market, the
Company has commenced generating GeneCalling databases with the objective of
selecting appropriate patient populations and accelerating the development of
an improved generation of drugs with fewer side effects. By providing a
precise correlation of gene expression levels and the activities of biological
pathways following treatment with specific

<PAGE>

drugs, the objective of the Company's pharmacogenomics approach is to minimize
the side effects of drugs, to identify appropriate patient populations for
existing drugs and to aid the development of safer, more effective drugs.

TECHNOLOGY INTEGRATION AND INFORMATION SYSTEMS (GENESCAPE)

The Company has integrated its GeneCalling, PathCalling and HitCalling
process and databases under its GeneScape BIOINFORMATICS operating system that
unifies all aspects of process management, data analysis and visualization.
CuraGen's goal is to establish its fully-integrated technology and the
GeneScape operating system as the preferred platform for genomics and to apply
its platform to accelerate drug discovery, drug development and
pharmacogenomics. GeneScape provides a standardized, web-based interface to
its technology platform, thereby allowing researchers remote access and
interactive capabilities from multiple sites to meet their individual
discovery and development needs. Once the HitCalling database is established,
the Company expects that all three databases will be interrelated. Thus,
researchers who discover a disease-related gene through GeneCalling have the
potential to locate the relevant biological pathways in the PathCalling
database and to use the HitCalling database to identify hits active against
proteins in this pathway.

CURAGEN'S STRATEGY

CuraGen's goal is to establish the first fully-integrated genomics business
providing comprehensive characterization of gene expression, biological
pathways and potential drugs for drug discovery and development. The Company
believes that its integrated approach can be the preferred alternative to
competitive methods employed today. In order to achieve this goal, the Company
will have to continue to add new information to its GeneCalling and
PathCalling databases, complete the development of its HitCalling system and
populate the HitCalling database. The key elements of the Company's strategy
are as follows:

Provide fully-integrated, innovative technologies to overcome limitations in
drug discovery and development. The Company believes that its integrated
genomics platform will provide enabling technologies at each of the three
critical levels of the genomics-based pharmaceutical development process:
identification of disease-related genes (gene discovery), elucidation of
biological pathways (target identification and validation) and identification
of compounds that interact with such pathways (assay development, high-
throughput screening, lead selection and optimization). These technologies
have the potential to advance the discovery and development of treatments for
complex diseases. The Company has designed these technologies to be (i)
applicable to a broad range of diseases; (ii) comprehensive in the analysis of
substantially all expressed genes, biological pathways and potential drugs;
(iii) standardized to enable the simultaneous processing of many combinations
of biological samples, proteins and drug candidates; (iv) integrated under a
single information system to facilitate the processing, analysis and use of
information generated from a variety of sources; and (v) readily used in
existing pharmaceutical development pipelines.

Apply its technology for drug discovery, drug development and
pharmacogenomics systematically to major diseases. The Company intends to
apply its technologies to address a wide range of diseases. CuraGen plans to
obtain biological samples from numerous models of disease (human tissue,
animal and cell-based models) in an effort to examine systematically the genes
and biological pathways involved in major diseases and to develop new drugs.
The Company believes that this broad-based approach will maximize its
opportunities to participate in the discovery and development of drugs either
alone or in collaboration with others. Through pharmacogenomics, the Company
believes it can help pharmaceutical companies develop more effective drugs
with fewer side effects by assessing the efficacy and safety of their
currently marketed drugs as well as drug candidates within their product
pipelines.

Generate revenue through research collaborations. The Company intends to
continue to generate revenue through research collaborations with
pharmaceutical, biotechnology and agricultural companies. Under such research
collaborations, pursuant to which the Company expects to receive revenues for
applying its proprietary technologies to a collaborator's own samples, for
providing a period of exclusivity for analyzing the data generated and from
milestone and royalty payments derived from licensed products. Data generated
in

36
<PAGE>

collaborations may become part of CuraGen's subscription databases. To date,
the Company has entered into collaborations of this type with Pioneer Hi-Bred,
Biogen and Genentech.

Generate revenue through database subscriptions. The Company believes that
the information in its GeneCalling, PathCalling and HitCalling databases will
be a valuable resource for pharmaceutical and agricultural product
development. The Company intends to generate revenue by providing subscribers
with fee-based, non-exclusive access to its databases for defined periods. The
Company expects that its research collaborators will enter into subscriptions
as they seek to access the additional information available in the Company's
databases. The Company's databases are in early stages of development and
there can be no assurance that the Company will succeed in commercializing its
databases. To date, the Company has entered into database subscription
arrangements with Biogen and Genentech.

Retain product rights to select internal research and drug discovery
programs. The Company intends to devote a substantial portion of its resources
to its internal research programs. The initial programs selected by the
Company are expected to focus on disease systems which, the Company believes,
have the potential to result in the discovery of novel proteins as drug
candidates or targets for drug discovery. The Company also expects that its
internal research programs will be an ongoing source of data for its
GeneCalling, PathCalling and HitCalling databases.

PRODUCTS AND SERVICES

CuraGen is marketing its genomics technology and information to the
pharmaceutical, biotechnology and agricultural industries through two
arrangements: research collaborations and subscriptions. Research
collaborations generally involve the application of CuraGen's GeneCalling and
PathCalling technologies to a collaborator's projects, include those support
services required to characterize gene and target discoveries, and provide
ready integration with a collaborator's existing development pipeline. The
Company anticipates that collaborations will involve HitCalling when it
becomes available. DATABASE SUBSCRIPTIONS will provide subscribers with access
to CuraGen's GeneCalling, PathCalling and HitCalling databases. Both
arrangements will use the GeneScape operating system, the Company's web-based
software that manages the Company's processes, provides access to the
Company's databases and includes CuraTools, a full-featured bioinformatics
software suite.

QEA AND GENECALLING: GENE EXPRESSION SERVICES AND DATABASE

CuraGen developed its proprietary QEA and GeneCalling technology to overcome
significant limitations of competing gene discovery methods. QEA is the
Company's method for generating and analyzing gene expression profiles.
GeneCalling is the Company's information system and database that analyzes and
stores differences in these gene expression profiles to identify disease-
related genes. QEA and GeneCalling permit sensitive detection of genes that
can control biological pathways when expressed at very low levels, and unlike
EST-based methods, do not require repetitive sequencing to measure gene
expression. The Company's technology is comprehensive in detecting genes with
novel sequences and therefore applicable universally to humans, animals,
plants, and pathogens. In comparison, hybridization-based methods are
primarily limited to known genes and do not readily discriminate between many
genes which share related DNA sequences.

QEA and GeneCalling provide the ability to discover disease-related genes by
measuring expression levels and determining gene expression differences
between biological samples, such as diseased and normal human tissues. These
samples are usually processed within a month of receipt, and profiles of gene
expression levels are available immediately for inspection and analysis. The
Company's current capacity is 5,000 biological samples per year. The Company
detects multiple fragments for each gene in a sample and believes that it can
quantify accurately the expression levels of over 150 million gene fragments
per year. The Company believes that this capability exceeds the capacity of
competing technologies, can be up to 6,000 or more times faster than EST-based
methods for comprehensive expression profiling, and can observe a greater
number of genes than methods relying on the detection of a single fragment per
gene. Based upon its current capacity, the Company estimates that it could
conduct approximately 250 projects per year consisting of approximately 20
samples each.

37
<PAGE>

The Company believes this is sufficient to support five collaborators while
meeting the needs of the Company's internal programs. See "--CuraGen Internal
Programs." The Company has designed its processes to be modular and scalable
in order to accommodate increases in the number of collaborations.

The Company's GeneCalling database stores data generated by QEA for
exclusive access for collaborations and internal programs. Through GeneScape,
researchers can access their projects and are able to select samples that have
been processed by QEA and use GeneCalling to analyze expression profiles to
identify those genes that are specific to a disease. The Company intends to
structure its collaborations such that, after the period of exclusivity has
ended, data generated from samples using QEA revert to CuraGen's GeneCalling
subscription database which currently contains gene expression data from
normal human and animal tissues.

Using QEA and GeneCalling, CuraGen has developed an innovative approach for
gene discovery for inherited diseases: positional expression cloning. By
combining its gene expression analysis with existing gene mapping techniques,
the Company can rapidly discover genes associated with inherited diseases by
identifying candidate genes that both show altered expression and map to the
chromosomal locations known to contain underlying disease genes. The Company
believes its positional expression cloning approach will be particularly
effective in identifying and characterizing susceptibility and protective
genes in many common complex diseases.

The Company believes that its technology for disease-related gene discovery
has significant advantages over genome sequencing, positional cloning and
competing gene expression technologies. CuraGen's methods permit the Company
to pursue research programs for many disease systems in parallel, with the
potential to identify rapidly a large number of commercially valuable disease-
related genes. As part of its internal programs, the Company seeks patent
protection for newly discovered disease-related genes and proteins, as well as
for novel uses of known genes and the proteins they encode. See "--
Intellectual Property" and "Risk Factors--Patents and Proprietary Rights;
Third-Party Rights."

MIM AND PATHCALLING: PATHWAY ANALYSIS SERVICES AND DATABASE

Once genes involved in a disease have been identified using GeneCalling, it
is important to be able to determine how the proteins they encode interact in
the complex pathways involved in the disease. Although a particular disease-
related protein might not be a potential protein drug or drug discovery
target, knowledge of the other proteins in the same pathway may lead to
promising protein drug or target candidates. CuraGen's MIM technology and
PathCalling database were developed to provide the link between disease-
related proteins and their biological pathways to aid in the identification
and validation of appropriate targets following the discovery of a disease-
related gene.

MIM consists of proprietary automated, high-throughput biological operations
that simultaneously test for interactions between billions of pairs of
proteins. By using MIM, CuraGen can routinely test 100,000 proteins against
100,000 other proteins, potentially identifying all interacting pairs.
PathCalling is the Company's proprietary software and database that assembles
protein-protein interactions discovered by the MIM system into connected
biological pathways, including pathways discovered previously by CuraGen or
previously described in the scientific literature. Although the PathCalling
database is still at a relatively early stage, the Company's objective is to
continue to build this database to contain as complete a set as possible of
the protein-protein interactions that constitute the pathways that are
relevant to disease. The PathCalling database permits the graphical display of
all pathways contained in the database involving any particular protein and
allows these pathways to be queried for information in much the same way gene
sequence databases are queried today. The Company believes that this will
facilitate the rapid linkage of disease-related genes to specific biological
pathways, providing the crucial biological context for gene discoveries, which
may lead to the identification of potential targets for therapeutic
intervention.

The Company seeks patent protection on the utility of specific proteins or
protein-protein interactions as drug targets based on information provided by
MIM and PathCalling, in addition to composition of matter claims based on the
sequences of novel and non-obvious proteins and the genes encoding them. There
can be no

38
<PAGE>

assurance, however, that such patents will be granted. See "--Intellectual
Property" and "Risk Factors--Patents and Proprietary Rights; Third-Party
Rights."

COMBIGEN AND HITCALLING: DRUG SCREENING SERVICES AND DATABASE

Traditionally, potential drugs have been screened against one target at a
time. Even with many of the advances in high-throughput screening, this
process remains inefficient, time-consuming and labor intensive. In an effort
to overcome these shortcomings, CuraGen is developing its proprietary CombiGen
technology and HitCalling database to identify simultaneously both novel
targets and hits. These technologies are based upon a combinatorial approach
for screening libraries of potential protein targets against libraries of
potential drugs.

CombiGen is being developed to use a biological assay system that will
permit the parallel processing of hundreds of drug discovery targets in the
form of single proteins or protein-protein interactions in a single high-
throughput screening assay. CombiGen has been designed to work efficiently
with the proteins in biological pathways which were identified by PathCalling.
The Company has designed this technology to avoid any need to develop a
specialized assay for each new target. With the ability to screen targets in
parallel, the Company believes that its automated, high-throughput screening
assays have the potential to screen more combinations of targets and compounds
than any competing technology of which the Company is aware.

When CombiGen is operational, the Company intends to commence screening of
many of the proteins in its PathCalling database, both in disease-related
biological pathways and in pathways not yet associated with disease, to
generate its HitCalling database. In this new approach, the Company believes
that, when a disease-related gene is discovered, the HitCalling database may
accelerate drug discovery by displaying hits against other proteins in that
gene's pathway.

CuraGen expects that it will complete pilot studies of its CombiGen
technology and begin marketing HitCalling later in 1998. The Company intends
to generate a database containing a large collection of hits against many of
the proteins in its PathCalling database. Where appropriate, the Company plans
to file patent applications to protect targets, small organic compounds and
their utilities. There can be no assurance, however, that the Company will
successfully complete the development of CombiGen and HitCalling, that the
Company will discover hits through the use of this technology, that patent
applications will be filed or that patents on such hits will be granted. See
"Risk Factors--New and Uncertain Business" and "--Patents and Proprietary
Rights; Third-Party Rights." In January 1998, the Company and ArQule
established a research collaboration for the discovery of novel therapeutics.
Under the research collaboration agreement, compound libraries of diverse,
small organic compounds provided by ArQule will be screened by CuraGen to
generate a HitCalling database. See "--Research Collaborations--ArQule."

GENESCAPE OPERATING SYSTEM FOR GENOMICS

CuraGen designed its GeneScape bioinformatics software to meet the needs of
researchers for a single operating system which integrates research requests,
project management, database access and data analysis and visualization. The
Company's GeneScape web-based bioinformatics operating system provides the
user with a standardized, internet-enabled interface to its processes and
databases for GeneCalling, PathCalling and HitCalling. GeneScape operates on
any computer platform that supports a standard web browser. GeneScape is
designed to be modular and extendable to incorporate other processes.
GeneScape currently consists of three components: Discovery, Study Management,
and CuraTools.

Discovery. The Discovery component manages queries to the GeneCalling,
PathCalling and HitCalling databases. GeneScape provides data analysis and
visualization through a flexible, easy-to-use point-and-click interface
organized in three sections corresponding to GeneCalling, PathCalling, and
HitCalling. GeneScape provides the answers to queries in visual format,
organized according to preferences set by the end user: differential gene
expression; expression in particular samples, tissues, or disease stages;
participation in metabolic or signal transduction pathways; map position;
functional role; interactions with proteins or small

39
<PAGE>

molecules; or other custom criteria. The Company believes that the ability to
respond to direct queries with the comprehensive analysis of gene expression
and biological pathways may make GeneScape a preferred platform for
discovering disease-related genes and drug discovery targets.

Study Management. CuraGen's collaborators can manage processes and resources
over the Internet to meet their individual research needs. Separate links on
the Study Management page provide direct, up-to-the-minute status reports for
projects, individual processes within projects, and resource allocation among
projects and processes. Study Management automates the operation of every
station in the QEA and MIM process and monitors quality control at each
processing step.

CuraTools. The GeneScape operating system also includes CuraTools, an easy-
to-use, unified bioinformatics software package for DNA and protein sequence
analysis; sequence similarity to known genes, protein drugs and protein
targets; three-dimensional structure prediction; identification of proteins
participating in biological pathways; and custom literature searches.
CuraTools also provides users with access to publicly available sequence,
mapping and expression databases that the Company has imported, assembled, and
annotated for enhanced value. In addition, the Company has assembled
proprietary sequence and mapping databases for portions of the corn, mouse,
rat and human genomes. Collaborators can elect to have CuraGen link their own
proprietary or third-party sequence databases into GeneScape and CuraTools for
their own exclusive use.

CURASHOP

Through its CuraShop, the Company now offers its collaborators services that
will complement its proprietary GeneCalling, PathCalling, and HitCalling
technologies. CuraShop can provide high-throughput, efficient and essential
research services including confirmation of gene expression differences, gene
sequencing, delivery of full-length clones of genes, gene mapping and mutation
detection. These services and materials can all be requested, for a fee,
directly through GeneScape.

RESEARCH COLLABORATIONS

The Company's business strategy includes the establishment of research
collaborations with pharmaceutical, biotechnology and agricultural companies.
The Company anticipates that such collaborations will generally provide
revenues in the form of fees for the generation of gene expression and
biological pathway data from samples provided by a collaborator. The
collaborator will have the ability to control how resources are allocated to
generate GeneCalling and PathCalling databases and to perform additional
research services through CuraShop, including the sequencing of gene fragments
and the generation of full-length clones. Fees will also give each such
partner exclusive access for a defined period of time to the GeneCalling or
PathCalling databases containing the information produced in the
collaboration. The Company expects that collaborators will have the right to
license, for an up-front fee, discoveries arising from a collaboration,
including rights to novel genes, novel uses of previously identified genes,
and protein targets and hits. Collaborations may also include milestone
payments and royalty payments on sales of products developed using discoveries
made through the use of the Company's technology. After the period of
exclusivity expires, rights to genes and portions of the data not licensed by
the collaborator are expected to revert to CuraGen. The Company intends to
include this data in its expanding subscription databases. The Company intends
to seek collaborations that will be non-exclusive with respect to a given
field or disease indication, for example stroke or cardiovascular disease, but
exclusive for a specific period of time for certain disease models, such as a
research project using a mouse model for stroke or cardiovascular disease.

The Company also intends to seek to enter into other research collaborations
that provide the Company access to complementary technologies. To date, the
Company has entered into collaborations with Pioneer Hi-Bred, Biogen,
Genentech and ArQule.

PIONEER HI-BRED

In May 1997, CuraGen and Pioneer Hi-Bred entered into a research
collaboration to identify genes responsible for agricultural seed product
performance, including crop yield, drought resistance and pest resistance

40
<PAGE>

(the "Pioneer Agreement"). Pioneer Hi-Bred is a leader in the development of
genetically based agricultural crop seed products, with approximately 44% of
the North American corn seed market and a significant share of the market in
other major corn-growing areas of the world. Historically, Pioneer Hi-Bred has
developed new hybrid seed strains with favorable traits using traditional
cross breeding techniques with only limited knowledge of the genes responsible
for such traits. The Company believes that by applying QEA and GeneCalling
technologies, it will discover the genes responsible for these favorable
traits, thereby enabling Pioneer Hi-Bred to develop, faster and more
efficiently, new generations of seed products with superior traits.

Under the terms of the Pioneer Agreement, Pioneer Hi-Bred agreed to fund a
research program for up to five years in certain areas related to agricultural
crop seed research and product development, and the Company agreed not to
collaborate with any other parties within such areas. The agreement provides
for minimum annual research payments of $2.5 million, with specified funding
increases after three years in order to avoid CuraGen's right to terminate the
agreement. If the research program continues for its full five-year term,
total research funding, including such increased research payments, could
reach $18.5 million. In connection with the collaboration, Pioneer Hi-Bred
made a $7.5 million equity investment in the Company.

Pioneer Hi-Bred has the right to terminate the research program at any time
upon a breach by the Company. The Agreement also provided that Pioneer Hi-Bred
could terminate the research program on three months' written notice, at any
time after November 1998, if the Company had not identified at least one gene
associated with a trait of interest selected by Pioneer Hi-Bred. In February
1998, Pioneer Hi-Bred confirmed that the Company had identified such a gene,
and therefore Pioneer Hi-Bred's termination right commencing in 1998 lapsed.
In addition, Pioneer Hi-Bred continues to have the right, at any time after
May 2000, to terminate the research program at its sole discretion on three
months' written notice.

The Pioneer Agreement provides Pioneer Hi-Bred with exclusive, worldwide,
royalty-bearing rights to develop and commercialize products based on gene
discoveries made in the collaboration in certain areas related to seed
products, non-seed plant products and agricultural chemicals. CuraGen will
receive specified royalties on the sale of seed products incorporating trait-
specific genes identified by CuraGen. Royalties with respect to non-seed plant
products and agricultural chemicals are to be negotiated. The Pioneer
Agreement provides the Company with a worldwide right to develop and
commercialize products in the fields of human healthcare, pharmaceuticals,
animal health and microbial applications based upon gene discoveries arising
from the collaboration.

The Company believes that this collaboration offers it significant discovery
benefits because Pioneer Hi-Bred has assembled one of the world's leading
collections of crop genetic materials, which contains a wide range of genes
and pathways responsible for important agricultural traits. Many of the genes
and pathways plant cells use to carry out biological processes have closely
related genes and pathways in human cells. CuraGen has retained all rights to
use the information gained in studies of plant genes for applications to the
Company's programs in human disease.

BIOGEN

In June 1997, CuraGen and Biogen entered into a stock purchase agreement,
pursuant to which Biogen made a $1 million equity investment in the Company in
anticipation of evaluating the application of CuraGen's technology to a
particular program of interest to Biogen.

In October 1997, CuraGen and Biogen entered into a research collaboration
and database subscription arrangement pursuant to a Research and Option
Agreement (the "Biogen Agreement"). Under the Biogen Agreement, CuraGen and
Biogen will collaborate in the discovery of novel therapeutics across a range
of Biogen-specified disease programs. The parties also expect to conduct
pharmacogenomic analysis of selected products and product candidates in
Biogen's portfolio. The collaboration will provide Biogen with access to
CuraGen's proprietary genomics platform, including the GeneScape
bioinformatics operating system in order to

41
<PAGE>

generate GeneCalling and PathCalling databases from Biogen-specified disease
systems. Biogen will also gain non-exclusive access to CuraGen's GeneCalling
and PathCalling subscription databases.

Under the terms of the agreement, Biogen agreed to invest $5 million in
CuraGen to purchase Common Stock at the initial public offering price and to
provide a $10 million interest-bearing loan facility. Interest under the loan
facility is payable semi-annually and accrues on the outstanding principal
balance at an annual rate equal to the prime rate plus one percent. The loan
is convertible at any time at CuraGen's option into Common Stock based upon a
formula that approximates its prevailing market price, and the principal is
payable at the earlier of five years or one year after termination by Biogen
of the Biogen Agreement. Biogen will additionally provide payments over five
years to support the research collaboration and to gain non-exclusive access
to CuraGen's GeneCalling and PathCalling subscription databases. Payments
could reach $18.5 million if the research collaboration and database
subscription payments both continue for the full five-year term. Biogen has an
exclusive right during specified periods to evaluate discoveries arising from
the collaboration and to license such discoveries, some of which will require
the payment of an additional fee. During the period of exclusivity, for each
discovery arising from the collaboration, the Company is prohibited from
undertaking substantially similar research projects with third parties. After
the period of exclusivity elapses, rights to genes not licensed to Biogen and
rights to the data will revert to CuraGen. For each therapeutic product which
is developed under an exclusive license and attains certain development and
commercialization milestones, Biogen will provide milestone payments of up to
$18.5 million. Biogen will also pay royalties based on future product sales.

Biogen has the right to terminate the research collaboration upon any breach
by the Company of any material obligation under the Biogen Agreement or at its
sole discretion at any time after October 1999, on six months' written notice.
In addition, Biogen may terminate its subscription to the Company's
GeneCalling and PathCalling databases at any time upon three months' written
notice. Upon the closing of the offering, after purchase of Biogen Shares,
Biogen will be the beneficial owner of 4.4% of the outstanding shares of
Common Stock. Biogen is entitled to certain registration rights with respect
to the shares of Common Stock issued pursuant to the Biogen Agreement. See
"Description of Capital Stock--Registration Rights."

GENENTECH

In June 1996 and December 1996, CuraGen and Genentech entered into
exploratory programs under certain agreements (the "1996 Genentech
Agreements") to evaluate the application of CuraGen's integrated genomics
technologies to selected internal programs at Genentech. The 1996 Genentech
Agreements are limited in scope and duration. Under the terms of the 1996
Genentech Agreements, CuraGen received a $1.8 million equity investment and
Genentech agreed to make research and development payments of $667,000 to
cover three separate exploratory programs. The 1996 Genentech Agreements call
for milestone payments and royalties on therapeutic product sales.

In November 1997, CuraGen and Genentech entered into a research
collaboration and database subscription arrangement pursuant to a Research and
Option Agreement (the "Genentech Agreement"). The Genentech Agreement
supersedes the 1996 Genentech Agreements with respect to project data
generated thereunder. Under the Genentech Agreement, CuraGen and Genentech
will collaborate in the discovery of novel therapeutics across a range of
Genentech-specified disease programs. The collaboration will provide Genentech
with access to CuraGen's genomics platform, including the GeneScape
bioinformatics operating system, in order to generate proprietary GeneCalling
and PathCalling databases. Genentech will also gain non-exclusive access to
CuraGen's GeneCalling and PathCalling databases. Genentech will provide
funding of up to $24 million over five years if the database subscription
arrangement is not terminated, the research collaboration continues for the
full five-year term and Genentech elects to retain licenses to its
discoveries. Genentech has an exclusive right during specified periods to
evaluate discoveries arising from the collaboration and to license such
discoveries, some of which require the payment of an additional fee. During
the period of exclusivity, for each discovery arising from the collaboration,
the Company is prohibited from undertaking substantially similar research
projects with third parties. After the period of exclusivity lapses, rights to
genes not licensed to Genentech and rights to the data

42
<PAGE>

will revert to CuraGen. Genentech will provide milestone payments for each
product which is developed under a license and attains certain development and
commercialization milestones and will pay royalties based on future product
sales.

Under the terms of the Genentech Agreement, Genentech has agreed to purchase
$5 million of Common Stock in a private placement at the initial public
offering price. Genentech has also agreed to provide CuraGen with an interest-
bearing loan facility which could in the aggregate reach $26 million if the
research program continues beyond its initial three year term. The loan
facility contains annual borrowing limits and the outstanding principal and
interest under the loan facility are payable five years from the date of the
Genentech Agreement. Interest accrues on the outstanding principal balance at
an annual rate equal to the prime rate plus one percent. Genentech may
accelerate the payment of the outstanding principal and interest in certain
circumstances, including Genentech's termination of the Genentech Agreement
due to a breach by CuraGen or if CuraGen's market capitalization is less than
two times the outstanding principal balance of the loan facility. After the
end of the first year, during the term of the Genentech Agreement, the then
outstanding indebtedness under the loan facility is convertible at CuraGen's
option into Non-Voting Common Stock based upon a formula that approximates the
prevailing market price of the Company's Common Stock. The Company's stock
repayment option may be limited under certain circumstances in the event that
Genentech's ownership of the Company's capital stock exceeds certain specified
percentages. In addition, if Genentech's ownership of the Company's capital
stock exceeds 19.8%, then the Company may be required to repurchase shares of
Non-Voting Common Stock previously issued to Genentech based upon a formula
that approximates the prevailing market price of the Company's Common Stock.
If issued, the Non-Voting Common Stock is convertible into Common Stock (i) at
any time, at Genentech's option, or (ii) upon the sale or transfer of the Non-
Voting Common Stock to a non-affiliated third party.

Genentech has the right to terminate the research collaboration, upon a
breach by the Company of any material obligation under the Genentech Agreement
or at its sole discretion, on one month's prior notice (i) in May 1999,
subject to its payment of a termination fee or forgiveness of the portion of
the loan facility outstanding on such termination date and (ii) on or after
November 2000. Upon the closing of the offering, after purchase of the
Genentech Shares, Genentech will be the beneficial owner of 6.0% of the
outstanding shares of Common Stock. Genentech is entitled to certain
registration rights with respect to the shares of Common Stock and Non-Voting
Common Stock issued pursuant to the Genentech Agreement. See "Description of
Capital Stock--Registration Rights."

ARQULE

In January 1998, the Company and ArQule entered into a research
collaboration, pursuant to which ArQule's libraries of diverse, small organic
compounds will be screened against protein targets using CuraGen's CombiGen
technology to identify hits and to provide the HitCalling database. The
agreement is for an initial term of six months and will be automatically
extended for successive six-months terms until terminated by either party on
at least 30 days' notice prior to the end of a term. Under the agreement,
CuraGen will have the option to negotiate a research collaboration and license
agreement with ArQule to optimize, develop and commercialize leads identified
through the screening program. The contemplated terms of such collaborations
include equal rights to participate in the development, preclinical and
clinical testing of lead compounds, with equal sharing of commercialization
revenues.

DATABASE SUBSCRIPTIONS

As part of its business strategy, the Company intends to offer subscriptions
which will provide users with non-exclusive access to its GeneCalling,
PathCalling and HitCalling databases through the GeneScape operating system.
The Company will also provide subscribers access to its CuraTools
bioinformatics software. The Company anticipates updating its databases
regularly with selected data generated from internal programs, as well as data
from collaborations which have reverted to the Company. The Company intends to
structure its arrangements to receive initial fees and periodic maintenance
fees for each subscription. In addition, the

43
<PAGE>

Company may receive license fees, milestone payments and royalties in
connection with the licensing or use of proprietary information in its
databases for the development of products. Certain subscribers may also seek
to take advantage of the full range of the Company's GeneCalling, PathCalling,
HitCalling and CuraShop services by entering into collaborations with the
Company. The Company's databases are in the early stages of development and
there can be no assurance that the Company will succeed in commercializing its
databases. To date, the Company has entered into a subscription arrangement
with Biogen as part of the Biogen Agreement and with Genentech as part of the
Genentech Agreement. See "--Research Collaborations--Biogen" and "--Research
Collaborations--Genentech."

CURAGEN INTERNAL PROGRAMS

The Company intends to use its integrated genomics technology platform to
pursue a broad portfolio of research programs that encompass drug discovery,
drug development and pharmacogenomics. During the next five years, the
Company's objective is to analyze systematically the genetic basis of many
common diseases as well as the mechanisms of action and adverse side effects
of many commonly prescribed drugs. CuraGen is focusing its efforts on programs
that address unmet medical needs and that the Company believes have the
potential to yield products that can be commercialized in a relatively short
time. In particular, the Company selects human diseases and animal models of
human disease based on their potential to yield protein drugs, to identify
novel targets for common diseases that lack effective treatments or to aid
rational development or marketing of existing drugs. At each stage, the
Company plans to reevaluate the relative merits of continuing such programs
through internal efforts or through research collaborations.

DISCOVERY PROGRAMS

The Company currently has programs in cardiovascular disease, including
hypertension and stroke; endocrine and metabolic disorders, including obesity,
diabetes and osteoporosis; autoimmune disorders including arthritis; cancer;
and infectious diseases. In its internal programs, CuraGen has discovered
thirteen disease-related genes and has filed five patent applications relating
to these discoveries.

Certain of the genetic disease models selected by the Company are designed
to discover variations of genes that protect individuals from disease in
addition to finding mutations in genes that are involved in the
susceptibility, onset or progression of disease. The Company intends to
explore the potential of the proteins encoded by protective genes as protein
drugs. The Company has already identified gene variants that are potentially
protective in stroke. These gene variants were identified from animal models
using QEA and GeneCalling within months of project inception. The Company has
also discovered mutations in genes involved in diabetes and hypertension, one
of which the Company believes may be a suitable target for small molecule drug
development.

Cardiovascular Disease and Stroke. Cardiovascular diseases such as stroke
and atherosclerosis are the leading cause of death in the United States.
Treatments for these diseases have limited efficacy. Using GeneCalling and
PathCalling, CuraGen is analyzing genetic models of hypertension and ischemic
stroke to identify disease-related genes. This strategy has led to the
discovery of a secreted protein variant that appears to protect against stroke
and the discovery of a gene that may contribute to hypertension.

Endocrine and Metabolic Diseases. Within the field of endocrine and
metabolic diseases, CuraGen is analyzing a variety of genetic models including
obesity, type II diabetes, osteoporosis, osteoarthritis and gall stone
disease. The Company believes that its technology platform is well-suited to
identifying the genes and pathways involved in these diseases, which are known
to involve errors in signal transduction and the regulation of metabolic
pathways. To date, the Company has used QEA and GeneCalling to discover over
40 genes associated with these diseases and is using PathCalling in an attempt
to identify disease-related pathways and potential targets for drug discovery.
The Company believes that this information may also lead to the discovery of
protein drugs.

Autoimmunity, Arthritis and Allergy. Although diseases of the immune system,
such as systemic lupus erythematosus and rheumatoid arthritis, are among the
most common and chronic, existing drugs for autoimmune

44
<PAGE>

diseases have exhibited limited efficacy and debilitating side effects. The
Company has used QEA and GeneCalling in nine different genetic models of
systemic autoimmune disease to identify disease-related genes. CuraGen is
using MIM and PathCalling to identify pathways which incorporate these genes.

Cancer. Cancer encompasses disease processes of almost every organ system
and involves the loss of control of multiple, diverse mechanisms of signal
transduction and pathway regulation. CuraGen is applying GeneCalling and
PathCalling to identify the genes and pathways involved in the early
development of cancer and its step-wise progression to metastatic disease.
CuraGen has analyzed a number of models of cancer and has identified pathways
incorporating proteins common to many of the models.

Infectious Diseases. The Company believes that its program for pathogenic
diseases offers advantages over alternative approaches that primarily aim at
sequencing pathogen genomes with little characterization of the role of
specific pathogen proteins in biological pathways. CuraGen's research,
however, uses MIM and PathCalling to identify protein-protein interactions,
including both pathogen-pathogen and pathogen-host interactions, and
biological pathways to provide this characterization, which is valuable for
target identification and validation. The Company anticipates discovering
novel pathways specific to unique human infectious agents, including viruses,
bacteria and parasites, that are important during resting, vegetative and
pathogenic states of infection. The Company believes its approach may
facilitate the development of diagnostic assays for infectious diseases and
improved vaccines and drugs. The Company has initiated a program for a
specific bacterial pathogen and has discovered novel protein-protein
interactions that tie into known pathways conferring pathogenicity.

DRUG DEVELOPMENT AND PHARMACOGENOMICS

The Company believes that the application of QEA and GeneCalling to identify
genes that are differentially expressed in response to treatment with drug
candidates and marketed drugs represents a significant commercial opportunity.
Using this approach, the tissues targeted by the drug, as well as the organs
that might exhibit side effects, including liver or kidney damage, can be
studied in animal models thought to be indicative of human response. The
Company believes that this information may help pharmaceutical companies
select and optimize drug candidates based on efficacy and reduced side
effects. In addition to reducing the time and cost of developing drugs, the
Company believes that such results may strengthen FDA applications. For drugs
already on the market, an understanding of the mechanism of action through
pharmacogenomics can help identify appropriate patient populations and lead to
an improved generation of drugs.

The Company has begun to analyze drugs whose commercial viability or
clinical indications are threatened either by a lack of understanding of
mechanism of action or by severe side effects. The Company's goal is to
generate GeneCalling databases to provide pharmacology and toxicology
information, to understand the mechanism of drug action, to identify patient
populations that are likely to respond favorably to a particular medication
and, potentially, to identify new indications or more optimal targets.

TECHNOLOGY PLATFORM

CuraGen's integrated genomics technologies, processes and information
systems are designed to rapidly generate extensive and precise information
about gene expression, biological pathways and the chemicals that affect these
pathways, each on a scale not previously undertaken. CuraGen's GeneCalling,
PathCalling and HitCalling and related core technologies have been integrated
under its GeneScape operating system. The Company has 16 patent applications
pending on its proprietary technologies. CuraGen intends to continue to pursue
a broad intellectual property position with respect to its GeneCalling,
PathCalling, HitCalling and related core technologies.

QEA AND GENECALLING: CURAGEN'S TECHNOLOGY FOR GENE DISCOVERY

CuraGen's QEA technology and GeneCalling database, accessed over the
Internet through GeneScape, serve as the basis of the Company's collaborations
with Pioneer Hi-Bred, Biogen and Genentech. The use of these technologies has
led to patent filings relating to over thirteen disease-related genes in
internal programs and research collaborations.

45
<PAGE>

The QEA process starts with a biological sample from which mRNA molecules
are isolated. The gene expression information contained in the mRNA molecules
is copied back to DNA molecules, which are more chemically stable, to create a
pool of complementary DNA (CDNA). Each of 48 to 96 QEA reactions probes a
separate portion of the original cDNA pool with a unique pair of subsequences,
short stretches of bases. If a cDNA molecule contains both subsequences, it
produces a fluorescently-labeled gene fragment whose length is determined by
the number of bases between the subsequences as they occur in the gene. Each
QEA reaction produces approximately 200 different fragments. The QEA process
typically generates multiple fragments per gene to provide fault tolerance by
minimizing the possibility that a gene will not be detected.

The labeled fragments from each QEA reaction are loaded into individual
lanes of an electrophoresis gel and separated according to length. The
quantity of fragments of each length is determined by optical detection of the
fragment labels. The more copies of a given gene, the more fragments are
produced and the brighter the signal from that gene's fragments. The Company's
proprietary instrumentation and software has the sensitivity to detect
fragments at the level of 1 in 250,000, sufficient to detect a single mRNA
molecule per cell. The detection of 200 fragments in each lane contains
information on both the identities (from the lengths) and expression levels
(from the fluorescence intensities) of approximately 200 genes, as opposed to
alternative EST-sequencing approaches, where a single lane yields information
solely on the identity of a single gene. Analysis of 48 to 96 lanes from
different QEA reactions generates data for approximately 10,000 to 20,000
fluorescently labeled gene fragments. Gene fragment patterns are stored in the
Company's GeneCalling database.

After a sample has been processed by QEA to produce gene fragment patterns,
GeneCalling software uses the subsequence pair in a QEA reaction like an area
code, the fragment length like a phone number, and a database of known genes
like a phone book to identify the gene that generated each fragment. Fragments
which do not have any match in the database of known genes, and which
therefore may represent valuable novel genes, may also be observed. The
Company sequences just these unmatched fragments for inclusion in its
database.

QEA and GeneCalling are designed to be sufficiently sensitive to detect
genes expressed at the level of a single mRNA per cell, comprehensive by
measuring the expression levels of 95% of the genes expressed in a cell, and
efficient in processing samples, generating gene expression profiles, and
identifying genes whose expression levels correlate with disease. The
Company's technology is able to detect genes with novel sequences and
therefore is applicable broadly to humans, animals, plants and pathogens. The
Company believes that QEA and GeneCalling provide advantages over other
technologies that analyze gene fragment patterns but lack fault tolerance,
specificity or the ability to look up gene identity in a database.

MIM AND PATHCALLING: CURAGEN'S TECHNOLOGY FOR TARGET IDENTIFICATION AND
VALIDATION

CuraGen's MIM technology and PathCalling database were developed to provide
a link between disease-related genes and the biological pathways in which the
proteins encoded by such genes interact. The Company believes that these
technologies, accessed over the Internet through GeneScape, will serve as a
significant component of the Company's research collaborations and
subscriptions. The use of these technologies in internal programs has led to
patent filings on twenty-three protein-protein interactions that participate
in disease-related biological pathways.

MIM uses genetically engineered cells to simultaneously test for
interactions between thousands of pairs of proteins. First, two cDNA libraries
are produced from the genes expressed in any biological sample, including
human tissues, animals or pathogens. Next, each cell in the MIM system is
engineered to contain a foreign protein encoded by a gene from one of the two
cDNA libraries. Each of these foreign proteins is connected to one half of an
essential activating protein that has been split in two and cannot function
unless reconstituted. Billions of these engineered cells are then fused,
simultaneously, to test for interactions between the majority of possible
combinations of foreign proteins from each library. If a cell contains two
foreign proteins which interact with each other, the essential activating
protein is reconstituted and permits the cell to live. Those cells that do not
contain interacting proteins die. The identities of the interacting proteins
in the surviving cells are then determined by sequencing the DNA encoding the
foreign proteins.

46
<PAGE>

The Company believes its automated MIM technology is an advance over
technical approaches in which a single target protein is the same in all the
cells, while the second foreign protein is from a cDNA library. This approach
can identify only those proteins that interact with a single target protein of
interest. The Company has introduced proprietary advances that permit testing
of interactions using two protein libraries simultaneously, which eliminates
the need for a specific target protein and the protein-by-protein approach for
elucidating pathways. The Company believes that its proprietary advances in
biological methods and computer software also allow a significant reduction in
the error rate due to incorrect identification of protein-protein
interactions.

COMBIGEN AND HITCALLING: CURAGEN'S TECHNOLOGY FOR MULTIPLEXED HIGH-
THROUGHPUT SCREENING ASSAYS

The Company is developing its CombiGen technology and HitCalling database to
accelerate high-throughput screening of novel protein targets. The Company's
CombiGen technology is designed to employ cells that have been engineered to
express foreign protein targets. Many of these cells, each potentially
expressing unique targets, are then introduced into each well of an assay
plate. The engineered cells in each well are then exposed to a small molecule
from a chemical diversity library as part of an automated, high-throughput
screen. In most cases, the small molecule does not bind to any of the foreign
proteins and all the cells in a well die. If the small molecule does bind to a
foreign protein target in one of the cells, however, that cell lives. This
selection step allows the assay to be multiplexed for many protein targets in
parallel: thousands or millions of cells, each expressing different targets,
can be introduced at once and assayed against the same small molecule. Growth
in a well implies that the small molecule is active against one or more of the
foreign protein targets. The identity of the targets can then be determined by
sequencing DNA from the surviving cells. The identities of the protein targets
and hits will be stored in the HitCalling database.

CombiGen technology leverages CuraGen's expertise with MIM technology and is
directly applicable to proteins discovered by MIM and PathCalling to
participate in protein-protein interactions. CombiGen also permits screening
of protein targets discovered through methods other than MIM.

Under a research collaboration established with ArQule in January 1998,
ArQule's libraries of diverse, small organic compounds will be screened
against protein targets using Curagen's CombiGen technology to identify hits
and to populate the HitCalling database.

CORE TECHNOLOGY DEVELOPMENT

The Company has historically reduced its reliance on equity financing for
developing its GeneCalling, PathCalling, HitCalling and related core
technologies by competing successfully for federal grants. Granting agencies
have included the National Cancer Institute (NCI) and the National Human
Genome Research Institute (NHGRI) of the National Institutes of Health (NIH)
and the National Institute of Standards and Technology (NIST) of the United
States Department of Commerce through its Advanced Technology Program (ATP).
The Company believes that these multiple awards, in particular the receipt of
three separate ATP awards in a highly competitive selection process, attest to
CuraGen's excellence in developing and applying innovative, commercially
valuable technology.

Bioinformatics. CuraGen's GeneScape operating system provides web-based
access to its technologies, processes and databases; full capabilities for
project management and discovery queries over the Internet or at a client's
site; and use of CuraTools, a full-featured suite of bioinformatics software.
GeneScape uses JAVA and C programs to interact with an underlying Oracle
database. The Company plans to continue development of GeneScape as a modular,
cross-platform system able to serve as a standardized operating system for
multiple genomic-based technologies.

Instrumentation. CuraGen has conducted extensive technology research and
development for the analysis of DNA fragments, which the Company considers to
be an important unit operation for genomics. The Company believes that there
is strategic value in developing in-house, proprietary technology and
instrumentation that offers higher performance than commercially-available DNA
electrophoresis and hybridization platforms.

47
<PAGE>

The Company has developed its Niagara DNA analysis device to operate in
conjunction with QEA and GeneCalling. The Company believes that Niagara is
faster, more sensitive and flexible, and offers better resolution of closely-
spaced gene fragments than commercially available instruments. In addition,
the Company has developed its proprietary Open Genome Initiative ("OGI")
software for signal processing and data analysis in conjunction with its
Niagara device. OGI software is integrated with the GeneScape operating
system, but is also capable of stand-alone operation or for use with
commercially available DNA analysis instruments.

CuraGen is developing an upgrade path for the Niagara instrument that
includes MicroNiagara, combining features of slab-gel and capillary
electrophoresis, and NanoNiagara, a micromachined separation chip that uses a
non-electrophoretic, liquid-phase mechanism for DNA separation. The Company
believes that these advanced programs will help maintain its competitive
advantage in the separation, detection and analysis of DNA.

COMPETITION

A number of competitors are attempting to identify and patent genes and gene
fragments sequenced at random, typically without specific knowledge of the
function of such genes or gene fragments. The Company's competitors may
discover, characterize or develop important genes or gene fragments in advance
of the Company, which could have a material adverse effect on any related
disease research program of the Company. The Company expects competition to
intensify in genomics research as technical advances are made and become more
widely known. See "Risk Factors--Competition."

INTELLECTUAL PROPERTY

The Company's business and competitive position are dependent upon its
ability to protect its GeneCalling, PathCalling and HitCalling proprietary
technologies, processes, databases and information systems. Despite the
Company's efforts to protect its proprietary rights, unauthorized parties may
attempt to obtain and use information that the Company regards as proprietary.
The Company relies on patent, trade secret and copyright law and nondisclosure
and other contractual arrangements to protect such proprietary information.
The Company has filed patent applications for its proprietary methods and
devices for gene expression analysis, for discovery of biological pathways and
for drug screening for pharmaceutical product development. As of March 1,
1998, the Company had 21 patent applications pending with the United States
Patent and Trademark Office ("USPTO") covering its technology and had filed
several corresponding international and foreign patent applications. To date,
no patents have been issued to the Company with respect to such technology and
there can be no assurance that any patents will issue. There can be no
assurance that others will not independently develop substantially equivalent
proprietary information and techniques or otherwise gain access to the
Company's proprietary information, that such information will not be disclosed
or that the Company can effectively protect its rights to unpatented trade
secrets or other proprietary information.

48
<PAGE>

The Company's commercial success will also depend in part on obtaining
patent protection on gene and protein target discoveries for which it or its
collaborators or subscribers discover utility and on products, methods and
services based on such discoveries. The Company has applied for patent
protection for novel mutants of known genes and their uses, partial sequences
of novel proteins and their gene sequences and uses, and novel uses for
previously identified genes discovered by third parties. The Company has
sought and intends to continue to seek patent protection for novel uses for
genes and proteins which may have been patented by third parties. In such
cases, the Company would need a license from the holder of the patent with
respect to such gene or protein in order to make, use or sell such gene or
protein for such use. There can be no assurance that the Company will be able
to acquire such licenses on commercially reasonable terms, if at all. The
Company's patent application filings that result from the identification of
genes associated with the cause or effect of a particular disease generally
seek to protect the genes and encoded proteins if these genes and encoded
proteins are, among other things, novel and non-obvious, as well as
therapeutic, diagnostic and drug screening methods and products, and other
subject matter based upon a gene and its indication. Where information is
discovered on the specific biological pathway in which the protein encoded by
the gene participates, the Company also seeks to protect the newly identified
protein complex as well as the methods for identifying intervention
strategies. Each application typically contains multiple genes discovered for
a particular disease system.

The Company cannot predict whether its or its competitors' patent
applications will result in valid patents being issued. Litigation, which
could result in substantial cost to the Company, may also be necessary to
enforce the Company's patent and proprietary rights and/or to determine the
scope and validity of others' proprietary rights. The Company may participate
in interference proceedings that may in the future be declared by the USPTO to
determine priority of invention, which could result in substantial cost to the
Company. There can be

49
<PAGE>

no assurance that the outcome of any such litigation or interference
proceedings will be favorable to the Company or that the Company will be able
to obtain licenses to technology that it may require or that, if obtainable,
such technology can be licensed at a reasonable cost.

The public availability of ESTs or other sequence information prior to the
time the Company applies for patent protection on a corresponding full-length
or partial gene could adversely affect the Company's ability to obtain patent
protection with respect to such gene or gene sequences. In addition, certain
other groups are attempting to rapidly identify and characterize genes through
the use of gene expression analysis and other technologies. To the extent any
patents issue to other parties on such partial or full-length genes or uses
for such genes, the risk increases that the sale of potential products,
including therapeutics, or processes developed by the Company or its
collaborators may give rise to claims of patent infringement. Others may have
filed and in the future are likely to file patent applications covering genes
or gene products that are similar or identical to those of the Company. No
assurance can be given that any such patent application will not have priority
over patent applications filed by the Company. Any legal action against the
Company or its collaborators claiming damages and seeking to enjoin commercial
activities relating to the affected products and processes could, in addition
to subjecting the Company to potential liability for damages, require the
Company or its collaborators to obtain a license in order to continue to
manufacture or market the affected products and processes or could enjoin the
Company from continuing to manufacture or market the affected products and
processes. There can be no assurance that the Company or its collaborators
would prevail in any such action or that any license required under any such
patent would be made available on commercially acceptable terms, if at all.
The Company believes that there may be significant litigation in the industry
regarding patent and other intellectual property rights. If the Company
becomes involved in such litigation, it could consume a substantial portion of
the Company's managerial and financial resources. Under the Company's
government grants and contracts, the federal government has a nonexclusive,
nontransferable, paid-up license to practice or have practiced for or on
behalf of the United States, throughout the world and, under certain
circumstances, to grant to other parties licenses under, any inventions
conceived or first actually reduced to practice under the government grants
and contracts.

There is substantial uncertainty concerning the extent to which supportive
data will be required for issuance of patents for human therapeutics. If data
additional to that available to the Company is required, the Company's ability
to obtain patent protection could be delayed or otherwise adversely affected.
Although the USPTO issued new utility guidelines in July 1995 that address the
requirements for demonstrating utility for biotechnology inventions,
particularly for inventions relating to human therapeutics, there can be no
assurance that USPTO examiners will follow such guidelines or that the USPTO's
position will not change with respect to what is required to establish utility
for gene sequences and products and methods based on such sequences.
Furthermore, the enactment of the legislation implementing the General
Agreement on Tariffs and Trade has resulted in certain changes to United
States patent laws that became effective on June 8, 1995. Most notably, the
term of patent protection for patent applications filed on or after June 8,
1995 is no longer a period of seventeen years from the date of grant. The new
term of United States patents will commence on the date of issuance and
terminate twenty years from the earliest filing date in the United States to
which priority is claimed for the application. Because the time from filing to
issuance of biotechnology patent applications is often more than three years,
a twenty-year term from the claimed United States priority date may result in
a substantially shortened term of patent protection, which may adversely
impact the Company's patent position. If this change results in a shorter
period of patent coverage, the Company's business could be adversely affected
to the extent that the duration and level of the royalties it is entitled to
receive from its strategic partners is based on the existence of a valid
patent.

<PAGE>

over the Internet. The Company has taken security measures to protect its
proprietary technologies, processes, information systems and data and
continues to explore ways to enhance such security. There can be no assurance,
however, that such measures will provide adequate protection for the Company's
trade secrets or other proprietary information. While the Company requires
employees, academic collaborators and consultants to enter into
confidentiality and/or non-disclosure agreements where appropriate, there can
be no assurance that proprietary information will not be disclosed, that
others will not independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to the Company's trade
secrets or disclose such technology, or that the Company can meaningfully
protect its trade secrets. See "Risk Factors--Patents and Proprietary Rights;
Third Party Rights."

GOVERNMENT REGULATION

Prior to marketing, any new drug developed by the Company or its
collaborative customers must undergo an extensive regulatory approval process
in the United States and other countries. This regulatory process, which
includes preclinical and clinical studies, as well as post-marketing
surveillance to establish a compound's safety and efficacy, can take many
years and require the expenditure of substantial resources. Generally, in
order to gain FDA approval, a company first must conduct preclinical studies
in the laboratory and in animal models to gain preliminary information on a
compound's efficacy and to identify any safety problems. The results of these
studies are submitted as part of an IND that the FDA must review before human
clinical trials of an investigational drug can start. In order to
commercialize any products, the Company or its collaborative customer will be
required to sponsor and file INDs and will be responsible for initiating and
overseeing the clinical studies to demonstrate the safety and efficacy that
are necessary to obtain FDA approval of any such products. Clinical trials are
normally done in three phases and generally take two to five years, but may
take longer to complete. After completion of clinical trials of a new product,
FDA regulatory authority marketing approval must be obtained. If the product
is classified as a new drug, the Company or its collaborative customer will be
required to file an NDA and receive approval before commercial marketing of
the drug. If the product is characterized as a biologic, both a PLA and an
Establishment License Application ("ELA") will be required prior to commercial
marketing. The testing and approval processes require substantial time and
effort and there can be no assurance that any approval will be granted on a
timely basis, if at all. NDAs and PLAs submitted to the FDA can take several
years to obtain approval. For marketing outside the United States, the Company
will also be subject to foreign regulatory requirements governing human
clinical trials and marketing approval for pharmaceutical products. The
requirements governing the conduct of clinical trials, product licensing,
pricing and reimbursement vary widely from country to country. Delays or
rejections may also be encountered based upon changes in FDA policies for drug
approval during the period of product development and FDA regulatory review of
each submitted NDA in the case of new pharmaceutical agents, or PLA in the
case of biologics. Similar delays also may be encountered in the regulatory
approval of any diagnostic product and in obtaining regulatory approvals in
foreign countries. Under current guidelines, proposals to conduct clinical
research involving gene therapy at institutions supported by the NIH must be
approved by the Recombinant DNA Advisory Committee and the NIH. There can be
no assurance that regulatory approval will be obtained for any drugs or
diagnostic products developed by the Company or its collaborative customers.
Furthermore, regulatory approval may impose limitations on the indicated use
of a drug. Because certain of the products likely to result from the Company's
disease research programs involve the application of new technologies and may
be based upon a new therapeutic approach, such products may be subject to
substantial additional review by various government regulatory authorities
and, as a result, regulatory approvals may be obtained more slowly than for
products using more conventional technologies.

51
<PAGE>

for any product candidate, and no product candidate has been approved for
commercialization in the United States or elsewhere. The Company intends to
rely primarily on its collaborators to file INDs and generally direct the
regulatory approval process. No assurance can be given that the Company or any
of its collaborators will be able to conduct clinical testing or obtain the
necessary approvals from the FDA or other regulatory authorities for any
products. Failure to obtain required governmental approvals will delay or
preclude the Company's collaborators from marketing drugs or diagnostic
products developed by the Company or limit the commercial use of such products
and could have a material adverse effect on the Company's business, financial
condition and results of operations.

The Company's research and development activities involve the controlled use
of hazardous materials, chemicals and various radioactive materials. The
Company is subject to federal, state and local laws and regulations governing
the use, storage, handling and disposal of such materials and certain waste
products. Although the Company believes that its safety procedures for
handling and disposing of such materials comply with the standards prescribed
by federal, state and local laws and regulations, the risk of accidental
contamination or injury from these materials cannot be completely eliminated.
In the event of such an accident, the Company could be held liable for any
damages that result and any liability could exceed the resources of the
Company. See "Risk Factors--Government Regulation; No Assurance of Regulatory
Approval."

EMPLOYEES

At December 31, 1997, the Company had 168 full-time equivalent employees, of
whom 72 held Ph.D. or other doctoral degrees and 15 others held masters or
other post-graduate degrees. The employee group includes engineers,
physicians, molecular biologists, chemists and computer scientists. The
Company intends to continue to expand its number of full-time equivalent
employees and affiliates during 1998. The Company believes that its relations
with its employees are good. None of the Company's employees is represented by
a union.

FACILITIES

CuraGen's principal administrative offices are located in New Haven,
Connecticut in a 26,000 square foot leased facility. The Company also leases
an 8,000 square foot technology development laboratory at its original site in
Branford, Connecticut, and a 4,000 square foot facility in Alachua, Florida.
The Company also supports scientists at the University of California at
Berkeley MicroFabrication Laboratory. CuraGen believes that its facilities are
adequate for the Company's operations and that suitable additional space will
be available in New Haven, Branford and Alachua as needed.

LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings.

52
<PAGE>

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The executive officers and directors of the Company, their ages as of
January 1, 1998, and their positions with the Company are as follows:

<TABLE>
<CAPTION>
Name Age Position
- ---- --- --------
<S> <C> <C>
Jonathan M. Rothberg, Ph.D. (3)...... 34 Chief Executive Officer, President
and Chairman of the Board
Gregory T. Went, Ph.D. (2)........... 34 Executive Vice President and
Director
David M. Wurzer, C.P.A............... 39 Executive Vice President, Treasurer
and Chief Financial Officer
Elizabeth A. Whayland, C.P.A......... 37 Director of Financial Management and
Secretary
Peter A. Fuller, Ph.D................ 43 Vice President, Business Development
Stephen F. Kingsmore, M.B., Ch.B..... 37 Vice President, Research
Richard H. Booth, C.P.A., C.L.U.,
Ch.F.C. (3)(4)...................... 50 Director
Vincent T. DeVita, Jr., M.D. (2)(5).. 62 Director
Robert E. Patricelli, J.D. (1)(5).... 58 Director
James L. Vincent (1)(4).............. 58 Director
</TABLE>
- --------
(1)Class I Director
(2)Class II Director
(3)Class III Director
(4)Member of the Compensation Committee
(5)Member of the Audit Committee

Jonathan M. Rothberg, Ph.D. has served as Chief Executive Officer, President
and Chairman of the Board of Directors of the Company since its formation in
1991. From May 1991 to March 1993, he served as a Postdoctoral Fellow at the
Howard Hughes Medical Institute's Boyer Center for Molecular Medicine. Dr.
Rothberg received his B.S. in Chemical Engineering from Carnegie Mellon
University and his M.S., M. Phil. and Ph.D. in Biology from Yale University.

Gregory T. Went, Ph.D. has served as Executive Vice President of the Company
since February 1997 and as a Director of the Company since October 1997. From
September 1994 until February 1997, Dr. Went served as Vice President,
Business Development of the Company. From the Company's formation until
September 1994, Dr. Went served as Director of Structural Biology. Dr. Went
received his B.S. in Chemical Engineering from Carnegie Mellon University and
his Ph.D. in Chemical Engineering from the University of California, Berkeley.

David M. Wurzer, C.P.A. has served as Executive Vice President, Treasurer
and Chief Financial Officer of the Company since September 1997. From January
1991 to September 1997, Mr. Wurzer served as Senior Vice President and Chief
Financial Officer and in other senior managerial positions for Value Health,
Inc., a managed health care provider. Mr. Wurzer received his B.B.A. from the
University of Notre Dame.

Elizabeth A. Whayland, C.P.A. has served as Director of Financial Management
since November 1994 and as Secretary of the Company since September 1997. From
July 1982 to November 1994, Ms. Whayland served as a Senior Manager and in
other staff and management positions with Deloitte & Touche. Ms. Whayland
received her B.A. from Grove City College and her M.S.T. from the University
of Hartford.

53
<PAGE>

Peter A. Fuller, Ph.D. has served as Vice President, Business Development of
the Company since October 1997. From September 1983 to October 1997, Dr.
Fuller served as Director, Technology Identification & Assessment, Director,
Technology Access, Director, Technology Acquisition Group and Soybean Research
Station Manager for Pioneer Hi-Bred, a leading supplier of agricultural
genetics. Dr. Fuller received his B.S. from California State University and
his M.S. and Ph.D. from the University of Nebraska.

Stephen F. Kingsmore, M.B., Ch.B. has served as Vice President, Research of
the Company since October 1997. From July 1994 to October 1997, Dr. Kingsmore
served as Assistant Professor at the University of Florida in its Department
of Medicine, Division of Rheumatology and Clinical Immunology and at its
Center for Mammalian Genetics. He also served as an Affiliate Assistant
Professor at the University of Florida in its Department of Pathology and
Laboratory Medicine from July 1994 to October 1997, and in its Department of
Molecular Genetics and Microbiology from August 1996 to October 1997. From
March 1988 to July 1994, he served in the positions of Postdoctoral Fellow,
Intern, Resident and Fellow, Rheumatology at Duke University. Dr. Kingsmore
received his M.B. and his Ch.B. from Queen's University, Belfast, United
Kingdom.

Richard H. Booth, C.P.A., C.L.U., Ch.F.C. has served as a Director of the
Company since October 1997. Currently, he serves as Executive Vice President,
Corporate Strategic Development of Phoenix Home Life Mutual Insurance Company,
a position he has held since October 1994. He also currently serves as a
director of Phoenix Duff & Phelps Corporation, HSB Group, Inc., Aberdeen Asset
Management, PLC and Mechanics Savings Bank. From August 1994 to September
1994, Mr. Booth served as a consultant for Phoenix Home Life Mutual Insurance
Company. From February 1991 to June 1994, he served as President, Chief
Operating Officer and as a director of The Travelers Corporation, a
diversified financial services company. Mr. Booth received his B.S. and his
M.S.P.A. from the University of Hartford.

Vincent T. DeVita, Jr., M.D. has served as a Director of the Company since
September 1995. Currently, he serves as a director of Imclone Systems, Inc.
and is Director of the Yale University Comprehensive Cancer Center, a position
he has held since July 1993. From September 1988 to July 1993, Dr. DeVita
served as Physician-in-Chief of the Memorial Sloane-Kettering Cancer Center.
From July 1980 to August 1988, he served as Director of the National Cancer
Institute. Dr. DeVita received his B.S. from the College of William and Mary
and his M.D. from the George Washington University School of Medicine.

Robert E. Patricelli, J.D. has served as a Director of the Company since
October 1997. Currently, he serves as the President and Chief Executive
Officer of Women's Health USA, Inc., formerly known as Patient Centered Health
Care, Inc., a women's health services company, a position he has held since
August 1997. He also currently serves as a director of Northeast Utilities,
Inc. and Hartford Life, Inc. From May 1987 to August 1997, he served as
Chairman, President and Chief Executive Officer of Value Health, Inc. Mr.
Patricelli received his B.A. from Wesleyan University and his J.D. from
Harvard Law School.

James L. Vincent has served as a Director of the Company since October 1997.
Currently, he serves as Chairman of the Board of Directors of Biogen, a
position he has held since October 1985. From October 1985 until February
1997, Mr. Vincent served as Chief Executive Officer of Biogen. He also served
as Chief Operating Officer and President of Biogen from April 1988 until
February 1994. Prior to that he served as Group Vice President of Allied
Corporation (now AlliedSignal, Inc.), an advanced technology and manufacturing
company, and as President of Allied Health and Scientific Products Company, a
subsidiary of Allied Corporation, a manufacturer of a variety of products used
in the healthcare industry, from 1982 to 1985. He also served as Executive
Vice President, Chief Operating Officer and as a director of Abbott
Laboratories, Inc., a pharmaceutical company. Mr. Vincent received his B.S.
from Duke University and his M.B.A. from Wharton Graduate Business School,
University of Pennsylvania.

54
<PAGE>

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors established a Compensation Committee and an Audit
Committee in October 1997. The Audit Committee oversees the engagement of the
Company's independent accountants, reviews the annual financial statements and
the scope of annual audits and considers matters relating to accounting policy
and internal controls. The Compensation Committee reviews, approves and makes
recommendations to the Board of Directors concerning the Company's
compensation policies, practices and procedures for its executive officers.
The Compensation Committee also administers the Company's 1997 Employee,
Director and Consultant Stock Plan (the "1997 Stock Plan") and the 1993 Stock
Option and Incentive Award Plan (the "1993 Stock Plan"). See "--Stock Option
Plans."

SCIENTIFIC ADVISORY BOARD

In 1995, the Company established a Scientific Advisory Board to assist the
Company in its research and development activities. The Scientific Advisory
Board is comprised of several distinguished scientists from outside the
Company who have significant accomplishments in areas of science and
technology that are important to the Company's future. The following
individuals are the current members of the Scientific Advisory Board:

MEDICAL/MOLECULAR BIOLOGY

Richard P. Lifton, M.D., Ph.D. serves as Chairman of the Company's
Scientific Advisory Board. Dr. Lifton is Professor of Medicine, Genetics,
Molecular Biophysics and Biochemistry at the Yale University School of
Medicine where he also serves as Director of the Programs in Molecular
Genetics and Cardiovascular Genetics. He also serves as Director of the Yale
University Specialized Center of Research in Hypertension and as investigator
of the Howard Hughes Medical Institute. Dr. Lifton received his B.A. from
Dartmouth College and his M.D. and Ph.D. from Stanford University.

Jose Costa, M.D. is Director of Anatomical Pathology and Vice-Chairman of
Pathology at the Yale University School of Medicine, Deputy Director of the
Yale University Comprehensive Cancer Center and Chief of Yale University's
Program for Critical Technologies in Breast Oncology. Dr. Costa received his
B.A. from Lycee Francais College International, Barcelona, Spain and his M.D.
from the University of Barcelona Medical School.

Pietro De Camilli, M.D. is Chairman and Professor of the Department of Cell
Biology at the Yale University School of Medicine where he also serves as a
member of the Executive Committee of the Yale University Diabetes
Endocrinology Research Center. He is an investigator of the Howard Hughes
Medical Institute and is a member of the National Advisory Committee of the
Pew Scholars Program in the BioMedical Sciences. Dr. De Camilli received his
M.D. from the University of Milano, Italy and carried out postdoctoral studies
at the Yale University School of Medicine.

BIOINFORMATICS

Daniel Seligson, Ph.D. has held various senior management positions in the
Technology and Manufacturing Group at Intel Corporation and currently serves
at Intel as Manager of 300mm Process Equipment Development. Dr. Seligson
received his B.S. from the Massachusetts Institute of Technology and his Ph.D.
from the University of California, Berkeley.

Lincoln D. Stein, M.D., Ph.D. has served as a consultant to the Company
since September 1997. From December 1995 to July 1997, Dr. Stein was Director
of Informatics Core at the Massachusetts Institute of Technology Whitehead
Institute. Dr. Stein received his B.A. from The Johns Hopkins University and
his M.D. and Ph.D. from Harvard Medical School.

TECHNOLOGY AND AUTOMATION

Harold G. Craighead, Ph.D. is Professor of Applied and Engineering Physics
at Cornell University. From January 1988 to June 1995, he served as Director
of the Cornell University Nanofabrication Facility. Dr. Craighead received his
B.S. from the University of Maryland and his Ph.D. from Cornell University.

55
<PAGE>

Lynn W. Jelinski, Ph.D. is Director of both the Office of Economic
Development and the Center for Advanced Technology in Biotechnology as well as
a Professor of Engineering at Cornell University. Dr. Jelinski received her
B.S. from Duke University and her Ph.D. from the University of Hawaii.

Each of the Scientific Advisory Board members is employed by an employer
other than the Company or is self-employed and may have commitments to, or
consulting or advisory contracts with, other entities that may conflict or
compete with his or her obligations to the Company. Generally, members of the
Scientific Advisory Board are not expected to devote a substantial portion of
their time to Company matters.

COMPENSATION OF DIRECTORS AND SCIENTIFIC ADVISORS

Non-employee directors are reimbursed for travel costs and other out-of-
pocket expenses incurred in attending each directors' meeting and committee
meeting. Non-employee directors receive no directors' fees but are eligible to
receive automatic grants of non-qualified stock options under the 1997 Stock
Plan. Under the 1997 Stock Plan, each non-employee director, upon first being
elected or appointed to the Board of Directors, receives an option to purchase
20,000 shares of Common Stock, which will vest one-third immediately and one-
third each on the first and second anniversaries of the grant date. Any non-
employee director who joined the Board of Directors prior to the adoption of
the 1997 Stock Plan received an option to purchase 5,000 shares of Common
Stock, which will also vest one-third immediately and one-third each on the
first and second anniversaries of the grant date. Upon joining the Board of
Directors in September 1995, Dr. DeVita was granted an option to purchase
15,000 shares of Common Stock under the 1993 Stock Plan. The 1997 Stock Plan
also provides for an annual grant of an immediately exercisable option to
purchase 5,000 shares of Common Stock to each continuing non-employee director
following each annual meeting of stockholders commencing with the 1998 annual
meeting. All automatic option grants to non-employee directors will have a
term of ten years and an exercise price equal to the fair market value of the
Common Stock on the date of grant. Pursuant to the foregoing provisions of the
1997 Stock Plan, Dr. DeVita and Messrs. Booth, Patricelli and Vincent have
been granted options to purchase 10,000, 25,000, 25,000, and 25,000 shares of
Common Stock, respectively, at the initial public offering price. See "--Stock
Option Plans."

Each member of the Scientific Advisory Board is paid a stipend of $1,000 per
day, plus expenses for each day of service. In addition, members have received
options to purchase shares of the Common Stock. These options were granted at
various exercise prices and are exercisable at various dates through May 2007.
Members of the Scientific Advisory Board may receive additional option grants
from time to time.

In May 1997, the Company entered into a Scientific Advisory Board Agreement
with Richard P. Lifton, M.D., Ph.D. (the "SAB Agreement"). The SAB Agreement
provides for Dr. Lifton to be retained as Chairman of the Company's Scientific
Advisory Board and as a consultant to the Company in the field of genomics.
Dr. Lifton will not be required to spend more than 24 days each year providing
services pursuant to the SAB Agreement. The initial term of the SAB Agreement
is for a period of three years and can be extended for one-year periods.
Either party may, however, terminate the SAB Agreement, with or without cause,
by giving at least 30 days prior written notice to the other party.

During the term of the SAB Agreement, and for a period of six months
following the termination of the SAB Agreement, Dr. Lifton will not directly
or indirectly be a founder of, serve as a member of the scientific board of,
or act as an officer or employee of, or, without written permission of the
Company, consult for any entity that provides biotechnology services or
products or otherwise assists an entity or person in developing, producing,
marketing or selling any biotechnology product or service. Dr. Lifton, may,
however, continue to perform services and research on behalf of the Howard
Hughes Medical Institute or Yale University School of Medicine. If the Company
terminates the SAB Agreement without cause, the foregoing restrictions do not
apply.

Pursuant to the SAB Agreement, Dr. Lifton will receive a consulting fee of
$1,000 for each day of services provided to the Company, as well as
reimbursement for all reasonable and necessary expenses incurred in connection
with his consulting services. Dr. Lifton has also received a stock option to
purchase 86,250 shares of Common Stock at an exercise price of $4.10 per
share.

56
<PAGE>

EXECUTIVE COMPENSATION

Summary Compensation. The following table presents certain information
concerning compensation paid or accrued for services rendered to the Company
in all capacities during (i) the years ended December 31, 1996 and December
31, 1997, for the chief executive officer, and (ii) the year ended December
31, 1997, for the other most highly compensated executive officers of the
Company earning greater than $100,000 in the year ended December 31, 1997
(collectively, the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ ------------
AWARDS
SECURITIES
UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY OPTIONS(#)
- --------------------------- ---- ------------ ------------
<S> <C> <C> <C>
Jonathan M. Rothberg, Ph.D. ................. 1997 $125,000 --
Chief Executive Officer 1996 $125,000(1) --
Gregory T. Went, Ph.D. ...................... 1997(2) $119,166 114,000
Executive Vice President
</TABLE>
- --------
(1) From the Company's inception through September 30, 1996, Dr. Rothberg
indefinitely deferred the payment of his salary on an interest-free basis.
Accordingly, $93,750 of Dr. Rothberg's salary for the year ended December
31, 1996 has been deferred and $308,125 of Dr. Rothberg's salary has been
deferred in the aggregate.
(2) Dr. Went's compensation was less than $100,000 in 1996.

Option Grants. The following table sets forth certain information regarding
options granted by the Company to the Named Executive Officers during the year
ended December 31, 1997:

OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------
POTENTIAL
REALIZABLE VALUE
PERCENT AT ASSUMED
OF TOTAL ANNUAL RATES OF
NUMBER OF OPTIONS STOCK PRICE
SHARES GRANTED TO APPRECIATION
UNDERLYING EMPLOYEES EXERCISE FOR OPTION TERM(3)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------
NAME GRANTED(#) YEAR(1) ($/SHARE)(2) DATE 5% ($) 10% ($)
- ---- ---------- ---------- ------------ ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Jonathan M. Rothberg,
Ph.D. ................. -- -- -- -- -- --
Gregory T. Went,
Ph.D. ................. 114,000(4) 20.9% $4.10 1/7/2007 $ 293,945 $ 744,915
</TABLE>
- --------
(1) The Company granted options to purchase 546,333 shares of Common Stock to
employees in the year ended December 31, 1997.
(2) All options were granted at fair market value as determined by the Board
of Directors based on all factors available to them on the grant date.
These factors included the history of, and prospects for, the Company and
the industry in which it competes, an assessment of the Company's past and
present operations and financial performance, the prospects for future
earnings of the Company, the present state of the Company's development,
the possibility of an initial public offering by the Company and market
prices of publicly traded common stocks of comparable companies in recent
periods.
(3) Amounts reported in this column represent hypothetical values that may be
realized upon exercise of the options immediately prior to the expiration
of their term, assuming that the stock price on the date of grant
appreciates at the specified annual rates of appreciation, compounded
annually over the term of the options. These numbers are calculated based
on rules promulgated by the Securities and Exchange Commission. Actual
gains, if any, on stock option exercises and Common Stock holdings are
dependent on the time of such exercise and the future performance of the
Company's Common Stock.

57
<PAGE>

(4) The 114,000 options granted to Dr. Went on January 7, 1997, pursuant to
the 1993 Stock Plan, are nonqualified stock options. The options vest 25%
per year over a four-year period. The options are subject to the
employee's continued employment. The options terminate ten years after the
grant date, subject to earlier termination in accordance with the 1993
Stock Plan and the option agreement. See "--Stock Option Plans."

Year-End Option Values. The following table sets forth for each of the Named
Executive Officers certain information concerning stock options held as of
December 31, 1997. No Named Executive Officer exercised stock options during
1997.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FY-END AT FY-END(1)
------------------------- -------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Jonathan M. Rothberg, -- -- -- --
Ph.D. ...................
Gregory T. Went, 189,500 220,500 $1,818,320 $1,774,920
Ph.D. (2)................
</TABLE>
- --------
(1) There was no public trading market for the Common Stock as of December 31,
1997. Accordingly, these values have been calculated on the basis of an
initial public offering price of $11.00 per share, less the applicable
exercise price.
(2) Of the 189,500 options which are exercisable as of December 31, 1997,
10,500 options are held by trusts for the benefit of Dr. Went's wife and
children.

EMPLOYMENT ARRANGEMENTS

The Company has entered into letter agreements (collectively, the
"Employment Letters") with the following executive officers: Dr. Went, Mr.
Wurzer, Dr. Fuller and Dr. Kingsmore in February 1997, July 1997, August 1997,
and August 1997, respectively. The Employment Letters do not specify a term of
employment. Pursuant to the Employment Letters, Drs. Went and Kingsmore and
Mr. Wurzer receive base salaries of $125,000 and Dr. Fuller receives a base
salary of $115,000. Each Employment Letter also provides for a bonus, which
the Board of Directors may, in its discretion, award from time to time. The
Company has agreed that, upon the closing of this offering, the Board of
Directors will review Dr. Went's, Mr. Wurzer's, Dr. Fuller's and Dr.
Kingsmore's compensation and provide an enhanced compensation package to each
employee.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Booth and Vincent, both non-employee directors, constitute the
Company's Compensation Committee. No executive officer of the Company will
serve as a member of the board of directors or compensation committee of any
entity that has one or more executive officers serving as a member of the
Company's Board of Directors or Compensation Committee.

STOCK OPTION PLANS

1997 Stock Plan. The Company's 1997 Stock Plan was approved by the Company's
Board of Directors and stockholders in October 1997. The 1997 Stock Plan
provides for the issuance of stock options and stock grants ("Stock Rights")
to employees, directors and consultants of the Company. A total of 1,500,000
shares of Common Stock have been reserved for issuance under the 1997 Stock
Plan. Options to purchase 85,000 shares of Common Stock have been granted and
are outstanding at January 31, 1998 under the 1997 Stock Plan. The 1997 Stock
Plan is administered by the Compensation Committee of the Board of Directors.
The Compensation Committee has the authority to administer the provisions of
the 1997 Stock Plan and to determine the persons to whom Stock Rights will be
granted, the number of shares to be covered by each Stock Right and the terms
and conditions upon which a Stock Right may be granted.

58
<PAGE>

Stock grants under the 1997 Stock Plan will be subject to such terms and
conditions as the Compensation Committee deems to be appropriate and in the
best interest of the Company. These terms may include conditions relating to
the right of the Company to reacquire the shares subject to the stock grant,
including the time and events upon which such rights shall accrue, and the
purchase price of the shares.

Options granted under the 1997 Stock Plan may be either (i) options intended
to qualify as "incentive stock options" under Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or (ii) non-qualified stock
options. The exercise price of options granted under the 1997 Stock Plan will
be determined by the Compensation Committee, provided that, in the case of
incentive stock options, the price will not be less than 100% of the fair
market value of the Common Stock on the date of grant, or not less than 110%
of the fair market value of the Common Stock on the date of grant if the
optionee holds 10% or more of the voting stock of the Company. The 1997 Stock
Plan also provides for the automatic grant of non-qualified options to non-
employee directors of the Company. See "--Compensation of Directors and
Scientific Advisors." An incentive stock option granted under the 1997 Stock
Plan may be exercised after the termination of the optionholder's employment
with the Company (other than by reason of death, disability or termination for
"cause" as defined in the 1997 Stock Plan), to the extent exercisable on the
date of termination, at any time prior to the earlier of the option's
specified expiration date or 90 days after such termination. The Compensation
Committee may specify the termination or cancellation provisions applicable to
a non-qualified stock option. In the event of the optionholder's death or
disability, both incentive stock options and non-qualified stock options
generally may be exercised, to the extent exercisable on the date of death or
disability, by the optionholder or the optionholder's survivors at any time
prior to the earlier of the option's specified expiration date or one year
from the date of death or disability. Generally, in the event of the
optionholder's termination for cause, all outstanding and unexercised options
are forfeited.

If the Company is to be consolidated with or acquired by another entity in a
merger, sale of all or substantially all of the Company's assets or otherwise
(an "Acquisition"), the Compensation Committee or the board of directors of
any entity assuming the obligations of the Company under the Plan shall, as to
outstanding options under the plan, either (i) make appropriate provision for
the continuation of such options by substituting, on an equitable basis, for
the shares then subject to such options, the consideration payable with
respect to the outstanding shares of Common Stock in connection with an
Acquisition or securities of the successor or acquiring entity; or (ii) upon
written notice to the optionholders, provide that all options must be
exercised (either to the extent then exercisable or, at the discretion of the
Compensation Committee, all options being made fully exercisable for purposes
of such transaction) within a specified number of days of the date of such
notice, at the end of which period the options shall terminate; or (iii)
terminate all options in exchange for a cash payment equal to the excess of
the fair market value of the shares subject to each such option (either to the
extent then exercisable or, at the discretion of the Compensation Committee,
all options being made fully exercisable for purposes of such transaction)
over the exercise price thereof.

1993 Stock Plan. The Company's 1993 Stock Plan was approved by the Company's
Board of Directors and stockholders in December 1993 and subsequently amended
by the Board of Directors in May 1997. The 1993 Stock Plan provides for the
issuance of stock options and stock awards to employees and consultants of the
Company and members of the Company's Board of Directors and Scientific
Advisory Board. Of the 1,500,000 shares of Common Stock which were reserved
for issuance under the 1993 Stock Plan, options to purchase 1,028,884 shares
have been granted and are outstanding at January 31, 1998. The Company does
not intend to grant any additional options or awards under the 1993 Stock
Plan.

Upon termination of service to the Company (other than by reason of death,
disability or termination for "cause" as defined in the 1993 Stock Plan) an
option granted under the 1993 Stock Plan is generally exercisable, to the
extent exercisable on the date of termination, for up to three months
following termination. In the event of the optionholder's death or disability,
options generally may be exercised, to the extent exercisable on the date of
death or disability, by the optionholder or the optionholder's survivors for
up to one year from the date of death or disability. In the event of the
optionholder's termination for cause, all outstanding and unexercised options
are forfeited.

59
<PAGE>

If the Company is to be consolidated with or merged into another entity
(such that the Company is not the surviving entity), or upon a sale of all or
substantially all of the Company's assets or otherwise (a "Change in
Control"), the Compensation Committee or the Board of Directors of any entity
assuming the obligations of the Company under the plan shall, as to
outstanding options, either (i) make appropriate provision for the
continuation of such options by substituting, on an equitable basis, the
shares then subject to such options for the consideration payable with respect
to the outstanding shares of Common Stock in connection with a Change in
Control or securities of the successor or acquiring entity; or (ii) upon
written notice to the optionholders, provide that all options must be
exercised (to the extent then exercisable) within a specified number of days
of the date of such notice, at the end of which period the options shall
terminate; or (iii) terminate all options in exchange for a cash payment equal
to the excess of the fair market value of the shares subject to each such
option (to the extent then exercisable) over the exercise price thereof.

Additional Options. In addition to the options granted under the 1993 Stock
Plan, the Company has granted options to purchase an aggregate of 570,000
shares of Common Stock pursuant to individual agreements with Company
employees and consultants. These options incorporate the provisions of the
1993 Stock Plan to the extent such provisions are not inconsistent with the
terms of those options.

LIMITATION OF DIRECTORS' LIABILITY AND INDEMNIFICATION

The DGCL authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of directors' fiduciary duty of care. The Restated
Certificate limits the liability of directors of the Company to the Company or
its stockholders to the fullest extent permitted by Delaware law. See
"Description of Capital Stock--Delaware Law and Certain Charter and Bylaw
Provisions."

The Restated Certificate provides mandatory indemnification rights to any
officer or director of the Company who, by reason of the fact that he or she
is an officer or director of the Company, is involved in a legal proceeding of
any nature. Such indemnification rights include reimbursement for expenses
incurred by such officer or director in advance of the final disposition of
such proceeding in accordance with the applicable provisions of the DGCL.

There is no pending litigation or proceeding involving a director, officer,
employee or agent of the Company in which indemnification by the Company will
be required or permitted. The Company is not aware of any threatened
litigation or proceeding that may result in a claim for such indemnification.

60
<PAGE>

CERTAIN TRANSACTIONS

Since January 1, 1995, there has not been nor is there currently proposed,
any transaction or series of similar transactions to which the Company was or
is to be a party in which the amount involved exceeded or exceeds $60,000 and
in which any director, executive officer, holder of more than 5% of the Common
Stock of the Company or any member of the immediate family of any of the
foregoing persons had or will have a direct or indirect material interest
other than the transactions described below.

In 1993, seven members of Dr. Rothberg's family, including Henry M. Rothberg
and Lillian R. Rothberg, who are Dr. Rothberg's parents and five percent
beneficial stockholders of the Company, and Michael J. Rothberg who is Dr.
Rothberg's brother and a five percent beneficial stockholder of the Company,
loaned $898,000 to the Company. On December 30, 1993, the notes evidencing
these loans were canceled in exchange for 898,000 shares of Common Stock and
two-year warrants to purchase 1,122,500 shares of Common Stock at an exercise
price of $1.00 per share. In 1995, the Company modified these warrants to
extend their terms from two years to seven years.

In June 1996 and December 1996, the Company and Genentech, a five percent
beneficial stockholder of the Company, entered into exploratory programs to
evaluate the application of Curagen's integrated genomics technologies to
selected internal programs at Genentech. In connection with the December 1996
exploratory program, the Company raised gross proceeds of approximately
$1,800,000 by completing a private placement of 307,167 shares of Series A
Preferred Stock (the "Series A Preferred Stock") with Genentech at a price of
approximately $5.86 per share. In November 1997, the Company and Genentech
entered into the Genentech Agreement. Pursuant to the Agreement, Genentech
agreed to purchase the Genentech Shares and to provide an interest-bearing
loan facility to the Company. See "--Business--Research Collaborations" for a
description of the exploratory programs and the Genentech Agreement.

In September 1996, October 1996 and January 1997, the Company received
subscriptions of $1,600,000, $50,000 and $100,000, respectively, from five
investors. In March 1997, the Company issued 175,000 shares of Series B
Preferred Stock to these five investors at a price of $10.00 per share in a
private placement. In connection with this private placement, the Company
issued five-year warrants to purchase 358,361 shares of Common Stock at an
exercise price of $5.86 per share. Henry and Lillian Rothberg purchased 60,000
shares of such Series B Preferred Stock and were issued warrants to purchase
122,866 shares of Common Stock. Hemroc II Trust, a trust of which Michael J.
Rothberg is a co-trustee, purchased 10,000 shares of Series B Preferred Stock
and was issued warrants to purchase 20,478 shares of Common Stock. Gianpiero
Molinari, the brother-in-law of Dr. Rothberg and Michael J. Rothberg and the
son-in-law of Henry and Lillian Rothberg, purchased 5,000 shares of the Series
B Preferred Stock and was issued warrants to purchase 10,239 shares of Common
Stock.

In March 1997, the Company raised gross proceeds of $11,787,202 by
completing a private placement of 2,011,468 shares of Series C Convertible
Preferred Stock (the "Series C Preferred Stock") with eleven investors at a
price of $5.86 per share. In connection with this private placement, the
Company also issued three-year warrants to purchase 366,894 shares of Common
Stock at an exercise price of $9.00 per share to two investors who purchased
1,706,485 and 127,986 shares of Series C Preferred Stock, respectively. Henry
and Lillian Rothberg purchased 34,130 shares of the Series C Preferred Stock.
Quantum Industrial Partners LDC, a five

61
<PAGE>

percent beneficial stockholder of the Company, purchased 1,706,485 shares of
the Series C Preferred Stock and was issued warrants to purchase 341,297
shares of Common Stock.

In May 1997, Pioneer became a five percent beneficial stockholder of the
Company, through the purchase of 1,000,000 shares of Series D Convertible
Preferred Stock (the "Series D Preferred Stock") at a price of $7.50 per
share. The Company and Pioneer also entered into a Collaborative Research and
License Agreement related to the discovery and development of genes associated
with plant growth and development. See "Business--Research Collaborations" for
a description of this Agreement.

In June 1997, the Company raised gross proceeds of approximately $1,000,000
by completing a private placement of 100,000 shares of Series E Convertible
Preferred Stock to Biogen at a price of $10.00 per share. In October 1997, the
Company and Biogen entered into the Biogen Agreement. Pursuant to the Biogen
Agreement, Biogen agreed to purchase the Biogen Shares and to provide a $10
million loan facility to the Company. See "--Business--Research
Collaborations" for a description of the Biogen Agreement. James L. Vincent, a
Director of the Company, currently serves as Chairman of the Board of Biogen.

Upon the closing of this offering, all of the Company's 175,000 outstanding
shares of Series B Preferred Stock will be redeemed by the Company. In
addition, upon the closing of this offering, as part of the Automatic
Conversion, all of the Series A Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock will convert into Common
Stock on a one for one basis. Genentech and Biogen, along with the holders of
the Series C Preferred Stock and the Series D Preferred Stock, have been
granted registration rights. See "Description of Capital Stock--Registration
Rights" for a description of these rights.

From September 1993 to July 1997, Michael J. Rothberg arranged a number of
capital leases and purchases of equipment and supplies on behalf of the
Company. The Company believes that these capital leases and purchases were on
terms at least as favorable as would have been available from a third party.
As compensation for these services, the Company granted stock options to
Michael J. Rothberg as follows: in November 1994, an immediately exercisable
stock option to purchase 15,000 shares of Common Stock at a price of $2.23 per
share; and in March 1996, a stock option to purchase 35,800 shares of Common
Stock at a price of $3.00 per share, which vests over a six-year period from
the date of grant. Both options expire ten years from the date of grant.

Robert Patricelli and James Vincent, both directors of the Company, have
indicated an interest in purchasing an aggregate of 90,909 shares of Common
Stock (at an assumed public offering price of $11.00 per share) pursuant to
the Directed Share Program upon the closing of this offering. Messrs.
Patricelli and Vincent are not obligated to purchase any shares of Common
Stock pursuant to the Directed Share Program and may purchase less than, or
none of, the 90,909 shares that they presently have indicated an interest in
purchasing. See "Underwriters."

62
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information known to the Company
regarding the beneficial ownership of Common Stock as of January 1, 1998, by
(i) each person known to the Company to be the beneficial owner of more than
5% of its outstanding shares of Common Stock, (ii) each director of the
Company, (iii) each executive officer named in the Summary Compensation Table
and (iv) all directors and executive officers of the Company as a group.
Except as otherwise indicated, the persons or entities listed below have sole
voting and investment power with respect to all shares of Common Stock owned
by them.

<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE OF SHARES
BENEFICIAL OWNER BENEFICIALLY OWNED BENEFICIALLY OWNED(1)(2)
---------------- ------------------ ------------------------
<S> <C> <C>
Jonathan M. Rothberg, Ph.D. (3).. 3,592,000 40.5%
c/o CuraGen Corporation
555 Long Wharf Drive, 11th Floor
New Haven, CT 06511
Quantum Industrial Partners LDC
(4)............................. 2,047,782 22.2%
Kaya Flamboyan
Willemstad, Curacao
Netherlands Antilles
Pioneer Hi-Bred International,
Inc............................. 1,000,000 11.3%
700 Capital Square
400 Locust Street
Des Moines, IA 50309
Henry M. Rothberg (5)............ 944,496 10.3%
c/o Law Offices of Marshal D.
Gibson, P.C.
152 Temple Street
New Haven, CT 06510
Lillian R. Rothberg (6).......... 944,496 10.3%
c/o Law Offices of Marshal D.
Gibson, P.C.
152 Temple Street
New Haven, CT 06510
Genentech, Inc. (7).............. 761,712 8.2%
460 Point San Bruno Blvd.
South San Francisco, CA 94080
Michael J. Rothberg (8).......... 544,388 6.0%
c/o Law Offices of Marshal D.
Gibson, P.C.
152 Temple Street
New Haven, CT 06510
Gregory T. Went, Ph.D. (9)....... 271,250 3.0%
Vincent T. DeVita, Jr., M.D.
(10)............................ 21,666 *
Richard H. Booth, C.P.A., C.L.U.,
Ch.F.C. (11).................... 33,731 *
Robert E. Patricelli, J.D. (12).. 11,666 *
James L. Vincent (13)............ 11,666 *
All directors and executive
officers as a group (10 persons)
(14)............................ 4,011,479 43.3%
</TABLE>
- --------
*Less than 1%.

63
<PAGE>

(1) Shares of Common Stock that an individual or group has the right to
acquire within 60 days of January 1, 1998, pursuant to the exercise of
options or warrants or pursuant to stock purchase agreements are deemed
to be outstanding for the purposes of computing the percentage ownership
of such individual or group, but are not deemed to be outstanding for the
purpose of computing the percentage ownership of any other person shown
in the table. Excludes an aggregate of 90,909 shares of Common Stock (at
an assumed initial public offering price of $11.00 per share) that
Messrs. Patricelli and Vincent have indicated an interest in purchasing
pursuant to the Directed Share Program upon the closing of this offering.
Messrs. Patricelli and Vincent are not obligated to purchase any shares
of Common Stock pursuant to the Directed Share Program and may purchase
less than, or none of, the 90,909 shares that they presently have
indicated an interest in purchasing. See "Underwriters."
(2) Percentage of ownership is based on 8,871,987 shares of Common Stock
outstanding on January 1, 1998.
(3) Includes 500,000 shares of Common Stock held by a limited partnership of
which Dr. Rothberg is the sole general partner.
(4) Includes 341,297 shares of Common Stock subject to currently exercisable
warrants. The sole general partner of Quantum Industrial Partners LDC
("QIP") is QIH Management Investor, L.P. ("QIHMI"), the sole general
partner of which is QIH Management, Inc. ("QIH Management"). Mr. George
Soros ("Mr. Soros") is the sole shareholder of QIH Management, and has
entered into an agreement dated as of January 1, 1997 with Soros Fund
Management LLC ("SFM LLC") pursuant to which Mr. Soros has, among other
things, agreed to use his best efforts to cause QIH Management to act at
the direction of SFM LLC. Mr. Soros is also the Chairman of SFM LLC, and
in such capacity may be deemed to have voting and dispositive power over
securities held for the account of QIP. Mr. Stanley F. Druckenmiller, as
Lead Portfolio Manager of SFM LLC, may also be deemed to have voting and
dispositive power over securities held for the account of QIP.
(5) Consists of 634,130 shares of Common Stock and 310,366 shares of Common
Stock subject to currently exercisable warrants, all held by Grand Hemroc
Limited Partnership of which Henry M. Rothberg is a co-general partner
with his wife, Lillian R. Rothberg.
(6) Consists of 634,130 shares of Common Stock and 310,366 shares of Common
Stock subject to currently exercisable warrants described in footnote 5
above, all held by Grand Hemroc Limited Partnership of which Lillian R.
Rothberg is a co-general partner with her husband, Henry M. Rothberg.
(7) Includes the 454,545 Genentech Shares to be purchased by Genentech in a
private placement concurrent with this offering.
(8) Includes (i) 108,750 shares of Common Stock subject to currently
exercisable warrants, (ii) 22,160 shares of Common Stock subject to
currently exercisable options, (iii) 6,000 shares of Common Stock held by
his wife, Judith Rothberg and (iv) 100,000 shares of Common Stock and
145,478 shares of Common Stock subject to currently exercisable warrants,
all held by Hemroc Trust II of which Michael J. Rothberg is a co-trustee
with his sister, Celia Rothberg Meadow. Mr. Rothberg disclaims beneficial
ownership of the shares of Common Stock held by his wife.
(9) Consists of 271,250 shares of Common Stock subject to currently
exercisable options of which 10,500 shares are held by trusts for the
benefit of Dr. Went's wife and children. Dr. Went's wife is a co-trustee
of the trusts, and Dr. Went disclaims beneficial ownership of such 10,500
shares.
(10) Consists of 21,666 shares of Common Stock subject to currently
exercisable options.
(11) Includes 5,000 shares of Common Stock subject to currently exercisable
warrants and 11,666 shares of Common Stock subject to currently
exercisable options.
(12) Consists of 11,666 shares of Common Stock subject to currently
exercisable options.
(13) Consists of 11,666 shares of Common Stock subject to currently
exercisable options.
(14) Includes 10,000 shares of Common Stock subject to currently exercisable
options held by Peter A. Fuller, 20,000 shares of Common Stock subject to
currently exercisable options held by Stephen F. Kingsmore, 19,500 shares
of Common Stock subject to currently exercisable options held by
Elizabeth A. Whayland, and 20,000 shares of Common Stock subject to
currently exercisable options held by David M. Wurzer. See also footnotes
3 and 9 through 13 above.

64
<PAGE>

DESCRIPTION OF CAPITAL STOCK

The Company's authorized capital stock consists of 50,000,000 shares of
Common Stock, par value of $.01 per share ("Common Stock"), 5,000,000 shares
of Preferred Stock, par value of $.01 per share ("Preferred Stock") and
3,000,000 shares of non-voting Common Stock, par value of $.01 per share (the
"Non-Voting Common Stock"). Upon completion of this offering, there will be
12,621,986 shares of Common Stock and no shares of Preferred Stock or Non-
Voting Common Stock outstanding. As of January 31, 1998, there were 8,871,987
shares of Common Stock outstanding, held of record by 31 stockholders. In
addition, as of January 31, 1998 there were outstanding options to purchase
1,683,884 shares of Common Stock and warrants to purchase 1,583,866 shares of
Common Stock.

COMMON STOCK

The holders of Common Stock are entitled to one vote for each share held of
record on all matters submitted to a vote of stockholders. Subject to the
rights and preferences of the holders of any outstanding Preferred Stock, the
holders of Common Stock are entitled to receive ratably such dividends as are
declared by the Board of Directors out of funds legally available therefor,
except that (i) no cash dividends shall be declared and paid on the Common
Stock unless at the same time an equal cash dividend is declared and paid, per
share, on the Non-Voting Common Stock, and (ii) no dividend of property
(including capital stock of the Company) shall be declared and paid on the
Common Stock unless a dividend of an equal amount of the same property has
also been declared and paid, per share, on the Non-Voting Common Stock. See
"Dividend Policy." In the event of a liquidation, dissolution or winding up of
the Company, holders of Common Stock and Non-Voting Common Stock have the
right (together as one class) to a ratable portion of assets remaining after
the payment of all debts and other liabilities, subject to the liquidation
preferences of the holders of any outstanding Preferred Stock. Holders of
Common Stock have neither preemptive rights nor rights to convert their Common
Stock into any other securities and are not subject to future calls or
assessments by the Company. There are no redemption or sinking fund provisions
applicable to the Common Stock. All outstanding shares of Common Stock are,
and the shares offered hereby upon issuance and sale will be, fully paid and
non-assessable. The rights, preferences and privileges of the holders of
Common Stock are subject to, and may be adversely affected by, the rights of
the holders of shares of Preferred Stock that the Company may designate and
issue in the future.

Upon the closing of this offering, certain redemption rights relating to
291,875 shares of Redeemable Common Stock will terminate. See Note 6 of Notes
to Financial Statements for a description of the Redeemable Common Stock.

PREFERRED STOCK

Upon the closing of this offering, all of the outstanding shares of the
Company's Series A Convertible Preferred Stock (the "Series A Preferred
Stock"), Series C Convertible Preferred Stock (the "Series C Preferred
Stock"), Series D Convertible Preferred Stock (the "Series D Preferred Stock")
and Series E Convertible Preferred Stock (the "Series E Preferred Stock") will
be converted on a one-for-one basis into 3,418,635 shares of Common Stock
pursuant to the Automatic Conversion. Of such Preferred Stock, 100,000 shares
held by Biogen will be converted on a weighted average basis if the Company
sells Common Stock in this offering for less than $10.00 per share. For
example, if the over-allotment option is exercised in full, Biogen would
receive 2,377 shares of Common Stock if the price to public was $9.00 per
share and 5,000 shares if the price to public was $8.00 per share.

All of the outstanding shares of Series B Preferred Stock will be redeemed.
The Preferred Stock so converted and redeemed will be retired and may not be
reissued. See Notes 5 and 6 of Notes to Financial Statements for a description
of the Preferred Stock. The Board of Directors is authorized, subject to
certain limitations prescribed by Delaware law, without further action by the
stockholders, to issue shares of Preferred Stock in one or more series and to
fix the rights, preferences, privileges and restrictions thereof, including
dividend rights, conversion rights, voting rights, terms of redemption,
liquidation preferences, sinking fund terms and the number of shares
constituting any series or the designation of such series. The Company
believes that

65
<PAGE>

the power to issue Preferred Stock will provide flexibility in connection with
possible corporate transactions. The issuance of Preferred Stock, however,
could adversely affect the voting power of holders of Common Stock and
restrict their rights to receive payments upon liquidation. It could also have
the effect of delaying, deferring or preventing a change in control of the
Company. The Company has no present plans to issue any shares of Preferred
Stock.

NON-VOTING COMMON STOCK

Except as provided under the DGCL, the holders of the Non-Voting Common
Stock are not entitled to vote on any matters submitted to a vote of
stockholders. Subject to the rights and preferences of the holders of any
outstanding Preferred Stock, the holders of Non-Voting Common Stock are
entitled to receive ratably such dividends as are declared by the Board of
Directors out of funds legally available therefor, except that (i) no cash
dividends shall be declared and paid on the Non-Voting Common Stock unless at
the same time an equal cash dividend is declared and paid, per share, on the
Common Stock, and (ii) no dividend of property (including capital stock of the
Company) shall be declared and paid on the Non-Voting Common Stock unless a
dividend of an equal amount of the same property has also been declared and
paid, per share, on the Common Stock. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, holders of Non-Voting
Common Stock and Common Stock have the right (together as one class) to a
ratable portion of assets remaining after the payment of all debts and other
liabilities, subject to the liquidation preferences of the holders of any
outstanding Preferred Stock. Holders of Non-Voting Common Stock have the
right, at any time, to convert each share of Non-Voting Common Stock into
shares of Common Stock at the rate of one share of Common Stock for each share
of Non-Voting Common Stock. In addition, upon the transfer of beneficial
ownership of any shares of Non-Voting Common Stock, such shares shall be
automatically converted into shares of Common Stock at the rate of one share
of Common Stock for each share of Non-Voting Common Stock. This automatic
conversion shall not apply if such transfer is made to (i) a majority-owned
subsidiary of Genentech, (ii) a corporation of which Genentech is a wholly
owned subsidiary ("Genentech Parent") or (iii) a wholly owned subsidiary of
Genentech Parent; except that if such transfer is made to a wholly owned
subsidiary of Genentech or Genentech Parent and such wholly owned subsidiary
ceases to be a wholly owned subsidiary of Genentech or Genentech Parent, then
such shares shall be automatically converted into shares of Common Stock at
the rate of one share of Common Stock for each share of Non-Voting Common
Stock. Holders of Non-Voting Common Stock do not have preemptive rights and
are not subject to future calls or assessments by the Company. There are no
redemption or sinking fund provisions applicable to the Non-Voting Common
Stock. The rights, preferences and privileges of the holders of Non-Voting
Common Stock are subject to, and may be adversely affected by, the rights of
the holders of shares of Preferred Stock that the Company may designate and
issue in the future.

WARRANTS

As of January 31, 1998, there were outstanding warrants to purchase
1,583,866 shares of Common Stock held by 16 investors. Such warrants have
expiration dates ranging from 2000 to 2002 and have exercise prices that range
from $1.00 per share to $10.00 per share with a weighted average exercise
price of $4.12 per share. The number of shares for which the warrants are
exercisable is subject to adjustment for stock splits, combinations or
dividends and reclassifications, exchanges or substitutions.

REGISTRATION RIGHTS

Following this offering, the holders of 3,318,635 shares of Common Stock and
of warrants to purchase a total of 366,894 shares of Common Stock will have
certain rights to cause the Company to register those shares under the
Securities Act at any time after the first anniversary of the closing date of
this offering. These holders formerly held the Series A Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock that was converted into
Common Stock in the Automatic Conversion. After the first anniversary of the
closing date of this offering, the Company may be required to effect up to two
registrations requested by the former holders of the Series A Preferred Stock,
two registrations requested by the persons who formerly held the Series C
Preferred Stock and who hold the warrants to purchase 366,894 shares of Common
Stock and two registrations requested

66
<PAGE>

by the former holder of the Series D Preferred Stock. In addition, following
this offering, Biogen and the foregoing holders will have certain rights to
cause the Company to register the 3,685,529 shares, plus an additional
1,009,090 shares, on Form S-3 under the Securities Act at any time after the
first anniversary of the closing date of this offering. There is no limit to
the number of Form S-3 registrations that the Company may be required to
effect. Stockholders with registration rights who are not part of an initial
registration demand are entitled to notice of such registration and are
entitled to include shares of Common Stock therein. These registration rights
are subject to certain conditions and limitations, including (i) the right,
under certain circumstances, of the underwriters of an offering to limit the
number of shares included in such registration and (ii) the right of the
Company to delay the filing of a registration statement for not more than 180
days after receiving the registration demand. The Company will also have the
obligation to register on Form S-3 any shares issued to Biogen and Genentech
pursuant to the conversion of their loan facilities.

In addition, if the Company proposes to register any of its equity
securities under the Securities Act, whether or not for sale for its own
account, other than in connection with a Company employee benefit plan, the
foregoing holders of 4,694,619 shares of Common Stock, along with the holder
of warrants to purchase 21,111 shares of Common Stock, are entitled to notice
of such registration and are entitled to include their Common Stock therein.
These rights are subject to certain conditions and limitations, including the
right of the underwriters of an offering to limit the number of shares
included in such registration under certain circumstances and the right of the
Company to delay or withdraw any such registration.

All expenses incurred in connection with such registrations (other than
underwriters' discounts and commissions and stock transfer fees or expenses)
and the fees and expenses of a single counsel to the selling stockholders will
be borne by the Company. The right of any holder to demand or be included in
any registration terminates on the date on which such holder may sell all
shares of Common Stock held by such holder under Rule 144 of the Securities
Act.

DELAWARE LAW AND CERTAIN CHARTER AND BYLAW PROVISIONS

Upon the consummation of this offering made hereby, the Company will be
subject to the provisions of Section 203 of the DGCL, an anti-takeover law. In
general, Section 203 prohibits a publicly-held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction in which the person
became an interested stockholder, unless the business combination is, or the
transaction in which the person became an interested stockholder was, approved
in a prescribed manner or another prescribed exception applies. For purposes
of Section 203, a "business combination" is defined broadly to include a
merger, asset sale or other transaction resulting in a financial benefit to
the interested stockholder, and subject to certain exceptions, an "interested
stockholder" is a person who, together with affiliates and associates, owns
(or within three years prior, did own) 15% or more of the corporation's voting
stock.

The Board of Directors of the Company is divided into three classes as
nearly equal in number as possible. Each year the stockholders will elect the
members of one of the three classes to a three year term of office. Messrs.
Patricelli and Vincent serve in the class whose term expires in 1999; Drs.
Went and DeVita serve in the class whose term expires in 2000; and Dr.
Rothberg and Mr. Booth serve in the class whose term expires in 2001. All
directors elected to the Company's classified Board of Directors will serve
until the election and qualification of their successors or their earlier
resignation or removal. The Board of Directors is authorized to create new
directorships and to fill such positions so created and is permitted to
specify the class to which such new position is assigned, and the person
filling such position would serve for the term applicable to that class. The
Board of Directors (or its remaining members, even though less than a quorum)
is also empowered to fill vacancies on the Board of Directors occurring for
any reason for the remainder of the term of the class of Directors in which
the vacancy occurred. Members of the Board of Directors may only be removed
for cause. These provisions are likely to increase the time required for
stockholders to change the composition of the Board of Directors. For example,
in general, at least two annual meetings will be necessary for stockholders to
effect a change in a majority of the members of the Board of Directors.

67
<PAGE>

The Company's Amended and Restated Bylaws (the "Restated Bylaws"), provide
that, for nominations to the Board of Directors or for other business to be
properly brought by a stockholder before a meeting of stockholders, the
stockholder must first have given timely notice thereof in writing to the
Secretary of the Company. To be timely, a stockholder's notice generally must
be delivered not less than sixty days nor more than ninety days prior to the
annual meeting. If the meeting is not an annual meeting, the notice must
generally be delivered not more than ninety days prior to the special meeting
and not later than the later of sixty days prior to the special meeting or ten
days following the day on which public announcement of the meeting is first
made by the Company. Only such business shall be conducted at a special
meeting of stockholders as is brought before the meeting pursuant to the
Company's notice of meeting. The notice by a stockholder must contain, among
other things, certain information about the stockholder delivering the notice
and, as applicable, background information about the nominee or a description
of the proposed business to be brought before the meeting.

The Restated Certificate also requires that any action required or permitted
to be taken by stockholders of the Company must be effected at a duly called
annual or special meeting of stockholders and may not be effected by a consent
in writing. Special meetings may be called only by the Board of Directors of
the Company pursuant to a resolution adopted by a majority of the total number
of directors authorized.

The DGCL provides generally that the affirmative vote of a majority of the
shares entitled to vote on any matter is required to amend a corporation's
certificate of incorporation or bylaws, unless the corporation's certificate
of incorporation or bylaws, as the case may be, requires a greater percentage.
The Restated Certificate requires the affirmative vote of the holders of at
least 70% of the outstanding voting stock of the Company to amend or repeal
any of the provisions discussed in this section entitled "Delaware Law and
Certain Charter and Bylaw Provisions" or to reduce the number of authorized
shares of Common Stock and Preferred Stock. Such 70% vote is also required for
any amendment to or repeal of the Restated Bylaws by the stockholders. The
Restated Bylaws may also be amended or repealed by a majority vote of the
Board of Directors. Such 70% stockholder vote would be in addition to any
separate class vote that might in the future be required pursuant to the terms
of any Preferred Stock that might then be outstanding.

The provisions of the Restated Certificate and Restated Bylaws discussed
above could make more difficult or discourage a proxy contest or other change
in the management of the Company or the acquisition or attempted acquisition
of control by a holder of a substantial block of the Company's stock. It is
possible that such provisions could make it more difficult to accomplish, or
could deter, transactions which stockholders may otherwise consider to be in
their best interests.

As permitted by the DGCL, the Restated Certificate provides that Directors
of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of their fiduciary duties as
Directors, except for liability (i) for any breach of their duty of loyalty to
the Company and its stockholders, (ii) for acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
for unlawful payments of dividends or unlawful stock repurchases or
redemptions, as provided in Section 174 or successor provisions of the DGCL or
(iv) for any transaction from which the Director derives an improper personal
benefit.

The Restated Certificate and Restated Bylaws provide that the Company shall
indemnify its Directors and officers to the fullest extent permitted by
Delaware law (except in some circumstances, with respect to suits initiated by
the Director or officer) and advance expenses to such Directors or officers to
defend any action for which rights of indemnification are provided. In
addition, the Restated Certificate and Restated Bylaws also permit the Company
to grant such rights to its employees and agents. The Restated Bylaws also
provide that the Company may enter into indemnification agreements with its
Directors and officers and purchase insurance on behalf of any person whom it
is required or permitted to indemnify. The Company believes that these
provisions will assist the Company in attracting and retaining qualified
individuals to serve as Directors, officers and employees.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock will be American Stock
Transfer & Trust Company. The transfer agent's telephone number is (212) 936-
5100.

68
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Prior to this offering there has been no market for the Common Stock of the
Company. The Company can make no prediction as to the effect, if any, that
sales of shares or the availability of shares for sale will have on the market
price prevailing from time to time. Nevertheless, sales of significant amounts
of the Common Stock in the public market, or the perception that such sales
may occur, could adversely affect prevailing market prices. See "Risk
Factors--Shares Eligible for Future Sale."

Upon completion of this offering, the Company expects to have 12,621,986
shares of Common Stock outstanding (excluding 1,683,884 and 1,583,866 shares
reserved for issuance upon the exercise of outstanding stock options and
warrants, respectively) (13,034,486 shares of Common Stock outstanding if the
Underwriters' over-allotment option is exercised in full). Of these shares,
the 2,750,000 shares offered hereby will be freely tradable without
restrictions or further registration under the Securities Act, except for any
shares purchased by "affiliates" of the Company, as that term is defined in
Rule 144 under the Securities Act, which will be subject to the resale
limitations imposed by Rule 144, as described below.

All of the remaining 9,871,986 shares of Common Stock outstanding will be
"restricted securities" within the meaning of Rule 144 and may not be resold
in the absence of registration under the Securities Act, or pursuant to
exemptions from such registration including, among others, the exemption
provided by Rule 144 under the Securities Act. Of the restricted securities,
1,121,606 shares are eligible for sale in the public market immediately after
this offering pursuant to Rule 144(k) under the Securities Act. A total of
7,650,381 additional restricted securities will be eligible for sale in the
public market in accordance with Rule 144 under the Securities Act beginning
90 days after the date of this Prospectus. Taking into consideration the
effect of the lock-up agreements described below and the provisions of Rules
144 and 144(k), 50,000 restricted shares will be eligible for sale in the
public market immediately after this offering, 107,997 restricted shares
(excluding 1,683,884 and 1,583,866 shares issuable upon the exercise of
outstanding stock options and warrants, respectively) will be eligible for
sale beginning 90 days after the date of this Prospectus, and the remaining
restricted shares will be eligible for sale upon the expiration of the lock-up
agreements 180 days after the date of this Prospectus, subject to the
provisions of Rule 144 under the Securities Act.

In general, under Rule 144 as currently in effect, beginning 90 days after
the date of this Prospectus, a person (or persons whose shares are required to
be aggregated) whose restricted securities have been outstanding for at least
one year, including a person who may be deemed an "affiliate" of the Company,
may only sell a number of shares within any three-month period which does not
exceed the greater of (i) one percent of the then outstanding shares of the
Company's Common Stock (approximately 126,220 shares after this offering) or
(ii) the average weekly trading volume in the Company's Common Stock in the
four calendar weeks immediately preceding such sale. Sales under Rule 144 are
also subject to certain requirements as to the manner of sale, notice and the
availability of current public information about the Company. A person who is
not an affiliate of the issuer, has not been an affiliate within three months
prior to the sale and has owned the restricted securities for at least two
years is entitled to sell such shares under Rule 144(k) without regard to any
of the limitations described above.

Beginning 90 days after the date of this Prospectus, certain shares issued
or issuable upon the exercise of options granted by the Company prior to the
date of this Prospectus will also be eligible for sale in the public market
pursuant to Rule 701 under the Securities Act. In general, Rule 701 permits
resales of shares issued pursuant to certain compensatory benefit plans and
contracts, commencing 90 days after the issuer becomes subject to the
reporting requirements of the Securities Exchange Act of 1934, as amended, in
reliance upon Rule 144, but without compliance with certain restrictions of
Rule 144, including the holding period requirements. As of January 31, 1998,
the Company has granted options covering 1,683,884 shares of Common Stock
which have not been exercised and which become exercisable at various times in
the future. Any shares of Common Stock issued upon the exercise of these
options will be eligible for sale pursuant to Rule 701.

69
<PAGE>

The executive officers and directors and certain other existing stockholders
of the Company, who beneficially own in the aggregate 8,053,235 shares of
Common Stock and options and warrants to purchase 1,318,151 shares of Common
Stock, have agreed that they will not, without the prior written consent of
Morgan Stanley & Co. Incorporated (i) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
the Common Stock, whether any such transaction described in clause (i) or (ii)
above is to be settled by delivery of Common Stock or such other securities,
in cash or otherwise, for a period of 180 days after the date of the
Prospectus.

Upon completion of this offering, the holders of 4,327,725 shares of Common
Stock and warrants to purchase 388,005 shares of Common Stock are entitled to
certain rights with respect to the registration of such shares under the
Securities Act. The Company will also have the obligation to promptly register
for resale on Form S-3 any shares issued to Biogen and Genentech pursuant to
the conversion of their loan facilities. See "Description of Capital Stock--
Registration Rights." Registration of such shares under the Securities Act
would result in such shares becoming freely tradeable without restriction
under the Securities Act (except for shares purchased by affiliates)
immediately upon the effectiveness of such registration. Certain of these
existing stockholders who beneficially own in the aggregate 4,242,401 shares
of Common Stock and warrants to purchase 388,005 shares of Common Stock have
agreed that, without the prior written consent of Morgan Stanley & Co.
Incorporated, they will not, for a period of 180 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security exercisable for
Common Stock.

70
<PAGE>

UNDERWRITERS

Under the terms and subject to the conditions in the Underwriting Agreement
dated the date of this Prospectus (the "Underwriting Agreement"), the
Underwriters named below (the "Underwriters"), for whom Morgan Stanley & Co.
Incorporated, Lehman Brothers Inc. and Bear, Stearns & Co. Inc. are serving as
Representatives (the "Representatives"), have severally agreed to purchase,
and the Company has agreed to sell to the Underwriters, severally, the
respective number of shares of Common Stock set forth opposite the names of
such Underwriters below:

<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
---- ---------
<S> <C>
Morgan Stanley & Co. Incorporated...............................
Lehman Brothers Inc. ...........................................
Bear, Stearns & Co. Inc.........................................
---------
Total......................................................... 2,750,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the several
Underwriters to pay for and accept delivery of the shares of Common Stock
offered hereby are subject to the approval of certain legal matters by their
counsel and to certain other conditions. The Underwriters are obligated to
take and pay for all the shares of Common Stock offered hereby (other than
those covered by the over-allotment option described below) if any such shares
are taken.

The Underwriters initially propose to offer part of the shares of Common
Stock directly to the public at the public offering price set forth on the
cover page hereof and part to certain dealers at a price which represents a
concession not in excess of $ a share under the public offering price. Any
Underwriter may allow, and such dealers may reallow, a concession not in
excess of $ a share to other Underwriters or to certain other dealers.
After the initial offering of the shares of Common Stock, the offering price
and other selling terms may from time to time be varied by the Underwriters.

The Company has granted the Underwriters an option, exercisable for 30 days
from the date of the Prospectus, to purchase up to 412,500 additional shares
of Common Stock at the public offering price set forth on the cover page
hereof, less underwriting discounts and commissions. The Underwriters may
exercise such option to purchase solely for the purpose of covering over-
allotments, if any, made in connection with the offering of the shares of
Common Stock offered hereby. To the extent such option is exercised, each
Underwriter will become obligated, subject to certain conditions, to purchase
approximately the same percentage of such additional shares as the number set
forth next to such Underwriter's name in the preceding table bears to the
total number of shares of Common Stock offered by the Underwriters hereby.

See "Shares Eligible for Future Sale" for a description of certain
arrangements by which all of the Company's executive officers and directors
and certain other existing stockholders, who beneficially own in the aggregate
8,053,235 shares of Common Stock and options and warrants to purchase
1,318,151 shares of Common Stock, have agreed not to sell or otherwise dispose
of Common Stock or convertible securities of the Company for up to 180 days
after the date of this Prospectus without the prior written consent of Morgan
Stanley & Co. Incorporated. The Company has agreed in the Underwriting
Agreement that it will not, directly or indirectly, without the prior written
consent of Morgan Stanley & Co. Incorporated, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase, lend or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable for Common Stock, for a period of 180 days after the date of this
Prospectus, except under certain circumstances.

In March 1997, Frederick Frank, Vice Chairman of Lehman Brothers, purchased
100,000 shares of Series B Preferred Stock for a purchase price of $10.00 per
share, or an aggregate of $1,000,000. Upon the closing of this offering, all
of Mr. Frank's 100,000 shares of Series B Preferred Stock will be redeemed by
the Company. In addition, Mr. Frank received a warrant to purchase 204,778
shares of Common Stock at $5.86 per share.

71
<PAGE>

At the request of the Company, the Underwriters have reserved for sale at
the initial public offering price up to 137,500 shares offered hereby for
officers, directors, employees and certain other persons associated with the
Company (the "Directed Share Program"). The number of shares available for
sale to the general public will be reduced to the extent such persons purchase
such reserved shares. Any reserved shares not so purchased will be offered by
the Underwriters to the general public on the same basis as the other shares
offered hereby.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales in excess of five percent of the total number of
shares of Common Stock offered hereby to accounts over which they exercise
discretionary authority.

The Company and the Underwriters have agreed to indemnify each other against
certain liabilities, including liabilities under the Securities Act.

The Common Stock has been approved for quotation on the Nasdaq National
Market under the trading symbol "CRGN."

In order to facilitate the offering of the Common Stock, the Underwriters
may engage in transactions that stabilize, maintain or otherwise affect the
price of the Common Stock. Specifically, the Underwriters may over-allot in
connection with the offering, creating a short position in the Common Stock
for their own account. In addition, to cover overallotments or to stabilize
the price of the Common Stock, the Underwriters may bid for, and purchase,
shares of Common Stock in the open market. Finally, the underwriting syndicate
may reclaim selling concessions allowed to an underwriter or a dealer for
distributing the Common Stock in the offering, if the syndicate repurchases
previously distributed Common Stock in transactions to cover syndicate short
positions, in stabilization transactions or otherwise. Any of these activities
may stabilize or maintain the market price of the Common Stock above
independent market levels. The Underwriters are not required to engage in
these activities, and may cease any of these activities at any time.

PRICE OF THE OFFERING

Prior to the Offering, there has been no public market for the Common Stock.
The initial public offering price for the Common Stock will be determined by
negotiations between the Company and the Representatives of the Underwriters.
Among the factors considered in determining the initial public offering price
will be the future prospects of the Company and its industry in general; net
revenue, earnings and certain other financial and operating information of the
Company in recent periods; and certain ratios, market prices of securities and
certain financial operating information of companies engaged in activities
similar to those of the Company. The estimated initial public offering price
range set forth on the cover page of this Prospectus is subject to change as a
result of market conditions or other factors.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., Boston,
Massachusetts, and for the Underwriters by Ropes & Gray, Boston,
Massachusetts. Members of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
own an aggregate of 20,486 shares of Common Stock and warrants to purchase
15,000 shares of Common Stock.

EXPERTS

The financial statements of CuraGen Corporation included in this Prospectus
have been audited by Deloitte & Touche LLP, independent auditors, as stated in
their report appearing herein. These financial statements have been included
herein in reliance upon the report of said firm given upon their authority as
experts in accounting and auditing.

72
<PAGE>

The statements in this Prospectus under the captions "Risk Factors--Patents
and Proprietary Rights; Third-Party Rights" and "Business--Intellectual
Property" relating to United States patent matters have been passed upon by
Pennie & Edmonds LLP, New York, New York, patent counsel to the Company.
Members of Pennie & Edmonds LLP own an aggregate of 42,673 shares of Common
Stock.

ADDITIONAL INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 under the Securities Act,
with respect to the Common Stock offered hereby. As permitted by the rules and
regulations of the Commission, this Prospectus, which is part of the
Registration Statement, omits certain information, exhibits, schedules and
undertakings set forth in the Registration Statement. For further information
pertaining to the Company and the Common Stock, reference is made to such
Registration Statement and the exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents or provisions of any documents
referred to herein are not necessarily complete, and in each instance where a
copy of the document has been filed as an exhibit to the Registration
Statement, reference is made to the exhibit so filed. The Registration
Statement may be inspected without charge at the office of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549. Copies of the Registration
Statement may be obtained from the Commission at prescribed rates from the
Public Reference Section of the Commission at such address, and at the
Commission's regional offices located at 7 World Trade Center, 13th Floor, New
York, New York 10048, and at Citicorp Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. In addition, registration statements and
certain other filings made with the Commission through its Electronic Data
Gathering, Analysis and Retrieval ("EDGAR") system are publicly available
through the Commission's site on the Internet's World Wide Web, located at
http://www.sec.gov. The Registration Statement, including all exhibits thereto
and amendments thereof, has been filed with the Commission through EDGAR.

<PAGE>

GLOSSARY

The four chemical building blocks, represented
by the letters A, C, G and T, that compose DNA.

Base
Bioinformatics Computer software to assist in the acquisition
and analysis of information relating to genes,
proteins, biological pathways and drugs.

The physical structures in cells containing
large stretches of DNA (hundreds of millions of
bases) and the information for thousands of
Chromosome genes.

DNA The molecule that encodes genetic information
through the sequence of four constituent bases.

DNA Sequence The precise order of bases for a DNA fragment,
a gene, a chromosome or an entire genome.

Fluorescent Label A molecule attached to a gene fragment that
emits light when stimulated by a laser. The
emitted light is detected to measure the
quantity of labeled gene fragments.

Gel Electrophoresis A laboratory process using a gel matrix and an
electric field to determine the size (in number
of bases) of a DNA molecule.

Gene The fundamental unit of heredity. A gene is a
specific sequence of bases (usually thousands
to tens of thousands of bases) located in a
specific location on a particular chromosome.
Genes are transcribed to produce multiple
molecules of mRNA which are then translated to
produce multiple copies of a specific protein.

Gene Expression The process used by a cell to determine which
proteins to produce. The number of copies of a
particular protein produced by a cell is
determined primarily by the number of copies of
the mRNA which encodes it.

Gene Expression Analysis The process of correlating the expression
levels of individual genes (in terms of the
number of copies of mRNA present for a gene)
with cellular behavior as a cause or result of
disease, in response to drug treatment, or over
time.

Gene Fragment A physical piece of a gene (in a test tube or
electrophoresis gel) containing on the order of
50 to 500 bases.

Gene Mapping Determining the position of a gene (or gene
fragment) on a chromosome.

Genome All the bases in all the genes on all the
chromosomes of a species. The human genome
contains over 3 billion bases.

Genomics The comprehensive study of all genes and their
function in biological pathways.

74
<PAGE>

Hybridization Determining the sequence of bases in a gene
fragment by measuring its ability to pair with
trial complementary gene fragments.

mRNA A messenger molecule that serves as the
intermediate between the stretch of DNA that
contains a gene and the final protein that the
gene encodes.

Mutation A change (usually deleterious, but in some
cases protective) in the DNA of a gene.
Mutations can be inherited.

Pathways Networks of protein interactions used to carry
out biological functions including metabolism
and signal transduction.

Pharmacogenomics The study of genes and biological pathways to
predict the efficacy and safety of drug
candidates, review the performance and safety
of marketed drugs and identify appropriate
patient populations.

Protein A molecule composed of amino acids arranged in
a sequence determined by a gene. The types and
numbers of proteins produced by a cell are
determined by the expression levels of
individual genes. Proteins are required for the
structure, function and regulation of the
body's cells, tissues, and organs. Each protein
has a unique function and can act in biological
pathways.

Quantitative Expression
Analysis CuraGen's technology that measures the
expression levels of the different mRNA
molecules present in a cell.

Sequencing The process of determining the identity and
precise order of all the bases in a piece (or
fragment) of DNA.

Signal Transduction One of the processes through which cells
communicate. In a typical signal transduction
pathway, a signal in the form of a protein is
secreted from one cell and binds to a cell-
surface receptor on another cell. The signal is
transduced by downstream pathways in the second
cell to affect its gene expression and the
activities of its biological pathways.

Subsequence A small number of bases (4 to 8) of fixed
sequence used to tag longer stretches of DNA
that constitute a gene. ATCGATC is an example
of a subsequence of 7 bases.

Subsequence Pair A pair of subsequences that are used to tag
genes. The existence of both subsequences
within a gene, together with the distance in
bases between the pair, serves in GeneCalling
like an area code plus a phone number to
identify a gene uniquely.

75
<PAGE>

CURAGEN CORPORATION

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report............................................. F-2
Balance Sheets, December 31, 1996 and 1997............................... F-3
Statements of Operations for the Years Ended December 31, 1995, 1996 and
1997.................................................................... F-4
Statements of Changes in Stockholders' Equity (Deficiency) for the Years
Ended December 31, 1995, 1996 and 1997.................................. F-5
Statements of Cash Flows for the Years Ended December 31, 1995, 1996 and
1997.................................................................... F-6
Notes to Financial Statements............................................ F-7
</TABLE>

F-1
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors
of CuraGen Corporation
New Haven, Connecticut

We have audited the accompanying balance sheets of CuraGen Corporation (the
"Company") as of December 31, 1996 and 1997, and the related statements of
operations, changes in stockholders' equity (deficiency) and cash flows for
each of the three years in the period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing
standards. 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 financial statements referred to above present fairly,
in all material respects, the financial position of the Company at December
31, 1996 and 1997, and the results of its operations and its cash flows for
each of the three years in the period ended December 31, 1997, in conformity
with generally accepted accounting principles.

/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP

Hartford, Connecticut
February 13, 1998
(February 20, 1998 as to Note 10)

F-2

<PAGE>

CURAGEN CORPORATION

BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------
1996 1997
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents......................... $ 3,298,642 $ 17,417,161
Grants receivable................................. 466,089 421,564
Accounts receivable............................... 200,000 166,750
Stock subscriptions receivable.................... 100,000 --
Other current assets.............................. 13,031 13,883
Prepaid expenses.................................. 22,951 157,480
Stock issuance costs.............................. -- 1,083,251
----------- ------------
Total current assets............................ 4,100,713 19,260,089
----------- ------------
Property and equipment, net......................... 1,471,496 6,920,196
----------- ------------
Other assets:
Notes receivable--related parties................. -- 100,000
Deferred real estate commissions, net............. -- 59,955
Deferred financing costs, net..................... 11,670 --
Organization costs, net........................... 2,000 --
Deposits.......................................... 67,512 178,789
----------- ------------
Total other assets.............................. 81,182 338,744
----------- ------------
Total assets.................................. $ 5,653,391 $ 26,519,029
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.................................. $ 351,997 $ 1,106,134
Accrued payroll--related party.................... 308,125 308,125
Accrued expenses.................................. 574,630 1,345,262
Deferred revenue.................................. -- 375,000
Current portion of obligations under capital
leases........................................... 391,923 1,386,896
----------- ------------
Total current liabilities....................... 1,626,675 4,521,417
----------- ------------
Long-term liabilities:
Deferred rent..................................... -- 227,972
Note payable...................................... 509,425 --
Interest payable.................................. 647,328 21,000
Obligations under capital leases, net of current
portion.......................................... 752,162 4,126,153
----------- ------------
Total long-term liabilities..................... 1,908,915 4,375,125
----------- ------------
Commitments and contingencies
Redeemable Common Stock............................. -- 3,940,312
----------- ------------
Stockholders' equity:
Preferred Stock:
Series A Preferred............................... 1,800,000 --
Series B Preferred............................... 1,390,772 1,459,196
Common Stock; $.01 par value, issued and
outstanding shares 5,121,731 at December 31,
1996, and 8,580,112 at December 31, 1997......... 51,218 85,801
Additional paid-in capital........................ 2,164,824 23,861,665
Accumulated deficit............................... (3,289,013) (10,511,023)
Unamortized stock-based compensation.............. -- (1,213,464)
----------- ------------
Total stockholders' equity...................... 2,117,801 13,682,175
----------- ------------
Total liabilities and stockholders' equity.... $ 5,653,391 $ 26,519,029
=========== ============
</TABLE>

See notes to financial statements.

F-3
<PAGE>

CURAGEN CORPORATION

STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1995 1996 1997
----------- ---------- -----------
<S> <C> <C> <C>
Revenue:
Grant revenue.......................... $ 1,581,175 $4,047,947 $ 3,079,994
Collaboration revenue.................. -- 375,000 2,816,549
----------- ---------- -----------
Total revenue........................ 1,581,175 4,422,947 5,896,543
----------- ---------- -----------
Operating expenses:
Grant research......................... 1,122,158 3,065,140 4,615,886
Collaborative research and
development........................... 344,217 450,895 5,126,660
General and administrative............. 961,815 1,140,325 3,481,251
----------- ---------- -----------
Total operating expenses............. 2,428,190 4,656,360 13,223,797
----------- ---------- -----------
Loss from operations..................... (847,015) (233,413) (7,327,254)
----------- ---------- -----------
Other income (expenses):
Interest income........................ 12,306 20,848 789,781
Interest expense....................... (253,896) (376,570) (684,537)
----------- ---------- -----------
Total other income (expenses)........ (241,590) (355,722) 105,244
----------- ---------- -----------
Net loss................................. (1,088,605) (589,135) (7,222,010)
Preferred dividends...................... -- (17,106) (68,424)
----------- ---------- -----------
Net loss attributable to common
stockholders............................ $(1,088,605) $ (606,241) $(7,290,434)
=========== ========== ===========
Basic and diluted loss per share:
Net loss per share attributable to
common stockholders................... $ (.22) $ (.12) $ (.92)
=========== ========== ===========
Weighted average shares used in
computing basic and diluted net loss
per share attributable to common
stockholders.......................... 4,915,087 5,097,073 7,888,383
=========== ========== ===========
Proforma basic and diluted loss per
share:
Proforma net loss per share
attributable to common stockholders... $ (.12)
==========
Weighted average shares used in
computing proforma basic and diluted
loss per share attributable to common
stockholders.......................... 5,099,598
==========
</TABLE>

See notes to financial statements.

F-4
<PAGE>

CURAGEN CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIENCY)

YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997

<TABLE>
<CAPTION>
COMMON ADDITIONAL UNAMORTIZED
NUMBER STOCK ($.01 NUMBER OF PREFERRED PAID- ACCUMULATED STOCK-BASED
OF SHARES PAR VALUE) SHARES STOCK IN CAPITAL DEFICIT COMPENSATION TOTAL
--------- ----------- ---------- ----------- ----------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
January 1, 1995....... 4,902,156 $ 49,022 -- -- $ 1,414,255 $ (1,611,273) -- $ (147,996)
Issuance of Common
Stock................ 19,575 196 -- -- 45,023 -- -- 45,219
Exercise of Common
Stock warrants....... 100,000 1,000 -- -- 99,000 -- -- 100,000
Net loss.............. -- -- -- -- -- (1,088,605) -- (1,088,605)
December 31, 1995..... 5,021,731 50,218 -- -- 1,558,278 (2,699,878) -- (1,091,382)
Exercise of Common
Stock warrants....... 100,000 1,000 -- -- 151,000 -- -- 152,000
Issuance of Preferred
Stock--Series A...... -- -- 307,167 $ 1,800,000 -- -- -- 1,800,000
Issuance of Preferred
Stock with warrants--
Series B............. -- -- 175,000 1,373,666 376,334 -- -- 1,750,000
Issuance of options to
non-employees........ -- -- -- -- 96,318 -- -- 96,318
Preferred Stock
dividends............ -- -- -- 17,106 (17,106) -- -- --
Net loss.............. -- -- -- -- -- (589,135) -- (589,135)
--------- --------- ---------- ----------- ----------- ------------ ----------- ----------
December 31, 1996..... 5,121,731 51,218 482,167 3,190,772 2,164,824 (3,289,013) -- 2,117,801
Issuance of Common
Stock................ 39,746 397 -- -- 162,561 -- -- 162,958
Issuance of Preferred
Stock with warrants--
Series C............. -- -- 2,011,468 11,787,202 -- -- -- 11,787,202
Issuance of Preferred
Stock--Series D...... -- -- 1,000,000 7,500,000 -- -- -- 7,500,000
Issuance of Preferred
Stock--Series E...... -- -- 100,000 1,000,001 -- -- -- 1,000,001
Issuance of options... -- -- -- -- 736,781 -- -- 736,781
Unamortized stock-
based compensation -- -- -- -- 1,213,464 -- $(1,213,464) --
Issuance of warrants--
capital lease
obligations.......... -- -- -- -- 59,520 -- -- 59,520
Amortization of
warrants--capital
lease obligations.... -- -- -- -- (5,410) -- -- (5,410)
Preferred Stock
dividends............ -- -- -- 68,424 (68,424) -- -- --
Adjustment of
Redeemable Common
Stock................ -- -- -- -- (2,454,668) -- -- (2,454,668)
Adjustment to reflect
automatic conversion
of Preferred Stock... 3,418,635 34,186 (3,418,635) (22,087,203) 22,053,017 -- -- --
Net loss.............. -- -- -- -- -- (7,222,010) -- (7,222,010)
--------- --------- ---------- ----------- ----------- ------------ ----------- ----------
December 31, 1997..... 8,580,112 $ 85,801 175,000 $ 1,459,196 $23,861,665 $(10,511,023) $(1,213,464) 13,682,175
========= ========= ========== =========== =========== ============ =========== ==========
</TABLE>

See notes to financial statements.

F-5
<PAGE>

CURAGEN CORPORATION

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1995 1996 1997
----------- ---------- -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net loss................................ $(1,088,605) $ (589,135) $(7,222,010)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities:
Depreciation and amortization.......... 223,626 366,283 1,226,696
Non-monetary compensation.............. -- 96,318 736,781
Changes in assets and liabilities:
Grants receivable...................... (205,456) (260,633) 44,525
Accounts receivable.................... -- (200,000) 33,250
Other current assets................... (15,086) 2,055 (852)
Prepaid expenses....................... (8,448) (10,468) (134,529)
Payment of deferred real estate
commissions........................... -- -- (68,948)
Deposits............................... (6,082) (56,548) (111,277)
Accounts payable....................... 24,727 311,457 754,137
Accrued payroll--related party......... 105,000 93,750 --
Accrued expenses....................... 300,293 274,337 933,590
Deferred revenue....................... 265,079 (265,079) 375,000
Deferred rent.......................... (37,204) (17,246) 227,972
Interest payable....................... 220,127 268,807 259,316
----------- ---------- -----------
Net cash (used in) provided by
operating activities................ (222,029) 13,898 (2,946,349)
----------- ---------- -----------
Cash flows from investing activities:
Acquisitions of property and equipment.. (170,471) (248,033) (2,486,760)
Loans to related parties................ -- -- (100,000)
----------- ---------- -----------
Net cash used in investing
activities.......................... (170,471) (248,033) (2,586,760)
----------- ---------- -----------
Cash flows from financing activities:
Payments on capital lease obligations... (85,261) (178,352) (879,594)
Proceeds from issuance of loan payable.. -- 175,000 --
Payment of loan payable................. -- (175,000) --
Proceeds from issuance of Common Stock.. 210,000 252,000 --
Proceeds from issuance of Preferred
Stock.................................. -- 3,450,000 20,387,203
Proceeds from sale-leaseback of fixed
assets................................. -- -- 1,227,270
Payments of stock issuance costs........ -- -- (1,083,251)
----------- ---------- -----------
Net cash provided by financing
activities.......................... 124,739 3,523,648 19,651,628
----------- ---------- -----------
Net (decrease) increase in cash and cash
equivalents............................. (267,761) 3,289,513 14,118,519
Cash and cash equivalents, beginning of
year.................................... 276,890 9,129 3,298,642
----------- ---------- -----------
Cash and cash equivalents, end of year... $ 9,129 $3,298,642 $17,417,161
=========== ========== ===========
Supplemental cash flow information:
Interest paid........................... $ 33,770 $ 107,763 $ 423,655
Noncash financing transactions:
Reduction of note and related interest
payable upon exercise of Common Stock
warrants............................... $ -- $ -- $ 1,485,644
Reduction of accrued expenses upon
issuance of Common Stock............... 45,219 -- 162,958
Obligations under capital leases........ 385,314 979,096 5,302,666
Common Stock subscription receivable.... 100,000 -- --
Preferred Stock subscription
receivable............................. -- 100,000 --
Adjustment of Redeemable Common Stock... -- -- 2,454,668
</TABLE>

See notes to financial statements.

F-6
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization--CuraGen Corporation ("CuraGen" or the "Company") is a
biotechnology company focusing on the application of genomics to systematic
discovery of genes, biological pathways and drug candidates in order to
accelerate the discovery and development of the next generation of
therapeutic, diagnostic and agricultural products. The Company was
incorporated in November 1991 and, until March 1993 (inception), was engaged
principally in organizational activities, grant and patent preparation and
obtaining financing. In March 1993, the Company began construction of
approximately 8,000 square feet of custom laboratory and office space in a
leased facility in Branford, Connecticut, and opened its laboratories in July
1993. In March 1997, the Company expanded its custom laboratory and office
space into a 26,000 square foot leased facility in New Haven, Connecticut (see
Note 3).

The Company was in the development stage at December 31, 1995; during the
year ended December 31, 1996, the Company completed its development
activities, with the signing of its first collaborative research agreement,
and commenced its planned principal operations.

Revenue Recognition--The Company has entered into certain collaborative
research agreements which provide for the partial or complete funding of
specified projects in exchange for access to and certain rights in the
resultant data discovered under the related project. Revenue is recognized
based upon work performed or upon the attainment of certain benchmarks
specified in the related agreements (see Note 5). Grant revenue is recognized
as related costs qualifying under the terms of the grants are incurred. Grant
revenue is derived solely from federal and Connecticut agencies (see Note 8).
Deferred revenue arising from payments received from grants and collaborative
agreements is recognized as income when earned.

Cash and Cash Equivalents--The Company considers investments readily
convertible to cash with a maturity of three months or less at the date of
purchase to be cash equivalents.

Property and Equipment--Property and equipment are recorded at cost.
Equipment under capital leases is recorded at the lower of the net present
value of the minimum lease payments required over the term of the lease or the
fair value of the assets at the inception of the lease. Additions, renewals
and betterments that significantly extend the life of an asset are
capitalized. Minor replacements, maintenance and repairs are charged to
operations as incurred. Equipment is depreciated over the estimated useful
lives of the related assets, ranging from three to seven years, using the
straight-line method. Equipment under capital leases is amortized over the
shorter of the estimated useful life or the terms of the lease, using the
straight-line method. Leasehold improvements are amortized over the term of
the lease, using the straight-line method. When assets are retired or
otherwise disposed of, the assets and related accumulated depreciation or
amortization are eliminated from the accounts and any resulting gain or loss
is reflected in income. For income tax purposes, depreciation is computed
using various accelerated methods and, in some cases, different useful lives
than those used for financial reporting purposes.

Deferred Real Estate Commissions--Deferred real estate commissions were paid
in January 1997 in connection with the signing of the operating lease in New
Haven, Connecticut (see Note 3). These costs are amortized over the remaining
life of the lease as of the date of occupancy, sixty-nine months, using the
straight-line method. Accumulated amortization aggregated $8,993 as of
December 31, 1997.

Deferred Financing Costs--Deferred financing costs were amortized over the
life of the CII Note (see Note 4), eighty-four months, using the straight-line
method. Accumulated amortization aggregated $8,330 and $0 as of December 31,
1996 and 1997, respectively. Related amortization expense was $2,856 for 1995
and 1996.

F-7

<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

In April 1997, the CII Warrant was exercised (see Notes 4 and 6) and as a
result the related deferred financing costs were written off. Amortization
expense for the year ended December 31, 1997 was $11,670.

Organization Costs--Organization costs are amortized over sixty months,
using the straight-line method. Accumulated amortization was $8,000 and
$10,000 as of December 31, 1996 and 1997, respectively. Related amortization
expense was $2,000 for 1995, 1996 and 1997.

Patent Application Costs--Costs incurred in filing for patents are charged
to operations, until such time as it is determined that the filing will be
successful. When it becomes evident with reasonable certainty that an
application will be successful, the costs incurred in filing for patents will
begin to be capitalized. Capitalized costs related to successful patent
applications will be amortized over a period not to exceed twenty years or the
remaining life of the patent, whichever is shorter, using the straight-line
method. As of December 31, 1995, 1996, and 1997, all patent application costs
have been charged to operations.

Research and Development Costs--Research and development costs are charged
to operations as incurred. Grant research expenses include all direct research
and development costs incurred related to specific grant awards and programs.
All remaining research and development costs are incurred for the development
and maintenance of current and future research collaboration agreements, and
accordingly, have been classified as collaborative research and development
expenses.

Stock-Based Compensation--In October 1995, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 123
"Accounting for Stock-Based Compensation" ("SFAS 123"), which was effective
for the Company beginning January 1, 1996. SFAS 123 requires expanded
disclosures of stock-based compensation arrangements with employees and non-
employees and encourages (but does not require) compensation cost to be
measured based on the fair value of the equity instruments awarded to
employees. Companies are permitted to continue to apply Accounting Principles
Board ("APB") No. 25, which recognizes compensation cost based on the
intrinsic value of the equity instruments awarded. The Company will continue
to apply APB No. 25 to its stock-based compensation awards to employees. For
equity instruments awarded to non-employees, the Company records the
transactions based upon the consideration received for such awards or the fair
value of the equity instruments issued, whichever is more reliably measurable.
The Company recorded stock-based compensation expense attributable to non-
employees totaling $96,318 and $277,247 for the years ended December 31, 1996
and 1997, respectively. For options issued to employees, the Company records
the transactions based upon the difference between the option strike price and
the estimated fair market value as of the date of issuance. Stock-based
compensation associated with options granted to employees during 1997 amounted
to $1,672,998 and will be expensed by the Company over the vesting period of
the underlying options. The Company recorded stock-based compensation expense
for options issued to employees of $459,534 for the year ended December 31,
1997.

Income Taxes--Income taxes are provided for as required under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS
109"). This Statement requires the use of the asset and liability method in
determining the tax effect on future years of the "temporary differences"
between the tax basis of assets and liabilities and their financial reporting
amounts.

Fair Value of Financial Instruments--Statement of Financial Accounting
Standards No. 107, "Disclosures about Fair Value of Financial Instruments"
("SFAS 107"), requires the disclosure of fair value information for certain
assets and liabilities, whether or not recorded in the balance sheets, for
which it is practicable to estimate that value. The Company has the following
financial instruments: cash, receivables, accounts payable and accrued
expenses, and certain long-term liabilities including a note payable.
Additionally, the Company has Redeemable Common Stock (see Note 6). The
Company considers the carrying amount of these items, excluding the note
payable and the Redeemable Common Stock, to approximate fair value. In
addition, it was not practicable to estimate the fair value of the note
payable due to a lack of availability of similar instruments for comparative
purposes.

F-8
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Basic and Diluted Net Loss Per Share Attributable to Common Stockholders--As
of December 31, 1997, the Company, as required, retroactively adopted
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
("SFAS 128"). As a result, loss per share for all periods presented has been
restated to conform with the provisions of SFAS 128. As of December 31, 1997,
the Company has a total of 1,663,884 stock options outstanding (see Note 6),
which have not been used in the calculation of diluted earnings per share
because to do so would result in anti-dilution. As such, the numerator (net
loss attributable to common stockholders) and the denominator (weighted
average shares), respectively, used in calculating both the amount of basic
and diluted loss per share are equal.

Pro Forma Net Loss Per Share Attributable to Common Stockholders--At
December 31, 1996, pro forma net loss per share attributable to common
stockholders and the pro forma weighted average number of shares of Common
Stock outstanding have been presented in the statement of operations assuming
the Series A Preferred Stock (see Note 6) was converted to Common Stock upon
issuance.

Conversion of Preferred Stock--The accompanying financial statements
retroactively reflect the conversion of all outstanding shares of Series A, C,
D and E Preferred Stock (Convertible Preferred Stock) to Common Stock on a one
for one basis. The above conversion has been presented since the Company
amended its Certificate of Incorporation in December 1997 to provide that the
Series A, C, D and E Preferred Stock will be automatically converted into
shares of Common Stock upon the closing of a firm committment underwritten
public offering of the Common Stock prior to February 28, 1998, regardless of
the offering price and the net proceeds raised. The amendment to the
Certificate of Incorporation eliminated the conditions to conversion described
in Note 6 to the financial statements (see Note 10).

Recently Enacted Pronouncements--Statements of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130"), and No. 131,
"Disclosures About Segments of an Enterprise and Related Information" ("SFAS
131"), were issued in June 1997.

SFAS 130 establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. It requires that all items that are required to be recognized
under accounting standards as components of comprehensive income be reported
in a financial statement that is displayed with the same prominence as the
other financial statements. Comprehensive income is defined as "the change in
equity of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources." It includes all changes in
equity during a period, except those resulting from investments by owners and
distributions to owners. This statement is effective for fiscal years
beginning after December 15, 1997.

SFAS 131 establishes the way that public business enterprises report
information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to stockholders. It also
establishes standards for related disclosures about products and services,
geographic areas and major customers. This statement is effective for
financial statements for periods beginning after December 15, 1997.

As the Company does not have changes in equity other than from investments
by owners and distributions to owners and operates in a single segment the
implementation of both of these standards is not expected to have a material
effect on the Company.

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

F-9
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

2. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
---------- ----------
<S> <C> <C>
Laboratory equipment.................................. $ 351,251 $ 985,654
Leased equipment...................................... 1,432,780 6,593,064
Leasehold improvements................................ 205,998 399,996
Office equipment...................................... 171,501 677,318
---------- ----------
Total property and equipment........................ 2,161,530 8,656,032
Less accumulated depreciation and amortization........ 690,034 1,735,836
---------- ----------
Total property and equipment, net................... $1,471,496 $6,920,196
========== ==========
</TABLE>

3. LEASES

Capital Leases

In April 1997, the Company signed a lease-financing commitment to receive
$4,000,000 to purchase equipment and expand its facilities. The lease
commitment provides for a payment term of 48 months per individual lease
schedule. In addition, the commitment provides for the issuance to the lessor
of two warrants (the "First Warrant" and the "Second Warrant") to purchase
shares of the Common Stock. The First Warrant was issued in April 1997 and
entitles the lessor to purchase 11,111 shares of Common Stock at an exercise
price of $9.00 per share. The Second Warrant was issued when the Company's
aggregate equipment cost under the agreement exceeded $2,000,000. The Second
Warrant entitles the lessor to purchase 10,000 shares of Common Stock at an
exercise price of $10.00 per share. The value ascribed to the warrants was
$59,520.

The Company has also entered into other capital lease agreements to finance
the purchase of equipment. Leased equipment under all such agreements
consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1996 1997
---------- ----------
<S> <C> <C>
Leased equipment...................................... $1,432,780 $6,593,064
Less accumulated amortization......................... 338,879 1,133,842
---------- ----------
Leased equipment, net................................. $1,093,901 $5,459,222
========== ==========
</TABLE>

The Company financed assets with costs of $385,314, $979,096 and $5,302,666
for the years ended December 31, 1995, 1996 and 1997, respectively. These
arrangements have terms of three to five years with interest rates ranging
primarily from 8% to 22%. At the end of the respective lease terms, the
Company has the right to either return the equipment to the lessor or purchase
the equipment at between $1 and 10% of the fair market value of the equipment.

F-10
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The future minimum lease payments under capital lease obligations were as
follows:

<TABLE>
<CAPTION>
DECEMBER 31,
1997
------------
<S> <C>
Within 1 year................................................... $2,010,945
Within 1 to 2 years............................................. 1,822,954
Within 2 to 3 years............................................. 1,555,744
Within 3 to 4 years............................................. 1,612,132
Within 4 to 5 years............................................. 61,229
----------
Total minimum lease payments.................................... 7,063,004
Less amounts representing interest.............................. 1,549,955
----------
Present value of future minimum lease payments.................. 5,513,049
Less current portion of obligations............................. 1,386,896
----------
Obligations under capital leases, net of current portion........ $4,126,153
==========
</TABLE>

Operating Leases

On December 27, 1996, the Company entered into a six-year lease agreement
for 26,000 square feet to house its principal administrative and research
facilities at 555 Long Wharf Drive, New Haven, Connecticut. The lease allows
for two five-year extensions and an option to lease an additional 26,000
square feet.

The future minimum rental payments for the operating lease are as follows as
of December 31, 1997:

<TABLE>
<CAPTION>
YEAR
----
<S> <C>
1998........................................................... $ 469,505
1999........................................................... 538,453
2000........................................................... 538,453
2001........................................................... 538,453
2002........................................................... 538,453
----------
Total.......................................................... $2,623,317
==========
</TABLE>

The Company also leases its research facilities in Branford, Connecticut,
under a lease agreement expiring in May 1998. During 1996, the Company
exercised an option to extend the term of the operating lease for one
additional two-year term expiring in May 1998. In addition, the Company has an
option to extend the term of the operating lease for one subsequent one-year
term. The future minimum rental payments for this operating lease as of
December 31, 1997 is $42,048 due in fiscal year 1998. Total rent expense under
all operating leases for 1995, 1996 and 1997 was approximately $44,000,
$77,200 and $487,300, respectively.

4. NOTE PAYABLE

In February 1994, the Company borrowed $600,000 (the "CII Note") from
Connecticut Innovations, Incorporated ("CII"), a Connecticut state agency. The
CII Note bore interest at the rate of 10% per annum, and was secured by
certain technology and intellectual property of the Company. The principal
balance was payable on January 10, 2001. In connection with the CII Note, the
Company issued 102,156 shares of Common Stock to CII (the "CII Stock") and a
non-detachable stock subscription warrant (the "CII Warrant") to purchase
291,875 shares of Common Stock at an aggregate exercise price equal to the
original principal balance of the CII Note ($600,000) plus unpaid interest.
Prior to the exercise of the CII Warrant, the Put Right described in Note 6
that applies to the 291,875 shares of Common Stock received under the CII
Warrant (the "CII Warrant Shares") applied to the CII Warrant. Accordingly,
the Company accrued interest on the CII Note at a rate pursuant to the

F-11
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

terms of such Put Right. The rate represented the greater of (i) a compounded
annual rate of return of 25% from the date of the CII Note, or (ii) such rate
that would be necessary so that the principal amount of the CII Note plus
accrued interest equaled the fair value of the CII Warrant. The CII Stock was
valued at $155,277 and recorded as original issue discount. Such discount was
being amortized as deferred financing costs over eighty-four months, the term
of the CII Note. In April 1997, the CII Warrant was exercised and CII received
the CII Warrant Shares for consideration of $1,485,644, which represented full
payment of the CII Note totaling $600,000 in principal and $885,644 in accrued
interest. The remaining discount on the CII Stock was fully amortized upon
payment of the CII Note.

5. COLLABORATIONS

Pioneer Hi-Bred International, Inc.

Effective June 1, 1997, the Company entered into a Collaborative Research
and License Agreement with Pioneer Hi-Bred International, Inc. whereby the
Company is to perform research which will be funded by Pioneer Hi-Bred. In
conjunction with the execution of this agreement Pioneer Hi-Bred made an
equity investment of $7,500,000 in the form of 1,000,000 shares of Series D
Convertible Preferred Stock (see Note 6). In addition, Pioneer Hi-Bred will
pay the Company $2.5 million per year, for each of three years, in quarterly
installments due in advance, on or before the first day of each calendar
quarter, with the first and last payments prorated. Pioneer Hi-Bred has the
right to terminate the research program at any time upon a breach by the
Company and on three months' written notice at any time after May 2000. The
Company may terminate the research program after the third anniversary of the
effective date unless Pioneer Hi-Bred increases annual research funding for
the fourth and fifth years to at least $5.0 million per year, plus a
contractually provided inflation adjustment.

The $2.5 million per year fee is based upon an established number of CuraGen
employees whom will be devoted to the Pioneer Hi-Bred research. In accordance
with the Company's revenue recognition policy as described in Note 1, revenue
has been recorded based upon work performed. For the year ended December 31,
1997, the Company has recorded revenue of $1,458,333, which represents 25% of
total revenue, related to this agreement.

Genentech, Inc.

In June 1996, the Company entered into a Pilot Research Services and
Evaluation Agreement with Genentech, Inc. pursuant to which the Company
performed certain research services for a $200,000 fee. The pilot
collaboration was superseded by the Evaluation Agreement, signed and effective
December 27, 1996, pursuant to which the Company is performing additional
research services during 1997 for a research fee of $667,000 payable in four
equal installments of $166,750. The Company completed the research within four
months of the receipt of tissue samples from Genentech as required by the
Evaluation Agreement and recorded $667,000 as revenue, which represented 11%
of total revenues for the year ended December 31, 1997. The entire accounts
receivable balance at December 31, 1996 and 1997 was due from Genentech. In
connection with the execution of the Evaluation Agreement, Genentech made an
equity investment of $1,800,000 in the form of 307,167 shares of Series A
Convertible Preferred Stock (see Note 6).

F-12
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

first year, the drawn-down portion of the loan is convertible at CuraGen's
option into CuraGen Non-Voting Common Stock based upon a formula that
approximates the prevailing market price of the Company's Common Stock. If
issued, the Non-Voting Common Stock is convertible, at Genentech's option,
into Common Stock (i) at any time, at Genentech's option or (ii) upon the sale
or transfer of the Non-Voting Common Stock to a non-affiliated party.
Genentech will additionally provide funding of up to $24 million over five
years if the database subscription arrangement is not terminated, the research
collaboration continues for the full five-year term and Genentech elects to
retain licenses to its discoveries. Genentech has an option to acquire
licenses to certain discoveries arising from the collaboration.

Biogen, Inc.

In October 1997, CuraGen and Biogen, Inc. entered into a research
collaboration and database subscription arrangement to discover novel genes
and therapeutics. Under the terms of the agreement, Biogen agreed to invest $5
million in the Company to purchase Common Stock of the Company at the initial
public offering price and to provide a $10 million interest-bearing loan
facility. At any time during the term of the agreement, the loan is
convertible at the Company's option into Common Stock based upon a formula
that approximates its prevailing market price. Biogen will additionally
provide payments over five years to support a research collaboration to
generate project-specific GeneCalling and PathCalling databases from Biogen-
specified disease systems and to gain non-exclusive access to the Company's
GeneCalling and PathCalling subscription databases. Payments could reach $18.5
million if the research collaboration and database subscription arrangement
both continue for the full five-year term. Biogen has an option to acquire
exclusive licenses to certain discoveries arising from the collaboration.

For the year ended December 31, 1997, the Company has recorded revenue of
$375,000 related to this agreement. In addition, $375,000 has been received
from Biogen for which the related services have not been performed and,
therefore, such amount is recorded as deferred revenue at December 31, 1997.

6. STOCKHOLDERS' EQUITY

Authorized Capital Stock and Stock Split

In December 1993, the Board of Directors of the Company (i) increased the
authorized shares of Common Stock of the Company to 20,000,000 shares, (ii)
authorized a class of 3,000,000 shares of serial Preferred Stock, and (iii)
approved a 34,820 for 1 Common Stock split. In June 1997, the Board of
Directors of the Company, upon stockholder approval, increased the authorized
shares of Common Stock of the Company to 25,000,000 and increased the
authorized number of shares of serial Preferred Stock to 7,500,000.

At December 31, 1996, the Company had reserved 1,329,375 shares of Common
Stock for issuance pursuant to the 1993 Warrants, the Incentive Warrant and
the CII Warrant and 1,500,000 shares of Common Stock for issuance pursuant to
the 1993 Stock Option and Incentive Award Plan (the "1993 Stock Plan")
discussed below. At December 31, 1997, the Company has reserved 1,583,666
shares of Common Stock pursuant to outstanding warrants and 1,500,000 shares
of Common Stock for issuance pursuant to the 1993 Stock Plan.

Common Stock and Warrants to Purchase Common Stock

During 1993, eight persons advanced an aggregate of $1,008,000 (the "1993
Debt") to the Company to fund certain start-up expenses incurred by, and to
provide certain working capital for, the Company. On December 30, 1993, the
Company converted the 1993 Debt into 1,008,000 shares of Common Stock, and
issued warrants (the "1993 Warrants") to such persons to purchase an aggregate
of 1,122,500 shares of Common Stock, at an exercise price of $1.00 per share.
The 1993 Warrants expire on various dates through December 1, 2000. In
December 1994, four 1993 Warrants to purchase an aggregate of 210,000 shares
of Common Stock were exercised for consideration of $210,000. The proceeds
were received in January 1995. In December 1995, two

F-13
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

1993 Warrants to purchase an aggregate of 100,000 shares of Common Stock were
exercised for $100,000. The proceeds were received in January 1996.

In December 1993, the Company entered into an agreement, concluded in March
1994, with a scientific advisor to issue for consideration of $100,000 (i)
100,000 shares of Common Stock, and (ii) a warrant (the "Investor Warrant") to
purchase 125,000 shares of Common Stock, at an exercise price of $1.52 per
share. In March 1996, the Investor Warrant to purchase 100,000 shares of
Common Stock was exercised for consideration of $152,000. The remainder of the
Investor Warrant expired in March 1996.

In February 1994, in connection with the CII Note (see Note 4), the Company
issued 102,156 shares of Common Stock to CII (the "CII Stock") and a non-
detachable stock subscription warrant (the "CII Warrant") to purchase 291,875
shares of Common Stock (the "CII Warrant Shares") at an aggregate exercise
price equal to the original principal balance of the CII Note ($600,000) plus
any unpaid interest. The CII Stock was valued at $155,277. In April 1997, the
CII Warrant was exercised and CII received the CII Warrant Shares for
consideration of $1,485,644, which represented full payment of the CII Note
totaling $600,000 in principal and $885,644 in accrued interest. The Company
has the right to purchase (the "Call Right") the CII Warrant Shares from CII.
Further, CII has the right to sell (the "Put Right") the CII Warrant Shares to
the Company. In October 1997, the Company entered into an agreement with CII
whereby, among other things, the Call Right and Put Right will be terminated
upon the closing of this initial public offering. In the absence of
termination, the Call Right is exercisable by the Company, (i) after June 30,
1996, for the greater of (a) the fair market value of the CII Warrant Shares,
or (b) $600,000 plus a compounded annual rate of return of 30% from the date
of the CII Note, if certain levels of capital are raised, or (ii) after
February 10, 1999, for the greater of (a) the fair market value of the CII
Warrant Shares, or (b) $600,000 plus a compounded annual rate of return of 25%
from the date of the CII Note. In the absence of termination, the Put Right is
exercisable by CII (i) at any time until February 10, 2004, in the event that
the Company fails to maintain a Connecticut presence, for the greater of (a)
the fair market or book value of the CII Warrant Shares, or (b) $600,000 plus
a compounded annual rate of return of 40% from the date of the CII Note, or
(ii) at any time in the event that the Company violates certain covenants or a
default occurs under the CII documents, or at any time after February 10,
1999, for the greater of (a) the fair market value of the CII Warrant Shares,
or (b) $600,000 plus a compounded annual rate of return of 25% from the date
of the CII Note. Given the Put Right, the Company has classified the CII
Warrant Shares as Redeemable Common Stock on the balance sheet. The carrying
value of the Redeemable Common Stock has been adjusted through charges to
additional paid-in capital to amounts approximating the exercise price
pursuant to the Put Right.

In March 1997, the Company also issued 17,073 and 22,673 shares of Common
Stock for a total value of $70,000 and $92,958, respectively, for the
settlement of outstanding accrued expense balances with two separate entities.

Stock Options

In December 1993, the Company adopted the 1993 Stock Plan, which enables the
Company to grant non-qualified and incentive stock options to purchase up to
1,500,000 shares of Common Stock to officers, directors, advisors, employees,
and affiliates of the Company. At December 31, 1996, under the 1993 Stock
Plan, the Company had 541,550 options outstanding and an additional 958,450
available for grant. At December 31, 1997, the Company had 1,028,884 options
outstanding under the 1993 Stock Plan and an additional 471,116 available for
grant. The Company's 1997 Employee, Director and Consultant Stock Plan (the
"1997 Stock Plan") was approved by the Company's Board of Directors and
stockholders in October 1997. The 1997 Stock Plan provides

F-14
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

for the issuance of up to 1,500,000 shares of Common Stock via grants of stock
options to employees, directors and consultants of the Company. At December
31, 1997, the Company had 65,000 options outstanding under the 1997 Stock Plan
and an additional 1,435,000 available for grant. In addition to the stock
options granted under the 1993 Stock Plan and the 1997 Stock Plan, the Company
has granted 456,000 and 570,000 non-qualified stock options at December 31,
1996 and December 31, 1997, respectively, which are not part of a specific
plan. No stock options have been exercised as of December 31, 1997.

A summary of all stock option activity during the years ended December 31,
1995, 1996 and 1997 is as follows:

<TABLE>
<CAPTION>
WEIGHTED
NUMBER AVERAGE
OF SHARES EXERCISE PRICE
--------- --------------
<S> <C> <C>
Outstanding January 1, 1995........................ 321,500 $1.21
Granted.......................................... 452,000 2.03
Canceled or lapsed............................... (32,500) 1.00
---------
Outstanding December 31, 1995...................... 741,000 1.72
Granted.......................................... 269,550 3.16
Canceled or lapsed............................... (13,000) 3.00
---------
Outstanding December 31, 1996...................... 997,550 2.09
Granted.......................................... 697,583 7.12
Canceled or lapsed............................... (31,249) 3.29
---------
Outstanding December 31, 1997...................... 1,663,884 4.18
=========
Exercisable December 31, 1995...................... 282,450 1.30
=========
Exercisable December 31, 1996...................... 427,959 1.64
=========
Exercisable December 31, 1997...................... 718,779 2.68
=========
</TABLE>

The following table summarizes information about stock options at December
31, 1997:

<TABLE>
<CAPTION>
WEIGHTED
NUMBER OF AVERAGE WEIGHTED
RANGE OF OPTIONS CONTRACTUAL AVERAGE
EXERCISE PRICES OUTSTANDING LIFE EXERCISE PRICE
--------------- ----------- -------------- --------------
<S> <C> <C> <C>
$ 1.00-$ 2.50.................... 727,667 7 years $ 1.73
3.00- 4.10.................... 473,884 9 years 3.62
6.00- 7.50.................... 338,333 9.5 years 7.22
10.00- 13.00.................... 124,000 9.75 years 12.43
--------- ---------- ------
1,663,884 8.25 years $ 4.18
=========
<CAPTION>
WEIGHTED
AVERAGE
NUMBER OF EXERCISE PRICE
RANGE OF OPTIONS OF OPTIONS
EXERCISE PRICES EXERCISABLE EXERCISABLE
--------------- ----------- --------------
<S> <C> <C> <C>
$ 1.00-$ 2.50.................... 526,967 $ 1.59
3.00- 4.10.................... 120,144 3.31
6.00- 7.50.................... 50,000 7.50
10.00- 13.00.................... 21,668 13.00
--------- ----------
718,779 $ 2.68
=========
</TABLE>

F-15
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Had compensation cost for the Company's stock option plans been determined
in accordance with the minimum value method for non-public companies as
prescribed under SFAS 123, the Company's net loss attributable to common
stockholders and net loss per share attributable to common stockholders would
have approximated the pro forma amounts shown below for each of the years
ended December 31, 1995, 1996 and 1997.

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------------------
1995 1996 1997
------------------------ --------------------- ------------------------
AS REPORTED PRO FORMA AS REPORTED PRO FORMA AS REPORTED PRO FORMA
----------- ----------- ----------- --------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net loss attributable to
common stockholders.... $(1,088,605) $(1,122,100) $(606,241) $(685,816) $(7,290,434) $(7,891,326)
Net loss per share
attributable to common
stockholders........... $ (0.22) $ (0.20) $ (0.12) $ (0.12) $ (.92) $ (1.00)
</TABLE>

The assumptions utilized by the Company in deriving the pro forma amounts
are as follows: 1) 0% dividend yield, 2) .1% expected volatility, 3) risk-free
interest rate of approximately 6%, and 4) expected life of the options of 10
years. The weighted average grant date fair value of options granted during
the years ended December 31, 1995, 1996, and 1997 was approximately $0.58 per
share, $0.81 per share and $6.14 per share, respectively.

Preferred Stock

The Company received aggregate consideration of $1,750,000 from five
investors as subscriptions for the purchase of 175,000 shares of Series B
Preferred Stock. In September 1996, October 1996 and January 1997, the Company
received proceeds of $1,600,000, $50,000 and $100,000, respectively. The
Series B Preferred Stock is non-convertible and accrues dividends at the prime
rate. Dividends are payable when declared by the Board of Directors. Dividends
in arrears at December 31, 1996 and 1997 were $36,094 and $181,563,
respectively. At any time the Company may redeem the Series B Preferred Stock
for an aggregate purchase price of $1,750,000 plus accrued dividends and
dividends in arrears.

If the Company enters into certain qualified equity financings subsequent to
the Series B Preferred Stock issuance, as defined in the agreement, the
Company will be required, if requested by all of the holders of the Series B
Preferred Stock, to redeem such shares at an aggregate redemption price of
$1,750,000 plus accrued dividends and dividends in arrears. Such terms have
not been met at December 31, 1997. In addition, holders of the Series B
Preferred Stock received 5 year warrants to purchase an aggregate of 358,361
shares of Common Stock at $5.86 per share, which warrants expire on March 27,
2002. Such warrants were valued at $376,334. The value of such warrants is
being accreted over the warrant period and such accretion is classified as
preferred dividends. For the year ended December 31, 1996 and 1997 such
accretion amounted to $17,106 and $68,424, respectively. At December 31, 1997,
the Series B Preferred Stock has a liquidation preference of $1,931,563.

In December 1996, in connection with the Genentech Evaluation Agreement (see
Note 5), Genentech, Inc. purchased 307,167 shares of Series A Preferred Stock
for $1,800,000, or $5.86 per share. At any time the holders of such stock may
convert their shares to Common Stock on a 1 for 1 basis. The Series A
Preferred Stock is automatically convertible to Common Stock on a 1 for 1
basis upon the closing of a firm commitment underwritten public offering of
the Common Stock subject to the offering price being at least $12.00 per share
and net proceeds raised of at least $10,000,000. The Series A Preferred Stock
has a liquidation preference of $1,800,000.

F-16
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

In March 1997, the Company issued 2,011,468 shares of convertible Series C
Preferred Stock for an aggregate purchase price of $11,787,202. At any time
the holders of such stock may convert their shares to Common Stock on a 1 for
1 basis. The Series C Preferred Stock is automatically convertible to Common
Stock on a 1 for 1 basis upon the closing of a firm commitment underwritten
public offering of the Common Stock subject to the offering price being at
least $12.00 per share and net proceeds raised of at least $10,000,000. In
addition, three year warrants were issued to certain purchasers of the Series
C Preferred Stock to purchase an aggregate of 366,894 shares of Common Stock
at an exercise price of $9.00 per share. Such warrants were valued at $0 upon
issuance. The Series C Preferred Stock has a liquidation preference of
$11,787,202.

In May 1997, as a result of the Pioneer Hi-Bred Agreement (see Note 5), the
Company issued 1,000,000 shares of Series D Convertible Preferred Stock, for
an aggregate purchase price of $7,500,000. At any time the holders of such
stock may convert their shares to Common Stock on a 1 for 1 basis. The Series
D Preferred Stock is automatically convertible to Common Stock on a 1 for 1
basis upon the closing of a firm commitment underwritten public offering of
the Common Stock subject to the offering price being at least $12.00 per share
and net proceeds raised of at least $10,000,000. The Series D Preferred Stock
has a liquidation preference of $7,500,000.

In June 1997, the Company issued 100,000 shares of Series E Convertible
Preferred Stock for an aggregate purchase price of $1,000,001. At any time the
holders of such stock may convert their shares to Common Stock on a 1 for 1
basis. The Series E Preferred Stock is automatically convertible to Common
Stock on a 1 for 1 basis upon the closing of a firm commitment underwritten
public offering of the Common Stock subject to the offering price being at
least $12.00 per share and net proceeds raised of at least $10,000,000. The
Series E Preferred Stock has a liquidation preference of $1,000,001.

In December 1997, the Company amended its Certificate of Incorporation to
provide that the Series A, C, D and E Preferred Stock will be automatically
converted into shares of Common Stock upon the closing of a firm commitment
underwritten public offering of the Company's Common Stock prior to February
28, 1998, regardless of the offering price and the net proceeds raised.

7. INCOME TAXES

The net deferred income tax assets consisted of:

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Total deferred income tax assets..................... $1,862,000 $5,930,000
Valuation allowance.................................. (1,862,000) (5,930,000)
---------- ----------
Total.............................................. $ -- $ --
========== ==========
</TABLE>

The deferred income tax assets are primarily a result of the federal and
Connecticut net operating loss and research and development credit
carryforwards and timing differences relating to accrued payroll and
depreciation and amortization. As the Company has no prior earnings history, a
valuation allowance has been established due to the Company's uncertainty in
its ability to benefit from the federal and Connecticut net operating loss
carryforwards. The change in the valuation allowance was $611,000, $538,000
and $4,068,000 for the years ended December 31, 1995, 1996 and 1997,
respectively.

F-17
<PAGE>

CURAGEN CORPORATION

NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

At December 31, 1997, the Company has federal and Connecticut net operating
loss carryforwards for income tax purposes of approximately $8,987,000.
Federal and Connecticut net operating loss carryforwards expire beginning in
2008 and 1998, respectively. The Company also has federal and Connecticut
research and development tax credit carryforwards for income tax purposes of
approximately $498,000 and $1,519,000, respectively at December 31, 1997.

8. GRANTS

The Company has received federal grants for specific purposes that are
subject to review and audit by the grantor agencies. Such audits could lead to
requests for reimbursement by the grantor agency for any expenditures
disallowed under the terms of the grant. Additionally, any noncompliance with
the terms of the grant could lead to loss of current or future awards.

During 1995, the Company received two grants from CII in the amounts of
$450,000 and $237,500. The Company could be required to repay 100% of these
amounts if (i) the Company breaches and fails to cure a material covenant,
(ii) a material representation or warranty of the Company becomes untrue and
is not cured, (iii) the Company becomes bankrupt or insolvent or liquidates
its assets, or (iv) the Company is required to repay the federal grants to
which the CII grants relate. In addition, the Company could be required to
repay up to 200% of the amounts of the CII grants if the Company ceases to
have a "Connecticut presence," prior to December 31, 2004, as defined in the
grants.

9. RELATED PARTIES

The Chief Executive Officer of the Company has elected to defer payment of a
portion of his salary to future periods on an interest free basis. This amount
has been recorded as accrued payroll--related party as of December 31, 1996
and 1997.

In March 1997, the Company loaned one of its officers $50,000. The term of
the note receivable--related party is 4 years and the note bears interest at
8% per annum. The note will automatically be forgiven upon consummation of an
initial public offering if certain net proceed amounts are received by the
Company, as defined in the agreement.

In September 1997, the Company agreed to loan one of its officers $50,000
with a term of 17 months bearing interest at 8% per annum. If this officer
remains an employee through the maturity date, the loan will be extended
contingent upon continued employment. This note will be forgiven if such
officer remains an employee through September 2001.

10. SUBSEQUENT EVENTS

On February 20, 1998, the Company amended its Certificate of Incorporation
for purposes of extending the automatic conversion features of the Series A,
C, D and E Preferred Stock upon the closing of a firm committment underwritten
public offering of the Common Stock prior to July 31, 1998, regardless of the
offering price and the net proceeds raised (see Note 1).

* * * * * * *

F-18
<PAGE>

CURAGEN
CORPORATION

LOGO

<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth all expenses, other than underwriting
discounts and commissions, payable by the Company in connection with the sale
of the Common Stock being registered. All amounts are estimated except the
registration fee.

<TABLE>
<S> <C>
Commission Registration Fee................................... $ 12,121
NASD filing fee............................................... 5,000
Nasdaq National Market listing fee............................ 83,500
Printing and engraving expenses............................... 200,000
Legal fees and expenses....................................... 565,000
Accounting fees and expenses.................................. 225,000
Blue sky fees and expenses (including legal fees)............. 5,000
Transfer agent and registrar fees and expenses................ 2,000
Miscellaneous................................................. 2,379
----------
TOTAL....................................................... $1,100,000
==========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The amendment and restatement of the Company's Certificate of Incorporation
(the "Restated Certificate") provides that the Company shall indemnify to the
fullest extent authorized by the Delaware General Corporation Law ("DGCL"),
each person who is involved in any litigation or other proceeding because such
person is or was a director or officer of the Company or is or was serving as
an officer or director of another entity at the request of the Company,
against all expense, loss or liability reasonably incurred or suffered in
connection therewith. The Restated Certificate provides that the right to
indemnification includes the right to be paid expenses incurred in defending
any proceeding in advance of its final disposition; provided, however, that
such advance payment will only be made upon delivery to the Company of an
undertaking, by or on behalf of the director or officer, to repay all amounts
so advanced if it is ultimately determined that such director is not entitled
to indemnification. If the Company does not pay a proper claim for
indemnification in full within 60 days after a written claim for such
indemnification is received by the Company, the Restated Bylaws authorize the
claimant to bring an action against the Company and prescribe what constitutes
a defense to such action.

Section 145 of the DGCL permits a corporation to indemnify any director or
officer of the corporation against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement actually and reasonably
incurred in connection with any action, suit or proceeding brought by reason
of the fact that such person is or was a director or officer of the
corporation, if such person acted in good faith and in a manner that he or she
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or proceeding, if he or
she had no reason to believe his or her conduct was unlawful. In a derivative
action, (i.e., one brought by or on behalf of the corporation),
indemnification may be made only for expenses, actually and reasonably
incurred by any director or officer in connection with the defense or
settlement of such an action or suit, if such person acted in good faith and
in a manner that he reasonably believed to be in, or not opposed to, the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged to be liable to the corporation, unless
and only to the extent that the court in which the action or suit was brought
shall determine that the defendant is fairly and reasonably entitled to
indemnity for such expenses despite such adjudication of liability.

Pursuant to Section 102(b)(7) of the DGCL, Article Tenth of the Restated
Certificate eliminates the liability of a director or the corporation or its
stockholders for monetary damages for such breach of fiduciary duty as a
director, except for liabilities arising (i) from any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) from acts or
omissions not in good faith or which involve intentional misconduct or a
knowing

II-1
<PAGE>

violation of law, (iii) under Section 174 of the DGCL, or (iv) from any
transaction from which the director derived an improper personal benefit.

The Company has obtained primary and excess insurance policies insuring the
directors and officers of the Company against certain liabilities that they
may incur in their capacity as directors and officers. Under such policies,
the insurers, on behalf of the Company, may also pay amounts for which the
Company has granted indemnification to the directors or officers.

Additionally, reference is made to the Underwriting Agreement filed as
Exhibit 1.1 hereto, which provides for indemnification by the Underwriters of
the Company, its directors and officers who sign the Registration Statement
and persons who control the Company, under certain circumstances.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

In the three years preceding the filing of this Registration Statement, the
Company has sold the following securities that were not registered under the
Securities Act.

(a) Issuances of Capital Stock.

On May 9, 1995, the Company issued an aggregate of 19,575 shares of its
Common Stock to two investors in exchange for financial advisory services
rendered by such investors to the Company having a value of $45,218.75.

On December 29, 1995, the Company sold an aggregate of 100,000 shares of its
Common Stock to two investors at $1.00 per share in exchange for payments of
an aggregate of $100,000 by such investors upon the exercise of warrants to
purchase Common Stock.

On March 30, 1996, the Company sold 100,000 shares of its Common Stock to
one investor at $1.52 per share in exchange for payment of $152,000 by such
investor upon the exercise of a warrant to purchase Common Stock.

On December 27, 1996, the Company sold 307,167 shares of its Series A
Convertible Preferred Stock at a purchase price of $5.86 per share to
Genentech, Inc. in a private placement for $1,800,000.

In March 1997, the Company issued 17,073 and 22,673 shares of its Common
Stock to Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. and Pennie &
Edmonds LLP, respectively, at $4.10 per share in exchange for legal services
rendered on behalf of the Company and having an aggregate value of
$162,958.60.

On March 27, 1997, the Company sold an aggregate of 175,000 shares of its
Series B Redeemable Preferred Stock at a purchase price of $10.00 per share to
five investors in a private placement for $1,750,000 in cash. In connection
with this private placement, the Company issued five-year warrants to purchase
358,361 shares of Common Stock at an exercise price of $5.86 per share.

On March 27, 1997, the Company sold an aggregate of 2,011,468 shares of its
Series C Convertible Preferred Stock at a purchase price of $5.86 per share to
eleven investors in a private placement for $11,787,202.48. In connection with
this private placement, the Company also issued three-year warrants to
purchase 366,894 shares of Common Stock at an exercise price of $9.00 per
share to two investors who each purchased 1,706,485 and 127,986 shares of
Series C Convertible Preferred Stock, respectively.

On April 10, 1997, the Company sold 291,875 shares of its Common Stock to
Connecticut Innovations Incorporated in exchange for the cancellation of a
$600,000 principal amount promissory note (plus accrued interest thereon) upon
the exercise of a warrant to purchase Common Stock.

II-2
<PAGE>

On May 16, 1997, the Company sold 1,000,000 shares of its Series D
Convertible Preferred Stock at a purchase price of $7.50 per share to Pioneer
Hi-Bred International, Inc. in a private placement for $7,500,000.

On June 25, 1997, the Company sold 100,000 shares of its Series E
Convertible Preferred Stock at a purchase price of $10.00 per share to Biogen,
Inc. in a private placement for $1,000,000.

In October 1997, the Company agreed to sell $5,000,000 of its Common Stock
to Biogen, Inc. in a private placement concurrent with this offering at a
price per share equal to the price per share at which the Common Stock is sold
in this Offering.

In November 1997, the Company agreed to sell $5,000,000 of its Common Stock
to Genentech, Inc. in a private placement concurrent with this offering at a
price per share equal to the price per share at which the Common Stock is sold
in this Offering.

In November 1997, the Company agreed to sell $1,000,000 of its Common Stock
to the University of Florida Research Foundation, Inc. in a private placement
concurrent with this offering at a price per share equal to the price per
share at which the Common Stock is sold in this Offering.

(b) Certain Grants and Exercises of Stock Options.

Pursuant to the 1993 Stock Option and Incentive Award Plan (the "1993 Stock
Plan"), as of December 31, 1997, the Company has granted options to purchase
an aggregate of 1,028,884 shares of Common Stock, of which options to purchase
an aggregate of 347,611 shares of Common Stock are exercisable at a weighted
average exercise price of $3.32 per share. As of December 31, 1997, no options
pursuant to the foregoing have been exercised.

Pursuant to the 1997 Employee, Director and Consultant Stock Plan (the "1997
Stock Plan"), as of December 31, 1997, the Company has granted options to
purchase an aggregate of 65,000 shares of Common Stock at a price per share
equal to the initial public offering price, of which options to purchase an
aggregate of 21,668 shares of Common Stock are exercisable. As of December 31,
1997, no options pursuant to the foregoing have been exercised.

In addition to the options granted under the 1993 Stock Plan and the 1997
Stock Plan, as of December 31, 1997, the Company has issued options to
purchase an aggregate of 570,000 shares of Common Stock pursuant to individual
agreements with Company employees and consultants, of which options to
purchase an aggregate of 349,500 shares of Common Stock are exercisable at a
weighted average exercise price of $1.40 per share. As of December 31, 1997,
no options pursuant to the foregoing have been exercised.

No underwriters were involved in the foregoing offers and sales of
securities. Such offers and sales were made in reliance upon an exemption from
the registration provisions of the Securities Act set forth in Section 4(2)
thereof relative to sales by an issuer not involving any public offering or
the rules and regulations thereunder, or, in the case of options to purchase
Common Stock, Rule 701 under the Securities Act. All of the foregoing
securities are deemed restricted securities for purposes of the Securities
Act.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
@1.1 Form of Underwriting Agreement
@3.1 Amended and Restated Certificate of Incorporation of the Registrant
@3.2 Certificate of Amendment of Restated Certificate of Incorporation of
the Registrant and Certificate of Amendment of Certificate of
Designation, Preferences, and Rights of Series E Preferred Stock of
the Registrant.
</TABLE>

II-3
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
3.3 Amended and Restated Certificate of Incorporation of the Registrant
@3.4 Bylaws of the Registrant
3.5 Amended and Restated Bylaws of the Registrant
4.1 Article Fourth of the Amended and Restated Certificate of
Incorporation of the Registrant (see Exhibit 3.3)
4.2 Form of Common Stock Certificate
@5.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. with
respect to the legality of the securities being registered
@10.1 Lease Agreement (New Haven), dated December 23, 1996, between the
Registrant and Fusco Harbour Associates, LLC
@10.2 Standard Form of Office Lease, as amended (Branford), dated February
11, 1993 and April 26, 1996, between the Registrant and Branford
Office Venture
@10.3 Sid Martin Biotechnology Development Institute Incubator License
Agreement, dated July 15, 1997, between the Registrant and the
University of Florida Research Foundation, Inc.
10.4 1997 Employee, Director and Consultant Stock Plan
@10.5 1993 Stock Option and Incentive Award Plan
@10.6 Amendment to 1993 Stock Option and Incentive Plan, dated May 12, 1997
@10.7 Employment Letter, dated February 20, 1997, between the Registrant and
Gregory T. Went, Ph.D.
@10.8 Employment Letter, dated July 18, 1997, between the Registrant and
David M. Wurzer
@10.9 Employment Letter, dated August 21, 1997, between the Registrant and
Peter A. Fuller, Ph.D.
@10.10 Employment Letter, dated August 22, 1997, between the Registrant and
Stephen F. Kingsmore, M.B., Ch.B.
@+10.11 Option and Exclusive License Agreement, dated October 4, 1996, between
the Registrant and Wisconsin Alumni Research Foundation
@+10.12 Standard Non-Exclusive License Agreement--Brumley, dated July 1, 1996,
between the Registrant and Wisconsin Alumni Research Foundation
+10.13 Collaborative Research and License Agreement, dated May 16, 1997,
between the Registrant and Pioneer Hi-Bred International, Inc.
+10.14 Research and Option Agreement, dated October 1, 1997, between the
Registrant and Biogen, Inc.
+10.15 Research and Option Agreement, dated November 20, 1997, between the
Registrant and Genentech, Inc.
+10.16 Notice of Grant Award and Grant Application to Department of Health
and Human Services for Automated Sequencing System for Human Genome
Project, dated March 25, 1995
@10.17 ATP Agreement for Integrated Microfabricated DNA Analysis Device for
Diagnosis of Complex Genetic Disorders, dated February 1995
@10.18 ATP Agreement for Molecular Recognition Technology for Precise Design
of Protein-Specific Drugs, dated March 2, 1995
@10.19 ATP Agreement for Programmable Nanoscale Engines for Molecular
Separation, dated May 6, 1997
@10.20 Material Transfer and Screening Agreement, dated January 15, 1998,
between the Registrant and ArQule, Inc.
11.1 Schedule of Computation of Net Loss Per Share
@21.1 Subsidiaries of the Registrant
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in Exhibit 5.1)
23.3 Consent of Pennie & Edmonds LLP
@24.1 Power of Attorney of Messrs. Went, Wurzer and DeVita
@24.2 Power of Attorney of Messrs. Booth, Patricelli and Vincent
27.1 Financial Data Schedule
</TABLE>
- --------
@ Previously filed.

+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.

II-4
<PAGE>

(b) Financial Statement Schedules

All schedules are omitted because they are not required, are not applicable
or the information is included in the financial statements or notes thereto.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes to provide to the Underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding), is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purposes of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

The undersigned registrant hereby undertakes to provide to the Underwriters
at the Closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the Underwriters to
permit prompt delivery to each purchaser.

II-5
<PAGE>

SIGNATURES

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THE
REGISTRANT HAS DULY CAUSED THIS AMENDMENT NO. 7 TO THE REGISTRATION STATEMENT
TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED, IN
THE CITY OF BOSTON, MASSACHUSETTS ON THIS 13TH DAY OF MARCH, 1998.

CuraGen Corporation (Registrant)

/s/ Jonathan M. Rothberg
By: __________________________________
JONATHAN M. ROTHBERGCHIEF
EXECUTIVE OFFICER, PRESIDENT
ANDCHAIRMAN OF THE BOARD

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, THIS
AMENDMENT NO. 7 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES AND ON THE DATES INDICATED.

<TABLE>
<S> <C>
SIGNATURE TITLE
DATE

/s/ Jonathan M. Rothberg Chief Executive March 13, 1998
- ------------------------------------ Officer, President
JONATHAN M. ROTHBERG and Chairman of
the Board
(principal
executive officer)

* Executive Vice March 13, 1998
- ------------------------------------ President and a
GREGORY T. WENT Director

* Executive Vice March 13, 1998
- ------------------------------------ President,
DAVID M. WURZER Treasurer and
Chief Financial
Officer (principal
financial and
accounting
officer)

* Director March 13, 1998
- ------------------------------------
VINCENT T. DEVITA, M.D.

* Director March 13, 1998
- ------------------------------------
RICHARD H. BOOTH

* Director March 13, 1998
- ------------------------------------
ROBERT E. PATRICELLI

* Director March 13, 1998
- ------------------------------------
JAMES L. VINCENT
</TABLE>

II-6
<PAGE>

*By executing his name hereto, Jonathan M. Rothberg is signing this document
on behalf of the persons indicated above pursuant to powers of attorney duly
executed by such persons and filed with the Securities and Exchange
Commission.

By: /s/ Jonathan M. Rothberg
----------------------------------
JONATHAN M. ROTHBERG
(ATTORNEY-IN-FACT)

II-7

<PAGE>

EXHIBIT INDEX

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
@1.1 Form of Underwriting Agreement
@3.1 Amended and Restated Certificate of Incorporation of the
Registrant
@3.2 Certificate of Amendment of Restated Certificate of Incorporation
of the Registrant and Certificate of Amendment of Certificate of
Designation, Preferences, and Rights of Series E Preferred Stock
of the Registrant.
3.3 Amended and Restated Certificate of Incorporation of the
Registrant
@3.4 Bylaws of the Registrant
3.5 Amended and Restated Bylaws of the Registrant
4.1 Article Fourth of the Amended and Restated Certificate of
Incorporation of the Registrant (see Exhibit 3.3)
4.2 Form of Common Stock Certificate
@5.1 Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
with respect to the legality of the securities being registered
@10.1 Lease Agreement (New Haven), dated December 23, 1996, between the
Registrant and Fusco Harbour Associates, LLC
@10.2 Standard Form of Office Lease, as amended (Branford), dated
February 11, 1993 and April 26, 1996, between the Registrant and
Branford Office Venture
@10.3 Sid Martin Biotechnology Development Institute Incubator License
Agreement, dated July 15, 1997, between the Registrant and the
University of Florida Research Foundation, Inc.
10.4 1997 Employee, Director and Consultant Stock Plan
@10.5 1993 Stock Option and Incentive Award Plan
@10.6 Amendment to 1993 Stock Option and Incentive Plan, dated May 12,
1997
@10.7 Employment Letter, dated February 20, 1997, between the Registrant
and Gregory T. Went, Ph.D.
@10.8 Employment Letter, dated July 18, 1997, between the Registrant and
David M. Wurzer
@10.9 Employment Letter, dated August 21, 1997, between the Registrant
and Peter A. Fuller, Ph.D.
@10.10 Employment Letter, dated August 22, 1997, between the Registrant
and Stephen F. Kingsmore, M.B., Ch.B.
@+10.11 Option and Exclusive License Agreement, dated October 4, 1996,
between the Registrant and Wisconsin Alumni Research Foundation
@+10.12 Standard Non-Exclusive License Agreement--Brumley, dated July 1,
1996, between the Registrant and Wisconsin Alumni Research
Foundation
+10.13 Collaborative Research and License Agreement, dated May 16, 1997,
between the Registrant and Pioneer Hi-Bred International, Inc.
+10.14 Research and Option Agreement, dated October 1, 1997, between the
Registrant and Biogen, Inc.
+10.15 Research and Option Agreement, dated November 20, 1997, between
the Registrant and Genentech, Inc.
+10.16 Notice of Grant Award and Grant Application to Department of
Health and Human Services for Automated Sequencing System for
Human Genome Project, dated March 25, 1995
@10.17 ATP Agreement for Integrated Microfabricated DNA Analysis Device
for Diagnosis of Complex Genetic Disorders, dated February 1995
@10.18 ATP Agreement for Molecular Recognition Technology for Precise
Design of Protein-Specific Drugs, dated March 2, 1995
@10.19 ATP Agreement for Programmable Nanoscale Engines for Molecular
Separation, dated May 6, 1997
@10.20 Material Transfer and Screening Agreement, dated January 15, 1998,
between the Registrant and ArQule, Inc.
11.1 Schedule of Computation of Net Loss Per Share
@21.1 Subsidiaries of the Registrant
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.
(included in Exhibit 5.1)
23.3 Consent of Pennie & Edmonds LLP
@24.1 Power of Attorney of Messrs. Went, Wurzer and DeVita
@24.2 Power of Attorney of Messrs. Booth, Patricelli and Vincent
27.1 Financial Data Schedule
</TABLE>
- --------
@ Previously filed.

+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.

<PAGE>

Exhibit 3.3
RESTATED
CERTIFICATE OF INCORPORATION
OF
CURAGEN CORPORATION

Adopted in accordance with the
provisions of Sections 242 and 245
of the General Corporation Law of the State of Delaware
-------------------------------------------------------

CuraGen Corporation, a Delaware corporation, hereby certifies as follows:

1. The name of the corporation is CuraGen Corporation. The date of the
filing of its original Certificate of Incorporation with the Secretary of State
of the State of Delaware was November 22, 1991.

2. This Restated Certificate of Incorporation amends and restates the
provisions of the Certificate of Incorporation of said corporation and was duly
adopted pursuant to resolutions adopted by the Board of Directors and
Stockholders of the corporation in accordance with the provisions of Sections
242 and 245 of the General Corporation Law of the State of Delaware (the
"Delaware General Corporation Law"). In lieu of a meeting and vote of the
Stockholders, the holders of the necessary number of shares of the corporation's
capital stock have given written consent to said amendment and restatement in
accordance with the provisions of Section 228 of the Delaware General
Corporation Law, and said written consent was filed with the corporation and
notice thereof has been given to those Stockholders who have not consented in
writing.

3. The text of the Certificate of Incorporation is hereby amended and
restated to read in its entirety as follows:

FIRST: The name of the corporation is CuraGen Corporation (the
"Corporation").

SECOND: The address of the registered office of the Corporation in the
State of Delaware is 1013 Centre Road, City of Wilmington, County of New Castle;
and the name of the registered agent of the Corporation in the State of Delaware
is The Prentice-Hall Corporation System, Inc.

THIRD: The purpose of the Corporation is to engage in any lawful act or
activity or carry on any business for which corporations may be organized under
the Delaware General Corporation Law or any successor statue.

FOURTH:

A. Designation and Number of Shares.
--------------------------------

The total number of shares of all classes of stock which the Corporation
shall have the authority to issue is 58,000,000 shares, consisting of 50,000,000
shares of common stock, par value $.01 per share (the "Common Stock"), 3,000,000
shares of non-voting common stock, par value $.01 per share (the "Non-Voting
Common Stock"), and 5,000,000 shares of Preferred Stock, par value $.01 per
share (the "Preferred Stock").
<PAGE>

Each share of common stock, par value $.01 per share, of the Corporation
issued and outstanding at the time and date that this Restated Certificate of
Incorporation becomes effective (the "Effective Time") is hereby reclassified
and changed, without any action on the part of the holders of any such common
stock or on the part of the Corporation, into one share of fully paid and
nonassessable Common Stock, and each person holding of record any shares of such
common stock issued and outstanding at the Effective Time shall be entitled to
receive, upon the surrender of certificates evidencing such shares to the
Corporation, one or more certificates to evidence the number of shares of Common
Stock into which such shares of common stock have been reclassified.

A statement of the designations of the different classes of stock of the
Corporation and of the powers, preferences and rights, and the qualifications,
limitations or restrictions thereof, and of the authority conferred upon the
Board of Directors to fix by resolution or resolutions any of the foregoing in
connection with the creation of one or more series of Preferred Stock and the
limitation of variations between or among such series, is set forth below in
this Article FOURTH.

B. Preferred Stock
---------------

1. Shares of Preferred Stock may be issued in one or more series at
such time or times and for such consideration as the Board of Directors may
determine. All shares of any one series shall be of equal rank and identical in
all respects.

2. Authority is hereby expressly granted to the Board of Directors to
fix from time to time, by resolution or resolutions providing for the
establishment and/or issuance of any series of Preferred Stock, the designation
of such series and the powers, preferences and rights of the shares of such
series, and the qualifications, limitations or restrictions thereof, including,
without limitation, the following:

(a) The distinctive designation and number of shares comprising
such series, which number may (except where otherwise provided by the
Board of Directors in creating such series) be increased or decreased
(but not below the number of shares then outstanding) from time to time
by action of the Board of Directors;

(b) The rate of dividends, if any, on the shares of that series,
whether dividends shall be (i) non-cumulative, (ii) cumulative to the
extent earned or (iii) cumulative (and, if cumulative, from which date
or dates), whether dividends shall be payable in cash, property or
rights, or in shares of the Corporation's capital stock, and the
relative rights of priority, if any, of payment of dividends on shares
of that series over shares of any other series or class;

(c) Whether the shares of that series shall be redeemable and, if
so, the terms and conditions of such redemption, including the date or
dates upon or after which they shall be redeemable, and the amount per
share payable in case of redemption (which amount may vary under
different conditions and at different redemption dates) or the property
or rights, including securities of any other corporation, payable in
case of redemption;

(d) Whether the series shall have a sinking fund for the
redemption or purchase of shares of that series and, if so, the terms
and amounts payable into such sinking fund;

(e) The rights to which the holders of the shares of that series
shall be entitled in the event of the voluntary or involuntary
liquidation, dissolution or winding-up of the

2
<PAGE>

Corporation, and the relative rights of priority, if any, of payment of
shares of that series in any such event;

(f) Whether the shares of that series shall be convertible into
or exchangeable for shares of stock of any other class or any other
series and, if so, the terms and conditions of such conversion or
exchange, including the rate or rates of conversion or exchange, the
date or dates upon or after which they shall be convertible or
exchangeable, the period or periods during which they shall be
convertible or exchangeable, the event or events upon or after which
they shall be convertible or exchangeable or at whose option they shall
be convertible or exchangeable, and the method (if any) of adjusting
the rates of conversion or exchange in the event of a stock split,
stock dividend, combination of shares or similar event;

(g) Whether the issuance of any additional shares of such series,
or of any shares of any other series, shall be subject to restrictions
as to issuance, or as to the powers, preferences or rights of any such
additional shares of such series or shares of such other series;

(h) Whether or not the shares of that series shall have voting
rights, the extent of such voting rights on specified matters or on all
matters, the number of votes to which the holder of a share of such
series shall be entitled in respect of such share, whether such series
shall vote generally with the Common Stock on all matters or (either
generally or upon the occurrence of specified circumstances) shall vote
separately as a class or with other series of Preferred Stock; and

(i) Any other preferences, privileges and powers and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions of such series, as the Board of Directors
may deem advisable and as shall not be inconsistent with the provisions
of this Restated Certificate of Incorporation and to the full extent
now or hereafter permitted by the Delaware General Corporation Law.

C. Common Stock and Non-Voting Common Stock.
----------------------------------------

The Common Stock and the Non-Voting Common Stock shall be identical in all
respects and shall have equal rights and privileges, except as otherwise
expressly provided herein. The relative powers, preferences, rights,
qualifications, limitations and restrictions of the shares of the Common Stock
and the Non-Voting Common Stock are as follows:

1. Dividends. The holders of record of Common Stock and the Non-
---------
Voting Common Stock shall be entitled to receive, when, if and as declared by
the Board of Directors, such dividends of cash, property or stock of the
Corporation as the Board of Directors shall from time to time declare, subject
to the following rights and restrictions and the rights and restrictions set
forth in paragraph (C)(2) of this Article FOURTH:

(a) No cash dividends shall be declared and paid on the Common
Stock unless at the same time an equal cash dividend is declared and
paid, per share, on the Non-Voting Common Stock. No cash dividends
shall be declared and paid on the Non-Voting Common Stock unless at the
same time an equal cash dividend is declared and paid, per share, on
the Common Stock.

3
<PAGE>

(b) No dividend of property (including capital stock of the
Corporation) shall be declared and paid on the Common Stock unless a
dividend of an equal amount of the same property has also been declared
and paid, per share, on the Non-Voting Common Stock. No dividend of
property (including capital stock of the Corporation) shall be declared
and paid on the Non-Voting Common Stock unless a dividend of an equal
amount of the same property has also been declared and paid, per share,
on the Common Stock.

2. Stock Subdivisions and Combinations. The Corporation shall not
-----------------------------------
subdivide or combine shares Common Stock by stock split, stock dividend,
reclassification, reorganization or otherwise without at the same time making a
proportionate subdivision or combination of the Non-Voting Common Stock. The
Corporation shall not subdivide or combine shares of Non-Voting Common Stock by
stock split, stock dividend, reclassification, reorganization or otherwise
without at the same time making a proportionate subdivision or combination of
the Common Stock.

3. Liquidation. In the event of any liquidation, dissolution or winding up
-----------
of the Corporation, whether voluntary or involuntary, after payment or provision
for payment of the debts and other liabilities of the Corporation and the
amounts to which the holders of any Preferred Stock shall be entitled, the
holders of Common Stock and Non-Voting Common Stock shall be entitled (together
as one class) to share ratably in the remaining assets of the Corporation.

4. Voting. The holders of the Common Stock are entitled to one vote for
------
each share held. Except as provided under the Delaware General Corporation Law,
the holders of the Non-Voting Common Stock are not entitled to vote. There shall
be no cumulative voting.

5. Conversion of Non-Voting Common Stock.
--------------------------------------

(a) Optional Conversion. Each share of Non-Voting Common Stock shall be
-------------------
convertible, at the option of the holder thereof, at any time and from time
to time, into shares of Common Stock at the rate of one share of Common
Stock for each share of Non-Voting Common Stock by surrendering the
certificate or certificates for such shares of Non-Voting Common Stock,
together with written notice that such holder elects to convert all or any
portion of the shares of Non-Voting Common Stock represented by such
certificate or certificates, to the office of the transfer agent (which
shall be the principal office of the Corporation if it serves as its own
transfer agent). Such notice shall state the names of the nominees, if any,
in which such holder wishes the certificate or certificates for the shares
of Common Stock to be issued. The date of receipt of such certificates and
notice by the transfer agent (or by the Corporation if it serves as its own
transfer agent) shall be the conversion date. The Corporation shall, as soon
as practicable after such conversion date, issue and deliver at such office
to such holder of Non-Voting Common Stock, or to its nominees, a certificate
or certificates for the number of shares of Common Stock to which such
holder shall be entitled, together with cash in lieu of any fraction of a
share.

(b) Automatic Conversion. (i) Except as provided in paragraph 5(b)(ii),
--------------------
upon the transfer by a holder of beneficial ownership of any shares of Non-
Voting Common Stock, such shares shall automatically, with no further action
being required by any party to such transfer or otherwise, be converted into
shares of Common Stock at the rate of one share of Common Stock for each
share of Non-Voting Common Stock.

4
<PAGE>

(ii) The provisions of paragraph 5(b)(i) shall not apply, and Non-
Voting Common Stock shall be issued to a transferee of Non-Voting Common
Stock upon the transfer of beneficial ownership of any shares thereof, if
such transfer is made to (i) a majority- owned subsidiary of Genentech,
Inc., a Delaware corporation ("Genentech"), (ii) a corporation ("Genentech
Parent") of which Genentech is a wholly owned subsidiary or (iii) a wholly
owned subsidiary of Genentech Parent (in any such case, a "qualifying
transfer"); provided that if such transfer is made to a wholly owned
--------
subsidiary of Genentech or of Genentech Parent, as the case may be, and such
wholly owned subsidiary ceases to be a wholly owned subsidiary of Genentech
or of Genentech Parent, as the case may be, then such shares shall
automatically, with no further action being required by any party, be
converted into shares of Common Stock at the rate of one share of Common
Stock for each share of Non-Voting Common Stock. Upon any qualifying
transfer, the transferor shall provide written certification to the transfer
agent for the Common Stock and Non-Voting Common Stock of such facts which
constitute such transfer as a "qualifying transfer" and, absent prima facie
evidence that such certification is false, the Corporation or any transfer
agent shall accept such certification as being correct and shall not be
required to conduct any investigation with respect thereto.

(c) The Corporation shall reserve and keep available out of its
authorized but unissued Common Stock such number of shares of Common Stock
as shall from time to time be sufficient to effect the conversion of all
outstanding shares of Non-Voting Common Stock.

FIFTH: The Corporation is to have perpetual existence.

SIXTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:

A. The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by statute or by this Restated
Certificate of Incorporation or the By-Laws of the Corporation as in effect from
time to time, the directors are hereby empowered to exercise all such powers and
do all such acts and things as may be exercised or done by the Corporation.

B. The directors of the Corporation need not be elected by written ballot
unless the By-Laws so provide.

C. Any action required or permitted to be taken by the stockholders of the
Corporation may be effected only at a duly called annual or special meeting of
stockholders of the Corporation and not by written consent.

SEVENTH: A. Subject to the rights of the holders of shares of any series
of Preferred Stock then outstanding to elect additional directors under
specified circumstances, the number of directors shall be fixed from time to
time exclusively by the Board of Directors pursuant to a resolution adopted by a
majority of the Board of Directors.

in lieu thereof, the term of office of the second class to expire at the 2000
annual meeting of stockholders or any special meeting in lieu thereof, and the
term of office of the third class to expire at the 2001 annual meeting of
stockholders or any special meeting in lieu thereof. At each annual meeting of
stockholders or special meeting in lieu thereof following such initial
classification, directors elected to succeed those directors whose terms expire
shall be elected for a term of office to expire at the third succeeding annual
meeting of stockholders or special meeting in lieu thereof after their election
and until their successors are duly elected and qualified.

C. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office even though less than a quorum, or by a sole remaining director.
In the event of any increase or decrease in the authorized number of directors,
(i) each director then serving as such shall nevertheless continue as a director
of the class of which he is a member until the expiration of his current term or
his prior death, retirement, removal or resignation and (ii) the newly created
or eliminated directorships resulting from such increase or decrease shall if
reasonably possible be apportioned by the Board of Directors among the three
classes of directors so as to ensure that no one class has more than one
director more than any other class. To the extent reasonably possible,
consistent with the foregoing rule, any newly created directorships shall be
added to those classes whose terms of office are to expire at the latest dates
following such allocation and newly eliminated directorships shall be subtracted
from those classes whose terms of office are to expire at the earliest dates
following such allocation, unless otherwise provided for from time to time by
resolution adopted by a majority of the directors then in office, although less
than a quorum. In the event of a vacancy in the Board of Directors, the
remaining directors, except as otherwise provided by law, may exercise the
powers of the full Board of Directors until the vacancy is filled.

D. Advance notice of stockholder nominations for the election of directors
and of business to be brought by stockholders before any meeting of the
stockholders of the Corporation shall be given in the manner provided in the By-
Laws of the Corporation.

E. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, any director, or the entire Board of Directors, may be removed
from office at any time only for cause. A director may be removed for cause only
after a reasonable notice and opportunity to be heard before the body proposing
to remove him.

EIGHTH: The Board of Directors is expressly empowered to adopt, amend or
repeal By-Laws of the Corporation. Any adoption, amendment or repeal of the By-
Laws of the Corporation by the Board of Directors shall require the approval of
a majority of the Board of Directors. The stockholders shall also have power to
adopt, amend or repeal the By-Laws of the Corporation; provided, that, in
--------
addition to any vote of the holders of any class or series of stock of the
Corporation required by law or by this Restated Certificate of Incorporation,
the affirmative vote of the holders of at least seventy percent (70%) of the
voting power of all of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required for the stockholders to adopt,
amend or repeal any provision of the By-Laws of the Corporation.

6
<PAGE>

Corporation as a director, officer, trustee, employee or agent of another
corporation, or of a partnership, joint venture, trust or other enterprise, if
such person was or is made a party to or is threatened to be made a party to or
is otherwise involved (including, without limitation, as a witness) in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a director or
officer of the Corporation or is or was serving at the request of the
Corporation as a director, officer, trustee, employee or agent of another
corporation, or of a partnership, joint venture, trust or other enterprise,
including service with respect to an employee benefit plan; provided, that
--------
except with respect to proceedings to enforce rights to indemnification or as is
otherwise required by law, the By-Laws of the Corporation may provide that the
Corporation shall not be required to indemnify, and advance expenses to, any
director, officer or other person in connection with a proceeding (or part
thereof) initiated by such director, officer or other person, unless such
proceeding (or part thereof) was authorized by the Board of Directors and shall
be made only upon delivery to the Corporation of an undertaking, by or on behalf
of such person, to repay all amounts so advanced if it shall ultimately be
determined by final judicial decision from which there is no further right to
appeal that such person is not entitled to be indemnified for such expenses
under this Article NINTH or otherwise. The Corporation, by action of its Board
of Directors, may provide indemnification or advance expenses to employees and
other agents of the Corporation or other persons only on such terms and
conditions and to the extent determined by the Board of Directors in its sole
and absolute discretion.

B. The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article NINTH shall not be deemed exclusive of any other
rights to which a person seeking indemnification or advancement of expenses may
be entitled under any By-Law, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in such person's official capacity and
as to action in another capacity while holding such office.

C. The Corporation shall have the power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the Corporation, or is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such capacity,
or arising out of such person's status as such, whether or not the Corporation
would have the power to indemnify such person against such liability under this
Article NINTH.

D. The indemnification and advancement of expenses provided by, or granted
pursuant to, this Article NINTH shall, unless otherwise specified when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person. The indemnification and rights to
advancement of expenses that may have been provided to an employee or agent of
the Corporation by action of the Board of Directors, pursuant to the last
sentence of paragraph 1 of this Article NINTH, shall, unless otherwise specified
when authorized or ratified, continue as to a person who has ceased to be an
employee or agent of the Corporation and shall inure to the benefit of the
heirs, executors and administrators of such person, after the time such person
has ceased to be an employee or agent of the Corporation, only on such terms and
conditions and to the extent determined by the Board of Directors in its sole
discretion. No repeal or amendment of this Article NINTH shall adversely affect
any rights of any person pursuant to this Article NINTH which existed at the
time of such repeal or amendment with respect to acts or omissions occurring
prior to such repeal or amendment.

7
<PAGE>

TENTH: No director shall be personally liable to the Corporation or its
stockholders for any monetary damages for breaches of fiduciary duty as a
director, notwithstanding any provision of law imposing such liability; provided
that this provision shall not eliminate or limit the liability of a director, to
the extent that such liability is imposed by applicable law, (i) for any breach
of the director's duty of loyalty to the Corporation or its stockholders; (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) under Section 174 or successor provisions
of the Delaware General Corporation Law; or (iv) for any transaction from which
the director derived an improper personal benefit. This provision shall not
eliminate or limit the liability of a director for any act or omission if such
elimination or limitation is prohibited by the Delaware General Corporation Law.
No amendment to or repeal of this provision shall apply to or have any effect on
the liability or alleged liability of any director for or with respect to any
acts or omissions of such director occurring prior to such amendment or repeal.
If the Delaware General Corporation Law is amended to authorize corporate action
further eliminating or limiting the personal liability of directors, then the
liability of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the Delaware General Corporation Law, as so amended.

ELEVENTH: The Corporation reserves the right to amend or repeal any
provision contained in this Restated Certificate of Incorporation in the manner
prescribed by the Delaware General Corporation Law and all rights conferred upon
stockholders are granted subject to this reservation; provided that, in addition
--------
to the vote of the holders of any class or series of stock of the Corporation
required by law or by this Restated Certificate of Incorporation, the
affirmative vote of the holders of shares of voting stock of the Corporation
representing at least seventy percent (70%) of the voting power of all of the
then outstanding shares of the capital stock of the Corporation entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to (i) reduce or eliminate the number of authorized shares of Common
Stock or Non-Voting Common Stock or the number of authorized shares of Preferred
Stock set forth in Article FOURTH or (ii) amend or repeal, or adopt any
provision inconsistent with, Articles SIXTH, SEVENTH, EIGHTH, NINTH, TENTH, and
this Article ELEVENTH of this Amended and Restated Certificate of Incorporation.

TWELFTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of the Delaware General Corporation Law or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of the Delaware General
Corporation Law, order a meeting of the creditors or class of creditors, and/or
of the stockholders or class of stockholders of this Corporation, as the case
may be, to be summoned in such manner as the said court directs. If a majority
in number representing three-fourths (3/4) in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.

8
<PAGE>

IN WITNESS WHEREOF, the Corporation has caused this certificate to be signed
by its Chairman of the Board of Directors, President and Chief Executive Officer
this 12th day of March 1998.

CURAGEN CORPORATION

By: /s/ Jonathan M. Rothberg, Ph.D.
-------------------------------
Jonathan M. Rothberg, Ph.D.
Its Chairman of the Board,
President and
Chief Executive Officer

<PAGE>

Exhibit 3.5
CURAGEN CORPORATION

RESTATED BY-LAWS

ARTICLE I - STOCKHOLDERS

Section 1. Annual Meeting.

An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall fix each year.

Section 2. Special Meetings.

Subject to the rights of the holders of any class or series of preferred
stock of the Corporation, special meetings of stockholders of the Corporation
may be called only by the Board of Directors pursuant to a resolution adopted by
a majority of the total number of directors authorized. Special meetings of the
stockholders may be held at such place within or without the State of Delaware
as may be stated in such resolution.

Section 3. Notice of Meetings.

Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law or the Certificate of Incorporation of the
Corporation, as amended and restated from time to time).

When a meeting is adjourned to another place, date or time, written notice
need not be given of the adjourned meeting if the place, date and time thereof
are announced at the meeting at which the adjournment is taken; provided,
however, that if the date of any adjourned meeting is more than thirty (30) days
after the date for which the meeting was originally noticed, or if a new record
date is fixed for the adjourned meeting, written notice of the place, date, and
time of the adjourned meeting shall be given in conformity herewith. At any
adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.

Section 4. Quorum.

At any meeting of the stockholders, the holders of a majority of all of the
shares of the stock entitled to vote at the meeting, present in person or by
proxy, shall constitute a quorum for all purposes, unless or except to the
extent that the presence of a larger number may be required by law. Where a
separate vote by a class or classes is required, a majority of the shares of
such class or classes present in person or represented by proxy shall constitute
a quorum entitled to take action with respect to that vote on that matter.

-1-

<PAGE>

If a quorum shall fail to attend any meeting, the chairman of the meeting or
the holders of a majority of the shares of stock entitled to vote who are
present, in person or by proxy, may adjourn the meeting to another place, date,
or time.

Section 5. Organization.

The Chairman of the Board of Directors or, in his or her absence, such
person as the Board of Directors may have designated or, in his or her absence,
the Chief Executive Officer of the Corporation or, in his or her absence, the
President or, in his or her absence such person as may be chosen by the holders
of a majority of the shares entitled to vote who are present, in person or by
proxy, shall call to order any meeting of the stockholders and act as chairman
of the meeting. In the absence of the Secretary of the Corporation, the By-Laws
of the meeting shall be such person as the chairman of the meeting appoints.

Section 6. Conduct of Business.

The Chairman of the Board of Directors or his or her designee or, if neither
the Chairman of the Board nor his or her designee is present at the meeting,
then a person appointed by a majority of the Board of Directors, shall preside
at, and act as chairman of, any meeting of the stockholders. The chairman of
any meeting of stockholders shall determine the order of business and the
procedures at the meeting, including such regulation of the manner of voting and
the conduct of discussion as he or she deems to be appropriate.

Section 7. Notice of Stockholder Business and Nominations.

A. Annual Meetings of Stockholders.

Nominations of persons for election to the Board of Directors and the
proposal of business to be considered by the stockholders may be made at an
annual meeting of stockholders (a) pursuant to the Corporation's notice of
meeting, (b) by or at the direction of the Board of Directors or (c) by any
stockholder of the Corporation who was a stockholder of record at the time of
giving of notice provided for in this Section, who is entitled to vote at the
meeting and who complies with the notice procedures set forth in this Section.

B. Special Meetings of Stockholders.

Only such business shall be conducted at a special meeting of stockholders
as shall have been brought before the meeting pursuant to the notice of meeting
given pursuant to Section 2 above. Nominations of persons for election to the
Board of Directors may be made at a special meeting of stockholders at which
directors are to be elected (a) by or at the direction of the Board of Directors
or (b) provided that the Board of Directors has determined that directors shall
be elected at such meeting, by any stockholder of the Corporation who is a
stockholder of record at the time of giving of notice of the special meeting,
who shall be entitled to vote at the meeting and who complies with the notice
procedures set forth in this Section.

-2-
<PAGE>

C. Certain Matters Pertaining to Stockholder Business and Nominations.

(1) For nominations or other business to be properly brought before an
annual meeting by a stockholder pursuant to clause (c) of paragraph A of this
Section or a special meeting pursuant to paragraph B of this Section, the
stockholder must have given timely notice thereof in writing to the Secretary of
the Corporation and such other business must otherwise be a proper matter for
stockholder action. To be timely, a stockholder's notice pertaining to an annual
meeting shall be delivered to the Secretary at the principal executive offices
of the Corporation not later than the close of business on the sixtieth (60) day
nor earlier than the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided, however,
-------- -------
that in the event that the date of the annual meeting is more than thirty (30)
days before or more than sixty (60) days after such an anniversary date, notice
by the stockholder to be timely must be so delivered not earlier than the close
of business on the ninetieth (90) day prior to such annual meeting and not later
than the close of business on the later of the sixtieth (60th) day prior to such
annual meeting or the close of business on the tenth (10th) day following the
day on which public announcement of the date of such meeting is first made by
the Corporation. Such stockholder's notice for an annual meeting or a special
meeting shall set forth (a) as to each person whom the stockholder proposes to
nominate for election or reelection as a director, all information relating to
such person that is required to be disclosed in solicitations of proxies for
election of directors, or is otherwise required, in each case, pursuant to
Regulation 14A under the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected); (b) as to
any other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation that are owned beneficially and held of record by
such stockholder and such beneficial owner. A stockholder shall also comply with
all applicable requirements of the Exchange Act (or any successor provision),
and the rules and regulations thereunder with respect to the matters set forth
in these By-Laws.

(2) Notwithstanding anything in the second sentence of paragraph C (1)
of this Section to the contrary, in the event that the number of directors to be
elected to the Board of Directors of the Corporation is increased and there is
no public announcement by the Corporation naming all of the nominees for
director or specifying the size of the increased Board of Directors at least
seventy (70) days prior to the first anniversary of the preceding year's annual
meeting (or, if the annual meeting is held more than thirty (30) days before or
sixty (60) days after such anniversary date, at least seventy (70) days prior to
such annual meeting), a stockholder's notice required by this Section shall also
be considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive office of the Corporation not later than the close of
business on the tenth (10th) day following the day on which such public
announcement is first made by the Corporation.

-3-
<PAGE>

(3) In the event the Corporation calls a special meeting of
stockholders for the purpose of electing one or more directors to the Board of
Directors, any such stockholder may nominate a person or persons (as the case
may be), for election to such position(s) as specified in the Corporation's
notice of meeting, if the stockholder's notice required by paragraph C(1) of
this Section shall be delivered to the Secretary at the principal executive
offices of the Corporation not earlier than the ninetieth (90th) day prior to
such special meeting nor later than the close of business on the later of the
sixtieth (60th) day prior to such special meeting, or the tenth (10th) day
following the day on which public announcement is first made of the date of the
special meeting and of the nominees proposed by the Board of Directors to be
elected at such meeting.

D. General.

(1) Only such persons who are nominated in accordance with the
procedures set forth in this Section shall be eligible to serve as directors and
only such business shall be conducted at a meeting of stockholders as shall have
been brought before the meeting in accordance with the procedures set forth in
this Section. Except as otherwise provided by law or these By-Laws, the chairman
of the meeting shall have the power and duty to determine whether a nomination
or any business proposed to be brought before the meeting was made or proposed,
as the case may be, in accordance with the procedures set forth in this Section
and, if any proposed nomination or business is not in compliance herewith to
declare that such defective proposal or nomination shall be disregarded.

(2) For purposes of this Section, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.

(3) Notwithstanding the foregoing provisions of this Section, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein. Nothing in this Section shall be deemed to affect any rights (i)
of stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act or (ii) of the holders
of any series of Preferred Stock to elect directors under specified
circumstances.

Section 8. Proxies and Voting.

At any meeting of the stockholders, every stockholder entitled to vote may
vote in person or by proxy authorized by an instrument in writing or by a
transmission permitted by law filed in accordance with the procedure established
for the meeting. Any copy, facsimile telecommunication or other reliable
reproduction of the writing or transmission created pursuant to this Section may
be substituted or used in lieu of the original writing or transmission for any
and all purposes for which the original writing or transmission could be used,
provided that such copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or transmission.

-4-
<PAGE>

All voting, including on the election of directors but excepting where
otherwise required by law, may be by voice vote. Any vote not taken by voice
shall be taken by ballots, each of which shall state the name of the stockholder
or proxy voting and such other information as may be required under the
procedure established for the meeting. The Corporation may, and to the extent
required by law, shall, in advance of any meeting of stockholders, appoint one
or more inspectors to act at the meeting and make a written report thereof. The
Corporation may designate one or more persons as alternate inspectors to replace
any inspector who fails to act. If no inspector or alternate is able to act at
a meeting of stockholders, the person presiding at the meeting may, and to the
extent required by law, shall, appoint one or more inspectors to act at the
meeting. Each inspector, before entering upon the discharge of his duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his ability.

Except as otherwise provided in the terms of any class or series of
Preferred Stock of the Corporation, all elections at any meeting of stockholders
shall be determined by a plurality of the votes cast, and except as otherwise
required by law, all other matters determined by stockholders at a meeting shall
be determined by a majority of the votes cast affirmatively or negatively.

Section 9. Action Without Meeting.

Any action required or permitted to be taken by the stockholders of the
Corporation may be effected only at a duly called annual or special meeting of
stockholders of the Corporation and may not be effected by written consent.

Section 10. Stock List.

A complete list of stockholders entitled to vote at any meeting of
stockholders, arranged in alphabetical order for each class of stock and showing
the address of each such stockholder and the number of shares registered in his
or her name, shall be open to the examination of any such stockholder, for any
purpose germane to the meeting, during ordinary business hours for a period of
at least ten (10) days prior to the meeting, either at a place within the city
where the meeting is to be held, which place shall be specified in the notice of
the meeting, or if not so specified, at the place where the meeting is to be
held.

The stock list shall also be kept at the place of the meeting during the
whole time thereof and shall be open to the examination of any such stockholder
who is present. Such list shall presumptively determine the identity of the
stockholders entitled to vote at the meeting and the number of shares held by
each of them.

-5-
<PAGE>

ARTICLE II - BOARD OF DIRECTORS

Section 1. General Powers, Number, Election, Tenure and Qualification.

A. The business and affairs of the Corporation shall be managed by or
under the direction of its Board of Directions.

B. Subject to the rights of the holders of any series of Preferred Stock
then outstanding to elect additional directors under specified circumstances,
the number of directors shall be fixed from time to time exclusively by the
Board of Directors pursuant to a resolution adopted by a majority of the Board.

C. On or prior to the Effective Time, as defined in Article FOURTH of the
Corporation's Restated Certificate of Incorporation, the Board of Directors of
the Corporation shall divide the directors into three classes, as nearly equal
in number as reasonably possible, with the term of office of the first class to
expire at the annual meeting of stockholders or any special meeting in lieu
thereof in 1999, the term of office of the second class to expire at the annual
meeting of stockholders or any special meeting in lieu thereof in 2000, and the
term of office of the third class to expire at the annual meeting of
stockholders or any special meeting in lieu thereof in 2001. At each annual
meeting of stockholders or special meeting in lieu thereof following such
initial classification, directors elected to succeed those directors whose terms
expire shall be elected for a term of office to expire at the third succeeding
annual meeting of stockholders or special meeting in lieu thereof after their
election and until their successors are duly elected and qualified.

Section 2. Vacancies and Newly Created Directorships.

Subject to the rights of the holders of any series of Preferred Stock then
outstanding, newly created directorships resulting from any increase in the
authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office even though less than a quorum, or by a sole remaining director.
In the event of any increase or decrease in the authorized number of directors,
(i) each director then serving as such shall nevertheless continue as a director
of the class of which he is a member until the expiration of his current term or
his prior death, retirement, removal or resignation and (ii) the newly created
or eliminated directorships resulting from such increase or decrease shall if
reasonably possible be apportioned by the Board of Directors among the three
classes of directors so as to ensure that no one class has more than one
director more than any other class. To the extent reasonably possible,
consistent with the foregoing rule, any newly created directorships shall be
added to those classes whose terms of office are to expire at the latest dates
following such allocation and newly eliminated directorships shall be subtracted
from those classes whose terms of office are to expire at the earliest dates
following such allocation, unless otherwise provided for from time to time by
resolution adopted by a majority of the directors then in office, although less
than a quorum. In the event of a vacancy in the Board of Directors, the
remaining directors, except as otherwise provided by law, may exercise the
powers of the full Board of Directors until the vacancy is filled.

-6-
<PAGE>

Section 3. Resignation and Removal.

Any director may resign at any time upon written notice to the Corporation
at its principal place of business or to the Chief Executive Officer, President
or Secretary. Such resignation shall be effective upon receipt unless it is
specified to be effective at some other time or upon the happening of some other
event. Subject to the rights of the holders of any series of Preferred Stock
then outstanding, any director, or the entire Board of Directors, may be removed
from office at any time only for cause. A director may be removed for cause
only after a reasonable notice and opportunity to be heard before the body
proposing to remove him.

Section 4. Regular Meetings.

Regular meetings of the Board of Directors shall be held at such place or
places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
written notice of each regular meeting shall not be required.

Section 5. Special Meetings.

Special meetings of the Board of Directors may be called by the Chairman of
the Board of Directors, if any, the President, the Treasurer, the Secretary or
one or more of the directors then in office and shall be held at such place, on
such date, and at such time as they or he or she shall fix. Notice of the
place, date, and time of each such special meeting shall be given to each
director by whom it is not waived by mailing written notice not less than three
(3) days before the meeting or orally, by telegraph, telex, cable or telecopy
given not less than twenty-four (24) hours before the meeting. Unless otherwise
indicated in the notice thereof, any and all business may be transacted at a
special meeting.

Section 6. Quorum.

At any meeting of the Board of Directors, a majority of the total number of
members of the Board of Directors shall constitute a quorum for all purposes.
If a quorum shall fail to attend any meeting, a majority of those present may
adjourn the meeting to another place, date, or time, without further notice or
waiver thereof.

Section 7. Action by Consent.

Unless otherwise restricted by the Certificate of Incorporation or these By-
Laws, any action required or permitted to be taken at any meeting of the Board
of Directors or of any committee thereof may be taken without a meeting, if all
members of the Board or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee.

Section 8. Participation in Meetings By Conference Telephone.

Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar

-7-
<PAGE>

communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.

Section 9. Conduct of Business.

At any meeting of the Board of Directors, business shall be transacted in
such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law.

Section 10. Powers.

The Board of Directors may, except as otherwise required by law, exercise
all such powers and do all such acts and things as may be exercised or done by
the Corporation, including, without limiting the generality of the foregoing,
the unqualified power:

(1) To declare dividends from time to time in accordance with law;

(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;

(3) To authorize the creation, making and issuance, in such form as it
may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, to borrow funds and
guarantee obligations, and to do all things necessary in
connection therewith;

(4) To remove any officer of the Corporation with or without cause,
and from time to time to devolve the powers and duties of any
officer upon any other person for the time being;

(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and
agents;

(6) To adopt from time to time such stock, option, stock purchase,
bonus or other compensation plans for directors, officers,
employees and agents of the Corporation and its subsidiaries as it
may determine;

(7) To adopt from time to time such insurance, retirement, and other
benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,

(8) To adopt from time to time regulations, not inconsistent with
these By-Laws, for the management of the Corporation's business
and affairs.

-8-
<PAGE>

Section 11. Compensation of Directors.

Directors, as such, may receive, pursuant to a resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committees of the
Board of Directors.

ARTICLE III - COMMITTEES

Section 1. Committees of the Board of Directors.

The Board of Directors, by a vote of a majority of the Board of Directors,
may from time to time designate committees of the Board, with such lawfully
delegable powers and duties as it thereby confers, to serve at the pleasure of
the Board and shall, for those committees and any others provided for herein,
elect a director or directors to serve as the member or members, designating, if
it desires, other directors as alternate members who may replace any absent or
disqualified member at any meeting of the committee. Any such committee, to the
extent provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-Laws of the Corporation. Any committee so designated may
exercise the power and authority of the Board of Directors to declare a
dividend, to authorize the issuance of stock or to adopt a certificate of
ownership and merger pursuant to Section 253 of the Delaware General Corporation
Law if the resolution which designates the committee or a supplemental
resolution of the Board of Directors shall so provide. In the absence or
disqualification of any member of any committee and any alternate member in his
or her place, the member or members of the committee present at the meeting and
not disqualified from voting, whether or not he or she or they constitute a
quorum, may by unanimous vote appoint another member of the Board of Directors
to act at the meeting in the place of the absent or disqualified member.

Section 2. Conduct of Business.

Each committee may determine the procedural rules for meeting and conducting
its business and shall act in accordance therewith, except as otherwise provided
herein or required by law. Adequate provision shall be made for notice to
members of all meetings; one-third (1/3) of the members of any committee shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of such committee.

-9-
<PAGE>

ARTICLE IV - OFFICERS

Section 1. Enumeration.

The officers of the Corporation shall consist of a President, a Treasurer, a
Secretary and such other officers as the Board of Directors or the Chairman of
the Board may determine, including, but not limited to, a Chairman of the Board
of Directors, a Chief Executive Officer, one or more Vice Presidents, Assistant
Treasurers and Assistant Secretaries.

Section 2. Election.

The Chairman of the Board, if any, the President, the Treasurer and the
Secretary shall be elected annually by the Board of Directors at their first
meeting following the annual meeting of the stockholders. The Board of
Directors or the Chairman of the Board, if any, may, from time to time, elect or
appoint such other officers as it or he or she may determine, including, but not
limited to, one or more Vice Presidents, Assistant Treasurers and Assistant
Secretaries.

Section 3. Qualification.

No officer need be a stockholder. The Chairman of the Board, if any, and
any Vice Chairman appointed to act in the absence of the Chairman, if any, shall
be elected by and from the Board of Directors, but no other officer need be a
director. Two or more offices may be held by any one person. If required by
vote of the Board of Directors, an officer shall give bond to the Corporation
for the faithful performance of his or her duties, in such form and amount and
with such sureties as the Board of Directors may determine. The premiums for
such bonds shall be paid by the Corporation.

Section 4. Tenure and Removal.

Each officer elected or appointed by the Board of Directors shall hold
office until the first meeting of the Board of Directors following the next
annual meeting of the stockholders and until his or her successor is elected or
appointed and qualified, or until he or she dies, resigns, is removed or becomes
disqualified, unless a shorter term is specified in the vote electing or
appointing said officer. Each officer appointed by the Chairman of the Board,
if any, shall hold office until his or her successor is elected or appointed and
qualified, or until he or she dies, resigns, is removed or becomes disqualified,
unless a shorter term is specified by any agreement or other instrument
appointing such officer. Any officer may resign by giving written notice of his
or her resignation to the Chairman of the Board, if any, the President, or the
Secretary, or to the Board of Directors at a meeting of the Board, and such
resignation shall become effective at the time specified therein. Any officer
elected or appointed by the Board of Directors may be removed from office with
or without cause by vote of a majority of the directors. Any officer appointed
by the Chairman of the Board, if any, may be removed with or without cause by
the Chairman of the Board.

Section 5. Chairman of the Board.

The Chairman of the Board, if any, shall preside at all meetings of the
Board of Directors and stockholders at which he or she is present and shall have
such authority and perform such

-10-
<PAGE>

duties as may be prescribed by these By-Laws or from time to time be determined
by the Board of Directors. The Chairman of the Board shall also have the power
and authority to determine the compensation and duties of all officers,
employees and agents of the Corporation and shall have the power and authority
to sign all stock certificates, contracts and other instruments of the
Corporation which are authorized.

Section 6. President.

Except for meetings at which the Chief Executive Officer or the Chairman of
the Board, if any, presides, the President shall, if present, preside at all
meetings of stockholders, and if a director, at all meetings of the Board of
Directors. The President shall, subject to the control and direction of the
Chief Executive Officer and the Board of Directors, have and perform such powers
and duties as may be prescribed by these By-Laws or from time to time be
determined by the Chief Executive Officer or the Board of Directors. The
President shall have power to sign all stock certificates, contracts and other
instruments of the Corporation which are authorized. In the absence of a Chief
Executive Officer, the President shall be the chief executive officer of the
Corporation and shall, subject to the direction of the Board of Directors, have
general supervision and control of its business and shall have general
supervision and direction of all of the officers, employees and agents of the
Corporation.

Section 7. Chief Executive Officer

The Chief Executive Officer shall be the chief executive officer of the
Corporation and shall, subject to the direction of the Board of Directors, have
general supervision and control of its business. Unless otherwise provided by
resolution of the Board of Directors, in the absence of the Chairman of the
Board, if any, the Chief Executive Officer shall preside at all meetings of the
stockholders and, if a director, meetings of the Board of Directors. The Chief
Executive Officer shall have general supervision and direction of all of the
officers, employees and agents of the Corporation.

Section 8. Vice Presidents.

The Vice Presidents, if any, in the order of their election, or in such
other order as the Board of Directors may determine, shall have and perform the
powers and duties of the President (or such of the powers and duties as the
Board of Directors may determine) whenever the President is absent or unable to
act. The Vice Presidents, if any, shall also have such other powers and duties
as may from time to time be determined by the Board of Directors.

Section 9. Treasurer and Assistant Treasurers.

The Treasurer shall, subject to the control and direction of the Board of
Directors, have and perform such powers and duties as may be prescribed in these
By-Laws or be determined from time to time by the Board of Directors. All
property of the Corporation in the custody of the Treasurer shall be subject at
all times to the inspection and control of the Board of Directors. The Treasurer
shall have the responsibility for maintaining the financial records of the
Corporation. The Treasurer shall make such disbursements of the funds of the
Corporation as are authorized and shall render from time to time an account of
all such transactions and of the financial condition of the Corporation. Unless
otherwise voted by the Board of Directors, each

-11-
<PAGE>

Assistant Treasurer, if any, shall have and perform the powers and duties of the
Treasurer whenever the Treasurer is absent or unable to act, and may at any time
exercise such of the powers of the Treasurer, and such other powers and duties,
as may from time to time be determined by the Board of Directors.

Section 10. Secretary and Assistant Secretaries.

The Board of Directors shall appoint a Secretary and, in his or her absence,
an Assistant Secretary. The Secretary or, in his or her absence, any Assistant
Secretary, shall attend all meetings of the directors and shall record all votes
of the Board of Directors and minutes of the proceedings at such meetings. The
Secretary or, in his or her absence, any Assistant Secretary, shall notify the
directors of their meetings, and shall have and perform such other powers and
duties as may from time to time be determined by the Board of Directors. If the
Secretary or an Assistant Secretary is elected but is absent from any meeting of
directors, a temporary Secretary may be appointed by the directors at the
meeting.

Section 11. Bond.

If required by the Board of Directors, any officer shall give the
Corporation a bond in such sum and with such surety or sureties and upon such
terms and conditions as shall be satisfactory to the Board of Directors,
including without limitation a bond for the faithful performance of the duties
of his office and for the restoration to the Corporation of all books, papers,
vouchers, money and other property of whatever kind in his or her possession or
under his control and belonging to the Corporation.

Section 12. Action with Respect to Securities of Other Corporations.

Unless otherwise directed by the Board of Directors, the President, the
Treasurer or any officer of the Corporation authorized by the President shall
have power to vote and otherwise act on behalf of the Corporation, in person or
by proxy, at any meeting of stockholders of or with respect to any action of
stockholders of any other corporation in which this Corporation may hold
securities and otherwise to exercise any and all rights and powers which this
Corporation may possess by reason of its ownership of securities in such other
corporation.

ARTICLE V - STOCK

Section 1. Certificates of Stock.

Each stockholder shall be entitled to a certificate signed by, or in the
name of the Corporation by the Chairman of the Board of Directors, or the
President or a Vice President, and by the Treasurer or an Assistant Treasurer,
or the Secretary or an Assistant Secretary, certifying the number of shares
owned by him or her. Any or all of the signatures on the certificate may be by
facsimile.

-12-
<PAGE>

Section 2. Transfers of Stock.

Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of this Article of these By-
Laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefor.

Section 3. Record Date.

In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held, and, for determining stockholders entitled to
receive payment of any dividend or other distribution or allotment of rights or
to exercise any rights of change, conversion or exchange of stock or for any
other purpose, the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote
at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.

Section 4. Lost, Stolen or Destroyed Certificates.

In the event of the loss, theft or destruction of any certificate of stock,
another may be issued in its place pursuant to such regulations as the Board of
Directors may establish concerning proof of such loss, theft or destruction and
concerning the giving of a satisfactory bond or bonds of indemnity.

Section 5. Regulations.

The issue, transfer, conversion and registration of certificates of stock
shall be governed by such other regulations as the Board of Directors may
establish.

Section 6. Interpretation.

The Board of Directors shall have the power to interpret all of the terms
and provisions of these By-Laws, which interpretation shall be conclusive.

-13-
<PAGE>

ARTICLE VI - NOTICES

Section 1. Notices.

Except as otherwise specifically provided herein or required by law, all
notices required to be given to any stockholder, director, officer, employee or
agent shall be in writing and may in every instance be effectively given by hand
delivery to the recipient thereof, by depositing such notice in the mail,
postage paid, or by sending such notice by courier service, prepaid telegram or
mailgram, or telecopy, cable, or telex. Any such notice shall be addressed to
such stockholder, director, officer, employee or agent at his or her last known
address as the same appears on the books of the Corporation. The time when such
notice is received, if hand delivered, or dispatched, if delivered through the
mail or by courier, telegram, mailgram, telecopy, cable, or telex shall be the
time of the giving of the notice.

Section 2. Waiver of Notice.

A written waiver of any notice, signed by a stockholder, director, officer,
employee or agent, whether before or after the time of the event for which
notice is to be given, shall be deemed equivalent to the notice required to be
given to such stockholder, director, officer, employee or agent. Neither the
business nor the purpose of any meeting need be specified in such a waiver.
Attendance of a director or stockholder at a meeting without protesting prior
thereto or at its commencement the lack of notice shall also constitute a waiver
of notice by such director or stockholder.

ARTICLE VII -INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 1. Right to Indemnification.

Each person who was or is made a party or is threatened to be made a party
to or is otherwise involved (including, without limitation, as a witness) in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director or an officer
of the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, including service with
respect to an employee benefit plan (hereinafter an "Indemnitee"), whether the
basis of such proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held harmless by
the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such Indemnitee in connection therewith; provided, however, that,
except as provided in Section 3 of this Article with respect to proceedings to
enforce rights to indemnification or as otherwise required by law, the
Corporation shall not be required to indemnify or advance expenses to any such
Indemnitee in connection

-14-
<PAGE>

with a proceeding (or part thereof) initiated by such Indemnitee unless such
proceeding (or part thereof) was authorized by the Board of Directors of the
Corporation.

Section 2. Right to Advancement of Expenses.

The right to indemnification conferred in Section 1 of this Article shall
include the right to be paid by the Corporation the expenses (including
attorney's fees) incurred in defending any such proceeding in advance of its
final disposition; provided, however, that, if the Delaware General Corporation
Law requires, an advancement of expenses incurred by an Indemnitee in his
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such Indemnitee, including, without limitation,
service to an employee benefit plan) shall be made only upon delivery to the
Corporation of an undertaking, by or on behalf of such Indemnitee, to repay all
amounts so advanced if it shall ultimately be determined by final judicial
decision from which there is no further right to appeal that such Indemnitee is
not entitled to be indemnified for such expenses under this Section 2 or
otherwise. The rights to indemnification and to the advancement of expenses
conferred in Sections 1 and 2 of this Article shall be contract rights and such
rights shall continue as to an Indemnitee who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the Indemnitee's
heirs, executors and administrators. Any repeal or modification of any of the
provisions of this Article shall not adversely affect any right or protection of
an Indemnitee existing at the time of such repeal or modification.

Section 3. Right of Indemnitees to Bring Suit.

If a claim under Section 1 or 2 of this Article is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty (20) days, the Indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any such suit,
or in a suit brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the Indemnitee shall also be entitled
to be paid the expenses of prosecuting or defending such suit. In (i) any suit
brought by the Indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the Indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) in any suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking, the Corporation shall be entitled to recover such expenses upon a
final adjudication that, the Indemnitee has not met any applicable standard for
indemnification set forth in the Delaware General Corporation Law. Neither the
failure of the Corporation (including its board of directors, independent legal
counsel, or its stockholders) to have made a determination prior to the
commencement of such suit that indemnification of the Indemnitee is proper in
the circumstances because the Indemnitee has met the applicable standard of
conduct set forth in the Delaware General Corporation Law, nor an actual
determination by the Corporation (including its board of directors, independent
legal counsel, or its stockholders) that the Indemnitee has not met such
applicable standard of conduct, shall create a presumption that the Indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the Indemnitee, be a defense to such suit. In any suit brought by
the Indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of

-15-
<PAGE>

proving that the Indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article or otherwise shall be on the
Corporation.

Section 4. Non-Exclusivity of Rights.

The rights to indemnification and to the advancement of expenses conferred
in this Article shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, the Corporation's Certificate of
Incorporation as amended from time to time, these By-Laws, any agreement, any
vote of stockholders or disinterested directors or otherwise.

Section 5. Insurance.

The Corporation may maintain insurance, at its expense, to protect itself
and any director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Corporation would have the power
to indemnify such person against such expense, liability or loss under the
Delaware General Corporation Law.

Section 6. Indemnification of Employees and Agents of the Corporation.

The Corporation may, to the extent authorized from time to time by the Board
of Directors, grant rights to indemnification and to the advancement of expenses
to any employee or agent of the Corporation to the fullest extent of the
provisions of this Article with respect to the indemnification and advancement
of expenses of directors and officers of the Corporation.

ARTICLE VIII - CERTAIN TRANSACTIONS

Section 1. Transactions with Interested Parties.

No contract or transaction between the Corporation and one or more of its
directors or officers, or between the Corporation and any other corporation,
partnership, association, or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board or
committee thereof which authorizes the contract or transaction or solely because
the votes of such director or officer are counted for such purpose, if:

(a) The material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the Board of
Directors or the committee, and the Board or committee in good faith
authorizes the contract or transaction by the affirmative votes of a
majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or

(b) The material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders; or

-16-
<PAGE>

(c) The contract or transaction is fair as to the Corporation as of
the time it is authorized, approved or ratified, by the Board of Directors,
a committee thereof, or the stockholders.

Section 2. Quorum.

Common or interested directors may be counted in determining the presence of
a quorum at a meeting of the Board of Directors or of a committee which
authorizes the contract or transaction.

ARTICLE IX - MISCELLANEOUS

Section 1. Facsimile Signatures.

In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-Laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.

Section 2. Corporate Seal.

The Board of Directors may provide a suitable seal, containing the name of
the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.

Section 3. Reliance upon Books, Reports and Records.

Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.

Section 4. Fiscal Year.

Except as otherwise determined by the Board of Directors from time to time,
the fiscal year of the Corporation shall end on the last day of December of each
year.

Section 5. Time Periods.

In applying any provision of these By-Laws which requires that an act be
done or not be done a specified number of days prior to an event or that an act
be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded,
and the day of the event shall be included.

-17-
<PAGE>

Section 6. Pronouns.

Whenever the context may require, any pronouns used in these By-Laws shall
include the corresponding masculine, feminine or neuter forms.

ARTICLE X - AMENDMENTS

These By-Laws may be amended or repealed by the affirmative vote of a
majority of the whole Board at any meeting or by the stockholders by the
affirmative vote of seventy percent (70%) of the outstanding voting power of the
then-outstanding shares of capital stock of the Corporation, entitled to vote
generally in the election of directors, at any meeting at which a proposal to
amend or repeal these By-Laws is properly presented.

-18-

<PAGE>

Exhibit 4.2

NUMBER CURAGEN SHARES
CORPORATION

INCORPORATED UNDER THE LAWS OF CUSIP 23126R 10 1
THE STATE OF DELAWARE SEE REVERSE FOR CERTAIN DEFINITIONS

THIS CERTIFIES THAT

is the record holder of

FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK,
$.01 PAR VALUE PER SHARE, OF

- --------------------------- CURAGEN CORPORATION ----------------------------

transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this certificate properly
endorsed. This certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.

WITNESS the seal of the Corporation and the signatures of its duly authorized
officers.

Dated:

/s/ Elizabeth A. Whayland /s/ Jonathan M. Rothberg
Secretary Chief Executive Officer,
President and Chairman of the Board

Curagen Corporation
Seal 1991
<PAGE>

CURAGEN CORPORATION

CuraGen Corporation will furnish to any shareholder upon request to its
principal office, and without charge, a full statement of the designations,
preferences, limitations and relative rights of the shares of each class
authorized, and of the variations in the relative rights and preferences between
the shares of each preferred or special class in a series, so far as the same
have been fixed and determined, and the authority of the board of directors to
fix and determine the relative rights and preferences of subsequent series.

The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM - as tenants in common

UNIF GIFT ACT-___________ Custodian______________
(Cust) (Minor)

TEN ENT - as tenants by the entireties

JT TEN - as joint tenants with right of survivorship and not
as tenants in common

under Uniforms Gifts to Minors

Act___________________________
(State)

Additional abbreviations may also be used though not in the above list.

For value received, ________________ hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
[ ]
________________________________________________________________________________

________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

________________________________________________________________________________

__________________________________________________________________________Shares
of the Capital Stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

________________________________________________________________________Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.

Dated,____________________________________

_________________________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THIS CERTIFICATE IN EVERY PARTICULAR,
WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE
WHATEVER.

Signature(s) Guaranteed:

By_______________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY
AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17 Ad-15.

<PAGE>

Exhibit 10.4
CURAGEN CORPORATION

1997 EMPLOYEE, DIRECTOR AND CONSULTANT STOCK PLAN

1. DEFINITIONS.
-----------

Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this CuraGen Corporation 1997 Employee,
Director and Consultant Stock Plan, have the following meanings:

Administrator means the Board of Directors, unless it has delegated
-------------
power to act on its behalf to the Committee, in which case the
Administrator means the Committee.

Affiliate means a corporation which, for purposes of Section 424 of
---------
the Code, is a parent or subsidiary of the Company, direct or
indirect.

Board of Directors means the Board of Directors of the Company.
------------------

Code means the United States Internal Revenue Code of 1986, as
----
amended.

Committee means the committee of the Board of Directors to which the
---------
Board of Directors has delegated power to act under or pursuant to the
provisions of the Plan.

Common Stock means shares of the Company's voting common stock, $.01
------------
par value per share.

Company means CuraGen Corporation, a Delaware corporation.
-------

Disability or Disabled means permanent and total disability as defined
---------- --------
in Section 22(e)(3) of the Code.

Fair Market Value of a Share of Common Stock means:
-----------------

(1) If the Common Stock is listed on a national securities exchange or
traded in the over-the-counter market and sales prices are regularly
reported for the Common Stock, the closing or last price of the Common
Stock on the Composite Tape or other comparable reporting system for
the trading day immediately preceding the applicable date;
<PAGE>

(2) If the Common Stock is not traded on a national securities exchange
but is traded on the over-the-counter market, if sales prices are not
regularly reported for the Common Stock for the trading day referred
to in clause (1), and if bid and asked prices for the Common Stock are
regularly reported, the mean between the bid and the asked price for
the Common Stock at the close of trading in the over-the-counter
market for the trading day on which Common Stock was traded
immediately preceding the applicable date; and

(3) If the Common Stock is neither listed on a national securities
exchange nor traded in the over-the-counter market, such value as the
Administrator, in good faith, shall determine.

ISO means an option meant to qualify as an incentive stock option
---
under Section 422 of the Code.

Key Employee means an employee of the Company or of an Affiliate
------------
(including, without limitation, an employee who is also serving as an
officer or director of the Company or of an Affiliate), designated by
the Administrator to be eligible to be granted one or more Stock
Rights under the Plan.

Non-Qualified Option means an option which is not intended to qualify
--------------------
as an ISO.

Option means an ISO or Non-Qualified Option granted under the Plan.
------

Option Agreement means an agreement between the Company and a
----------------
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.

Participant means a Key Employee, director or consultant to whom one
-----------
or more Stock Rights are granted under the Plan. As used herein,
"Participant" shall include "Participant's Survivors" where the
context requires.

Plan means this CuraGen Corporation 1997 Employee, Director and
----
Consultant Stock Plan.

Shares means shares of the Common Stock as to which Stock Rights have
------
been or may be granted under the Plan or any shares of capital stock
into which the Shares are changed or for which they are exchanged
within the provisions of Paragraph 3 of the Plan. The Shares issued
under the Plan may be authorized and unissued shares or shares held by
the Company in its treasury, or both.

Stock Grant means a grant by the Company of Shares under the Plan.
-----------

Stock Grant Agreement means an agreement between the Company and a
---------------------
Participant delivered pursuant to the Plan, in such form as the
Administrator shall approve.

2
<PAGE>

Stock Right means a right to Shares of the Company granted pursuant to
-----------
the Plan -- an ISO, a Non-Qualified Option or a Stock Grant.

Survivors means a deceased Participant's legal representatives and/or
---------
any person or persons who acquired the Participant's rights to a Stock
Right by will or by the laws of descent and distribution.

2. PURPOSES OF THE PLAN.
--------------------

The Plan is intended to encourage ownership of Shares by Key Employees and
directors of and certain consultants to the Company in order to attract such
people, to induce them to work for the benefit of the Company or of an Affiliate
and to provide additional incentive for them to promote the success of the
Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-
Qualified Options and Stock Grants.

3. SHARES SUBJECT TO THE PLAN.
--------------------------

The number of Shares which may be issued from time to time pursuant to this
Plan shall be 1,500,000 or the equivalent of such number of Shares after the
Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in
accordance with Paragraph 23 of the Plan.

If an Option ceases to be "outstanding", in whole or in part, or if the
Company shall reacquire any Shares issued pursuant to a Stock Grant, the Shares
which were subject to such Option and any Shares so reacquired by the Company
shall be available for the granting of other Stock Rights under the Plan. Any
Option shall be treated as "outstanding" until such Option is exercised in full,
or terminates or expires under the provisions of the Plan, or by agreement of
the parties to the pertinent Option Agreement.

4. ADMINISTRATION OF THE PLAN.
--------------------------

The Administrator of the Plan will be the Board of Directors, except to the
extent the Board of Directors delegates its authority to the Committee, in which
case the Committee shall be the Administrator. Subject to the provisions of the
Plan, the Administrator is authorized to:

a. Interpret the provisions of the Plan or of any Option or Stock Grant
and to make all rules and determinations which it deems necessary or
advisable for the administration of the Plan;

3
<PAGE>

b. Determine which employees of the Company or of an Affiliate shall be
designated as Key Employees and which of the Key Employees, directors
and consultants shall be granted Stock Rights;

c. Determine the number of Shares for which a Stock Right or Stock Rights
shall be granted, provided, however, that in no event shall Stock
Rights with respect to more than 750,000 shares be granted to any
Participant in any fiscal year; and

d. Specify the terms and conditions upon which a Stock Right or Stock
Rights may be granted;

provided, however, that all such interpretations, rules, determinations, terms
and conditions shall be made and prescribed in the context of preserving the tax
status under Section 422 of the Code of those Options which are designated as
ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Stock Right granted under
it shall be final, unless otherwise determined by the Board of Directors, if the
Administrator is the Committee.

5. ELIGIBILITY FOR PARTICIPATION.
-----------------------------

The Administrator will, in its sole discretion, name the Participants in
the Plan, provided, however, that each Participant must be a Key Employee,
director or consultant of the Company or of an Affiliate at the time a Stock
Right is granted. Notwithstanding the foregoing, the Administrator may authorize
the grant of a Stock Right to a person not then an employee, director or
consultant of the Company or of an Affiliate; provided, however, that the actual
grant of such Stock Right shall be conditioned upon such person becoming
eligible to become a Participant at or prior to the time of the delivery of the
Agreement evidencing such Stock Right. ISOs may be granted only to Key
Employees. Non-Qualified Options and Stock Grants may be granted to any Key
Employee, director or consultant of the Company or an Affiliate. The granting of
any Stock Right to any individual shall neither entitle that individual to, nor
disqualify him or her from, participation in any other grant of Stock Rights.

6. TERMS AND CONDITIONS OF OPTIONS.
-------------------------------

Each Option shall be set forth in writing in an Option Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be
granted subject to such conditions as the Administrator may deem appropriate
including, without limitation, subsequent approval by the shareholders of the
Company of this Plan or any amendments thereto. The Option Agreements shall be
subject to at least the following terms and conditions:

A. Non-Qualified Options: Each Option intended to be a Non-Qualified
---------------------
Option shall be subject to the terms and conditions which the
Administrator determines to be

4
<PAGE>

appropriate and in the best interest of the Company, subject to the
following minimum standards for any such Non-Qualified Option:

a. Option Price: Each Option Agreement shall state the option price
(per share) of the Shares covered by each Option, which option
price shall be determined by the Administrator but shall not be
less than the par value per share of Common Stock.

b. Each Option Agreement shall state the number of Shares to which
it pertains;

c. Each Option Agreement shall state the date or dates on which it
first is exercisable and the date after which it may no longer be
exercised, and may provide that the Option rights accrue or
become exercisable in installments over a period of months or
years, or upon the occurrence of certain conditions or the
attainment of stated goals or events; and

d. Exercise of any Option may be conditioned upon the Participant's
execution of a Share purchase agreement in form satisfactory to
the Administrator providing for certain protections for the
Company and its other shareholders, including requirements that:

i. The Participant's or the Participant's Survivors' right to
sell or transfer the Shares may be restricted; and

ii. The Participant or the Participant's Survivors may be
required to execute letters of investment intent and must
also acknowledge that the Shares will bear legends noting
any applicable restrictions.

e. Directors' Options: Each director of the Company who is serving
------------------
on the Board of Directors on October 6, 1997 and who is not an
employee of or consultant to the Company or any Affiliate, shall
be granted a Non-Qualified Option to purchase 5,000 Shares as of
such date. In addition, each director of the Company who is
elected or appointed to the Board of Directors after October 6,
1997 and who is not an employee of or consultant to the Company
or any Affiliate, upon first being elected or appointed to the
Board of Directors, shall be granted a Non-Qualified Option to
purchase 20,000 Shares as of the date of election or appointment.
Each Option described in the foregoing two sentences shall (i)
have an exercise price equal to the Fair Market Value (per share)
of the Shares on the date of grant of the Option, (ii) have a
term of ten years, and (iii) become cumulatively exercisable as
follows: (x) one-third shall vest immediately on the date of
grant, (y) one-third shall vest on the first anniversary of the
date of grant, and (z) one-third shall vest on the second
anniversary of the date of grant.

5
<PAGE>

Immediately following each annual meeting of stockholders (or
special meeting in lieu of an annual meeting), commencing with
the 1998 annual meeting, each Continuing Director (as defined
below) will be granted a Non-Qualified Option to purchase 5,000
Shares. As used herein, the term "Continuing Director" shall mean
a director who (i) is serving as a director immediately following
such annual or special meeting but was not first elected at such
annual or special meeting, (ii) has been in continued and
uninterrupted service as a director of the Company since his or
her initial election or appointment and (iii) is not an employee
of or consultant to the Company or any Affiliate. Each such
Option shall (i) have an exercise price equal to the Fair Market
Value (per share) of the Shares on the date of grant of the
Option, (ii) have a term of ten years, and (iii) be immediately
exercisable in full.

Any director entitled to receive an Option under this
subparagraph may elect to decline the Option.

Except as otherwise provided in the pertinent Option Agreement, if a director
who receives Options pursuant to this subparagraph:

a. ceases to be a member of the Board of Directors for any
reason other than death or Disability, any then unexercised
Options granted to such director may be exercised by the
director within a period of ninety (90) days after the date
the director ceases to be a member of the Board of
Directors, but only to the extent of the number of Shares
with respect to which the Options are exercisable on the
date the director ceases to be a member of the Board of
Directors, and in no event later than the expiration date of
the Option; or

b. ceases to be a member of the Board of Directors by reason of
his or her death or Disability, any then unexercised Options
granted to such director may be exercised by the director
(or by the director's personal representative, or the
director's Survivors) within a period of one hundred eighty
(180) days after the date the director ceases to be a member
of the Board of Directors, but only to the extent of the
number of Shares with respect to which the Options are
exercisable on the date the director ceases to be a member
of the Board of Directors, and in no event later than the
expiration date of the Option.

B. ISOs: Each Option intended to be an ISO shall be issued only to a Key
----
Employee and be subject to at least the following terms and
conditions, with such additional restrictions or changes as the
Administrator determines are appropriate but not in

6
<PAGE>

conflict with Section 422 of the Code and relevant regulations and
rulings of the Internal Revenue Service:

a. Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A)
above, except clauses (a) and (e) thereunder.

b. Option Price: Immediately before the Option is granted, if the
Participant owns, directly or by reason of the applicable
attribution rules in Section 424(d) of the Code:

i. Ten percent (10%) or less of the total combined voting power
-------
of all classes of stock of the Company or an Affiliate, the
Option price per share of the Shares covered by each Option
shall not be less than one hundred percent (100%) of the
Fair Market Value per share of the Shares on the date of the
grant of the Option.

ii. More than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an
Affiliate, the Option price per share of the Shares covered
by each Option shall not be less than one hundred ten
percent (110%) of the said Fair Market Value on the date of
grant.

c. Term of Option: For Participants who own

i. Ten percent (10%) or less of the total combined voting power
-------
of all classes of stock of the Company or an Affiliate, each
Option shall terminate not more than ten (10) years from the
date of the grant or at such earlier time as the Option
Agreement may provide.

ii. More than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or an
Affiliate, each Option shall terminate not more than five
(5) years from the date of the grant or at such earlier time
as the Option Agreement may provide.

d. Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of Options which may be exercisable in any
calendar year (under this or any other ISO plan of the Company or
an Affiliate) so that the aggregate Fair Market Value (determined
at the time each ISO is granted) of the stock with respect to
which ISOs are exercisable for the first time by the Participant
in any calendar year does not exceed one hundred thousand dollars
($100,000), provided that this subparagraph (d) shall have no
force or effect if its inclusion in the Plan is not necessary for
Options issued as ISOs to qualify as ISOs pursuant to Section
422(d) of the Code.

7
<PAGE>

7. TERMS AND CONDITIONS OF STOCK GRANTS.
------------------------------------

Each offer of a Stock Grant to a Participant shall state the date prior to
which the Stock Grant must be accepted by the Participant, and the principal
terms of each Stock Grant shall be set forth in a Stock Grant Agreement, duly
executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Stock Grant Agreement shall be in a form
approved by the Administrator and shall contain terms and conditions which the
Administrator determines to be appropriate and in the best interest of the
Company, subject to the following minimum standards:

(a) Each Stock Grant Agreement shall state the purchase price (per share),
if any, of the Shares covered by each Stock Grant, which purchase
price shall be determined by the Administrator but shall not be less
than the minimum consideration required by the Delaware General
Corporation Law on the date of the grant of the Stock Grant;

(b) Each Stock Grant Agreement shall state the number of Shares to which
the Stock Grant pertains; and

(c) Each Stock Grant Agreement shall include the terms of any right of the
Company to reacquire the Shares subject to the Stock Grant, including
the time and events upon which such rights shall accrue and the
purchase price therefor, if any.

8. EXERCISE OF OPTIONS AND ISSUE OF SHARES.
---------------------------------------

An Option (or any part or installment thereof) shall be exercised by giving
written notice to the Company at its principal executive office address,
together with provision for payment of the full purchase price in accordance
with this Paragraph for the Shares as to which the Option is being exercised,
and upon compliance with any other condition(s) set forth in the Option
Agreement. Such written notice shall be signed by the person exercising the
Option, shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the
Option Agreement. Payment of the purchase price for the Shares as to which such
Option is being exercised shall be made (a) in United States dollars in cash or
by check, or (b) at the discretion of the Administrator, through delivery of
shares of Common Stock having a Fair Market Value equal as of the date of the
exercise to the cash exercise price of the Option, or (c) at the discretion of
the Administrator, by having the Company retain from the shares otherwise
issuable upon exercise of the Option, a number of shares having a Fair Market
Value equal as of the date of exercise to the exercise price of the Option, or
(d) at the discretion of the Administrator, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (e) at the discretion of the Administrator, in accordance with a
cashless exercise program established with a securities brokerage firm, and
approved by the Administrator, or (f) at the discretion of the Administrator, by
any combination

8
<PAGE>

of (a), (b), (c), (d) and (e) above. Notwithstanding the foregoing, the
Administrator shall accept only such payment on exercise of an ISO as is
permitted by Section 422 of the Code.

The Company shall then reasonably promptly deliver the Shares as to which
such Option was exercised to the Participant (or to the Participant's Survivors,
as the case may be). In determining what constitutes "reasonably promptly," it
is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.
The Shares shall, upon delivery, be evidenced by an appropriate certificate or
certificates for fully paid, non-assessable Shares.

The Administrator shall have the right to accelerate the date of exercise
of any installment of any Option; provided that the Administrator shall not
accelerate the exercise date of any installment of any Option granted to any Key
Employee as an ISO (and not previously converted into a Non-Qualified Option
pursuant to Paragraph 26) if such acceleration would violate the annual vesting
limitation contained in Section 422(d) of the Code, as described in Paragraph
6.B.d.

The Administrator may, in its discretion, amend any term or condition of an
outstanding Option provided (i) such term or condition as amended is permitted
by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Option was granted, or in the event of the death of the
Participant, the Participant's Survivors, if the amendment is adverse to the
Participant, and (iii) any such amendment of any ISO shall be made only after
the Administrator, after consulting the counsel for the Company, determines
whether such amendment would constitute a "modification" of any Option which is
an ISO (as that term is defined in Section 424(h) of the Code) or would cause
any adverse tax consequences for the holder of such ISO.

9. ACCEPTANCE OF STOCK GRANT AND ISSUE OF SHARES.
---------------------------------------------

A Stock Grant (or any part or installment thereof) shall be accepted by
executing the Stock Grant Agreement and delivering it to the Company at its
principal office address, together with provision for payment of the full
purchase price, if any, in accordance with this Paragraph for the Shares as to
which such Stock Grant is being accepted, and upon compliance with any other
conditions set forth in the Stock Grant Agreement. Payment of the purchase
price for the Shares as to which such Stock Grant is being accepted shall be
made (a) in United States dollars in cash or by check, or (b) at the discretion
of the Administrator, through delivery of shares of Common Stock having a fair
market value equal as of the date of acceptance of the Stock Grant to the
purchase price of the Stock Grant determined in good faith by the Administrator,
or (c) at the discretion of the Administrator, by delivery of the grantee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the applicable Federal rate, as defined in Section 1274(d) of
the Code, or (d) at the discretion of the Administrator, by any combination of
(a), (b) and (c) above.

9
<PAGE>

The Company shall then reasonably promptly deliver the Shares as to which
such Stock Grant was accepted to the Participant (or to the Participant's
Survivors, as the case may be), subject to any escrow provision set forth in the
Stock Grant Agreement. In determining what constitutes "reasonably promptly," it
is expressly understood that the issuance and delivery of the Shares may be
delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or "blue sky" laws) which requires the
Company to take any action with respect to the Shares prior to their issuance.

The Administrator may, in its discretion, amend any term or condition of an
outstanding Stock Grant or Stock Grant Agreement provided (i) such term or
condition as amended is permitted by the Plan, and (ii) any such amendment shall
be made only with the consent of the Participant to whom the Stock Grant was
made, if the amendment is adverse to the Participant.

10. RIGHTS AS A SHAREHOLDER.
-----------------------

No Participant to whom a Stock Right has been granted shall have rights as
a shareholder with respect to any Shares covered by such Stock Right, except
after due exercise of the Option or acceptance of the Stock Grant and tender of
the full purchase price, if any, for the Shares being purchased pursuant to such
exercise or acceptance and registration of the Shares in the Company's share
register in the name of the Participant.

11. ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.
-------------------------------------------------

By its terms, a Stock Right granted to a Participant shall not be
transferable by the Participant other than (i) by will or by the laws of descent
and distribution, or (ii) as otherwise determined by the Administrator and set
forth in the applicable Option Agreement or Stock Grant Agreement. The
designation of a beneficiary of a Stock Right by a Participant shall not be
deemed a transfer prohibited by this Paragraph. Except as provided above, a
Stock Right shall only be exercisable or may only be accepted, during the
Participant's lifetime, by such Participant (or by his or her legal
representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to
execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Stock Right or of any rights
granted thereunder contrary to the provisions of this Plan, or the levy of any
attachment or similar process upon a Stock Right, shall be null and void.

10
<PAGE>

12. EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR DEATH
---------------------------------------------------------------------------
OR DISABILITY.
-------------

Except as otherwise provided in the pertinent Option Agreement in the event
of a termination of service (whether as an employee, director or consultant)
with the Company or an Affiliate before the Participant has exercised an Option,
the following rules apply:

a. A Participant who ceases to be an employee, director or consultant of
the Company or of an Affiliate (for any reason other than termination
"for cause", Disability, or death for which events there are special
rules in Paragraphs 13, 14, and 15, respectively), may exercise any
Option granted to him or her to the extent that the Option is
exercisable on the date of such termination of service, but only
within such term as the Administrator has designated in the pertinent
Option Agreement.

b. Except as provided in subparagraph (c) below, or Paragraph 14 or 15,
In no event may an Option Agreement provide, if an Option is intended
to be an ISO, that the time for exercise be later than three (3)
months after the Participant's termination of employment.

c. The provisions of this Paragraph, and not the provisions of Paragraph
14 or 15, shall apply to a Participant who subsequently becomes
Disabled or dies after the termination of employment, director status
or consultancy, provided, however, in the case of a Participant's
Disability or death within three (3) months after the termination of
employment, director status or consultancy, the Participant or the
Participant's Survivors may exercise the Option within one (1) year
after the date of the Participant's termination of employment, but in
no event after the date of expiration of the term of the Option.

d. Notwithstanding anything herein to the contrary, if subsequent to a
Participant's termination of employment, termination of director
status or termination of consultancy, but prior to the exercise of an
Option, the Board of Directors determines that, either prior or
subsequent to the Participant's termination, the Participant engaged
in conduct which would constitute "cause", then such Participant shall
forthwith cease to have any right to exercise any Option.

e. A Participant to whom an Option has been granted under the Plan who is
absent from work with the Company or with an Affiliate because of
temporary disability (any disability other than a permanent and total
Disability as defined in Paragraph 1 hereof), or who is on leave of
absence for any purpose, shall not, during the period of any such
absence, be deemed, by virtue of such absence alone, to have
terminated such Participant's employment, director status or
consultancy with the Company or with an Affiliate, except as the
Administrator may otherwise expressly provide.

11
<PAGE>

f. Except as required by law or as set forth in the pertinent Option
Agreement, Options granted under the Plan shall not be affected by any
change of a Participant's status within or among the Company and any
Affiliates, so long as the Participant continues to be an employee,
director or consultant of the Company or any Affiliate.

13. EFFECT ON OPTIONS OF TERMINATION OF SERVICE "FOR CAUSE".
-------------------------------------------------------

Except as otherwise provided in the pertinent Option Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause" prior to the time that all his or her outstanding Options have been
exercised:

a. All outstanding and unexercised Options as of the time the Participant
is notified his or her service is terminated "for cause" will
immediately be forfeited.

b. For purposes of this Plan, "cause" shall include (and is not limited
to) dishonesty with respect to the Company or any Affiliate,
insubordination, substantial malfeasance or non-feasance of duty,
unauthorized disclosure of confidential information, and conduct
substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the existence
of "cause" will be conclusive on the Participant and the Company.

c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service but prior to the exercise of an Option, that either prior or
subsequent to the Participant's termination the Participant engaged in
conduct which would constitute "cause", then the right to exercise any
Option is forfeited.

d. Any definition in an agreement between the Participant and the Company
or an Affiliate, which contains a conflicting definition of "cause"
for termination and which is in effect at the time of such
termination, shall supersede the definition in this Plan with respect
to such Participant.

14. EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.
----------------------------------------------------------

Except as otherwise provided in the pertinent Option Agreement, a
Participant who ceases to be an employee, director or consultant of the Company
or of an Affiliate by reason of Disability may exercise any Option granted to
such Participant:

a. To the extent exercisable but not exercised on the date of Disability;
and

12
<PAGE>

b. In the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion of any additional rights as would have
accrued had the Participant not become Disabled prior to the end of
the accrual period which next ends following the date of Disability.
The proration shall be based upon the number of days of such accrual
period prior to the date of Disability.

A Disabled Participant may exercise such rights only within a period of not
more than one (1) year after the date of the Participant's termination of
employment, directorship or consultancy, as the case may be, notwithstanding
that the Participant might have been able to exercise the Option as to some or
all of the Shares on a later date if the Participant had not become disabled and
had continued to be an employee, director or consultant or, if earlier, within
the originally prescribed term of the Option.

The Administrator shall make the determination both of whether Disability
has occurred and the date of its occurrence (unless a procedure for such
determination is set forth in another agreement between the Company and such
Participant, in which case such procedure shall be used for such determination).
If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for
by the Company.

15. EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
--------------------------------------------------------------------

Except as otherwise provided in the pertinent Option Agreement, in the
event of the death of a Participant while the Participant is an employee,
director or consultant of the Company or of an Affiliate, such Option may be
exercised by the Participant's Survivors:

a. To the extent exercisable but not exercised on the date of death; and

b. In the event rights to exercise the Option accrue periodically, to the
extent of a pro rata portion of any additional rights which would have
accrued had the Participant not died prior to the end of the accrual
period which next ends following the date of death. The proration
shall be based upon the number of days of such accrual period prior to
the Participant's death.

If the Participant's Survivors wish to exercise the Option, they must take
all necessary steps to exercise the Option within one (1) year after the date of
death of such Participant, notwithstanding that the decedent might have been
able to exercise the Option as to some or all of the Shares on a later date if
he or she had not died and had continued to be an employee, director or
consultant or, if earlier, within the originally prescribed term of the Option.

13
<PAGE>

16. EFFECT OF TERMINATION OF SERVICE ON STOCK GRANTS.
------------------------------------------------

In the event of a termination of service (whether as an employee, director
or consultant) with the Company or an Affiliate for any reason before the
Participant has accepted a Stock Grant, such offer shall terminate.

For purposes of this Paragraph 16 and Paragraph 17 below, a Participant to
whom a Stock Grant has been offered under the Plan who is absent from work with
the Company or with an Affiliate because of temporary disability (any disability
other than a permanent and total Disability as defined in Paragraph 1 hereof),
or who is on leave of absence for any purpose, shall not, during the period of
any such absence, be deemed, by virtue of such absence alone, to have terminated
such Participant's employment, director status or consultancy with the Company
or with an Affiliate, except as the Administrator may otherwise expressly
provide.

In addition, for purposes of this Paragraph 16 and Paragraph 17 below, any
change of employment or other service within or among the Company and any
Affiliates shall not be treated as a termination of employment, director status
or consultancy so long as the Participant continues to be an employee, director
or consultant of the Company or any Affiliate.

17. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN "FOR CAUSE" OR
--------------------------------------------------------------------------
DEATH OR DISABILITY.
-------------------

Except as otherwise provided in the pertinent Stock Grant Agreement, in the
event of a termination of service (whether as an employee, director or
consultant), other than termination "for cause," Disability, or death for which
events there are special rules in Paragraphs 18, 19, and 20, respectively,
before all Company rights of repurchase shall have lapsed, then the Company
shall have the right to repurchase that number of Shares subject to a Stock
Grant as to which the Company's repurchase rights have not lapsed.

18. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE "FOR CAUSE".
------------------------------------------------------------

Except as otherwise provided in the pertinent Stock Grant Agreement, the
following rules apply if the Participant's service (whether as an employee,
director or consultant) with the Company or an Affiliate is terminated "for
cause":

a. All Shares subject to any Stock Grant shall be immediately subject to
repurchase by the Company at the purchase price, if any, thereof.

b. For purposes of this Plan, "cause" shall include (and is not limited
to) dishonesty with respect to the employer, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized
disclosure of confidential information, and conduct substantially
prejudicial to the business of the Company or any Affiliate.

14
<PAGE>

The determination of the Administrator as to the existence of "cause"
will be conclusive on the Participant and the Company.

c. "Cause" is not limited to events which have occurred prior to a
Participant's termination of service, nor is it necessary that the
Administrator's finding of "cause" occur prior to termination. If the
Administrator determines, subsequent to a Participant's termination of
service, that either prior or subsequent to the Participant's
termination the Participant engaged in conduct which would constitute
"cause," then the Company's right to repurchase all of such
Participant's Shares shall apply.

19. EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.
---------------------------------------------------------------

Except as otherwise provided in the pertinent Stock Grant Agreement, the
following rules apply if a Participant ceases to be an employee, director or
consultant of the Company or of an Affiliate by reason of Disability: to the
extent the Company's rights of repurchase have not lapsed on the date of
Disability, they shall be exercisable; provided, however, that in the event such
rights of repurchase lapse periodically, such rights shall lapse to the extent
of a pro rata portion of the Shares subject to such Stock Grant as would have
lapsed had the Participant not become Disabled prior to the end of the vesting
period which next ends following the date of Disability. The proration shall be
based upon the number of days of such vesting period prior to the date of
Disability.

20. EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.
-------------------------------------------------------------------------

Except as otherwise provided in the pertinent Stock Grant Agreement, the
following rules apply in the event of the death of a Participant while the
Participant is an employee, director or consultant of the Company or of an
Affiliate: to the extent the Company's rights of repurchase have not lapsed on
the date of death, they shall be exercisable; provided, however, that in the

15
<PAGE>

event such rights of repurchase lapse periodically, such rights shall lapse to
the extent of a pro rata portion of the Shares subject to such Stock Grant as
would have lapsed had the Participant not died prior to the end of the vesting
period which next ends following the date of death. The proration shall be
based upon the number of days of such vesting period prior to the Participant's
death.

21. PURCHASE FOR INVESTMENT.
-----------------------

Unless the offering and sale of the Shares to be issued upon the particular
exercise or acceptance of a Stock Right shall have been effectively registered
under the Securities Act of 1933, as now in force or hereafter amended (the
"1933 Act"), the Company shall be under no obligation to issue the Shares
covered by such exercise unless and until the following conditions have been
fulfilled:

a. The person(s) who exercise(s) or accept(s) such Stock Right shall
warrant to the Company, prior to the receipt of such Shares, that such
person(s) are acquiring such Shares for their own respective accounts,
for investment, and not with a view to, or for sale in connection
with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of
the following legend which shall be endorsed upon the certificate(s)
evidencing their Shares issued pursuant to such exercise or such
grant:

"The shares represented by this certificate have been taken for
investment and they may not be sold or otherwise transferred by
any person, including a pledgee, unless (1) either (a) a
Registration Statement with respect to such shares shall be
effective under the Securities Act of 1933, as amended, or (b)
the Company shall have received an opinion of counsel
satisfactory to it that an exemption from registration under such
Act is then available, and (2) there shall have been compliance
with all applicable state securities laws."

b. At the discretion of the Administrator, the Company shall have
received an opinion of its counsel that the Shares may be issued upon
such particular exercise or acceptance in compliance with the 1933 Act
without registration thereunder.

22. DISSOLUTION OR LIQUIDATION OF THE COMPANY.
-----------------------------------------

Upon the dissolution or liquidation of the Company, all Options granted
under this Plan which as of such date shall not have been exercised and all
Stock Grants which have not been accepted will terminate and become null and
void; provided, however, that if the rights of a Participant or a Participant's
Survivors have not otherwise terminated and expired, the Participant or the
Participant's Survivors will have the right immediately prior to such
dissolution or

16
<PAGE>

liquidation to exercise or accept any Stock Right to the extent that the Stock
Right is exercisable or subject to acceptance as of the date immediately prior
to such dissolution or liquidation.

23. ADJUSTMENTS.
-----------

Upon the occurrence of any of the following events, a Participant's rights
with respect to any Stock Right granted to him or her hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
pertinent Option Agreement or Stock Grant Agreement:

A. Stock Dividends and Stock Splits. If (i) the shares of Common Stock
--------------------------------
shall be subdivided or combined into a greater or smaller number of shares or if
the Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, or (ii) additional shares or new or different shares
or other securities of the Company or other non-cash assets are distributed with
respect to such shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise or acceptance of such Stock Right may be
appropriately increased or decreased proportionately, and appropriate
adjustments may be made in the purchase price per share to reflect such events.
The number of Shares subject to Options to be granted to directors pursuant to
Paragraph 6(A)(e) and the number of Shares subject to the limitation in
Paragraph 4(c) shall also be proportionately adjusted upon the occurrence of
such events.

B. Consolidations or Mergers. If the Company is to be consolidated with
-------------------------
or acquired by another entity in a merger, sale of all or substantially all of
the Company's assets or otherwise (an "Acquisition"), the Administrator or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, either (i)
make appropriate provision for the continuation of such Options by substituting
on an equitable basis for the Shares then subject to such Options either the
consideration payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition or securities of any successor or acquiring
entity; or (ii) upon written notice to the Participants, provide that all
Options must be exercised (either to the extent then exercisable or, at the
discretion of the Administrator, all Options being made fully exercisable for
purposes of this Subparagraph) at the end of which period the Options shall
terminate; or (iii) terminate all Options in exchange for a cash payment equal
to the excess of the Fair Market Value of the Shares subject to such Options
(either to the extent then exercisable or, at the discretion of the
Administrator, all Options being made fully exercisable for purposes of this
Subparagraph) over the exercise price thereof.

With respect to outstanding Stock Grants, the Administrator or the Successor
Board, shall either (i) make appropriate provisions for the continuation of such
Stock Grants by substituting on an equitable basis for the Shares then subject
to such Stock Grants either the consideration payable with respect to the
outstanding Shares of Common Stock in connection with the Acquisition or
securities of any successor or acquiring entity; or (ii) upon written notice to
the Participants, provide that all Stock Grants must be accepted (to the extent
then subject to acceptance) within a specified number of days of the date of
such notice, at the end of which

17
<PAGE>

period the offer of the Stock Grants shall terminate; or (iii) terminate all
Stock Grants in exchange for a cash payment equal to the excess of the Fair
Market Value of the Shares subject to such Stock Grants over the purchase price
thereof, if any. In addition, in the event of an Acquisition, the Administrator
may waive any or all Company repurchase rights with respect to outstanding Stock
Grants.

C. Recapitalization or Reorganization. In the event of a recapitalization
----------------------------------
or reorganization of the Company (other than a transaction described in
Subparagraph B above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Common Stock, a
Participant upon exercising or accepting a Stock Right shall be entitled to
receive for the purchase price, if any, paid upon such exercise or acceptance
the securities which would have been received if such Stock Right had been
exercised or accepted prior to such recapitalization or reorganization.

D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
--------------------
made pursuant to Subparagraph A, B or C with respect to ISOs shall be made only
after the Administrator, after consulting with counsel for the Company,
determines whether such adjustments would constitute a "modification" of such
ISOs (as that term is defined in Section 424(h) of the Code) or would cause any
adverse tax consequences for the holders of such ISOs. If the Administrator
determines that such adjustments made with respect to ISOs would constitute a
modification of such ISOs, it may refrain from making such adjustments, unless
the holder of an ISO specifically requests in writing that such adjustment be
made and such writing indicates that the holder has full knowledge of the
consequences of such "modification" on his or her income tax treatment with
respect to the ISO.

24. ISSUANCES OF SECURITIES.
-----------------------

Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any
class, shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares subject to Stock Rights. Except as
expressly provided herein, no adjustments shall be made for dividends paid in
cash or in property (including without limitation, securities) of the Company
prior to any issuance of Shares pursuant to a Stock Right.

25. FRACTIONAL SHARES.
-----------------

No fractional shares shall be issued under the Plan and the person
exercising a Stock Right shall receive from the Company cash in lieu of such
fractional shares equal to the Fair Market Value thereof.

18
<PAGE>

26. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION OF ISOs.
------------------------------------------------------------------

The Administrator, at the written request of any Participant, may in its
discretion take such actions as may be necessary to convert such Participant's
ISOs (or any portions thereof) that have not been exercised on the date of
conversion into Non-Qualified Options at any time prior to the expiration of
such ISOs, regardless of whether the Participant is an employee of the Company
or an Affiliate at the time of such conversion. Such actions may include, but
not be limited to, extending the exercise period or reducing the exercise price
of the appropriate installments of such Options. At the time of such
conversion, the Administrator (with the consent of the Participant) may impose
such conditions on the exercise of the resulting Non-Qualified Options as the
Administrator in its discretion may determine, provided that such conditions
shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed
to give any Participant the right to have such Participant's ISOs converted into
Non-Qualified Options, and no such conversion shall occur until and unless the
Administrator takes appropriate action. The Administrator, with the consent of
the Participant, may also terminate any portion of any ISO that has not been
exercised at the time of such conversion.

27. WITHHOLDING.
-----------

In the event that any federal, state, or local income taxes, employment
taxes, Federal Insurance Contributions Act ("F.I.C.A.") withholdings or other
amounts are required by applicable law or governmental regulation to be withheld
from the Participant's salary, wages or other remuneration in connection with
the exercise or acceptance of a Stock Right or in connection with a
Disqualifying Disposition (as defined in Paragraph 28) or upon the lapsing of
any right of repurchase, the Company may withhold from the Participant's
compensation, if any, or may require that the Participant advance in cash to the
Company, or to any Affiliate of the Company which employs or employed the
Participant, the amount of such withholdings unless a different withholding
arrangement, including the use of shares of Common Stock or a promissory note,
is authorized by the Administrator (and permitted by law). For purposes hereof,
the fair market value of the shares withheld for purposes of payroll withholding
shall be determined in the manner provided in Paragraph 1 above, as of the most
recent practicable date prior to the date of exercise. If the fair market value
of the shares withheld is less than the amount of payroll withholdings required,
the Participant may be required to advance the difference in cash to the Company
or the Affiliate employer. The Administrator in its discretion may condition the
exercise of an Option for less than the then Fair Market Value on the
Participant's payment of such additional withholding.

28. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.
----------------------------------------------

Each Key Employee who receives an ISO must agree to notify the Company in
writing immediately after the Key Employee makes a Disqualifying Disposition of
any shares acquired pursuant to the exercise of an ISO. A Disqualifying
Disposition is any disposition (including any

19
<PAGE>

sale) of such shares before the later of (a) two years after the date the Key
Employee was granted the ISO, or (b) one year after the date the Key Employee
acquired Shares by exercising the ISO. If the Key Employee has died before such
stock is sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.

29. TERMINATION OF THE PLAN.
-----------------------

The Plan will terminate on 10 years after adoption, the date which is ten
(10) years from the earlier of the date of its adoption and the date of its
-------
approval by the shareholders of the Company. The Plan may be terminated at an
earlier date by vote of the shareholders of the Company; provided, however, that
any such earlier termination shall not affect any Option Agreements or Stock
Grant Agreements executed prior to the effective date of such termination.

30. AMENDMENT OF THE PLAN AND AGREEMENTS.
------------------------------------

The Plan may be amended by the shareholders of the Company. The Plan may
also be amended by the Administrator, including, without limitation, to the
extent necessary to qualify any or all outstanding Stock Rights granted under
the Plan or Stock Rights to be granted under the Plan for favorable federal
income tax treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the Code, and to the
extent necessary to qualify the shares issuable upon exercise or acceptance of
any outstanding Stock Rights granted, or Stock Rights to be granted, under the
Plan for listing on any national securities exchange or quotation in any
national automated quotation system of securities dealers. Any amendment
approved by the Administrator which the Administrator determines is of a scope
that requires shareholder approval shall be subject to obtaining such
shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely affect his or her rights under a
Stock Right previously granted to him or her. With the consent of the
Participant affected, the Administrator may amend outstanding Option Agreements
and Stock Grant Agreements in a manner which may be adverse to the Participant
but which is not inconsistent with the Plan. In the discretion of the
Administrator, outstanding Option Agreements and Stock Grant Agreements may be
amended by the Administrator in a manner which is not adverse to the
Participant.

31. EMPLOYMENT OR OTHER RELATIONSHIP.
--------------------------------

Nothing in this Plan or any Option Agreement or Stock Grant Agreement shall
be deemed to prevent the Company or an Affiliate from terminating the
employment, consultancy or director status of a Participant, nor to prevent a
Participant from terminating his or her own employment, consultancy or director
status or to give any Participant a right to be retained in employment or other
service by the Company or any Affiliate for any period of time.

20
<PAGE>

32. GOVERNING LAW.
-------------

This Plan shall be construed and enforced in accordance with the law of the
State of Delaware.

<PAGE>

Exhibit 10.13

CuraGen Corporation has omitted from this Exhibit 10.13 portions of the
Agreement for which CuraGen Corporation has requested confidential treatment
from the Securities and Exchange Commission. The portions of the Agreement for
which confidential treatment has been requested are marked with X's in brackets
and such confidential portions have been filed separately with the Securities
and Exchange Commission.

COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

BETWEEN

PIONEER HI-BRED INTERNATIONAL, INC.

AND

CURAGEN CORPORATION

May 16, 1997

<PAGE>

5/16/97

COLLABORATIVE RESEARCH AND LICENSE AGREEMENT

This COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement")
is entered into as of May 16, 1997 by and between PIONEER HI-BRED INTERNATIONAL,
INC. ("PIONEER"), an Iowa corporation having its registered office at 700
Capital Square, 400 Locust Street, Des Moines, Iowa 50309-2340 , and CURAGEN
Corporation ("CURAGEN"), a Delaware corporation, having its registered office at
555 Long Wharf Drive, 11th Floor, New Haven, CT 06511, U.S.A.

WHEREAS, CURAGEN has expertise in the discovery and characterization
of genes utilizing proprietary technologies; and

WHEREAS, PIONEER has expertise in the breeding and development of
proprietary crop species and proprietary planting seed; and

WHEREAS, PIONEER and CURAGEN wish to enter into this Agreement in
order to collaborate in the performance of research to discover and develop
genes associated with plant growth and development; and

WHEREAS, CURAGEN will perform research which will be funded and
supported by PIONEER in order to discover and develop such genes and will
license the results of such research to PIONEER in the Territory for the purpose
of the development, testing, manufacture and sale of products in the PIONEER
Commercialization Field (as hereinafter defined); and

WHEREAS, PIONEER will perform research in order to develop products
and technology based on the genes and other research results discovered by
CURAGEN and will grant to CURAGEN an option to license the results of such
research in the territory for the purpose of the development, testing,
manufacture and sale of products in the CURAGEN Commercialization Field (as
hereinafter defined).

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the parties hereby agree
as follows:

1. DEFINITIONS
-----------

2
<PAGE>

5/16/97

Whenever used in this Agreement with an initial capital letter, the
terms defined in this Section 1 shall have the meanings specified.

1.1 "Affiliate" means any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a party to this Agreement.
"Control" means ownership, directly or through one or more Affiliates, of forty
percent (40%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or forty percent (40%) or more of
the equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.

1.2 "Agent" shall mean any corporation, firm, limited liability
company, partnership or other entity through which PIONEER and/or any Affiliate
produces and/or markets Licensed Products. An Agent shall not be deemed a
sublicensee hereunder.

1.3 "Agricultural Chemical" means a chemical or non-chemical Licensed
Product other than a Seed Product or a Non-Seed Plant Product that is used
directly in crop production, including but not limited to fertilizers and
pesticides.

1.4 "Confidential Information" means all information (including but
not limited to information about any element of Proprietary Know-How) which is
disclosed by one party to the other hereunder or under the Superseded
Confidentiality Agreement (as defined in Section 13.13) except to the extent
that such information (i) as of the date of disclosure is demonstrably known to
the party receiving such disclosure or its Affiliates, as shown by written
documentation, other than by virtue of a prior confidential disclosure from the
other party to such party or its Affiliates; (ii) as of the date of disclosure
is in, or subsequently enters, the public domain, through no fault or omission
of the party receiving such disclosure; or (iii) as of the date of disclosure or
thereafter is obtained from a third party free from any obligation of
confidentiality.

1.5 "CURAGEN Commercialization Field" means all human healthcare and
pharmaceutical (including, without limitation, therapeutic, prophylactic and
diagnostic) applications, animal health applications and microbial applications.

3
<PAGE>

5/16/97

1.6 "Development Program" has the meaning set forth in Section 2.4.1

1.7 "Effective Date" means June 1, 1997 unless another date is agreed
upon by unanimous decision of the RDSC.

1.8 "Fiscal Quarter" means one quarter of a Fiscal Year.

1.9 "Fiscal Year" means the twelve month period beginning September 1
and ending August 31.

1.10 "FTE" means the equivalent of a full year of effort on a full
time basis of a scientist or other professional possessing skills and experience
necessary to carry out the R&D Program, determined in accordance with CURAGEN's
normal policies and procedures.

1.11 "Full-Price Unit" means units (i.e., packages) of seed that are
invoiced or otherwise transferred to Third Parties by PIONEER, its Affiliates,
Agents, licensees and/or sublicensees at full price or full price discounted for
volume, pre-pay or other trade discounts.

1.12 "Genomics Research" means the discovery and analysis of genes,
the discovery and analysis of the expression of genes, the discovery and
analysis of the function of genes, and discovery and analysis of mutations and
the pathways in which genes interact.

1.13 "Genomics Technology" means hardware, software and methods,
together with any copyright, patent application or patent with claims thereto,
relating to techniques and technologies for Genomics Research developed or
invented by CURAGEN, PIONEER or any PIONEER Affiliate, solely or jointly, in the
course of performance of the R&D Program, but shall not include Improvements to
the GeneScape(TM) database and software. "CURAGEN Genomics Technology" means
Genomics Technology developed or invented by CURAGEN. "PIONEER Genomics
Technology" means Genomics Technology developed or invented by PIONEER. "Joint
Genomics Technology" means Genomics Technology developed or invented jointly by
both parties.

4
<PAGE>

5/16/97

1.14 An item will be considered "jointly" developed or invented by
both parties if employees and/or consultants of both parties made an Inventive
Contribution to the invention or development thereof.

1.15 A party or a party's employees or consultants will be deemed to
have made an "Inventive Contribution":

A. to a patentable invention or copyrightable work if such employee
or consultant would be considered an inventor or author under 35
U.S.C. et. seq. or 17 U.S.C. et. seq., and as interpreted by the
U.S. Patent and Trademark Office and the U.S. Copyright Office,
respectively, and the United States courts, or

B. to any item, if the Confidential Information, Proprietary
Intellectual Property, or Research Results of such party were
actually used in the development or invention of the item in
question in a substantive manner, or if the development or
invention of the item was actually based in a substantive manner
on such party's Confidential Information, Proprietary
Intellectual Property, or Research Results.

1.16 "Improvements" means Pioneer-developed enhancements to the
GeneScape(TM) database and software that are uniquely applicable to the
GeneScape(TM) database and software and are not useful in databases or software
other than GeneScape(TM) database and software.

1.17 "Licensed Product" means any product or any part thereof, that
(i) the development, production, use or sale of which would infringe any issued
and unexpired claim contained in or any copyright included in CURAGEN Patent
Rights or Joint Patent Rights but for the license granted hereunder, or (ii)
which incorporates, or the discovery, development or production of which
incorporates or uses CURAGEN or Joint Proprietary Know-How.

1.18 "License Term" means the time period referenced in Section
8.2(a).

1.19 "Net Sales" means, with respect to a Licensed Product that is a
Seed Product within PIONEER Crop Species, [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx]

[Confidential Treatment Requested]

<PAGE>

5/16/97

[xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxx

xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

1.20 "Non-PIONEER Crop Species" means [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

1.21 "Non-Seed Plant Product" means any Licensed Product other than a
Seed Product which is (i) a plant, (ii) a part of a plant, or (iii) an extract
from a plant, in each case whether in unprocessed or processed form, including
feed, food, industrial materials and fibers. Non-Seed Plant Product shall not
include any product produced in a plant or extracted from a plant which is
within the CURAGEN Commercialization Field or the Other Commercialization Field.
For example, a human protein produced in a plant shall not be a Non-Seed Plant
Product.

1.22 "Other Commercialization Field" means all fields other than the
PIONEER Commercialization Field and the CURAGEN Commercialization Field.

1.23 "Patent Coordinator" has the meaning set forth in Section 6.3

1.24 "Patent Rights" means the rights and interests in and to (i) issued
patents and pending patent applications in any country, including, but not
limited to, all provisional
6
[Confidential Treatment Requested]

<PAGE>

5/16/97

applications, substitutions, continuations, continuations-in-part, divisions,
and renewals, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, whether owned solely or jointly by a
party or licensed in by a party now or in the future, with the right to
sublicense, wherein at least one claim of such patent right is directly based,
in whole or in part, on Research Results other than Genomics Technology, and
(ii) copyrights with respect to Research Data and Proprietary Know-How, other
than Genomics Technology. "CURAGEN Patent Rights" shall mean Patent Rights with
respect to CURAGEN Proprietary Know-How and CURAGEN Research Results. "PIONEER
Patent Rights" shall mean Patent Rights with respect to PIONEER Proprietary
Know-How and PIONEER Research Results. "Joint Patent Rights" shall mean Patent
Rights with respect to Joint Proprietary Know-How and Joint Research Results.

1.25 "PIONEER Commercialization Field" means (i) Seed Products; (ii)
Non-Seed Plant Products and (iii) Agricultural Chemicals.

1.26 "PIONEER Crop Species" means [xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx].

1.27 "PIONEER Proprietary Material" means tissue samples or germplasm
provided by PIONEER to CURAGEN in order for CURAGEN to perform the R&D Program
and shall also be deemed to include the actual nucleic acids and other
substances contained in such tissue samples or germplasm.

1.28 "Proprietary Intellectual Property" means all Patent Rights and
Proprietary Know-How. "CURAGEN Proprietary Intellectual Property" shall mean
CURAGEN Patent Rights and CURAGEN Proprietary Know-How. "PIONEER Proprietary
Intellectual Property" shall mean PIONEER Patent Rights and PIONEER Proprietary
Know-How. "Joint Proprietary Intellectual Property" shall mean Joint Patent
Rights and Joint Proprietary Know-How.

1.29 "Proprietary Know-How" means, without limitation, all Research
Results and all non-patented inventions, improvements, discoveries, proprietary
materials, biological substances, data, know-how and trade secrets based on
Research Results. Proprietary Know-How shall not include Genomics Technology.
"CURAGEN Proprietary Know-How shall mean Proprietary Know-How invented or
developed by CURAGEN. "PIONEER Proprietary Know-

7
[Confidential Treatment Requested]

<PAGE>

5/16/97

How" shall mean Proprietary Know-How invented or developed by PIONEER. "Joint
Proprietary Know-How" shall mean Proprietary Know-How invented or developed
jointly by both parties.

1.30 "R&D Field" means PIONEER Crop Species and Non-PIONEER Crop
Species.

1.31 "R&D Program" means the research and development program to be
conducted by CURAGEN and PIONEER pursuant to Section 2 and reflected in the Work
Plans.

1.32 "R&D Steering Committee" or "RDSC " means the committee created
pursuant to Section 2.2 hereof.

1.33 "Research Data" means all differential expression and sequence
data and any other information obtained, developed or derived in the course of
performance of the R&D Program, but excluding Genomics Technology.

1.34 "Research Materials" mean all tangible property invented,
obtained, discovered, developed or derived, or the function or utility of which
is discovered or determined, in the course of performance of the R&D Program
including, without limitation, all cDNAs cloned and/or sequenced in the course
of performance of the R&D Program, but excluding Genomics Technology.

1.35 "Research Results" means all Research Data and Research
Materials, collectively. "CURAGEN Research Results" means Research Results
invented or developed by CURAGEN. "PIONEER Research Results" means Research
Results invented or developed by PIONEER. "Joint Research Results" means
Research Results invented or developed jointly by both parties.

1.36 "Research Term" has the meaning set forth in Section 2.3.1.

1.37 "Royalty Reduction Date" has the meaning set forth in Section
8.4.4.

8
<PAGE>

5/16/97

1.38 "Sample Unit" means units (i.e., packages) of seed that are
invoiced or otherwise transferred to Third Parties by PIONEER, its Affiliates,
Agents, licensees and/or sublicensees for promotional purposes at no value.

1.39 "Seed Product" means a Licensed Product that is a seed of any
plant for use as planting seed.

1.40 "Staffing Level" has the meaning set forth in Section 2.1.1.

1.41 "Target Trait" means a Trait selected by PIONEER for which
CURAGEN will endeavor to identify and confirm associated genes in the course of
performance of the R&D Program.

1.42 "Territory" means all the countries of the world.

1.43 "Third Party" shall mean any party who is not a party hereto, or
an Affiliate, Agent, licensee or sublicensee thereof.

1.44 "Trait" means a characteristic of a product associated with one
or more genes which is manipulated (either through continued selection or
transgenic intervention) and tracked (as evidenced by recorded notes) by PIONEER
as part of the product development process. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX].

1.45 "Work Plan" means the written plan describing the activities to
be carried out during each semi-annual period of the R&D Program pursuant to
this Agreement. Each Work Plan will be set forth in a written document prepared
by CURAGEN and PIONEER and approved by the R&D Steering Committee.

2. R&D PROGRAM
-----------

[Confidential Treatment Requested]

<PAGE>

5/16/97

2.1 Implementation of R&D Program.
-----------------------------

2.1.1 Basic Provisions of Program.
---------------------------

(a) The objective of the R&D Program shall be the discovery and
characterization of genes associated with plant growth and development,
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. CURAGEN and PIONEER shall each use
commercially reasonable efforts to perform such tasks as are set forth to be
performed by it in the Work Plans, including the provision of such facilities,
materials (including PIONEER Proprietary Materials), equipment and consultants
as each deems necessary to the achievement of such Work Plans. In carrying out
the R&D Program, CURAGEN shall devote an average of at least [XXXXXXXX] FTEs per
year, including [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] to the R&D Program
over its five year duration (the "Staffing Level") unless PIONEER has requested
an increase in the Staffing Level as provided in (b) below. At least one FTE,
who shall be an individual reasonably acceptable to PIONEER, shall be devoted to
the R&D Program on a full-time basis.

(b) PIONEER may, at its sole discretion, request an increase in the
Staffing Level of up to [XXXXXX] additional FTEs per year to be devoted to the
R&D Program by giving [XXXXXXXXXXXXXX] prior notice to CURAGEN, which notice may
not be given more than [XXXXXXXXXXXXXXXXXXXXXXX]. CURAGEN will use commercially
reasonable efforts to increase the staffing level as requested as promptly as
practical. Once the Staffing Level is increased, it may not be decreased during
the Research Term without the consent of CURAGEN, which consent may be withheld
at CURAGEN's sole discretion.

2.1.2 Collaborative Efforts and Reports.
---------------------------------

(a) The parties agree that the successful execution of the R&D
Program will require the collaborative use of both parties' areas of expertise.
The parties shall keep the RDSC fully informed about the status of the portions
of the R&D Program they respectively perform. In particular, without limitation,
each party shall furnish to the RDSC and each other semi-annual written reports
within thirty (30) days after the end of each semi-annual period, describing the
progress of its activities in reasonable detail, including (x) a detailed
accounting of the FTEs used and actual allocation of FTEs, and (y) a description
of Proprietary Intellectual Property arising

10
[Confidential Treatment Requested]

<PAGE>

5/16/97

from (i) CURAGEN's research efforts and accomplishments and (ii) PIONEER's
research programs, breeding programs and field tests. The RDSC shall also be
kept informed of any efforts by PIONEER or the parties jointly to (x) pursue
commercialization partners in the PIONEER Commercialization Field or (y) pursue
research partners for the purpose of facilitating additional research within the
R&D Field beyond the scope of the research on Target Traits described in the
Work Plan. Any such expansion of the research efforts in the R&D Field shall
include additional research funding for CURAGEN and may include additional
payments to the parties in the form of additional up front fees, milestone fees,
royalties or license fees which shall be shared by the parties in a mutually
agreeable manner so as to reflect each party's contribution to any such expanded
collaboration.

(b) Scientists at CURAGEN and PIONEER shall cooperate in the
performance of the R&D Program and, subject to any confidentiality obligations
to third parties, shall exchange information and materials as necessary to carry
out the R&D Program, subject to the provisions of Section 5. Each party will
attempt to accommodate any reasonable request of the other party to send or
receive personnel for purposes of collaborating or exchanging information under
the R&D Program. Such visits and/or access will have defined purposes and be
scheduled in advance. The requesting party will bear the travel and lodging
costs of any such personnel.

(c) CURAGEN shall set up and maintain, throughout the Research
Term, a secure partition of its GeneScape(TM) database and software and provide
online E-mail and telephone help in the use thereof to PIONEER. CURAGEN and
PIONEER shall jointly set up and maintain a secure connection to said partition
of the GeneScape(TM) database and software in order to give PIONEER on-line
access thereto. PIONEER shall have no rights to use the GeneScape(TM) database
and software except as set forth above and in Section 8.1.1(b). The parties
recognize that PIONEER may desire to include other data in GeneScape(TM)
database and software and/or that PIONEER may wish to analyze Research Data with
other data analysis tools not available in GeneScape(TM) database and software
or in conjunction with other data owned or controlled or accessed by PIONEER. In
recognition of this desire, the Parties may cooperate in an effort to
incorporate other data and/or data analysis tools into the GeneScape(TM)
database and software.

(d) After the first six (6) months of the R&D Program, but before
the first anniversary of the R&D Program, CURAGEN and PIONEER shall discuss
strategies and the resources needed to import a copy of Research Data to
PIONEER, if necessary for efficiency, and to keep

11
<PAGE>

5/16/97

it updated. Any such Research Data imported to PIONEER may be used by PIONEER
only for activities pursuant to Section 8.8.

2.1.3 Work Plans.
----------

The Work Plan for the first six months of the R&D Program will be
agreed upon by the parties within one (1) month of the Effective Date and will
include plans to implement the installation of access to the GeneScape(TM)
database and software for PIONEER. For each subsequent semi-annual period of the
R&D Program, the Work Plan shall be prepared by CURAGEN and PIONEER and approved
by the RDSC no later than thirty (30) days before the end of the prior
semi-annual period. The Work Plan shall set forth specific research and
development objectives, milestones and resource allocation requirements and
shall be designed to facilitate the earliest practical identification of genes
associated with Target Traits selected by PIONEER. Each Work Plan shall be in
writing and shall set forth with reasonable specificity tasks for the period
covered by the Work Plan. The RDSC may make adjustments in the Work Plan as it
may determine.

2.1.4 Exclusivity.
-----------

(a) CURAGEN agrees that during the Research Term CURAGEN will
not collaborate in the performance of research in the R&D Field with any other
commercial party or will not undertake activities for the benefit of any other
commercial party in the R&D Field, except as otherwise permitted hereby.
Notwithstanding the foregoing, nothing contained in this Agreement shall in any
way restrict CURAGEN's right to perform research or collaborate with third
parties outside of the R&D Field and to grant to third parties the right to
exploit the results of any such research or collaborations without restriction.

(b) PIONEER agrees that for the duration of this Agreement,
PIONEER will not utilize any CURAGEN Proprietary Intellectual Property or
CURAGEN Research Results for any purpose other than as provided herein. CURAGEN
agrees that CURAGEN will not use and/or replicate any PIONEER Proprietary
Materials or utilize any PIONEER Proprietary Intellectual Property or PIONEER
Research Results for any purpose other than as provided herein.

2.2 R&D Steering Committee.
----------------------

12
<PAGE>

5/16/97

2.2.1 Establishment and Functions of RDSC.
-----------------------------------

(a) CURAGEN and PIONEER shall establish an "R&D Steering
Committee" (the "RDSC"). The RDSC will act on behalf of the two companies and
will be responsible for the planning and monitoring of the R&D Program and for
setting forth specific research and development objectives, milestones and
resource allocation requirements. In particular, the activities of the RDSC
shall include reviewing progress in the R&D Program and recommending necessary
adjustments to the R&D Program, including any study substitutions deemed
desirable based on results and on PIONEER's commercial interest, as the research
and development progresses, and considering and evaluating potential
collaborations with third parties in the R&D Field or the PIONEER
Commercialization Field.

(b) In planning and monitoring the R&D Program, the RDSC shall
assign tasks and responsibilities taking into account each party's respective
specific capabilities and expertise in order in particular to avoid duplication
and enhance efficiency and synergies.

2.2.2 RDSC Membership.
---------------

CURAGEN and PIONEER each shall appoint, in their sole discretion,
three members to the RDSC, which shall include a Co-Chair to be designated by
PIONEER and a Co-Chair to be designated by CURAGEN. Substitutes or alternates
for the Co-Chairs or other RDSC members may be appointed at any time by notice
in writing to the other party. The parties may mutually agree to change the size
of the RDSC as long as there shall be an equal number of representatives of each
party on the RDSC. The initial Co-Chairs and other RDSC members shall be
designated by the parties upon execution of this Agreement. CURAGEN shall
appoint a Project Coordinator, who shall be reasonably satisfactory to PIONEER,
to serve as the principal liaison with PIONEER for the R&D Program.
Such Project Coordinator will be one of CURAGEN's members of the RDSC.

2.2.3 Meetings.
--------
The RDSC shall meet at least semi-annually, with such meetings to be
held, alternately, in New Haven, Connecticut, and Des Moines, Iowa, unless the
parties agree otherwise. Any

13
<PAGE>

5/16/97

additional meetings shall be held at places and on dates selected by the Co-
Chairs of the RDSC. In addition, the RDSC may act without a formal meeting by a
written memorandum signed by the Co-Chairs of the RDSC. Whenever any action by
the RDSC is called for hereunder during a time period in which the RDSC is not
scheduled to meet, the Co-Chairs of the RDSC shall cause the RDSC to take the
action in the requested time period by calling a special meeting or by action
without a meeting. Subject to the obligations set forth in Section 5,
representatives of each party or of its Affiliates, in addition to the members
of the RDSC, may attend RDSC meetings at the invitation of either party with the
prior approval of the other party, which shall not be unreasonably withheld.

2.2.4 Minutes.
-------

The RDSC shall keep accurate minutes of its deliberations which
record all proposed decisions and all actions recommended or taken. Drafts of
the minutes shall be delivered to the Co-Chairs of the RDSC within twenty (20)
days after the meeting. The party hosting the meeting shall be responsible for
the preparation and circulation of the draft minutes. Draft minutes shall be
edited by the Co-Chairs and shall be issued in final form only with their
approval and agreement as evidenced by their signatures on the minutes.

2.2.5 Quorum; Voting; Decisions.
-------------------------

At each RDSC meeting, at least two (2) member(s) appointed by each
party shall constitute a quorum and decisions shall be made by majority vote.
Each RDSC member shall have one vote on all matters before the RDSC, provided
that the member or members of each party present at an RDSC meeting shall have
the authority to cast the votes of any of such party's members on the RDSC who
are absent from the meeting. Notwithstanding the foregoing, the objective of the
parties to this Agreement is that decisions of the RDSC shall be made by
consensus. However, except as otherwise set forth herein, in the event that the
RDSC is unable to resolve any matter before it as set forth above, such matter
shall be resolved by PIONEER, taking into reasonable consideration the best
interests of both PIONEER and CURAGEN.

2.2.6 Expenses.
--------

14
<PAGE>

5/16/97

CURAGEN and PIONEER shall each bear all expenses of their respective
RDSC members related to their participation on the RDSC and attendance at RDSC
meetings.

2.3 Research and Development Term.
-----------------------------

2.3.1 Term of the R&D Program.
-----------------------

The R&D Program shall expire five (5) years after the Effective Date
unless extended as provided below or unless earlier terminated by either party
pursuant to the provisions in Section 2.3.3 and/or Article 9 (the "Research
Term").

2.3.2 Extension of the Research Phase of the R&D Program.
--------------------------------------------------

The Research Term may be extended upon six (6) months prior written
notice by mutual agreement of the parties on terms to be agreed upon between the
parties.

2.3.3 Early Termination of the R&D Program.
------------------------------------

(a) PIONEER may terminate the R&D Program at its sole
discretion upon three (3) months prior written notice, such notice to be given
at any time after eighteen months have elapsed from the Effective Date, if
CURAGEN has not identified and confirmed at least one (1) gene that is
associated with a Target Trait selected by PIONEER prior to the time notice is
given; provided, however, that such notice shall be deemed automatically
withdrawn if CURAGEN identifies and confirms such a gene prior to the effective
date of the notice, and provided, further, that for any such termination which
would take effect prior to the third anniversary of the Effective Date, PIONEER
shall pay to CURAGEN upon such termination an amount equal to the lesser of (i)
nine months of research funding at levels existing at the time of such
termination, or (ii) the balance of the research funding due through the third
anniversary of the Effective Date at levels existing at the time of such
termination. Any such payments shall be made within thirty (30) days of such
termination. This Agreement shall terminate simultaneously with the termination
of the R&D Program under this Section 2.3.3(a) and all remaining PIONEER
Proprietary Material provided to CURAGEN under this Agreement shall be returned
to PIONEER or destroyed.

[Confidential Treatment Requested]

<PAGE>

5/16/97

(b) Either party may terminate the R&D Program after the third
anniversary of the Effective Date upon three (3) months prior written notice;
provided, however, that CURAGEN shall have no such rights to terminate if the
Staffing Level is, or has been duly requested by PIONEER to be, set at
[XXXXXXXX] FTEs prior to the giving of any such termination notice by CURAGEN.

(c) Any termination of the R&D Program under Section 2.3.3(b)
shall be without prejudice to the rights of either party against the other, then
accruing or otherwise accrued under this Agreement and upon any such
termination, all remaining PIONEER Proprietary Material provided to CURAGEN
under this Agreement shall be returned to PIONEER or destroyed.

2.3.4 Post Research Term Cooperation.
------------------------------

At least three months prior to the expiration or termination pursuant
to Section 2.3.3 of the Research Term, the parties shall meet to agree on
mechanisms for coordinating and managing activities which shall occur after the
expiration of the Research Term which would otherwise be addressed by the RDSC
hereunder including but not limited to (i) reporting on the development of
Proprietary Intellectual Property; (ii) decisions with respect to patent filing
and prosecution; (iii) resolution of inventorship disputes; and (iv) other items
as needed.

2.4 Product Development.
-------------------

2.4.1 Development Obligations.
-----------------------

PIONEER agrees that it will use reasonable efforts to develop and
market Licensed Products in the PIONEER Commercialization Field throughout the
Territory at its own expense (the "Development Program"), but only to the extent
that the development and commercialization of such Licensed Products is
economically practicable and the market for such Licensed Products justifies, in
PIONEER's reasonable determination, such development and sale.

2.4.2 Reports.
-------

[Confidential Treatment Requested]
<PAGE>

5/16/97

After expiration or early termination pursuant to Section 2.3.3(b) of
the Research Term, PIONEER will keep CURAGEN fully informed concerning the
status of the Development Program for each Licensed Product. In particular,
without limitation, PIONEER shall (a) report to CURAGEN on an annual basis with
respect to all aspects of such development and commercialization activities; (b)
provide CURAGEN with summaries of all governmental filings filed in connection
with such Licensed Products in the United States and other countries; and (c)
provide such other information concerning such development and commercialization
activities as CURAGEN shall reasonably request.

3. EQUITY INVESTMENT
-----------------

In conjunction with the execution of this Agreement, PIONEER will
make an equity investment in CURAGEN of $7.5 million upon execution of this
Agreement. The equity investment will be in the form of a purchase of One
Million (1,000,000) shares of Series D Convertible Preferred Stock at a price of
$7.50 per share (the "Preferred Stock") pursuant to the provisions of a Stock
Purchase Agreement of even date herewith.

4. RESEARCH FUNDING
----------------

In partial consideration of the work to be done by CURAGEN in the R&D
Program, PIONEER will pay CURAGEN non-refundable research payments of
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] per year per FTE in the Staffing
Level during the first three years of the Research Term, commencing as of the
Effective Date. During the fourth and fifth years of the Research Term, PIONEER
will pay CURAGEN [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] per year per FTE, adjusted
for inflation occurring during the prior three year or four year term,
respectively, at the greater of (i) four percent (4%) per annum or (ii)
inflation as indicated by the Consumer Price Index for New Haven, Connecticut
for All Urban Consumers (CPI-U) (1982-84=100) published by the U.S. Department
of Labor, Bureau of Labor Statistics since the Effective Date. Such payments
will be made in advance, on or before the first day of each calendar quarter,
with the first and last payments prorated in the event that the Effective Date
is not the first day of a calendar quarter. In the event that the Staffing Level
is to change in any calendar quarter, such payment shall be pro-rated
accordingly based on the above-specified level of funding per FTE. The first
research payment shall be made simultaneously with the execution of this
Agreement and shall include all amounts necessary to

[Confidential Treatment Requested]

<PAGE>

5/16/97

make PIONEER current in research payments due since the Effective Date. PIONEER
will fund its own activities under the R&D Program.

5. TREATMENT OF CONFIDENTIAL INFORMATION
-------------------------------------

5.1 Confidentiality.
---------------

5.1.1 General.
-------

CURAGEN and PIONEER each recognize that the other party's
Confidential Information constitutes highly valuable and proprietary
confidential information. For the purposes hereof, PIONEER Proprietary Material
shall be deemed PIONEER Confidential Information. Subject to the terms and
conditions of Section 8, CURAGEN and PIONEER each agree that, except as required
by applicable law or regulation (including the filing and prosecution of patent
applications) or judicial or administrative order, during the term of this
Agreement and for five (5) years thereafter, (i) it will keep confidential, and
will cause its employees, consultants, Affiliates, licensees and sublicensees to
keep confidential, all Confidential Information of the other party that is
disclosed to it, or to any of its employees, consultants, Affiliates and
licensees and sublicensees, pursuant to or in connection with this Agreement;
and (ii) neither it nor any of its respective employees, consultants, Affiliates
and licensees and sublicensees shall use Confidential Information of the other
party for any purpose whatsoever except as expressly permitted in this
Agreement. Notwithstanding the foregoing, (i) either party may disclose
Confidential Information to its sublicensees as long as such sublicensees
execute a confidentiality agreement providing protections similar to those
contained herein, and (ii) PIONEER will reasonably cooperate with CURAGEN in the
making of reasonable disclosures of Confidential Information, CURAGEN Research
Results, Joint Research Results, CURAGEN Proprietary Intellectual Property and
Joint Proprietary Intellectual Property to investment bankers, investors and
potential investors of CURAGEN; provided, however, that such disclosures shall
only be made under the terms of a confidentiality agreement providing
protections similar to those contained herein.

5.1.2 Restricted Access.
-----------------

18
<PAGE>

5/16/97

CURAGEN and PIONEER each agree that any disclosure of the other
party's Confidential Information to any of its officers, employees, consultants
or agents or those of any of its Affiliates and licensees and sublicensees shall
be made only if and to the extent necessary to carry out its rights and
responsibilities under this Agreement, shall be limited to the maximum extent
possible consistent with such rights and responsibilities and shall only be made
to persons who are bound by written confidentiality agreements to maintain the
confidentiality thereof and not to use such Confidential Information except as
expressly permitted by this Agreement. Each party, upon the other's request,
will return all the Confidential Information disclosed to it by the other party
pursuant to this Agreement, including all copies and extracts of documents,
within sixty (60) days of the request of the disclosing party following the
expiration or termination of this Agreement; provided that a party may retain
Confidential Information of the other party relating to any license or right to
use Proprietary Intellectual Property which survives such termination and one
copy of all other Confidential Information may be retained in confidential and
inactive archives solely for the purpose of establishing the contents thereof.

5.1.3 Employee Confidentiality Agreements.
-----------------------------------

CURAGEN and PIONEER each represent that all of its employees and all
of the employees of its Affiliates, and any consultants to such party or its
Affiliates, participating in the R&D Program or who shall otherwise have access
to Confidential Information of the other party are bound by written agreements
to maintain such information in confidence and not to use such information
except as expressly permitted herein. Each party agrees to enforce
confidentiality obligations to which its employees and consultants (and those of
its Affiliates) are obligated.

5.2. Publicity.
---------

Neither party may disclose the existence or terms of this Agreement
without the prior written consent of the other party; provided, however, that
either party may make such a disclosure to the extent required by law and that
CURAGEN may make a disclosure of the existence and terms of this Agreement to
investors, prospective investors, lenders and other financing sources, and to
strategic partners or licensees for products in the CURAGEN Commercialization
Field; provided, however, that such disclosures shall only be made under the
terms of a confidentiality agreement providing protections similar to those
contained herein. The parties, upon the execution of this Agreement, will agree
to a news release for publication in

19
<PAGE>

5/16/97

general circulation periodicals and news wires. Once any written statement is
approved for disclosure by both parties, either party may make subsequent public
disclosures limited to the specific contents of such prior statement without the
further approval of the other party.

5.3. Publication.
-----------

It is expected that each party may wish to publish the results of its
research under this Agreement. In order to safeguard intellectual property
rights, the party wishing to publish or otherwise publicly disclose the results
of its research hereunder shall first submit a draft of the proposed manuscripts
to the RDSC for review, comment and consideration of appropriate patent action
at least thirty (30) days prior to any submission for publication or other
public disclosure. Within thirty (30) days of receipt of the prepublication
materials, the RDSC will advise the party seeking publication as to whether a
patent application will be prepared and filed or whether trade secret protection
should be pursued and, if so, the RDSC will, in cooperation with both parties,
determine the appropriate timing and content of any such publications.

5.4. Prohibition on Hiring.
---------------------

Neither PIONEER nor its Affiliates shall, during the Research Term,
but in any event for at least five (5) years from the Effective Date, hire any
person who was employed by CURAGEN or its Affiliates during such period, whether
such person is hired as an employee, investigator, independent contractor or
otherwise, without the express written consent of CURAGEN.

5.5 Consultants.
-----------

Prior to retaining any consultant who shall have access to any
Confidential Information of the other party or who shall participate in the
performance of the R&D Program, each party shall use reasonable efforts to
determine if such consultant has or will have any potential conflict of interest
with respect to the other party as a result of any other relationships of such
consultant and will not retain any consultant known to have such a conflict
without the consent of the other party, such consent to not be unreasonably
withheld.

6. INTELLECTUAL PROPERTY RIGHTS
----------------------------

<PAGE>

5/16/97

6.1 Disclosure of Inventions.
------------------------

Each party shall promptly inform the other and the RDSC about all
Research Results, Proprietary Intellectual Property and Genomics Technology. The
following provisions shall apply to rights in Research Results, Proprietary
Intellectual Property, and Genomics Technology.

6.2 Ownership.
---------

6.2.1 CURAGEN Intellectual Property Rights.
------------------------------------

CURAGEN shall have sole and exclusive ownership of all right, title
and interest on a worldwide basis in and to any Research Results, Proprietary
Intellectual Property, and Genomics Technology developed or invented solely by
employees or consultants of CURAGEN.

6.2.2 PIONEER Intellectual Property Rights.
------------------------------------

PIONEER shall have sole and exclusive ownership of all right, title
and interest on a worldwide basis in and to any Research Results, Proprietary
Intellectual Property, and Genomics Technology developed or invented solely by
employees or consultants of PIONEER.

6.2.3 Joint Intellectual Property Rights.
----------------------------------

PIONEER and CURAGEN shall jointly own all Research Results,
Proprietary Intellectual Property, and Genomics Technology jointly developed or
invented by employees or consultants of both CURAGEN and PIONEER.

6.3 Patent Coordinators.
-------------------

CURAGEN and PIONEER shall each appoint a patent coordinator (a
"Patent Coordinator") who shall serve as such party's primary liaison with the
other party on matters relating to patent filing, prosecution, maintenance and
enforcement. Each party may replace its Patent Coordinator at any time by notice
in writing to the other party. The initial Patent Coordinators shall be
designated by the parties upon execution of this Agreement.

21
<PAGE>

5/16/97

6.4 Inventorship.
------------

In case of dispute between CURAGEN and PIONEER over inventorship or
authorship, the RDSC, with the advice of the Patent Coordinators and counsel,
shall, at its next meeting following the disclosure of any Research Results,
Proprietary Intellectual Property or Genomics Technology pursuant to Section
6.1, make a determination of the inventor(s) or author(s) by application of the
standards embodied in United States patent and copyright law. The RDSC, with the
advice of the Patent Coordinators and counsel, shall also, in the case of
dispute, make any determination as to whether an invention is Genomics
Technology or an Improvement to GeneScape(TM) database and software.

7. PROVISIONS CONCERNING THE FILING, PROSECUTION
---------------------------------------------
AND MAINTENANCE OF PATENT RIGHTS
--------------------------------

The following provisions relate to the filing, prosecution and
maintenance of Patent Rights during the term of this Agreement:

7.1 Filing of Patents.
-----------------

7.1.1 Primary Responsibilities.
------------------------

In consultation with the Patent Coordinators, the RDSC will
coordinate the determination of what patents will be filed on Research Results
developed under the R&D Program. PIONEER will be responsible for the filing,
prosecution and maintenance (including the defense of interferences and similar
proceedings) of any patents on such Research Results, provided that PIONEER
shall use reasonable efforts to obtain patent coverage that is as broad as
possible to cover all potential commercial applications thereof, and provided
that CURAGEN will have the opportunity to provide substantive review and comment
on any such prosecution. Additionally, CURAGEN shall have a period of fifteen
(15) business days from receipt of any draft patent application to add any
proper claims and specifications outside of the PIONEER Commercialization Field.

7.1.2 Elective Termination of Rights.
------------------------------

22
<PAGE>

5/16/97

If at any time PIONEER wishes to discontinue the prosecution or
maintenance of any Patent Rights filed in accordance with Section 7.1.1, PIONEER
shall promptly give notice of such intention to CURAGEN. CURAGEN shall have the
right, but not the obligation, to assume responsibility for the prosecution of
any such Patent Rights at its own expense, by giving notice to PIONEER of such
intention within thirty (30) days and such Patent Rights shall thereafter be
treated as Patent Rights of CURAGEN. PIONEER shall transfer ownership of such
Patent Rights to CURAGEN, and PIONEER shall no longer have any rights hereunder
to such Patent Rights.

7.2 Expenses.
--------

PIONEER will bear the costs of the filing, prosecution and
maintenance of all Patent Rights for which it has responsibilities pursuant to
Section 7.1, provided, however, that if CURAGEN desires, at its sole discretion,
to add any claims to any Patent Rights which are outside of the PIONEER
Commercialization Field as provided in Section 7.1, CURAGEN shall pay for the
drafting and prosecution of any such claims, which drafting and prosecution
shall be performed by patent counsel designated by CURAGEN, who shall cooperate
with PIONEER's patent counsel as necessary.

8. LICENSE RIGHTS
--------------

8.1 License Grants.
--------------

8.1.1 Licenses to PIONEER.
-------------------

(a) CURAGEN hereby grants to PIONEER a sole and exclusive
license in the Territory, including the right to grant sublicenses, to develop,
have developed, make, have made, use, have used, distribute for production
and/or sale, offer for sale, sell, have sold, and import Licensed Products in
the PIONEER Commercialization Field under any and all CURAGEN and/or Joint
Research Results and Proprietary Intellectual Property. PIONEER shall have the
right to assign or otherwise transfer its rights in the license granted herein
(or any part thereof) to certain Affiliates such as PIONEER Overseas Corporation
for the purposes of conducting PIONEER's business. Notwithstanding any such
assignment, PIONEER shall be responsible for

23
<PAGE>

5/16/97

the activities, including all reporting and royalty obligations, of such
Affiliates as if they were PIONEER.

(b) As set forth in Section 2.1.2(c), during the Research Term,
CURAGEN hereby agrees to continue to maintain its GeneScape(TM) database and
software and to use such database and software in the R&D Program; provided
that, for a period starting at expiration or termination of the Research Term
and for three years thereafter, CURAGEN shall license the GeneScape(TM) database
and software to PIONEER under reasonable terms and conditions which, for
clarity, shall be based on CURAGEN's reasonable costs for maintenance and
support under such license, all in accordance with a GeneScape(TM) License
Agreement to be negotiated in good faith by the parties. Further, CURAGEN hereby
agrees that, at PIONEER's option and expense, CURAGEN shall export a licensed
copy of GeneScape(TM) database and software to PIONEER, along with the Research
Data if not already resident at PIONEER pursuant to Section 2.1.2(d), upon
request made within twelve (12) months after the expiration of the Research
Term.

8.1.2 Licenses to CURAGEN.
-------------------

(a) PIONEER hereby grants to CURAGEN, to the extent it has
rights to do so, an exclusive, worldwide, royalty-free license of perpetual
duration to any Improvements made to the GeneScape(TM) database and software by
PIONEER or by the parties jointly during the Research Term or during the period
of any license to PIONEER as set forth in Section 8.1.1(b). PIONEER hereby
agrees to execute and deliver any documents as requested by CURAGEN in order to
achieve the intent of this Section 8.1.2(a).

(b) PIONEER hereby grants to CURAGEN, to the extent PIONEER has
the right to grant such licenses, a worldwide, royalty-free (except for the
consideration set forth in Section 8.4.3) license of perpetual duration to
commercialize products or services based on Genomics Technology under PIONEER's
ownership interest in such Genomics Technology. Such license shall be exclusive
with respect to Joint Genomics Technology, subject only to [XXXXXXXX]. The
license granted herein may be exploited by CURAGEN in all fields and at all
times with the sole exception that CURAGEN will not exploit such license for the
benefit of any Third Party in the R&D Field during the Research Term.

[Confidential Treatment Requested]

<PAGE>

5/16/97

8.1.3 Rights in the Other Commercialization Field.
-------------------------------------------

Neither party shall have the right, including rights under any of the
other party's solely-owned Research Results or Proprietary Intellectual Property
or jointly owned Research Results or Proprietary Intellectual Property, to
develop, have developed, make, have made, use, distribute for sale, sell, offer
for sale or import any Licensed Product in the Other Commercialization Field, or
to grant any licenses to any third parties to do the same. If either party
wishes to develop and commercialize Licensed Products in the Other
Commercialization Field alone, in collaboration with the other party, or in
conjunction with any third party, it shall notify the other party. All such
opportunities shall only be pursued upon terms mutually agreeable to both
parties, such agreement to not be unreasonably withheld.

8.2 Term of License and Royalty Periods.
-----------------------------------

The License Term with respect to any rights licensed to PIONEER in
Section 8.1.1(a) for any Licensed Product shall commence upon the Effective Date
and shall continue on a country-by-country basis until the royalty obligation
set forth in Section 8.4 expires for such Licensed Product. Thereafter, PIONEER
shall have a fully paid-up license of perpetual duration to all CURAGEN Research
Results, all CURAGEN Proprietary Intellectual Property and CURAGEN's interest in
all Joint Research Results and Joint Proprietary Intellectual Property with
respect to such Licensed Product.

8.3 Licenses and Sublicenses to Third Parties.
-----------------------------------------

If PIONEER grants a license or sublicense to a Third Party with
respect to any CURAGEN Research Results, Joint Research Results, CURAGEN
Proprietary Intellectual Property and/or Joint Proprietary Intellectual
Property, PIONEER shall guarantee that such licensee or sublicensee will fulfill
all of PIONEER's obligations under this Agreement; provided, however, that
PIONEER shall remain directly liable for the fulfillment of all such obligations
unless otherwise consented to in writing by CURAGEN.

8.4 Payment of Royalties, Royalty Rates, Accounting for
---------------------------------------------------
Royalties and Records
---------------------

25
<PAGE>

5/16/97

8.4.1 Payment of Royalties to CURAGEN.
-------------------------------

PIONEER recognizes and acknowledges that each of the following,
separately and together, has substantial economic benefit to PIONEER:

(i) CURAGEN's expertise and know-how concerning the discovery
and characterization of genes in the R&D Field,

(ii) the performance by CURAGEN of the R&D Program on the
terms specified herein,

(iii) the disclosure to PIONEER of results obtained in the R&D
Program by CURAGEN,

(iv) access to CURAGEN's informatics capabilities and software,

(v) the licenses granted to PIONEER hereunder with respect to
CURAGEN Proprietary Know-How and Joint Proprietary Know-How
which are not within the claims of any letters patent owned
or controlled by CURAGEN,

(vi) the licenses granted to PIONEER under letters patent owned
or controlled by CURAGEN,

(vii) the foundation afforded to PIONEER for its internal program
of research, development, manufacturing and marketing of
products in the PIONEER Commercialization Field using gene
discovery and characterization technology by each of the
elements set forth in subparagraphs (i) through (v) above,

(viii) CURAGEN's commitment not to collaborate with any other
party in the R&D Field during the Research Term, as set
forth in Section 2.1.4(a), and

(ix) the "head start" afforded to PIONEER, whether or not any
patents issue with respect to any CURAGEN Proprietary Know-
How and whether or not any or all unpatented CURAGEN Know-
How becomes a part of the public domain, by each of the
elements set forth in subparagraphs (i) through (viii)
above,

26
<PAGE>

5/16/97

and in consideration of each, separately and together, and in consideration of
the fact that CURAGEN is relying upon PIONEER to produce Licensed Products in
the PIONEER Commercialization Field, PIONEER agrees to pay to CURAGEN earned
royalties with respect to sales by PIONEER, its Affiliates, Agents, licensees
and sublicensees of Licensed Products as follows:

PIONEER shall pay CURAGEN a royalty based on the Net Sales of
Licensed Products pursuant to Section 8.4.1(a) in each country until the royalty
obligation ceases as set forth in Section 8.4.4; provided, however, that a
royalty shall not be payable with respect to any Licensed Product which is
within the definition of Licensed Product solely under clause (ii) of Section
1.17 unless CURAGEN has made an Inventive Contribution to such Licensed Product.
For each Licensed Product, the royalty shall be as follows:

(a) For Licensed Products in the PIONEER Commercialization
Field that are Seed Products within PIONEER Crop Species that are invoiced or
otherwise transferred to a Third Party, the royalty shall be [XXXXXXXX].

(b) For all other Licensed Products in the PIONEER
Commercialization Field not covered in (a) above, PIONEER and CURAGEN will share
revenues from the commercialization of such Licensed Products using a mutually
agreeable formula to be negotiated upon request of PIONEER, such negotiation to
be conducted in good faith over a period of not more than ninety (90) days,
prior to commercialization by PIONEER or the execution of any agreement with
third parties or the granting of any license or sublicense for such Licensed
Products. Such formula shall recognize the relative value contributed by CURAGEN
to the Licensed Product and the relative value contributed by PIONEER's plant
genetic business and expertise existing outside the R&D Program. The parties
recognize that PIONEER has substantial expertise and investment in plant
genomics research and product development, and that the relative value of
CURAGEN's contribution may be comparatively small. If the parties cannot agree
on the formula or the valuation during such good faith negotiation, the parties
will submit to dispute resolution as provided in Article 12.

8.4.2 Alternate Net Sales Calculation.
-------------------------------

[Confidential Treatment Requested]

<PAGE>

5/16/97

The parties agree that prior to the first commercialization of a
Licensed Product by PIONEER or its Affiliates, Agents, licensees or sublicensees
pursuant to Section 8.4.1(a), the parties will meet to discuss in good faith an
amendment to this Agreement which would provide for an alternative definition of
Net Sales for such Licensed Product which may be based on the gross amount
invoiced, less the average over a prior period of the deductions set forth in
Section 1.19(a) through (d).

8.4.3 Royalty Reductions Due to Other Commercial Activities.
-----------------------------------------------------

The royalty specified in Section 8.4.1(a) [XXXXXXXX] may be
reduced as a result of good faith negotiations between the parties (i) in the
event that technologies or intellectual properties owned by third parties are
essential for commercialization of [XXXXXXXX] Licensed Products and depending
on the relative contribution of the third party technology [XXXXXXXX] and/or
(ii) in the event that exclusive or non-exclusive rights granted to CURAGEN as
set forth in Section 8.1.2(b) have enabled CURAGEN to develop material business
opportunities; provided, however, that the [XXXXXXXX] minimum royalty will not
be reduced [XXXXXXXX] and that such discussions shall occur only once with
respect to (i) or (ii) above. Any reduction based on (ii) above will recognize
the value contributed by PIONEER relative to the overall value contributed by
CURAGEN's Genomics Technology and CURAGEN's genomics technology and expertise
existing outside the R&D Program. The parties recognize that CURAGEN has
substantial expertise and investment in genomics and Genomics Research, and that
the relative value of the rights granted to CURAGEN in Section 8.1.2(b) may be
comparatively small.

8.4.4 Royalties After the Royalty Reduction Date.
------------------------------------------

For the reasons set forth in Section 8.4.1, for each Licensed Product
specified in Section 8.4.1(a), for exclusive use of CURAGEN Proprietary Know-How
and Joint Proprietary Know-How, PIONEER also hereby agrees to pay royalties to
CURAGEN on a country-by-country [XXXX] basis, [XXXX] after the Royalty Reduction
Date, as defined below, in such country. For purposes hereof, the "Royalty
Reduction Date" for a Licensed Product in each country shall be (i) the date of
expiration of the last to expire of the CURAGEN Patent Rights or Joint Patent
Rights in such country covering the Licensed Product, or (ii) December 31, 2025
if such Licensed Product is covered solely by CURAGEN Proprietary Know-How
and/or Joint Proprietary Know-How in such country. However, if, after the
Royalty Reduction Date, a competitor of PIONEER is marketing a product in any
such country with any such Trait that would be within the definition of a
Licensed Product if marketed by PIONEER, then PIONEER's royalty obligations
hereunder in such country for such Trait in such Licensed Product shall cease
upon proper written notice of such fact from PIONEER to CURAGEN.

[Confidential Treatment Requested]

<PAGE>

5/16/97

[XXXXXXXX]

8.4.5 Payment Dates and Reports.
-------------------------

Royalties shall be paid by PIONEER on Net Sales within thirty (30)
days after the end of each of the first three Fiscal Quarters in the Fiscal Year
in which such Net Sales are made, and within sixty (60) days of the end of the
final Fiscal Quarter in any Fiscal Year; provided, however, that royalties for
the first three Fiscal Quarters of each Fiscal Year shall be based on
seventy-five percent (75%) of Net Sales in such Fiscal Quarters, with royalties
for the fourth quarter to be adjusted to account for actual Net Sales for the
entire Fiscal Year. Such payments shall be accompanied by a report showing the
quantity and Net Sales of each Licensed Product sold by PIONEER or any
Affiliate, licensee or sublicensee in each country, the applicable royalty rate
for such Licensed Product, any credits or offsets to be applied, and a
calculation of the amount of royalty due.

8.4.6 Accounting.
----------

The Net Sales used for computing the royalties payable to CURAGEN
hereunder shall be computed, and royalties shall be paid, in U.S. dollars. For
purposes of determining the amount of royalties due, the amount of Net Sales in
any foreign currency shall be computed by converting such amount into U.S.
dollars at the prevailing commercial rate of exchange for purchasing dollars
with such foreign currency as reported in The Wall Street Journal on the last
business day of the period to which a royalty payment relates.

8.4.7 Records.
-------

PIONEER, its Affiliates, licensees and sublicensees shall keep for
three (3) years from the date of each payment of royalties complete and accurate
records of sales by PIONEER and its Affiliates, licensees and sublicensees of
each Licensed Product in sufficient detail to allow the

[Confidential Treatment Requested]

<PAGE>

5/16/97

accruing royalties to be determined accurately. CURAGEN shall have the right for
a period of three (3) years after receiving any report or statement with respect
to royalties due and payable to appoint an independent certified public
accountant reasonably acceptable to PIONEER to inspect the relevant records of
PIONEER and its Affiliates, licensees and sublicensees to verify such report or
statement. PIONEER and its Affiliates, licensees and sublicensees shall make its
records available for inspection by such independent certified public accountant
during regular business hours at such place or places where such records are
customarily kept, upon reasonable notice from CURAGEN, solely to verify the
accuracy of the reports and payments. Such inspection right shall not be
exercised more than once in any Fiscal Year nor more than once with respect to
sales of any Licensed Product in any given payment period. CURAGEN agrees to
hold in strict confidence all information concerning royalty payments and
reports, and all information learned in the course of any audit or inspection,
except to the extent necessary for CURAGEN to reveal such information in order
to enforce its rights under this Agreement or if disclosure is required by law,
regulation or judicial order. CURAGEN shall pay for such inspections, except
that in the event there is any upward adjustment in aggregate royalties payable
for any Fiscal Year of the inspected party shown by such inspection of more than
four percent (4%) of the amount paid, PIONEER shall pay for such inspection.

8.4.8 Overdue Royalties.
-----------------

Royalties not paid within the time period set forth in Section 8.4.5
shall bear interest at a rate of one percent (1%) per month from the due date
until paid in full.

8.5 Legal Action.
------------

8.5.1 Actual or Threatened Infringement.
---------------------------------

(a) In the event either party becomes aware of any possible
infringement or unauthorized possession, knowledge or use of any Patent Rights
or Proprietary Know-How licensed hereunder (collectively, an "Infringement"),
that party shall promptly notify the other party and provide it with full
details. The parties will meet to determine the appropriate course of action,
and will collaborate in pursuing such course or action.

30
<PAGE>

5/16/97

(b) Notwithstanding the foregoing, if the parties do not
otherwise agree on a course of action, PIONEER shall have primary responsibility
for the prosecution, prevention or termination of any Infringement in the
PIONEER Commercialization Field at PIONEER's expense and with the sharing of
recoveries as specified below and CURAGEN shall have primary responsibility for
the prosecution, prevention or termination of any Infringement in the CURAGEN
Commercialization Field or the Other Commercialization Field at CURAGEN's
expense and with the sharing of recoveries as specified below. If either PIONEER
or CURAGEN, respectively, does not commence an action to prosecute, or otherwise
take steps to prevent or terminate an Infringement of a Patent Right for which
it has primary responsibility hereunder within sixty (60) days from such notice,
then the other party shall have the right and option to take such reasonable
action as it considers appropriate to prosecute, prevent or terminate such
Infringement. If either party determines that it is necessary or desirable for
the other to join any such suit, action or proceeding, the second party shall
execute all papers and perform such other acts as may be reasonably required in
the circumstances.

(c) PIONEER shall bear the cost of any proceeding or suit
under this Section 8.5.1 brought by PIONEER and CURAGEN shall bear the cost of
any proceeding or suit under this Section 8.5.1 brought by CURAGEN. In each such
case, the responsible party shall have the right first to reimburse itself out
of any sums recovered in such suit or in its settlement for all reasonable costs
and expenses, including reasonable attorney's fees, related to such suit or
settlement. The remainder is next to be used to reimburse the other party for
its costs and expenses so incurred. Any remaining amounts which are in the form
of compensatory damages in the PIONEER Commercialization Field shall be treated
as Net Sales hereunder; any remaining amounts which are in the form of
compensatory damages in the CURAGEN Commercialization Field shall be the
property of CURAGEN; and any punitive damages shall be shared equally by CURAGEN
and PIONEER. Any non-monetary recovery or award shall be shared as mutually
agreed between the parties hereto. Each party shall always have the right to be
represented by counsel of its own selection and at its own expense in any suit
instituted under this Section by the other party for an Infringement. If either
party lacks standing and the other party has standing to bring any such suit,
action or proceeding as specified above, then the other party shall do so at the
request of the responsible party and at the responsible party's expense.

(d) In any action under this Section 8.5.1, the parties shall
fully cooperate with and assist each other. No suit under Section 8.5.1
regarding CURAGEN or Joint Proprietary Intellectual Property may be settled by
PIONEER without CURAGEN's consent. No suit under

31
<PAGE>

5/16/97

Section 8.5.1 regarding PIONEER or Joint Proprietary Intellectual Property may
be settled by CURAGEN without PIONEER's consent.

8.5.2 Defense of Claims Asserted by Third Parties.
-------------------------------------------

(a) Notwithstanding anything to the contrary in this Agreement,
in the event that any action, suit or proceeding is brought against CURAGEN or
PIONEER or any Affiliate, Agent, licensee or sublicensee of PIONEER alleging the
infringement of the intellectual property rights of a third party by reason of
the discovery, development, manufacture, use, sale, importation or offer for
sale of a Licensed Product by PIONEER or its Affiliates, Agents, licensees or
sublicensees, PIONEER will have the obligation to defend itself and CURAGEN and
such Affiliate, Agent, licensee or sublicensee in such action, suit or
proceeding at PIONEER's expense, except if the action, suit or proceeding is
brought primarily due to the actions of CURAGEN in its discovery and
characterization of genes, including but not limited to the use of CURAGEN's
proprietary technologies. (In such case, PIONEER shall have no obligation to
defend CURAGEN.) CURAGEN shall have the right to separate counsel at its own
expense in any such action or proceeding and PIONEER will reimburse CURAGEN for
all reasonable expenditures incurred in connection therewith. The parties will
cooperate with each other in the defense of any such suit, action or proceeding.
The parties will give each other prompt written notice of the commencement of
any such suit, action or proceeding or claim of infringement and will furnish
each other a copy of each communication relating to the alleged infringement.
PIONEER shall not compromise, litigate, settle or otherwise dispose of any such
suit, action or proceeding which involves CURAGEN Proprietary Intellectual
Property or Joint Proprietary Intellectual Property without CURAGEN's advice and
prior consent, provided that CURAGEN shall not unreasonably withhold its consent
to any settlement which does not have a material adverse effect on CURAGEN or
CURAGEN's business.

(b) Notwithstanding anything to the contrary in this
Agreement, in the event that any action, suit or proceeding is brought against
PIONEER or CURAGEN or any Affiliate, licensee or sublicensee of CURAGEN alleging
the infringement of the intellectual property rights of a third party by reason
of the discovery, development, manufacture, use, sale, importation or offer for
sale of a Licensed Product by CURAGEN or its Affiliates, licensees or
sublicensees, CURAGEN will have the obligation to defend itself and PIONEER and
such Affiliate, licensee or sublicensee in such action, suit or proceeding at
CURAGEN's expense, except if the action, suit or proceeding is brought primarily
due to the use by CURAGEN of PIONEER developed

32
<PAGE>

5/16/97

technologies. (In such case, CURAGEN is under no obligation to defend or to pay
for PIONEER's defense.) PIONEER shall have the right to separate counsel at its
own expense in any such action or proceeding and CURAGEN will reimburse PIONEER
for all reasonable expenditures incurred in connection therewith. The parties
will cooperate with each other in the defense of any such suit, action or
proceeding. The parties will give each other prompt written notice of the
commencement of any such suit, action or proceeding or claim of infringement and
will furnish each other a copy of each communication relating to the alleged
infringement. CURAGEN shall not compromise, litigate, settle or otherwise
dispose of any such suit, action or proceeding which involves PIONEER
Proprietary Intellectual Property or Joint Proprietary Intellectual Property
without PIONEER's advice and prior consent, provided that PIONEER shall not
unreasonably withhold its consent to any settlement which does not have a
material adverse effect on PIONEER or PIONEER's business.

8.6 CURAGEN License Option.
----------------------

8.6.1 Option.
------

PIONEER hereby grants to CURAGEN an option to obtain a worldwide
exclusive license in the CURAGEN Commercialization Field with the right to grant
sublicenses (to the extent PIONEER has the right to grant such license) under
(i) all PIONEER Research Results and PIONEER Proprietary Intellectual Property
and (ii) PIONEER's rights to Joint Research Results and Joint Proprietary
Intellectual Property.

8.6.2 Exercise of Option.
------------------

In the event that CURAGEN wishes to exercise its option to obtain an
exclusive license as provided in Section 8.6.1, CURAGEN shall give written
notice to PIONEER specifying in reasonable detail the rights that CURAGEN
desires to license (the "Notice"). The parties shall execute a license in a form
to be agreed upon within ninety (90) days of the date hereof, with the
definition of "Licensed Intellectual Property" completed to specify the Research
Results and/or Proprietary Intellectual Property specified in CURAGEN's Notice.
Such license (i) shall define Licensed Products and Net Sales in a manner
substantially similar to the definitions herein, (ii) shall require royalties to
be paid at a rate of [XXXXXXXX] of Net Sales for a period determined in a manner
substantially similar to the period determined pursuant to Section 8.4.4, and
(iii) shall

[Confidential Treatment Requested]

<PAGE>

5/16/97

contain other provisions substantially similar to the provisions regarding
licensing, royalties, record keeping and reporting, confidentiality, prosecution
and maintenance of patent rights, legal action, default and warranties and
indemnifications set forth herein. Any license requested in the Notice to any
Research Results or Proprietary Intellectual Property other than PIONEER
Proprietary Intellectual Property shall be royalty free.

8.6.3 Third Party Licenses.
--------------------

PIONEER shall not offer any licenses to any third parties in the
CURAGEN Commercialization Field under its rights in any PIONEER Proprietary
Intellectual Property or PIONEER Research Results or Joint Proprietary
Intellectual Property or Joint Research Results during the Research Term and for
a period of one year thereafter. After such period, PIONEER shall only be
permitted to offer any such licenses to any third parties which would limit its
ability to grant the licenses to CURAGEN as specified in Section 8.6.1 or 8.6.2
after giving CURAGEN sixty days prior written notice of its intent to do so in
order to give CURAGEN an opportunity to exercise its option with respect thereto
as set forth in Section 8.6.2.

8.7 Use of Research Results and Proprietary Intellectual
----------------------------------------------------
Property.
--------

CURAGEN shall use Research Results and Proprietary Intellectual
Property for the sole purpose of performing the R&D Program and shall keep all
Research Results and Proprietary Intellectual Property confidential as set forth
in Section 5, provided, however, that CURAGEN will have the right to use
Research Results and Proprietary Intellectual Property to pursue its research
and development and commercialization goals in the CURAGEN Commercialization
Field and will have the right to disclose or transfer Research Results and
Proprietary Intellectual Property for uses related to the CURAGEN
Commercialization Field; provided, however, that such disclosures shall only be
made under the terms of a confidentiality agreement providing protections
similar to those contained herein. CURAGEN recognizes that such disclosure may
compromise the value of Proprietary Know-How and Proprietary Intellectual
Property to PIONEER, and as such, CURAGEN agrees to use discretion to reasonably
protect against such compromise when making such disclosure.

8.8 Research Rights.
---------------

34
<PAGE>

5/16/97

CURAGEN shall have the sole and exclusive right to use all
Proprietary Intellectual Property and Research Results to conduct Genomics
Research in the CURAGEN Commercialization Field. PIONEER shall have the sole and
exclusive right to use all Proprietary Intellectual Property and Research
Results to conduct Genomics Research in the PIONEER Commercialization Field.
Both parties shall have the right to use all Proprietary Intellectual Property
and Research Results to conduct Genomics Research in the Other Commercialization
Field.

9. Termination and Disengagement
-----------------------------

9.1 Material Breach.
---------------

(a) A material breach of this Agreement by a party shall occur:

i) upon the failure of such party to pay, when
due, any amount due hereunder to the other party, effective
thirty (30) days after receiving written notice from the
other party of such failure to pay; or

ii) upon the material breach by such party of the
provisions of Section 5 effective sixty (60) days after
receiving written notice from the other party of such
breach; or

iii) upon breach of any material obligation or
condition by such party, effective sixty (60) days after
receiving written notice from the other party of such
breach.

(b) The foregoing notwithstanding, if the default or breach is
cured or shown to be non-existent within the aforesaid thirty (30) or sixty (60)
day period, the notice shall be deemed automatically withdrawn and of no effect.

(c) The foregoing notwithstanding, in the event that CURAGEN is
acquired by any material competitor of PIONEER, only a breach by PIONEER as set
forth in Section 9.1(a)(i) shall be deemed a material breach.

9.2 Effect of Breach.
----------------

(a) Effect of Material Breach by PIONEER. After the expiration
------------------------------------
of the date for curing any material breach by PIONEER under Section 9.1, without
the cure of such breach, the

35
<PAGE>

5/16/97

exclusive license granted by CURAGEN to PIONEER under Section 8.1.1 shall
convert to a non-exclusive license, without the right to sublicense. PIONEER
shall continue to pay royalties to CURAGEN at the rate as set forth in Section
8.4. In addition, the limitation imposed on CURAGEN under Section 8.1.3 shall
cease and CURAGEN shall be free to commercially exploit CURAGEN Research
Results, Joint Research Results, CURAGEN Proprietary Intellectual Property and
Joint Proprietary Intellectual Property in the Other Commercialization Field.

(b) Effect of Material Breach by CURAGEN. After the expiration
------------------------------------
of the date for curing any material breach by CURAGEN under Section 9.1, without
the cure of such breach, the royalties due by PIONEER to CURAGEN shall be
reduced commensurately with the impact of the breach by CURAGEN on PIONEER's
profitability from Licensed Products, as determined by mediation, as described
in Section 12.2.

9.3 Termination Upon Bankruptcy.
---------------------------

(a) If either party files for protection under bankruptcy
laws, makes an assignment for the benefit of creditors, appoints or suffers
appointment of a receiver or trustee over its property, files a petition under
any bankruptcy or insolvency act or has any such petition filed against it which
is not discharged within sixty (60) days of the filing thereof, then the other
party may terminate this Agreement by notice to such party.

(b) All rights and licenses granted under or pursuant to this
Agreement by CURAGEN to PIONEER, and by PIONEER to CURAGEN, are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code, licenses or rights to "intellectual property" as defined under Section
101(52) of the U.S. Bankruptcy Code. The parties agree that each party, as a
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the U.S. Bankruptcy Code, subject
to performance by the licensee of its preexisting obligations under this
Agreement. The parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against the licensor under the U.S. Bankruptcy Code,
the licensee shall be entitled to a complete duplicate of (or complete access
to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, and same, if not already in its possession, shall be
promptly delivered to the licensee (a) upon any such commencement of a
bankruptcy proceeding

36
<PAGE>

5/16/97

upon written request therefor by the licensee, unless the licensor elects to
continue to perform all of its obligations under this Agreement, or (b) if not
delivered under (a) above, upon the rejection of this Agreement by or on behalf
of the licensor upon written request therefor by the licensee, provided,
however, that upon the licensor's (or its successor's) written notification to
the licensee that it is again willing and able to perform all of its obligations
under this Agreement, the licensee shall promptly return all such tangible
materials to the licensor, but only to the extent that the licensee does not
require continued access to such materials to enable the licensee to perform its
obligations under this Agreement.

9.4 Surviving Provisions.
--------------------

Expiration or termination of this Agreement for any reason shall be
without prejudice to:

(a) the rights and obligations of the parties provided in
Article 3, Article 5, Sections 6.1, 6.2, 6.4, 7.1, 7.2, 8.1.2, 8.1.3, 8.4.6,
8.4.7, 8.4.8, 8.5, 8.7, 8.8, 10.1, 10.2, Article 11 and Article 12, all of which
shall survive such termination;

(b) CURAGEN's right to receive all payments earned and/or
accrued prior to expiration or termination hereunder; and

10. REPRESENTATIONS AND WARRANTIES
------------------------------

10.1 Mutual Representations.
----------------------

CURAGEN and PIONEER each represents and warrants as follows:

10.1.1 Organization.
------------

It is a corporation duly organized, validly existing and is in good
standing under the laws of the State of Delaware and of Iowa, respectively, is
qualified to do business and is in good standing as a foreign corporation in
each jurisdiction in which the performance of its obligations

37
<PAGE>

5/16/97

hereunder requires such qualification and has all, requisite power and
authority, corporate or otherwise, to conduct its business as now being
conducted, to own, lease and operate its properties and to execute, deliver and
perform this Agreement.

10.1.2 Authorization.
-------------

The execution, delivery and performance by it of this Agreement have
been duly authorized by all necessary corporate action and do not and will not
(a) require any consent or approval of its stockholders or (b) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award presently in effect having applicability to it or
any provision of its charter documents.

10.1.3 Binding Agreement.
-----------------

This Agreement is a legal, valid and binding obligation of it
enforceable against it in accordance with its terms and conditions.

10.1.4 No Inconsistent Obligation.
--------------------------

It is not under any obligation to any person, or entity, contractual
or otherwise, that is conflicting or inconsistent in any respect with the terms
of this Agreement or that would impede the diligent and complete fulfillment of
its obligations hereunder.

10.1.5 Warranty Disclaimer.
-------------------

EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER
PARTY MAKES ANY WARRANTY WITH RESPECT TO ANY TECHNOLOGY, GOODS, SERVICES, RIGHTS
OR OTHER SUBJECT MATTER OF THIS AGREEMENT AND HEREBY DISCLAIMS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH
RESPECT TO ANY AND ALL OF THE FOREGOING.

10.1.6 Limited Liability.
-----------------

38
<PAGE>

5/16/97

NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR OTHERWISE, NEITHER
CURAGEN NOR PIONEER WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR
EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY OR SERVICES.

10.2 PIONEER Representation.
----------------------

PIONEER represents to CURAGEN that no withholding tax is due on any
payment required to be made hereunder and that PIONEER will not withhold any
amounts on account of any tax or withholding.

11. INDEMNIFICATION
---------------

11.1 Indemnification of CURAGEN by PIONEER.
-------------------------------------

PIONEER shall indemnify, defend and hold harmless CURAGEN, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "CURAGEN Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the CURAGEN
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments of third parties, including without limitation personal
injury and product liability matters (except in cases where such claims, suits,
actions, demands or judgments result from a willful material breach of this
Agreement, gross negligence or willful misconduct on the part of CURAGEN)
arising directly out of any actions of PIONEER in the performance of the R&D
Program or arising out of the development, testing, production, manufacture,
promotion, import, sale or use by any person of any Licensed Product
manufactured or sold by PIONEER or by an Affiliate, Agent, licensee,
sublicensee, distributor or agent of PIONEER.

11.2 Indemnification of PIONEER by CURAGEN.
-------------------------------------

39
<PAGE>

5/16/97

CURAGEN shall indemnify, defend and hold harmless PIONEER, its
Affiliates, Agents and their respective directors, officers, employees, and
agents and their respective successors, heirs and assigns (the "PIONEER
Indemnitees"), against any liability, damage, loss or expense (including
reasonable attorneys' fees and expenses of litigation) incurred by or imposed
upon the PIONEER Indemnitees, or any one of them, in connection with any claims,
suits, actions, demands or judgments of third parties, (except in cases where
such claims, suits, actions, demands or judgments result from a willful material
breach of this Agreement, gross negligence or willful misconduct on the part of
PIONEER), arising directly out of any actions of CURAGEN in the performance of
the R&D Program.

12. DISPUTE RESOLUTION
------------------

12.1 Senior Officials.
----------------

The parties recognize that a bona fide dispute as to certain matters
may from time to time arise during the term of this Agreement which relates to
either party's rights and/or obligations hereunder. In the event of the
occurrence of such a dispute, either party may, by notice to the other party,
have such dispute referred to their respective senior officials designated as
set forth below or their successors, for attempted resolution by good faith
negotiations within thirty (30) days after such notice is received. Said senior
officials shall be designated by the parties upon execution of this Agreement.

12.2 Formal Dispute Resolution.
-------------------------

12.2.1 General.
-------

In the event of any dispute, difference or question arising between
the parties in connection with this Agreement, the construction thereof, or the
rights, duties or liabilities of either party, and which dispute cannot be
amicably resolved by the good faith efforts of the persons designated under
Section 12.1, then such dispute shall (i) be resolved by non-binding mediation
conducted in the manner set forth in Section 12.2.2, and (ii) in the event that
such dispute is not amicably resolved by such non-binding mediation, it may be
resolved by a lawsuit filed in a court of competent jurisdiction.

40
<PAGE>

5/16/97

12.2.2 Mediation.
---------

In the event of the occurrence of a dispute which cannot be amicably
resolved by the good faith efforts of the persons designated under Section 12.1,
either party may, by notice to the other party, commence a non-binding mediation
to resolve such dispute by providing written notice to the other party, which
notice (a "Mediation Notice") shall inform the other party of such dispute and
the issues to be resolved and shall contain a list of five (5) recommended
individuals to serve as the mediator. Within ten (10) business days after the
receipt of such Mediation Notice, the other party shall respond by written
notice to the party initiating mediation, which notice shall contain a list of
five (5) recommended individuals to serve as the mediator and which may add
additional issues to be resolved. The recommended mediators shall be individuals
with experience in the biotechnology and/or agriculture industry and shall not
be an employee, director, shareholder or agent of either party or of an
Affiliate or subsidiary of either party, or otherwise involved (whether by
contract or otherwise) in the affairs of either party. If, within twenty (20)
business days after receipt of such Mediation Notice, the parties shall have
been unable to mutually agree upon an individual to serve as a mediator, then
such dispute may be settled by lawsuit. If, within twenty (20) business days
after receipt of such Mediation Notice, the parties shall have mutually agreed
upon an individual to serve as a mediator, then the mediator shall conduct a
mediation in an effort to resolve such dispute as follows:

(a) Within thirty (30) business days after selection, the
mediator shall hold a hearing to resolve each of the issues identified by the
parties. Each party shall be represented at the hearing by up to two (2)
employees of such party, one of whom is an officer of such party, and may be
represented by counsel. The hearing shall be held in a mutually agreeable
location. No discovery will be conducted, unless the parties otherwise mutually
agree.

(b) At least ten (10) business days prior to the date set for
the hearing, each party shall submit to the other party and the mediator a
proposed ruling on each issue to be resolved, which writing (A) may, in addition
to containing the proposed rulings, contain arguments or analyses of the facts
or issues and (B) shall be limited to not more than twenty (20) pages.

(c) Each party shall be entitled to no more than three (3)
hours of hearing time to present oral testimony. The oral testimony of both
parties shall be presented during the same calendar day. Such time limitation
shall include any direct, cross or rebuttal testimony, but such time limitation
shall only be charged against the party conducting such direct, cross or
rebuttal

41
<PAGE>

5/16/97

testimony. It shall be the responsibility of the mediator to determine whether
the parties have had the presentation time to which they are entitled.

(d) At the hearing, the mediator shall attempt to resolve each
issue in dispute between the parties. If the mediator shall be unable to resolve
any issue, the mediator shall provide the parties with the mediator's non-
binding ruling on each such issue. The mediator shall, in rendering his
decision, apply the substantive law of the State of Delaware, without giving
effect to its principles of conflicts of law, and without giving effect to any
rules or laws relating to arbitration.

(e) If the mediator has not been able to resolve each issue,
each issue remaining in dispute may be settled by lawsuit. At any subsequent
legal proceeding, neither any rulings of the mediator, any admissions or
settlement offers made by any party at the mediation nor any other information
disclosed at the mediation may be introduced into evidence. The mediation
proceeding shall be confidential. Except as required by law, regulation or
judicial order, no party shall make (or instruct the mediator to make) any
public announcement with respect to the proceedings or rulings of the mediator
without the prior written consent of each other party. The existence of any
dispute submitted to mediation, and the rulings of the mediator, shall be kept
in confidence by the parties and the mediator, except as required by applicable
law, regulation or judicial order.

(f) Each party shall pay its own costs (including, without
limitation, attorneys fees) and expenses in connection with such mediation. The
fees and expenses of the mediator shall be shared equally by the parties.

13. MISCELLANEOUS
-------------

13.1 Payment Method.
--------------

Each payment to CURAGEN under this Agreement shall be paid by PIONEER
in U.S. currency by wire transfer of funds to an account of CURAGEN in
accordance with instructions provided by CURAGEN.

13.2 Notices.
-------

42
<PAGE>

5/16/97

All notices shall be in writing mailed via certified mail, return
receipt requested, courier providing evidence of delivery, addressed as follows,
or to such other address as may be designated by notice so given from time to
time:

If to PIONEER: PIONEER HI-BRED INTERNATIONAL, INC.
7300 NW 62nd Avenue
Johnson, Iowa 50131-1004
Attention: Director, Research Technology
Services

With a copy to: PIONEER HI-BRED INTERNATIONAL, INC.
700 Capital Square
400 Locust Street
Des Moines, Iowa 50309-2340
Attention: General Counsel

If to CURAGEN: CURAGEN CORPORATION
555 Long Wharf Drive, 11th Floor
New Haven, CT 06511
Attention: Executive Vice President

With a copy to: Jeffrey M. Wiesen, Esq.
Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, P.C.
One Financial Center
Boston, MA 02111

If to the RDSC: To the Chair and Co-Chair at their respective
addresses furnished in writing to the parties

If to the Patent
Coordinators: To the two Patent Coordinators at their
respective addresses furnished in writing to
the parties

Notices shall be deemed given as of the date received.

43
<PAGE>

5/16/97

13.3 Governing Law and Jurisdiction.
------------------------------

This Agreement shall be governed by and construed in accordance with
the laws of the State of Connecticut, U.S.A., without regard to the application
of principles of conflicts of law.

13.4 Binding Effect.
--------------

This Agreement shall be binding upon and inure to the benefit of the
parties and their respective legal representatives, successors and permitted
assigns.

13.5 Headings.
--------

Section and subsection headings are inserted for convenience of
reference only and do not form a part of this Agreement.

13.6 Counterparts.
------------

This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.

13.7 Amendment; Waiver.
-----------------

This Agreement may be amended, modified, superseded or canceled, and
any of the terms may be waived, only by a written instrument executed by each
party or, in the case of waiver, by the party or parties waiving compliance. The
delay or failure of any party at any time or times to require performance of any
provisions shall in no manner affect the rights at a later time to enforce the
same. No waiver by any party of any condition or of the breach of any term
contained in this Agreement, whether by conduct, or otherwise, in any one or
more instances, shall be deemed to be, or considered as, a further or continuing
waiver of any such condition or of the breach of such term or any other term of
this Agreement.

13.8 No Third Party Beneficiaries.
----------------------------

44
<PAGE>

5/16/97

Except as set forth in Section 10, no third party, including any
employee of any party to this Agreement, shall have or acquire any rights by
reason of this Agreement.

13.9 No Agency or Partnership.
------------------------

Nothing contained in this Agreement shall give either party the right
to bind the other, or be deemed to constitute the parties as agents for the
other or as partners with each other or any third party.

13.10 Assignment and Successors.
-------------------------

This Agreement may not be assigned by either party without the
consent of the other, which shall not be unreasonably withheld, except that each
party may, without such consent, assign this Agreement and the rights,
obligations and interests of such party, in whole or in part, to any of its
Affiliates, to any purchaser of all or substantially all of its assets in the
line of business to which this Agreement pertains or to any successor
corporation resulting from any merger or consolidation of such party with or
into such corporations.

13.11 Force Majeure.
-------------

Neither PIONEER nor CURAGEN shall be liable for failure of or delay
in performing obligations set forth in this Agreement, and neither shall be
deemed in breach of its obligations, if such failure or delay is due to natural
disasters or any causes beyond the reasonable control of PIONEER or CURAGEN. In
event of such force majeure, the party affected thereby shall use reasonable
efforts to cure or overcome the same and resume performance of its obligations
hereunder.

13.12 Interpretation.
--------------

The parties hereto acknowledge and agree that: (i) each party and its
counsel reviewed and negotiated the terms and provisions of this Agreement and
have contributed to its revision; (ii) the rule of construction to the effect
that any ambiguities are resolved against the drafting party shall not be
employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all parties hereto
and not in a favor of

45
<PAGE>

5/16/97

or against any party, regardless of which party was generally responsible for
the preparation of this Agreement.

13.13 Integration: Severability.
-------------------------

This Agreement is the sole agreement with respect to the subject
matter hereof and supersedes all other agreements and understandings between the
parties with respect to same, including but not limited to the Confidentiality
Agreement between CURAGEN and PIONEER dated October 3, 1996 (the "Superseded
Confidentiality Agreement"). If any provision of this Agreement is or becomes
invalid or is ruled invalid by any court of competent jurisdiction or is deemed
unenforceable, it is the intention of the parties that the remainder of this
Agreement shall not be affected.

13.14 Export Controls.
---------------

This Agreement is made subject to any restrictions concerning the
export of Licensed Products or Research Results or Proprietary Intellectual
Property ("Technology") from the United States which may be imposed upon or
related to either party to this Agreement from time to time by the Government of
the United States. Neither party will export, directly or indirectly, any
Technology or any Licensed Products utilizing such Technology to any countries
for which the United States Government or any agency thereof at the time of
export requires an export license or other governmental approval, without first
obtaining the written consent to do so from the Department of Commerce or other
agency of the United States Government when required by applicable statute or
regulation.

IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed this 16th day of May, 1997 by their duly authorized representatives.

PIONEER HI-BRED INTERNATIONAL, INC.

By: /s/ Anthony Cavalieri
------------------------------------

Name: Anthony Cavalieri
----------------------------------

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

46
<PAGE>

5/16/97

CURAGEN CORPORATION

By: /s/ Jonathan M. Rothberg
---------------------------------------

Name: Jonathan M. Rothberg
-------------------------------------

Title: Chairman and Chief Executive Officer
------------------------------------

<PAGE>

Exhibit 10.14

CuraGen Corporation has omitted from this Exhibit 10.14 portions of the
Agreement for which CuraGen Corporation has requested confidential treatment
from the Securities and Exchange commission. The portions of the Agreement for
which confidential treatment has been requested are marked with X's in brackets
and such confidential portions have been filed separately with the Securities
and Exchange Commission.

RESEARCH AND OPTION AGREEMENT

This Research and Option Agreement ("Agreement") is made effective as of
October 1, 1997 (the "Effective Date") by and between BIOGEN, INC., a
Massachusetts corporation having its principal business office at 14 Cambridge
Center, Cambridge, MA 02142 ("BIOGEN"), and CURAGEN CORPORATION, a Delaware
corporation with its principal place of business at 555 Long Wharf Drive, 11th
Floor, New Haven, Connecticut 06511 ("CURAGEN"). BIOGEN and CURAGEN are each
hereafter referred to individually as a "Party" and together as the "Parties".

WHEREAS, BIOGEN desires to have access to CURAGEN's functional genomics
technologies (including GeneScape(R), QEA/GeneCalling, MIM/PathCalling and all
additional services provided by CURAGEN) and to have CURAGEN apply such
technologies to certain BIOGEN Proprietary Material in order to expedite the
discovery of information which may lead to the development of novel
pharmaceutical products;

WHEREAS, BIOGEN and CURAGEN wish to initiate the performance of certain
research by CURAGEN;

WHEREAS, BIOGEN wishes to obtain an option to evaluate and license the
inventions obtained or made by CURAGEN in the performance of the research
pursuant to this Agreement, as well as an option to evaluate and license certain
other inventions of CURAGEN;

WHEREAS, BIOGEN will agree to make an equity investment in CURAGEN Common
Stock itself, or through one of its Affiliates, in the amount of Five Million
Dollars ($5,000,000), such investment to be made contemporaneously with the
initial public offering of CURAGEN Common Stock;

[Confidential Treatment Requested]
<PAGE>

WHEREAS, BIOGEN will itself, or through one of its Affiliates, also agree
to loan CURAGEN up to Ten Million Dollars ($10,000,000) on the terms and
conditions as set forth herein; and

WHEREAS, BIOGEN and CURAGEN therefore agree to undertake the foregoing, all
under the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the Parties hereby agree as follows:

1. DEFINITIONS

Whenever used in the Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

1.1 "Affiliate" shall mean any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement.
"Control" means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or fifty percent (50%) or more of
the equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a Party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.

1.2 [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

1.3 [XXXXXXXXXXXXXXXXX] shall have the meaning set forth in Section 2.6.

1.4 "BIOGEN Proprietary Material" shall mean samples provided by BIOGEN to
CURAGEN for the purposes of performing the Research Program and shall also be
deemed to include the nucleic acids and other substances actually contained in
such samples.

1.5 "Clone" shall mean a segment of DNA representing a whole or partial
gene whose sequence or utility is determined from the use of one or more Data
Sets.

[Confidential Treatment Requested]

<PAGE>

1.6 "CURAGEN Background Inventions" shall mean all patent rights and
know-how of CURAGEN, other than those relating primarily to Inventions, which
CURAGEN has the right to license as of the Effective Date or at any time during
the Term hereof, and which would be infringed by the activities of BIOGEN
permitted by this Agreement or by the development, manufacture, use, sale or
importation of a Licensed Product; provided, however, that CURAGEN Background
Inventions shall expressly exclude (i) any patent rights or know-how
specifically relating to Clones or genes not licensed by BIOGEN pursuant to an
executed License Agreement and (ii) any patent rights or know-how arising from
any CURAGEN collaboration with a third party, except to the extent permitted
thereby.

1.7 "CURAGEN Data" shall mean all information obtained by CURAGEN from the
processing of specified CURAGEN samples, including QC data, expression data,
sequence data and any other information obtained or generated by CURAGEN in the
performance of a discrete CURAGEN Project outside the performance of the
Research Program.

1.8 "CURAGEN Data Set" shall mean all CURAGEN Data resulting from a
discrete CURAGEN Project.

1.9 "CURAGEN Project" shall mean a particular project undertaken by
CURAGEN outside the Research Program to process and analyze a specified set of
samples which do not contain BIOGEN Proprietary Material, and as to which
CURAGEN is free to grant rights to BIOGEN hereunder.

1.10 "CURAGEN Project Invention" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN in the
performance of a CURAGEN Project that results in CURAGEN Data that becomes part
of an Exclusive Data Set, that is based on, incorporates or makes material use
of the corresponding CURAGEN Data.

1.11 "CURAGEN Proprietary Material" shall mean all substances made by
CURAGEN in the performance of the Research Program other than mRNA pools
extracted from BIOGEN Proprietary Material . CURAGEN Proprietary Material shall
also mean all substances made by CURAGEN in the performance of CURAGEN Projects,
including mRNA pools. CURAGEN Proprietary Materials shall include, without
limitation, QEA fragments and materials derived or constructed from QEA
fragments, including, without limitation, fragment and full length cDNA clones.

3
<PAGE>

1.12 "Data Set," which may be either a Project Data Set or a CURAGEN Data
Set, shall mean all Project Data resulting from a discrete Research Project or
all CURAGEN Data resulting from a discrete CURAGEN Project, respectively.

1.13 "Discovery Project" shall have the meaning set forth in Section 1.29.

1.14 [XXXXXXXXXXXXXXX] shall have the meaning set forth in Section 7.5.

1.15 "Exclusive Data Set" shall mean any Project Data Set during the
corresponding Exclusive Evaluation Period as provided in Section 2.4 or any
CURAGEN Data Set during the corresponding Exclusive Evaluation Period as
provided in Section 2.5.2.

1.16 "Exclusive Evaluation Period" shall have the meaning set forth in
Section 2.4 or 2.5.2.

1.17 "FTE" shall mean the equivalent of a full year of effort on a full
time basis of a researcher possessing skills and experience necessary to carry
out applicable tasks under the Research Program.

1.18 "Invention" shall mean either a CURAGEN Project Invention or a
Research Project Invention.

1.19 [XXXXXXXXXXXXXX] shall have the meaning set forth in Section 2.1.3.

1.20 "License Agreement" shall mean a license agreement in the form of
Appendix C hereto executed by the Parties upon exercise of any Option pursuant
to Section 7.

1.21 "Optioned Clone" shall have the meaning set forth in Section 7.1.

1.22 "Option Period" shall have the meaning set forth in Section 7.3.

1.23 "Patent Rights" means the rights and interests in and to issued
patents and pending patent applications in any country, including, but not
limited to, all provisional applications, substitutions, continuations,
continuations-in-part, divisions, and renewals, all letters patent granted
thereon, and all reissues, reexaminations and extensions thereof, whether owned
solely or jointly by a Party or licensed in by a Party, with the right to
sublicense, now or in the future, wherein at least one claim of such patent
right is to an Invention.

1.24 "Previously Committed Clone" shall mean any Clone (a) which is subject
to a license or an option previously granted by CURAGEN to any third party, (b)
which a third party has requested CURAGEN to full-length clone, or (c) of which
a third party has commenced full-length cloning and notified CURAGEN thereof.

[Confidential Treatment Requested]

<PAGE>

1.25 "Project Data" shall mean all information obtained by CURAGEN from
the processing of BIOGEN Proprietary Material in a particular Research Project,
including QC data, expression data, sequence data and any other information
obtained or generated by CURAGEN in the performance of each Research Project in
the Research Program.

1.26 "Project Data Set" shall mean all Project Data resulting from a
discrete Research Project.

1.27 "Research Committee" or "RC" shall have the meaning set forth in
Section 2.2.1.

1.28 "Research Plan" shall mean the written description of the research to
be performed by CURAGEN under this Agreement, as further described in Section
2.1.3. The Research Plan may specify one or more independent Research Projects.

1.29 "Research Project" shall mean (i) a particular project to process and
analyze a specified set of samples in the Research Program, one of the primary
purposes of which is the discovery of novel genes or novel utilities of genes (a
"Discovery Project") or (ii) any other project mutually agreed to by the
Parties. Each individual Research Project shall involve the analysis of no more
than [XX] samples unless otherwise agreed by the Parties.

1.30 "Research Project Invention" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN or BIOGEN or
jointly by employees of both, (a) in the performance of a Research Project
hereunder, or (b) in the course of evaluating or utilizing any Data Set, in each
case that is based on, incorporates or makes material inventive use of the
corresponding Project Data or CURAGEN Data.

1.31 "Research Program" shall mean the research program to be performed
by CURAGEN under this Agreement as described in the Research Plan and amendments
thereto.

1.32 "Research Term" shall have the meaning set forth in Section 2.3.1.

1.33 "Term" shall have the meaning set forth in Section 8.1.

1.34 "Territory" shall mean the world.

2. RESEARCH PROGRAM

2.1 Implementation of Research Program.
----------------------------------

[Confidential Treatment Requested]

<PAGE>

2.1.1 Basic Provisions of Program.
---------------------------

(a) The objective of the Research Program will be for CURAGEN to generate
and deliver to BIOGEN Project Data Sets by performing Research Projects
utilizing BIOGEN Proprietary Material. CURAGEN shall use commercially reasonable
efforts to perform such tasks as are set forth in the Research Plan, including
use of its functional genomics technologies (including GeneScape(R),
QEA/GeneCalling, MIM/PathCalling and all additional services provided by
CURAGEN) and the provision of such facilities and materials (other than BIOGEN
Proprietary Material), equipment and consultants as it deems necessary to the
achievement of such Research Plan and shall deliver each Project Data Set to
BIOGEN using the GeneScape(R) database and software. In carrying out the
Research Program, CURAGEN shall devote an average of at least [XXXXXXXX] FTEs
per year to the Research Program over its five year duration (the "Staffing
Level") unless BIOGEN and CURAGEN have agreed on a change in the Staffing Level
as provided in (b) below.

(b) BIOGEN may request an increase in the Staffing Level of up to [XXX
XXX] additional FTEs per year to be devoted to the Research Program, subject to
the agreement of CURAGEN. CURAGEN will use commercially reasonable efforts to
increase the staffing level if mutually agreed as promptly as practical. Once
the Staffing Level is increased, it may not be decreased during the following
[XXXXXXXXX] period without the consent of CURAGEN, which consent shall not be
unreasonably withheld.

(c) BIOGEN shall have the right, at BIOGEN's expense, to have an
independent certified public accountant review CURAGEN's accounting records for
the purpose of verifying the allocation of the required number of FTE's to the
Research Program.

2.1.2 Collaborative Efforts and Reports.
---------------------------------

(a) The Parties agree that the successful execution of the Research
Program will require the collaborative use of both Parties' areas of expertise.
The Parties shall keep the RC fully informed about the status of the portions of
the Research Program they respectively perform. In particular, without
limitation, each Party shall furnish to the RC quarterly written reports within
thirty (30) days after the end of each quarterly period, describing the progress
of its activities in reasonable detail, including (x) a summary of Project Data
from ongoing Research Projects, (y) a summary of uses of Project Data and (z) a
description of Project Data Sets from

[Confidential Treatment Requested]

<PAGE>

completed Research Projects. At any time, upon the reasonable request of BIOGEN,
CURAGEN will provide an update of the status of Research Projects to BIOGEN.

(b) Scientists at CURAGEN and BIOGEN shall cooperate in the performance of
the Research Program and, subject to any confidentiality obligations to third
parties, shall exchange information and materials (including BIOGEN Proprietary
Material) as necessary to carry out the Research Program, subject to the
provisions of Section 4. Each Party will attempt to accommodate any reasonable
request of the other Party to send or receive personnel for purposes of
collaborating or exchanging information under the Research Program. Such visits
and/or access will have defined purposes and be scheduled in advance. The
requesting Party will bear the reasonable travel and lodging costs of any such
personnel.

(c) CURAGEN will give written notice to BIOGEN and the RC upon completion
of the Project Data Set from each Research Project. "Completion" of a Project
Data Set shall occur upon generation of all QEA/GeneCalling data or
MIM/PathCalling data from a Research Project as contemplated by the Research
Plan.

(d) CURAGEN shall set up and maintain, throughout the Research Term, a
secure partition of its GeneScape(R) database and software for the exclusive use
of BIOGEN and CURAGEN for the purpose of identifying genes from Exclusive Data
Sets, and shall provide online E-mail and telephone help during normal business
hours in the use thereof to BIOGEN. CURAGEN and BIOGEN shall jointly set up and
maintain a secure connection to said partition of the GeneScape(R) database and
software in order to give BIOGEN on-line access thereto. Through such
connection, BIOGEN shall have the right to utilize all features and functions of
the GeneScape(R) database and software (including, without limitation,
GeneTools(TM)) in connection with the Research Program.

(e) BIOGEN will also receive access to CURAGEN's QEA/GeneCalling and
MIM/PathCalling subscription databases and to GeneTools(TM) pursuant to one or
more subscription agreements to be executed by the Parties, with terms
substantially as described in Appendix D hereto. Such subscriptions [XXXXXXXX
----------
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] until the
expiration of the Research Term. Such subscription agreements may be terminated
by BIOGEN at any time, without affecting the Research Program, either in their
entirety or with respect to any database at BIOGEN's sole discretion upon three
(3) months prior written notice. BIOGEN shall have no rights to use the
GeneScape(R) database and software except as expressly set forth herein or in an
executed database subscription agreement.

2.1.3 Research Plans.
--------------

The Research Plan for the first twelve months of the Research Program shall
be agreed upon by the Parties within thirty (30) days of the Effective Date and
shall include the initial Research Projects and plans to implement the
installation of access to the GeneScape(R) database and software for BIOGEN. The
initial Research Projects shall include a project on [XXXXXXXXXXXXXX
XXXXXXXXXXXXXX] and a project on [XXXXXXXXXX] as further described in Section
2.6. Every [XXXXXXXXXXXXXX] during the Research Term [XXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXX] the Research Plan shall be updated by BIOGEN in consultation
with CURAGEN to cover the next twelve months and shall be approved by the RC no
later than thirty (30) days before the end of each semi-annual period. The
Research Plan shall set forth specific Research Projects for the period covered
by the Research Plan. The RC will consider adjustments in the Research Plan at
any time upon the request of BIOGEN or CURAGEN. Notwithstanding the foregoing,
no project shall become a Research Project without the express consent of both
BIOGEN and CURAGEN; provided, however, that CURAGEN shall consent to any
reasonable proposed Discovery Project which is not substantially similar to a
project that is ongoing, planned, the subject of negotiation with a third party
or subject to a prior commitment to a third party, and which would not violate a
prior restriction under an agreement with a third party. The Parties shall
negotiate in good faith the terms to apply generally to any Research Project
that is not a Discovery Project, other than the [XXXXXXXXXX XXXXXXXX] which is
covered by Section 2.6.

2.1.4 Exclusivity.
-----------

(a) CURAGEN agrees that, during the conduct of a Research Project and
for the duration of any subsequent Exclusive Evaluation Period, CURAGEN shall
not undertake to perform a substantially similar research project with any third
party.

[Confidential Treatment Requested]

<PAGE>

(b) CURAGEN agrees that during any Exclusive Evaluation Period, CURAGEN
will not grant access to any Exclusive Data Set to any other party and that
during any Option Period, CURAGEN shall not grant to any third party rights to
any Optioned Clone. In addition, CURAGEN shall not, during any Exclusive
Evaluation Period, grant a third party any exclusive rights to license a Clone
contained in the corresponding Exclusive Data Set (i) which BIOGEN has requested
CURAGEN to full-length clone or (ii) for which BIOGEN has commenced full-length
cloning and notified CURAGEN thereof. Notwithstanding the provisions of Article
4 and except as provided in Section 2.6 hereof, upon the expiration of any
Exclusive Evaluation Period for any Exclusive Data Set, CURAGEN shall have the
right, at its sole option, to make such Data Set and reasonable descriptions of
the data contained therein available to third parties or to put the Data Set and
such descriptions in the subscription portion of the GeneScape(R) database.
Nothing contained in this Agreement shall in any way restrict CURAGEN's right to
perform research or collaborate with third parties and to grant to third parties
the right to exploit the results of any such research or collaborations without
restriction other than as set forth above or as expressly provided in an
executed License Agreement. CURAGEN agrees that CURAGEN will not use and/or
replicate any BIOGEN Proprietary Material for any purpose other than as provided
herein.

(c) CURAGEN acknowledges that BIOGEN may, in the course of reviewing
Data Sets, obtain general information not specifically relating to any Clone or
to the utility thereof. BIOGEN shall be permitted to use any such general
information that is non-proprietary to CURAGEN in the course of conducting its
internal research programs, or as otherwise permitted herein, but for no other
purpose.

(d) BIOGEN agrees that, until any such information is in the public
domain, other than as a result of a disclosure by BIOGEN in violation of this
Agreement, an executed subscription agreement or an executed License Agreement,
BIOGEN will only utilize Project Data, CURAGEN Data, CURAGEN Proprietary
Material, Inventions or Patent Rights as expressly provided herein, in an
executed License Agreement or in an executed subscription agreement.

2.1.5 Research License. CURAGEN hereby grants to BIOGEN a non-exclusive
----------------
license under CURAGEN Background Inventions and CURAGEN's interest in any
Inventions solely

9
<PAGE>

during the Term hereof and to the extent necessary to allow BIOGEN to perform
its obligations under the Research Program and to exercise the rights granted
herein.

2.1.6 Software License. Any access granted to the GeneScape(R) database
----------------
and software hereunder, or any components thereof, is granted according to the
following terms:

The GeneScape(R) database, software and display screeens are protected by
copyright, patent, trade secret and other intellectual property laws. CURAGEN
hereby grants to BIOGEN and its employees a non-exclusive non-transferrable
license to access the GeneScape(R) database and software solely for the purposes
of and during the Term of this Agreement. BIOGEN shall access Project Data Sets
and CURAGEN Data Sets only through the GeneScape(R) database and software
provided by CURAGEN. BIOGEN shall not copy the GeneScape(R) database, software
or display screens except as occurs during the normal course of CURAGEN-provided
access. In particular, BIOGEN will not retain such normal copies for a time not
reasonably related to CURAGEN-provided access. BIOGEN shall not reverse
engineer, decompile, or disassemble the GeneScape(R) software or display
screens. The GeneScape(R) database and software embody trade secrets of CURAGEN
that are considered Confidential Information of CURAGEN and subject to the
provisions of Article 6 hereof.

2.2 Research Committee.
------------------

2.2.1 Establishment and Functions of RC.
---------------------------------

(a) CURAGEN and BIOGEN shall establish a "Research Committee" (the
"RC"). The RC will be responsible for the planning and monitoring of the
Research Program. In particular, the activities of the RC shall include
reviewing progress in the Research Program and recommending necessary
adjustments to the Research Program, including any Research Project
substitutions deemed desirable based on results and on BIOGEN's commercial
interest, as the research and development progresses.

2.2.2 RC Membership.
-------------

CURAGEN and BIOGEN each shall appoint, in their sole discretion, three
members to the RC, which shall include a Co-Chair to be designated by BIOGEN and
a Co-Chair to be

10
<PAGE>

designated by CURAGEN. Substitutes or alternates for the Co-Chairs or other RC
members may be appointed at any time by notice in writing to the other Party.
The Parties may mutually agree to change the size of the RC as long as there
shall be an equal number of representatives of each Party on the RC. The initial
Co-Chairs and other RC members shall be designated by the Parties upon execution
of this Agreement. CURAGEN shall appoint a Project Coordinator, who shall be
reasonably satisfactory to BIOGEN, to serve as the principal liaison with BIOGEN
for the Research Program. Such Project Coordinator will be one of CURAGEN's
members of the RC.

2.2.3 Meetings.
--------

The RC shall meet at least quarterly, with such meetings to be held,
alternately, in New Haven, Connecticut, and Cambridge, Massachusetts unless the
Parties agree otherwise. Any additional meetings shall be held at places and on
dates selected by the Co-Chairs of the RC. In addition, the RC may act without a
formal meeting by a written memorandum signed by the Co-Chairs of the RC.
Whenever any action by the RC is called for hereunder during a time period in
which the RC is not scheduled to meet, the Co-Chairs of the RC shall cause the
RC to take the action in the requested time period by calling a special meeting
or by action without a meeting. Subject to the obligations set forth in Section
4, representatives of each Party or of its Affiliates, in addition to the
members of the RC, may attend RC meetings at the invitation of either Party with
the prior approval of the other Party, which shall not be unreasonably withheld.

2.2.4 Minutes.
-------

The RC shall keep accurate minutes of its deliberations which record all
proposed decisions and all actions recommended or taken. Drafts of the minutes
shall be delivered to the Co-Chairs of the RC within twenty (20) days after the
meeting. The Party hosting the meeting shall be responsible for the preparation
and circulation of the draft minutes. Draft minutes shall be edited by the
Co-Chairs and shall be issued in final form only with their approval and
agreement as evidenced by their signatures on the minutes.

2.2.5 Quorum; Voting; Decisions.
-------------------------

11
<PAGE>

of such Party's members on the RC who are absent from the meeting.
Notwithstanding the foregoing, the objective of the Parties to this Agreement is
that decisions of the RC shall be made by consensus. However, except as
otherwise set forth herein, in the event that the RC is unable to resolve any
matter before it as set forth above, such matter shall be resolved in good faith
by BIOGEN. Notwithstanding the foregoing, no project shall become a Research
Project without the express consent of both BIOGEN and CURAGEN; provided,
however, that CURAGEN shall consent to any reasonable proposed Discovery Project
which is not substantially similar to a project that is ongoing, planned, the
subject of negotiation with a third party or subject to a prior commitment to a
third party, and which would not violate a prior restriction under an agreement
with a third party.

2.2.6 Expenses.
--------

CURAGEN and BIOGEN shall each bear all expenses of their respective RC
members related to their participation on the RC and attendance at RC meetings.

2.3 Research and Development Term.
-----------------------------

2.3.1 Term of the R&D Program.
-----------------------

The Research Program shall expire five (5) years after the Effective Date
unless extended as provided below or unless earlier terminated by either Party
pursuant to the provisions in Section 2.3.3 and/or Article 8 (the "Research
Term").

2.3.2 Extension of the Research Phase of the R&D Program.
--------------------------------------------------

The Research Term may be extended upon six (6) months prior written
notice by mutual agreement of the Parties on terms to be agreed upon between the
Parties.

2.3.3 Early Termination of the R&D Program.
------------------------------------

(a) BIOGEN may terminate the Research Program at its sole discretion upon
six (6) months prior written notice to CURAGEN, which notice may be given at any
time after the second anniversary of the Effective Date. Notwithstanding any
other provision of this Agreement, any such early termination of the Research
Program shall automatically terminate any ongoing Exclusive Evaluation Period or
Option Period, but shall not affect any License Agreement executed between the
Parties prior to such early termination or any Option that has been exercised
prior to such early termination.

[Confidential Treatment Requested]

<PAGE>

(b) Any termination of the Research Program under Section 2.3.3(a) shall
be without prejudice to the rights of either Party against the other, then
accruing or otherwise accrued under this Agreement and upon any such
termination, all remaining BIOGEN Proprietary Material provided to CURAGEN under
this Agreement shall be returned to BIOGEN or destroyed and all remaining
CURAGEN Proprietary Material provided to BIOGEN under this Agreement shall be
returned to CURAGEN or destroyed, except for any CURAGEN Proprietary Material
licensed pursuant to an executed License Agreement.

2.4 Project Data Evaluations.
------------------------

2.4.1 Exclusive Access. From the time at which a Research Project is begun
----------------
and continuing through a one-year period which shall commence on the first day
of the calendar quarter following the calendar quarter in which delivery of
a notice of a complete Project Data Set is made pursuant to Section 2.1.2(c)
(the "Exclusive Evaluation Period"), CURAGEN: (a) shall not use such Project
Data Set and related CURAGEN Proprietary Material resulting from such Research
Project for any purpose other than conducting the Research Program hereunder and
(b) shall keep such Project Data Set and related Inventions and CURAGEN
Proprietary Material confidential and will not disclose or transfer the Project
Data Set, or related Inventions and CURAGEN Proprietary Material, to third
parties by publication or otherwise, without the prior written consent of
BIOGEN.

2.4.2 Extensions. BIOGEN may elect to extend the Exclusive Evaluation
----------
Period for any Project Data Set for up to two additional twelve (12) month
periods from the end of the initial, unextended Exclusive Evaluation Period by
giving written notice to CURAGEN and making a payment of $500,000 per twelve
(12) month period to CURAGEN prior to expiration of the then current Exclusive
Evaluation Period for such Project Data Set. An Exclusive Evaluation Period will
be automatically extended for [XXXXXXXXXXXXXX] for up to three months in order
to allow the completion of any reasonable requests for confirmation of data made
by BIOGEN during the primary twelve-month of such Exclusive Evaluation Period.

2.4.3 Non-exclusive Access. Except with respect to any information which
--------------------
becomes part of the public domain other than as a result of a disclosure by
BIOGEN in violation of this Agreement, an executed subscription agreement or an
executed License Agreement, following the expiration of the Exclusive Evaluation
Period for a Project Data Set, BIOGEN shall continue

[Confidential Treatment Requested]

<PAGE>

to have non-exclusive access to such Project Data Set solely through the
GeneScape(R) database and solely for the purpose of identifying Clones of
interest to BIOGEN in such Data Set, or to the extent expressly permitted in
Section 2.1.4(c), in an executed License Agreement or in an executed
subscription agreement.

2.4.4. Data Annotations. Upon the expiration of the Exclusive Evaluation
----------------
Period for each Project Data Set, CURAGEN shall furnish to BIOGEN reasonable
descriptions of the Project Data Set to be included in the GeneScape(R) database
with the Project Data Set. BIOGEN shall have a period of [XXXXXXXXXXXXXX] to
review such descriptions and advise CURAGEN of reasonable objections. CURAGEN
shall not include in the GeneScape(R) database any descriptions, or portions
thereof, to which BIOGEN reasonably objects.

2.5 CURAGEN Projects.
----------------

2.5.1 Access. BIOGEN shall have the option, for such period or periods as
------
CURAGEN may specify, to obtain exclusive access to specified proprietary CURAGEN
Data Sets and related CURAGEN Project Inventions which are offered by CURAGEN in
its sole discretion to BIOGEN for review. Such option shall be exercisable as
set forth in Section 2.5.2 below.

2.5.2 Exclusive Evaluation Option. Subject to any rights which CURAGEN may
---------------------------
grant or have granted to third parties, BIOGEN may request at any time during
the time period specified by CURAGEN that it receive exclusive access (as
described in Section 2.5.1) to any CURAGEN Data Set offered to BIOGEN pursuant
to Section 2.5.1. Such exclusive access to such CURAGEN Data Set shall be
granted to BIOGEN for an Exclusive Evaluation Period of [XXXXXXXXXX] commencing
upon CURAGEN's receipt of written notice from BIOGEN and payment of an exclusive
evaluation fee of [XXXXX] unless BIOGEN is notified by CURAGEN at any time
prior to CURAGEN's receipt of BIOGEN's written notice that exclusive access to
such CURAGEN Data Set is no longer available as a result of CURAGEN's agreements
with third parties existing at the time of the request.

2.5.3 Extensions. BIOGEN may elect to extend the Exclusive Evaluation
----------
Period for any CURAGEN Data Set for up to [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXX] from the end of the initial unextended Exclusive Evaluation Period by
giving written notice to CURAGEN and making a second payment [XXXXXXXXXX
XXXXXXXXX] to CURAGEN prior to expiration of the then current
Exclusive Evaluation Period for such CURAGEN Data Set. An

[Confidential Treatment Requested]

<PAGE>

Exclusive Evaluation Period will be automatically extended for [XXXXXXXXXXXX]
for up to [XXXXXXXXXXXX] in order to allow the completion of any reasonable
requests for confirmation of data made by BIOGEN during the primary [XXXXXXXXXX]
period of such Exclusive Evaluation Period. Following the expiration of the
Exclusive Evaluation Period for a CURAGEN Data Set, BIOGEN shall have no access
to or right to use such CURAGEN Data Set, other than as expressly permitted in
Section 2.1.4(c), in an executed License Agreement or in an executed
subscription agreement.

2.6 [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXX]

3. FINANCIAL TERMS

3.1 Equity Investment. BIOGEN agrees itself, or through one of its
-----------------
Affiliates, to make an equity investment in CURAGEN in the amount of Five
Million Dollars ($5,000,000), such investment to be made in a transaction exempt
from registration under the Securities Act of 1933 contemporaneously with the
closing of the initial public offering of CURAGEN Common Stock at the public
offering price and pursuant to a mutually agreeable stock purchase agreement
containing reasonable and customary terms for the purchase of stock in such
circumstances and a

[Confidential Treatment Requested]

<PAGE>

registration rights agreement providing for the filing of a registration
statement covering the resale of the purchased shares to be filed by CURAGEN
within twenty (20) days of the first anniversary of the effective date of the
registration statement pertaining such initial public offering. In the event
that CURAGEN has not closed an initial public offering within eighteen (18)
months from the Effective Date, BIOGEN shall be released from its obligation
pursuant to this Section 3.1.

3.2 Loan Commitment. As partial consideration for rights granted
---------------
hereunder, BIOGEN hereby commits to the following:

(a) BIOGEN shall itself, or through one of its Affiliates, subject to the
terms set forth below, make funds available to CURAGEN for general corporate
purposes in the form of a loan or loans to CURAGEN in an amount not to exceed
Ten Million Dollars ($10,000,000.00) (the "Loan"). Unless this Agreement has
been terminated for any reason, CURAGEN may, in such amounts and at such times
as CURAGEN, in it sole discretion, may determine, upon fifteen (15) days
written notice draw down the balance of the Loan over a period of five (5) Loan
Years (as defined below) following the Effective Date. For the purposes of this
section, a "Loan Year" commences on the Effective Date or an anniversary thereof
and terminates twelve months later. BIOGEN shall not be obligated to advance
more than Five Million Dollars ($5,000,000) in the first Loan Year or to advance
any funds under the Loan at any time during which (i) CURAGEN is in default
under any Note (defined below); or (ii) any proceeding, voluntary or
involuntary, in bankruptcy or insolvency, is pending against CURAGEN, or a
receiver is operating CURAGEN with or without the consent of CURAGEN. BIOGEN's
obligation to advance any funds under the Loan shall terminate upon the earlier
to occur of (i) the last day of the fifth Loan Year or (ii) termination or
expiration of the Research Program and the Research Term.

(b) On the Effective Date, CURAGEN shall execute and deliver to BIOGEN an
unsecured note, substantially in the form set forth in Appendix B attached
----------
hereto and made a part hereof (the "Note"), evidencing the Loan. The schedule
attached to the Note shall be revised each time any amount is drawn down under
the Loan and each time any amount is repaid. Once any principal amount has been
repaid, BIOGEN shall not be obligated to advance such amount to CURAGEN during
the remainder of the term of the Loan. The Note shall be subordinated to (i)
all secured debt and liabilities of CURAGEN and (ii) all liabilities of CURAGEN
to institutional or
16

[Confidential Treatment Requested]

<PAGE>

commercial lenders and equipment lessors existing as of the date hereof or
incurred hereafter (including, without limitation any lease obligations) and
may be prepaid by CURAGEN at any time without premium or penalty on a date
specified by CURAGEN, in cash or at CURAGEN's option, in CURAGEN Common Stock
valued at its then Fair Market Value (as defined in Section 3.2(e) below).

(c) The Note shall bear interest on the outstanding principal amount
thereof at a rate per annum equal to Prime (defined below) plus one (1%)
percent. Such interest shall accrue and be paid semi-annually commencing on the
six-month anniversary of the date first following any advance under the Loan and
continuing every six months thereafter until the Note is paid in full, unless
otherwise specified in this Section 3.2. Interest payments shall be made in cash
or at CURAGEN's option, in CURAGEN Common Stock valued at its then Fair Market
Value (as defined in Section 3.2(e) below). The applicable rate of interest for
the Note shall be adjusted semi-annually according to the Prime rate as
announced on each six-month anniversary date of the Effective Date.

(d) Within fifteen (15) days of the expiration of the fifth Loan Year,
repayment in full of the principal amount and accrued interest, under the Note
shall be made in cash or, at CURAGEN's option, in CURAGEN Common Stock valued at
its then Fair Market Value (as defined in Section 3.2(e) below). Notwithstanding
the foregoing, if this Agreement is terminated by BIOGEN pursuant to Section
8.2(a), or if the Research Program is terminated pursuant to Section 2.3.3,
CURAGEN shall repay the principal and accrued interest owed under the Note
within twelve (12) months of the date the Agreement or the Research Program,
as the case may be, is terminated; provided, however, that any such repayment
may be made in cash or stock as set forth above, at CURAGEN's sole discretion.

(e) For purposes of subsection (c) of this Section 3.2, "Prime" shall mean
the floating rate of interest reported by The Wall Street Journal as the
-----------------------
prevailing base rate on corporate loans posted by at least 75% of the 30 largest
banks in the United States. In the event that the The Wall Street Journal ceases
-----------------------
to publish such a rate, or modifies its criteria for such rate, the term "Prime"
shall mean the generally prevailing base corporate lending rate of Fleet
National Bank. For purposes of subsections (b), (c), (d) and (f) of this
Section 3.2, "Fair Market Value" of CURAGEN Common Stock shall mean: the lower
of (i) the average of the closing prices as reported by

[Confidential Treatment Requested]
<PAGE>

NASDAQ or, if not traded on NASDAQ, by such other principal securities exchange
on which the shares are traded, as applicable, over the twenty (20) trading days
preceding the payment date specified by CURAGEN or the date on which the Loan is
otherwise due or payable, or (ii) the closing price on the last day on which
shares are traded preceding such date if such price is more than twenty-percent
(20%) below such average. Notwithstanding the foregoing, if CURAGEN Common Stock
is not publicly traded at the time of any repayment hereunder, Fair Market Value
shall mean the price at which CURAGEN issued shares in its most recent third
party equity financing raising in excess of One Million Dollars. Delivery of
any shares of Common Stock shall take place no later than five (5) days after
the repayment date and shall be subject to execution by the Parties of an
agreement containing customary representations and provisions to comply with
Federal and State securities laws, as mutually agreed between the Parties.
Additionally, if CURAGEN Common Stock is not publicly traded at the time of any
such repayment, BIOGEN shall receive registration rights with respect to any
such shares on the same terms and conditions as set forth in the Registration
Rights Agreement between CURAGEN and Biotech Manufacturing Limited dated June
25, 1997.

(f) In the event that CURAGEN makes any repayment hereunder in CURAGEN
Common Stock and CURAGEN is eligible to file a registration statement on Form
S-3 (or successor short form) at the time of repayment, then within 20 days of
the repayment date, CURAGEN shall file a registration statement on Form S-3
covering the resale by BIOGEN of any shares so delivered to BIOGEN; provided,
however, that with respect to any repayment in CURAGEN Common Stock made under
subsection (c) hereof, to the extent not already included in any other
registration, CURAGEN shall annually during the month of April file a
registration statement on Form S-3 covering the resale by BIOGEN of any such
shares so delivered to BIOGEN. Notwithstanding anything herein to the contrary,
BIOGEN may require that CURAGEN repay the amounts borrowed under the Note in
cash and stock to the extent necessary to ensure that receipt of CURAGEN's
shares will not cause BIOGEN's holdings in CURAGEN to equal 19.9 percent or
more of CURAGEN's total Common Stock outstanding after the issuance of such
shares to BIOGEN.

3.3 Research Funding.
----------------

[Confidential Treatment Requested]

<PAGE>

During the Research Term, BIOGEN will pay CURAGEN non-refundable research
payments of [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] per year plus
the sum of [XXXXXX] per year per FTE in the Staffing Level above [XX]FTEs. Such
payments will be made quarterly in advance, commencing on the Effective Date,
and on or before the first day of each calendar quarter thereafter, with the
first and last payments prorated in the event that the Effective Date or the
expiration or termination date is not the first day or last day of a calendar
quarter, respectively. In the event that the Staffing Level is to change in any
calendar quarter, such payment shall be pro-rated accordingly, if necessary,
based on the above-specified level of funding per FTE. The first research
payment shall be made simultaneously with the execution of this Agreement and
shall include all amounts necessary to make BIOGEN current in research payments
due since the Effective Date. BIOGEN will fund its own activities under the
Research Program.

4. TREATMENT OF CONFIDENTIAL INFORMATION

4.1 Confidential Information. During the course of the Research Program,
------------------------
or in discussions concerning Exclusive Data Sets, each Party may disclose to the
other proprietary technical and business information, including but not limited
to information contained in Data Sets (which information shall be deemed
Confidential Information of CURAGEN), (collectively, "Confidential
Information"). For a period of [XXXXXXXXXXX] after the receipt of any such
Confidential Information, except as expressly permitted hereunder, the receiving
Party shall keep confidential all such Confidential Information of the other
Party and will not disclose such Confidential Information of the other Party to
third parties by publication or otherwise. Each Party shall take reasonable
steps to ensure that all of its employees, consultants and RC members shall
protect and use Confidential Information of the other Party only in accordance
with the terms hereof. Each Party further agrees not to use Confidential
Information of the other Party for any purpose other than conducting or
evaluating research hereunder, evaluating and analyzing Data Sets or exercising
any rights granted to it or reserved by it hereunder, in an executed License
Agreement or executed subscription agreement, or as otherwise expressly
permitted hereunder. Notwithstanding the foregoing, it is understood and

[Confidential Treatment Requested]

<PAGE>

agreed that the receiving Party's obligations of confidentiality and nonuse
herein shall not apply to any information which:

(a) is, at the time of disclosure by the disclosing Party hereunder,
or thereafter becomes, a part of the public domain or publicly known
or available through no fault or negligence of the receiving Party or
any of its Affiliates; or

(b) was otherwise in the receiving Party's lawful possession prior to
disclosure by the disclosing Party, as demonstrated by the receiving
Party's written records; or

(c) is lawfully disclosed to the receiving Party or any of its
Affiliates on a non-confidential basis by a third party who is not in
violation of an obligation of confidentiality to the disclosing Party
relative to such information.

4.2 Publications. It is expected that each Party may wish to publish the
------------
results of its research under this Agreement. In order to safeguard intellectual
property rights, the Party wishing to publish or otherwise publicly disclose the
results of its research hereunder shall first submit a draft of the proposed
manuscripts to the Research Committee for review, comment and consideration of
appropriate patent action at least [XXXXXXXXXX] prior to any submission for
publication or other public disclosure. Within [XXXXXXXXXXXX] of receipt of
the prepublication materials, the Research Committee will advise the Party
seeking publication as to whether a patent application will be prepared and
filed or whether trade secret protection should be pursued and, if so, the
Research Committee will, in cooperation with both Parties, determine the
appropriate timing and content of any such publications.

4.3 Press Release and Regulatory Filings. The Parties shall mutually
------------------------------------
agree on a press release announcing the execution of this Agreement and on any
confidential treatment request to be filed with the Securities and Exchange
Commission with respect to this Agreement. Once any written statement is
approved for disclosure by both Parties, either Party may make subsequent public
disclosures of the contents of such statement without the further approval of
the other Party.

[Confidential Treatment Requested]

<PAGE>

5. INTELLECTUAL PROPERTY RIGHTS

5.1 BIOGEN Proprietary Material. mRNA pools extracted by CURAGEN from a
---------------------------
BIOGEN Proprietary Material in the performance of the Research Program shall
remain BIOGEN Proprietary Material. All other substances made by CURAGEN in the
performance of the Research Program shall be CURAGEN Proprietary Material.
BIOGEN Proprietary Material shall remain the property of BIOGEN and CURAGEN
shall use such BIOGEN Proprietary Material only for the purpose of conducting
the Research Program hereunder and shall not transfer BIOGEN Proprietary
Material to any other person or entity.

5.2 CURAGEN Proprietary Material. Substances made by BIOGEN from CURAGEN
----------------------------
Proprietary Material shall remain CURAGEN Proprietary Material. CURAGEN
Proprietary Material shall remain the property of CURAGEN and BIOGEN shall use
such CURAGEN Proprietary Material only for purposes relating to performance of
the Research Program, evaluation of the Project Data, the exercise of the option
provided in Section 7.1, or pursuant to the terms of an executed License
Agreement. BIOGEN shall not transfer CURAGEN Proprietary Material to any other
person or entity except in connection with rights granted to BIOGEN pursuant to
an executed License Agreement.

5.3 Inventions. Each Party shall promptly disclose to the other Party all
----------
Inventions. Except as set forth in Sections 5.1 and 5.2, (i) all Research
Project Inventions, and Patent Rights thereon, shall be owned jointly by CURAGEN
and BIOGEN; and (ii) all CURAGEN Project Inventions, and Patent Rights thereon,
shall be owned by CURAGEN. The rights and interests of CURAGEN and BIOGEN in
Inventions shall be subject to the provisions of Article 7.

6. PROVISIONS CONCERNING THE FILING, PROSECUTION AND
MAINTENANCE OF PATENT RIGHTS

6.1 Applicability. The provisions of this Section 6 shall be applicable
-------------
to all Inventions and Patent Rights unless and until (i) they become subject to
a License Agreement, whereupon the License Agreement will govern the rights of
the Parties with respect to the subject matter thereof, or (ii) the relevant
Research Project is completed and the relevant Exclusive

21
<PAGE>

Evaluation Period expires and the relevant Option Period, if any, expires,
whereupon this Section 6 shall cease to apply.

6.2 Patent Filing.
-------------
(a) CURAGEN shall have the first right (but not the obligation) to
prepare, file, prosecute, obtain and maintain patent applications and patents on
Inventions, at its sole expense. BIOGEN agrees to provide reasonable assistance
and cooperation to CURAGEN to facilitate such filing, prosecution and
maintenance. CURAGEN agrees that any such preparation, filing, prosecution and
maintenance shall be conducted diligently and that BIOGEN shall be kept fully
informed of the progress thereof and provided with copies of all material
documents pertaining thereto until the end of the Exclusive Evaluation Period,
and for any Invention which becomes subject to an Option, until the end of the
Option Period. BIOGEN shall, whenever possible, be given the opportunity to
review and comment in advance on any patent filings or other correspondence with
the patent office during such periods and CURAGEN shall consider incorporating
any comments provided by BIOGEN in good faith.

(b) CURAGEN may elect not to exercise its first right to prepare, file,
prosecute, obtain and maintain patent applications and patents on Inventions as
described in Section 6.2(a) above at any time for any such patent applications
and patents by giving written notice thereof to BIOGEN. Such notice shall
specifically identify the patent application(s) and/or patent(s) for which
CURAGEN wishes to relinquish such first right. Following the receipt of such
notice, BIOGEN shall have the right to prepare, file, prosecute, obtain and
maintain the patent application(s) and patent(s) identified in the notice, at
its sole expense, on behalf of the owner of the Invention, subject to the rights
granted herein, until the end of the Exclusive Evaluation Period, and for any
Invention which becomes subject to an Option, until the end of the Option
Period.

(c) The Parties shall mutually agree before permitting any patent
application or patent within Patent Rights to lapse as well as before
authorizing any amendment to any patent application or patent within Patent
Rights that would irrevocably limit the lawful scope of the Patent Rights, until
the end of the Exclusive Evaluation Period, and for any Invention which becomes
subject to an option, until the end of the Option Period.

22
<PAGE>

(d) No Party shall have any obligation under this Agreement to pay any
fees or costs: (i) for bringing a lawsuit or other action to enforce any of the
Patent Rights against an actual or suspected infringement or (ii) for any other
Party to obtain for its own benefit independent business or legal advice
concerning any of the Patent Rights.

6.3 Notice of Infringement. If either Party learns of any infringement or
----------------------
threatened infringement by a third party of the patents within Patent Rights,
such Party shall promptly notify the other Party and shall provide such other
Party with available evidence of such infringement.

6.4 Infringement. CURAGEN shall have all rights, at its own expense, to
------------
bring suit (or other appropriate legal action) against any actual or suspected
infringement of the Patent Rights.

6.5 Cooperation. BIOGEN shall execute all papers and perform such other
-----------
acts as may be reasonably required to maintain any infringement suit brought in
accordance with Section 6.4 above (including giving legal consent for bringing
such suit, and agreeing to be named as a plaintiff or otherwise joined in such
suit). BIOGEN shall be reimbursed by CURAGEN for any out of pocket expenses
incurred in connection with the foregoing. BIOGEN, at its option and expense,
may be represented in such suit by counsel of its choice.

7. OPTION TO BIOGEN

7.1 Option Grant.
------------

7.1.1 Option. Subject to rights third parties have obtained by virtue of
------
access to other CURAGEN Data Sets, data sets resulting from agreements between
CURAGEN and third parties, or the subscription portion of the GeneScape(R)
database prior to BIOGEN's election, CURAGEN hereby grants to BIOGEN the right
to elect an exclusive option (the "Option") to license all Inventions and other
CURAGEN patents or patent applications as described in Section 2.3 of the
License Agreement relating to any Clone whose sequence or utility is determined
in whole or in part from the use of an Exclusive Data Set which is not a
Previously Committed Clone. Such Option shall give BIOGEN the right to obtain,
at BIOGEN's sole discretion, either (a) subject to the rights reserved by
CURAGEN in Section 7.1.3, an exclusive license to the Clone specified in
BIOGEN's notice of exercise (the "Optioned Clone") and to all Patent Rights

23
<PAGE>

and Inventions to the extent that they relate to such Optioned Clone including
but not limited to Patent Rights claiming whole or partial sequences or utility,
to develop, make, have made, use, have used, sell, offer for sale, have sold,
import and have imported products (i) incorporating or derived from such
Optioned Clone, or (ii) discovered or developed using such Optioned Clone, in
the Territory, for any and all human uses, under the terms and conditions set
forth in the License Agreement; (b) a non-exclusive license to the Optioned
Clone and to all Patent Rights and Inventions to the extent that they relate to
such Optioned Clone, solely for use of the Optioned Clone as a target to develop
small molecule products; or (c) subject to the rights reserved by CURAGEN in
Section 7.1.3, an exclusive license to all Patent Rights and Inventions claiming
utility of a known Optioned Clone, as further described in the License
Agreement. Such Option shall be exercisable at any time during the Option Period
specified in Section 7.3.

7.1.2 Option Election.
---------------
Such Option shall be elected by BIOGEN by giving written notice to CURAGEN
within the Exclusive Evaluation Period for such Exclusive Data Set, which shall
specify in detail the Optioned Clone to be included within the terms of any such
Option and which shall be accompanied by the payment of any Option Fee as
specified in Section 7.2. Each Optioned Clone, and the term of the corresponding
Option Period, shall be listed on Appendix A hereto from time to time.
Notwithstanding the foregoing, for Project Data Sets, BIOGEN may request such an
Option after expiration of the Exclusive Evaluation Period, which Option shall
be granted by CURAGEN upon payment of the Option Fee specified in Section 7.2,
unless prohibited by agreements with third parties.

7.1.3 Reservation of Rights. Notwithstanding the foregoing, in any
---------------------
exclusive license granted pursuant to the exercise of an Option, CURAGEN shall
retain for itself the right to use the Optioned Clone or the protein derived
therefrom as part of a general library of nucleic acids, which library is used
for research purposes.

7.2 Option Fee. An Option Fee of [XXXXXX] per Optioned Clone shall be due
----------
upon the election of an Option with respect to any Clone from any Exclusive Data
Set; [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX]

[Confidential Treatment Requested]

<PAGE>

7.3 Option Period. Each Option shall remain in effect for a period of
-------------
[XXXXXXXXXXXX] from receipt by CURAGEN of BIOGEN's written notice of its
election of such Option and payment of any required Option Fee (the "Option
Period"); provided, however, that any Option Period may be extended for [XXX
XXXXXXXXXXXXXXXXXXXXXXXX] period upon payment by BIOGEN of [XXXXXXXXXXXXXX]
per Optioned Clone.

7.4 Option Exercise. During each Option Period, upon notice to CURAGEN
---------------
and upon payment of the corresponding license fee, BIOGEN shall have the right
to receive a license to the Optioned Clone under the terms and conditions set
forth in an executed License Agreement. The license fee for a license described
in Section 7.1.1, clause (a) shall be [XXXXXX] and the license fee for a license
described in Section 7.1.1, clause (b) or (c), shall be [XXXXXX]
Notwithstanding the foregoing, [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]The License Agreement shall be executed in
substantially the form attached hereto upon exercise of the first Option, unless
previously executed pursuant to Section 7.5, and shall be amended from time to
time in accordance with the terms hereof and thereof as additional Options are
exercised.

7.5 [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

7.6 Reversion of Rights. CURAGEN shall retain all rights to all Project
-------------------
Data, CURAGEN Data, CURAGEN Proprietary Material, Inventions and Patent Rights
not expressly granted to BIOGEN hereunder. Upon expiration of any Exclusive
Evaluation Period,

[Confidential Treatment Requested]

<PAGE>

CURAGEN shall recover and retain all of CURAGEN's rights to the corresponding
Exclusive Data Set and related Inventions and Patent Rights thereon other than
such rights as BIOGEN may have as provided in Sections 2.1.4, 2.1.5, 2.4.3 and
2.6 or with respect to Optioned Clones. In the event that upon the expiration of
any Option Period the corresponding Option has not been exercised by BIOGEN, all
of CURAGEN's rights in the corresponding Optioned Clone and related Inventions
and Patent Rights thereon shall revert to CURAGEN. Notwithstanding the
foregoing, nothing contained in this Section 7.6 shall be deemed to limit any
rights of BIOGEN expressly provided in an executed License Agreement or an
executed subscription agreement. In addition, BIOGEN shall (a) upon the
expiration of each Exclusive Evaluation Period, without any further action on
its part, be deemed to have granted to CURAGEN an exclusive (except for uses by
BIOGEN permitted in Section 2.4.3), royalty-free license for all purposes under
BIOGEN's rights in Inventions or Patent Rights claiming (i) any Clones other
than [XXXXXXXXXXX] whose sequence or utility is determined in whole or in part
from the use of the corresponding Exclusive Data Set and which are not the
subject of any Option or License Agreement, or (ii) any uses of such Clones, and
(b) upon the expiration of each Option Period, without any further action on its
part, be deemed to have granted to CURAGEN a license as set forth in (a) above
with respect to each Optioned Clone for which an Option has not been exercised.
Prior to any disposition of rights as set forth above or in an executed License
Agreement, BIOGEN shall not assign, encumber or otherwise limit its ownership
interest in any Invention or Patent Right.

7.7 No Other Rights. BIOGEN shall receive no rights to Data Sets or
---------------
Clones under CURAGEN Patent Rights or Inventions except as expressly set forth
herein or in an executed License Agreement.

8. TERM AND TERMINATION

8.1 Term. Unless earlier terminated as provided in this Section 8, the
----
term of this Agreement shall be for five (5) years following the Effective Date
plus the length of any available Exclusive Evaluation Periods and any permitted
extensions thereof and the length of

[Confidential Treatment Requested]

<PAGE>

any Options and any permitted extensions thereof, or until the date on which
BIOGEN no longer has access to Project Data Sets, whichever is later (the
"Term").

8.2 Termination.
-----------
(a) This Agreement and the options granted herein may be terminated by
either Party upon any breach by the other Party of any material obligation or
condition, effective thirty (30) days after giving written notice to the
breaching Party of such termination in the case of a payment breach and sixty
(60) days after giving written notice to the breaching Party of such termination
in the case of any other breach, which notice shall describe such breach in
reasonable detail. The foregoing notwithstanding, if the default or breach is
cured or shown to be non-existent within the aforesaid thirty (30) or sixty (60)
day period, the notice shall be deemed automatically withdrawn and of no effect.

(b) If either Party files for protection under bankruptcy laws, makes an
assignment for the benefit of creditors, appoints or suffers appointment of a
receiver or trustee over its property, files a petition under any bankruptcy or
insolvency act or has any such petition filed against it which is not discharged
within sixty (60) days of the filing thereof, then the other Party may terminate
this Agreement by notice to such Party.

8.3 Remedies. If either Party shall fail to perform or observe or
--------
otherwise breaches any of its material obligations under this Agreement, in
addition to any right to terminate this Agreement, the non-defaulting Party may
elect to obtain other relief and remedies available under law.

8.4 Surviving Provisions. Notwithstanding any provision herein to the
--------------------
contrary, the rights and obligations set forth in Sections 2.1.4, 2.1.6 and
2.3.3(b), Articles 4, 5, and 6, Sections 7.6 and 8.4, and Article 9 hereof, as
well as any rights and obligations otherwise accrued, shall survive the
expiration or termination of the Term of this Agreement.

9. MISCELLANEOUS

9.1 CURAGEN Representations and Covenants. CURAGEN represents and
warrants that: (a) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly authorized by
all appropriate CURAGEN

27
<PAGE>

corporate action; (b) CURAGEN is under no obligation which is inconsistent with
this Agreement, (c) CURAGEN is not aware of any patent held by any third party
which would prevent CURAGEN's use of its technology in the performance of the
Research Program, and (d) CURAGEN has the full right and legal capacity to grant
the rights to BIOGEN pursuant to Article 7 without violating the rights of any
third party. CURAGEN covenants that (a) CURAGEN will obtain from its employees
and consultants rights of assignment with respect to all Inventions and (b)
CURAGEN will not enter into any agreement with any third party that is
inconsistent with the terms of this Agreement. Nothing in this Agreement shall
be interpreted as obligating either Party to commercialize technology made
hereunder or to perform any additional work beyond that set forth in the
Research Plan.

9.2 BIOGEN Representations. BIOGEN represents and warrants that: (a) the
----------------------
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all appropriate BIOGEN
corporate action; (b) BIOGEN is under no obligation which is inconsistent with
this Agreement, and (c) BIOGEN has the full right and legal capacity to grant
the rights to CURAGEN pursuant to Article 7 without violating the rights of any
third party. Nothing in this Agreement shall be interpreted as obligating either
Party to commercialize technology made hereunder or to perform any additional
work beyond that set forth in the Research Plan.

9.3 No Warranties.
-------------
(a) Nothing in this Agreement is or shall be construed as:

(i) a warranty or representation by CURAGEN as to the
validity or scope of any application or patent within the
Patent Rights;

(ii) a warranty or representation that anything made,
used, sold or otherwise disposed of under any license granted
pursuant to this Agreement is or will be free from infringement
of patents, copyrights, and other rights of third parties,
except as expressly set forth in Section 9.1.

28
<PAGE>

INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS, OR ANY OTHER
EXPRESS OR IMPLIED WARRANTIES.

9.4 Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
---------
OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY OR SERVICES

9.5 Notices. Any notices, requests, deliveries, approvals or consents
-------
required or permitted to be given under this Agreement to BIOGEN or CURAGEN
shall be in writing and shall be personally delivered or sent by telecopy (with
written confirmation to follow via United States first class mail), overnight
courier providing evidence of receipt or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below (or to such address as may be specified in writing to the other Party
hereto):

CURAGEN: 555 Long Wharf, 11th Floor
New Haven, CT 06511
Attn: Executive Vice President
Telecopy: (203) 401-3333

BIOGEN: 14 Cambridge Center
Cambridge, MA 02142
Attn: Director, Marketing and Business Development
Telecopy: (617) 679-2804

with copies to: Vice President - General Counsel
Telecopy: (617) 679-2838

Such notices shall be deemed to have been sufficiently given on: (a) the
date sent if delivered in person or transmitted by telecopy, (b) the next
business day after dispatch in the case of overnight courier or (c) five (5)
business days after deposit in the U.S. mail in the case of certified mail.

9.6 Governing Law. This Agreement will be construed, interpreted and
-------------
applied in accordance with the laws of the State of Connecticut (excluding its
body of law controlling conflicts of law).

29
<PAGE>

9.7 Limitations. Except as set forth elsewhere in this Agreement, neither
-----------
Party grants to the other Party any right or license to any of its intellectual
property.

9.8 Entire Agreement. This is the entire Agreement between the Parties
----------------
with respect to the subject matter hereof and supersedes all prior agreements
between the Parties with respect to the subject matter hereof. No modification
shall be effective unless in writing with specific reference to this Agreement
and signed by the Parties.

9.9 Waiver. The terms or conditions of this Agreement may be waived only
------
by a written instrument executed by the Party waiving compliance. The failure of
either Party at any time or times to require performance of any provision hereof
shall in no manner affect its rights at a later time to enforce the same. No
waiver by either Party of any condition or term shall be deemed as a continuing
waiver of such condition or term or of another condition or term.

9.10 Headings. Section and subsection headings are inserted for
--------
convenience of reference only and do not form part of this Agreement.

9.11 Assignment. This Agreement may not be assigned by either Party
----------
without the consent of the other, except that each Party may, without such
consent, assign this Agreement and the rights, obligations and interests of such
Party, in whole or in part, to any of its Affiliates, to any purchaser of all or
substantially all of its assets in the line of business to which this Agreement
pertains or to any successor corporation resulting from any merger or
consolidation of such Party with or into such corporations.

9.12 Force Majeure. Neither Party shall be liable for failure of or delay
-------------
in performing obligations set forth in this Agreement, and neither shall be
deemed in breach of its obligations, if such failure or delay is due to natural
disasters or any causes beyond the reasonable control of such Party. In event of
such force majeure, the Party affected thereby shall use reasonable efforts to
cure or overcome the same and resume performance of its obligations hereunder.

9.13 Construction. The Parties hereto acknowledge and agree that: (i) each
------------
Party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii) the rule of construction to
the effect that any ambiguities are resolved against the drafting Party shall
not be employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all Parties

30
<PAGE>

hereto and not in a favor of or against any Party, regardless of which Party was
generally responsible for the preparation of this Agreement.

9.14 Severability. If any provision(s) of this Agreement are or become
------------
invalid, are ruled illegal by any court of competent jurisdiction or are deemed
unenforceable under then current applicable law from time to time in effect
during the Term hereof, it is the intention of the Parties that the remainder of
this Agreement shall not be affected thereby provided that a Party's rights
under this Agreement are not materially affected. The Parties hereto covenant
and agree to renegotiate any such term, covenant or application thereof in good
faith in order to provide a reasonably acceptable alternative to the term,
covenant or condition of this Agreement or the application thereof that is
invalid, illegal or unenforceable, it being the intent of the Parties that the
basic purposes of this Agreement are to be effectuated.

9.15 Status. Nothing in this Agreement is intended or shall be deemed to
------
constitute a partner, agency, employer-employee, or joint venture relationship
between the Parties.

9.16 Indemnification.
---------------

(a) BIOGEN shall indemnify, defend and hold harmless CURAGEN, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "CURAGEN Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the CURAGEN
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments of third parties, including without limitation personal
injury matters (except to the extent such claims, suits, actions, demands or
judgments result from a material breach of this Agreement, or the negligence or
willful misconduct on the part of CURAGEN or are the subject matter of CURAGEN's
indemnification of BIOGEN as set forth in Section 9.16(b)) arising out of or
relating to any actions of BIOGEN under this Agreement including, without
limitation, the supply of samples for use in the Research Program.

31
<PAGE>

judgments result from a material breach of this Agreement, or the negligence or
willful misconduct on the part of BIOGEN) arising out of the performance of the
Research Program by CURAGEN, except to the extent such claims, suits, actions,
demands or judgments are based on the use of the samples or information provided
to CURAGEN by BIOGEN under this Agreement.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

32
<PAGE>

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representative in two (2) originals.

BIOGEN, INC. CURAGEN CORPORATION

By: By:
/s/ James R. Tobin /s/ Gregory Went
--------------------------------- -----------------------------------
Title: President and CEO Title: Executive Vice President
------------------------------ --------------------------------

33
<PAGE>

APPENDIX A

Optioned Clones

34
<PAGE>

APPENDIX B

Note

35
<PAGE>

PROMISSORY NOTE

Up to $10,000,000.00 __________, 1997

FOR VALUE RECEIVED, the undersigned, CURAGEN CORPORATION (the "Borrower"),
having an address of 555 Long Wharf Drive, 11th Floor, New Haven, Connecticut
06511, hereby promises to pay to BIOGEN, INC., having an address at 14 Cambridge
Center, Cambridge, MA 02142 (the "Lender"), the principal sum of

TEN MILLION DOLLARS ($10,000,000)

or such lesser sum which may from time to time be advanced pursuant to the terms
of the section of the Research and Option Agreement dated October 1, 1997
between the Borrower and the Lender (the "Agreement") entitled "Section 3.2-Loan
Commitment". Capitalized terms used herein and not defined herein have the
meanings assigned to them in the Agreement.

Payments
--------

(a) The Borrower shall pay the accrued interest and principal balance of
this Note, which represents the Loan, in full within [XXXXXX] of the last day of
the Fifth Loan Year, or within [XXXXXXXX] after any earlier termination of the
Research Program or the Agreement, whichever shall first occur.

(b) This Note may be prepaid by Borrower at any time without premium or
penalty.

(c) Payments pursuant to paragraph (a) or (b) shall be paid in cash or, at
the option of Borrower, in CuraGen Common Stock, valued at its then Fair Market
Value, as set forth in the Agreement.

Interest
--------

(a) Interest shall accrue on the outstanding principal balance hereunder at
a rate per annum equal to [XXXXXX] shall be determined and adjusted in
accordance with Section 3.2(c) and 3.2(e) of the Agreement. Interest shall
accrue and be paid semi-annually commencing on the six-month anniversary date of
the first advance under the Loan and continuing every six months thereafter
until all amounts due hereunder have been paid in full.

(b) Payments pursuant to paragraph (a) shall be made in cash or, at the
option of Borrower, in CuraGen Common Stock, valued at its then Fair Market
Value, as set forth in the Agreement.

[Confidential Treatment Requested]

<PAGE>

Recording of Advances and Repayments
------------------------------------

The advances described in the Agreement and made by the Lender to the
Borrower, and all repayments made on the account of principal thereof, shall be
recorded by the Lender on the Schedule attached hereto which is a part of this
Note; provided, however, that the failure of the Lender so to record on this
Note (or any error in recording on this Note) shall not affect the Borrower's
obligations hereunder.

Subordination
-------------

This Note shall be Subordinated to [(i) all secured debt and liabilities of
the Borrower and (ii) all liabilities of the Borrower to institutional or
commercial lenders and equipment lessors existing as of the date hereof or
incurred hereafter (including, without limitation any lease obligations).]

General
-------

The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. No failure on the part of the Lender in
exercising any right or remedy hereunder, and no single, partial or delayed
exercise by the Lender of any right or remedy shall preclude the full and timely
exercise by the Lender at any time of any right or remedy of the Lender
hereunder without notice. No course of dealing or other conduct, no oral
agreement or representation made by the Lender or usage of trade shall operate
as a waiver of any right or remedy of the Lender. This Note and the Agreement
contain the entire agreement between the parties with respect to the subject
matter hereof, and supersedes every course of dealing, other conduct, oral
agreement or representation previously made by the Lender. In the event that any
court of competent jurisdiction shall determine that any provision, or portion
thereof, contained in this Note shall be unenforceable in any respect, then such
provision shall be deemed limited to the extent that such court deems it
enforceable, and the remaining provisions of this Note shall nevertheless remain
in full force and effect.

None of the terms or provisions of this Note may be excluded, modified, or
amended except by a written instrument duly executed on behalf of both the
Borrower and the Lender expressly referring hereto and setting forth the
provision so excluded, modified or amended. No waiver or forbearance of any of
the rights and remedies of the Lender hereunder shall be effective unless made
specifically in a writing signed by the Lender, and any such waiver or
forbearance shall be effective only in the specific instance and for the
specific purpose for which given.

This Note is the "Note" referred to in the Agreement and is entitled to all
of the rights and benefits referred to therein.

This note is delivered to the Lender at its principal office in
Cambridge, Massachusetts, shall be governed by, and construed and enforced in
accordance with, the laws of the state of

- 2 -

[Confidential Treatment Requested]

<PAGE>

Connecticut, without regard to its principles of conflicts of laws and shall
take effect as a sealed instrument.

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as an
instrument under seal by its duly authorized officer as of the date first above
written.

Witness: CURAGEN CORPORATION

by:
- ------------------------- -------------------------------
(Signature)

----------------------------
(Print or type name)
its:
----------------------------
(Title or Capacity)

- 3 -
<PAGE>

Schedule to Promissory Note
dated October ___, 1997
from CURAGEN CORPORATION
to BIOGEN, INC.
in the amount of up to $10,000,000

Biogen CuraGen
Date Amount Drawn Amount Repaid Acknowledgement Acknowledgement
- ---- ------ ----- ------ ------ --------------- ---------------
<S> <C> <C> <C> <C>

</TABLE>

- 4 -
<PAGE>

APPENDIX C

Form of License Agreement

40
<PAGE>

LICENSE AGREEMENT

This License Agreement ("Agreement") is made effective as of _________,
_____ (the "Effective Date") by and between BIOGEN, INC., a Massachusetts
corporation having its principal business office at 14 Cambridge Center,
Cambridge, MA 02142 ("BIOGEN"), and CURAGEN CORPORATION, a Delaware corporation
with its principal place of business at 555 Long Wharf Drive, 11th Floor, New
Haven, Connecticut 06511 ("CURAGEN"). BIOGEN and CURAGEN are each hereafter
referred to individually as a "Party" and together as the "Parties".

WHEREAS, BIOGEN wishes to obtain a license to certain inventions made by
CURAGEN as provided in the Research and Option Agreement between the Parties
hereto dated as of _______, 1997 (the "Research Agreement");

WHEREAS, CURAGEN has agreed to provide such license under the terms and
conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the Parties hereby agree as follows:

1. DEFINITIONS

Whenever used in the Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

1
<PAGE>

or any other arrangement whereby a Party controls or has the right to control
the Board of Directors or equivalent governing body of a corporation or other
entity.

1.2 "Clone" shall mean a segment of DNA representing a whole or partial
gene whose sequence or utility is determined from the use of one or more Data
Sets.

1.3 "CURAGEN Background Inventions" shall mean all patent rights and
know-how of CURAGEN, other than those relating primarily to Inventions, which
CURAGEN has the right to license as of the Effective Date or at any time during
the term hereof and which would be infringed by the development, manufacture,
use, sale or importation of a Licensed Product; provided, however, that CURAGEN
Background Inventions shall expressly exclude any patent rights or know-how
specifically relating to Clones or genes not licensed by BIOGEN pursuant to this
Agreement and any patent rights or know-how arising from any CURAGEN
collaboration with a third party, except to the extent permitted thereby.

1.4 "CURAGEN Data" shall mean, with respect to a Licensed Clone, all
information pertaining to such Licensed Clone obtained by CURAGEN from the
processing of specified CURAGEN samples, including QC data, expression data,
sequence data and any other information obtained or generated by CURAGEN in the
performance of the CURAGEN Project relating to such Licensed Clone.

1.5 "CURAGEN Data Set" shall mean all CURAGEN Data resulting from a
discrete CURAGEN Project.

1.6 "CURAGEN Project" shall mean a particular project undertaken by CURAGEN
outside the Research Program to process and analyze a specified set of samples
which do not contain BIOGEN Proprietary Material, and as to which CURAGEN is
free to grant rights to BIOGEN hereunder.

1.7 "CURAGEN Project Invention" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN (i) in the
performance of a CURAGEN Project that results in CURAGEN Data that becomes part
of an Exclusive Data Set,

2
<PAGE>

that is based on, incorporates or makes material use of the corresponding
CURAGEN Data or (ii) relating to a Lead.

1.8 "CURAGEN Proprietary Material" shall mean, with respect to a Licensed
Clone, all substances made by CURAGEN in the performance of the Research Project
relating to such Licensed Clone other than mRNA pools extracted from BIOGEN
Proprietary Material. CURAGEN Proprietary Material shall also mean, with respect
to a Licensed Clone, all substances made by CURAGEN in the performance of the
CURAGEN Project relating to such Licensed Clone, including mRNA pools. CURAGEN
Proprietary Materials shall include, without limitation, QEA fragments and
materials derived or constructed from QEA fragments, including, without
limitation, fragment and full length cDNA clones.

1.9 "Data Set," which may be either a Project Data Set or a CURAGEN Data
Set, with respect to a Licensed Clone, shall mean all Project Data resulting
from the discrete Research Project relating to the Licensed Clone or all CURAGEN
Data resulting from the discrete CURAGEN Project relating to the Licensed Clone,
respectively.

1.10 [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

1.11 "Exclusive Data Set" shall mean any Project Data Set during the
corresponding Exclusive Evaluation Period as provided in Section 2.4 of the
Research Agreement or any CURAGEN Data Set during the corresponding Exclusive
Evaluation Period as provided in Section 2.5.2 of the Research Agreement.

1.12 "Exclusive Evaluation Period" shall have the meaning set forth in
Section 2.4 or 2.5.2 of the Research Agreement.

1.13 "Extended License" shall have the meaning set forth in Section 2.3.

1.14 "Invention," as to each Licensed Clone, shall mean any CURAGEN Project
Invention or Research Project Invention that is based on, incorporates or makes
material use of the Project Data or CURAGEN Data corresponding to the Licensed
Clone.

[Confidential Treatment Requested]

<PAGE>

1.15 [XXXXXXXX] shall have the meaning set forth in Section 2.1.3 of the
Research Agreement.

1.16 "Lead" shall mean a lead compound discovered or developed by CURAGEN
outside of the Research Program using a Licensed Clone or the protein expressed
thereby as a target, which lead compound is accepted by BIOGEN for use pursuant
to the terms of this Agreement.

1.17 "Licensed Clone" shall have the meaning set forth in Section 2.1.

1.18 "Licensed Product," as to each Licensed Clone, shall have the meaning
set forth in the relevant subsection of Section 2.1.

1.19 "Net Sales" shall mean [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXX]

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXX]

1.20 "Optioned Clone" shall have the meaning set forth in Section 7.1 of
the Research Agreement.

1.21 "Patent Rights," as to each Licensed Clone, mean the rights and
interests in and to issued patents and pending patent applications in any
country, including, but not limited to, all provisional applications,
substitutions, continuations, continuations-in-part, divisions, and renewals,
all letters patent granted thereon, and all reissues, reexaminations and
extensions thereof, whether owned solely or jointly by a Party or licensed in by
a Party, with the right to sublicense, now or in the future, wherein at least
one claim of such patent right is to an Invention. "CURAGEN Patent Rights" shall
mean Patent Rights owned solely or jointly by CURAGEN or licensed in by CURAGEN.

1.22 "Project Data" shall mean all information obtained by CURAGEN from the
processing of BIOGEN Proprietary Material in a particular Research Project,
including QC data,

[Confidential Treatment Requested]

<PAGE>

expression data, sequence data and any other information obtained or generated
by CURAGEN in the performance of the Research Project relating to such Licensed
Clone.

1.23 "Project Data Set" shall mean all Project Data resulting from a
discrete Research Project.

1.24 "Research Program" shall mean the Research Program to be performed by
CURAGEN under the Research Agreement.

1.25 "Research Project" shall mean a particular project to process and
analyze a specified set of samples in the Research Program.

1.26 "Research Project Invention" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN or BIOGEN or
jointly by employees of both, (a) in the performance of a Research Project
hereunder, or (b) in the course of evaluating any Exclusive Data Set, in each
case that is based on, incorporates or makes material inventive use of the
corresponding Project Data or CURAGEN Data.

1.27 "Sublicensee" shall mean any non-Affiliate third party expressly
sublicensed by BIOGEN under the license granted to BIOGEN hereunder, to make,
have made, use, have used, offer to sell, sell, have sold, import or have
imported any Licensed Product.

1.28 "Territory" shall mean the world.

1.29 "Valid Claim(s)" shall mean an unexpired claim of (i) any issued
patent within Patent Rights which has not been finally declared invalid or
unenforceable by a patent office or by a court or other body of competent
jurisdiction in any unappealed or unappealable decision and which has not been
lost through an interference or opposition proceeding or (ii) any pending patent
application within Patent Rights which has not been finally rejected by a patent
office of competent jurisdiction in any unappealed or unappealable decision and
which has not been pending for more than seven (7) years.

6
<PAGE>

2. LICENSE GRANT

2.1. License Grant. Upon exercise of an Option pursuant to Section 7.4 of
-------------
the Research Agreement for any Optioned Clone, BIOGEN shall elect one of the
following license types and the Parties shall indicate such election on Schedule
I attached hereto and shall complete the information on Schedule I for such
Optioned Clone and sign such Schedule I. Such Optioned Clone shall thereafter be
deemed a Licensed Clone. Additionally, upon written request of BIOGEN made
pursuant to Section 7.5 of the Research Agreement for any [XXXXXXXXXXX], BIOGEN
shall elect one of the following license types and the Parties shall indicate
such election on Schedule I attached hereto and shall complete the information
on Schedule I for such [XXXXXXXXXXXXXX] and sign such Schedule I. Such [XXXXXXX
XXXXX] shall thereafter be deemed a Licensed Clone.

(a) For each Licensed Clone listed on Schedule I for which a Section 2.1(a)
exclusive license is elected subject to the rights reserved to CURAGEN in
Section 2.5 below, CURAGEN hereby grants to BIOGEN an exclusive license (even as
to CURAGEN) in the Territory, to develop, make, have made, use, have used, sell,
have sold, offer for sale, import and have imported products (i) incorporating
or derived from such Licensed Clone or the protein expressed thereby, (ii)
discovered or developed using any such Licensed Clone or the protein expressed
thereby as a target or (iii) discovered or developed using a Lead which was
itself discovered or developed using such Licensed Clone or the protein
expressed thereby as a target ("Licensed Products"), for any and all human uses,
under (x) all Patent Rights, Inventions, and CURAGEN Proprietary Material
pertaining to such Licensed Clone or the uses thereof, including but not limited
to Patent Rights claiming whole or partial sequences or utility and (y) all
Patent Rights and know-how of CURAGEN which CURAGEN has the right to license to
BIOGEN relating to Leads discovered or developed using the Licensed Clone or the
protein expressed thereby as a target. Such license shall be perpetual unless
terminated as set forth herein.

(b) For each Licensed Clone listed on Schedule I for which a Section 2.1(b)
exclusive license is elected and which was "known" by third parties prior to the
exercise of the corresponding Option as determined pursuant to subsection (d)
below, subject to the rights reserved to CURAGEN in Section 2.5 below, CURAGEN
hereby grants to BIOGEN an

[Confidential Treatment Requested]

<PAGE>

exclusive license (even as to CURAGEN) in the Territory, to develop, make, have
made, use, have used, sell, have sold, offer for sale, import and have imported
products (i) incorporating or derived from such Licensed Clone or the protein
expressed thereby, (ii) discovered or developed using any such Licensed Clone or
the protein expressed thereby as a target or (iii) discovered or developed using
a Lead which was itself discovered or developed using such Licensed Clone or the
protein expressed thereby as a target ("Licensed Products"), for any and all
human uses, under (x) all Patent Rights, Inventions, and CURAGEN Proprietary
Material pertaining to such Licensed Clone or the uses thereof, including but
not limited to Patent Rights claiming whole or partial sequences or utility and
(y) all Patent Rights and know-how of CURAGEN which CURAGEN has the right to
license to BIOGEN relating to Leads discovered or developed using the Licensed
Clone or the protein expressed thereby as a target. Such license shall be
perpetual unless terminated as set forth herein.

(c) For each Licensed Clone listed on Schedule I for which a Section 2.1(c)
non-exclusive license is elected, CURAGEN hereby grants to BIOGEN a
non-exclusive license in the Territory to use such Licensed Clone or the protein
expressed thereby as a target for discovering or developing small molecule drugs
and to develop, make, have made, use, have used, sell, have sold, offer for
sale, import and have imported any small molecule discovered or developed by
BIOGEN using such Licensed Clone or the protein expressed thereby as a target
("Licensed Products"), for any and all human uses, under all Patent Rights,
Inventions, and CURAGEN Proprietary Materials pertaining to such Licensed Clone
or the uses thereof, including but not limited to Patent Rights claiming whole
or partial sequences or utility. Such license shall be perpetual unless
terminated as set forth herein.

8
<PAGE>

parties other than through any disclosure of research results related to such
Research Project or CURAGEN Project, shall not be deemed "known" for the
purposes hereof.

(e) A Licensed Product will be deemed to be discovered or developed using a
Licensed Clone or the protein expressed thereby as a target if the Licensed
Clone or the whole or partial sequence thereof or the protein expressed thereby
is utilized in any material way in the discovery, development, modification or
testing of the Licensed Product, or of analogs thereof or of molecules used in
the discovery, development or modification thereof.

2.2 Non-exclusive License. CURAGEN hereby grants to BIOGEN a non-exclusive
---------------------
license, coterminus with each license grant in Section 2.1, under CURAGEN
Background Inventions solely to the extent necessary to allow BIOGEN to practice
the license granted in Section 2.1 and for no other purpose.

2.3 Extended License. In the event that (a) CURAGEN is the owner of any
----------------
patent or patent application resulting from any activities other than the
Research Program that claims (i) any Licensed Clone, (ii) the protein expressed
by such Licensed Clone, (iii) any product discovered or developed using any such
Licensed Clone or the protein expressed thereby as a target, or (iv) a human
gene functionally equivalent to such Licensed Clone [XXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] and (b) CURAGEN is not utilizing
the invention or inventions claimed in such patent or application in a research
or development project then being actively planned or conducted by CURAGEN
(alone or in collaboration with any third party), and (c) CURAGEN has the right
to grant a license thereunder to BIOGEN, then any license granted to BIOGEN
under Section 2.1(a) or (b) shall include a license to such patent or patent
applications (an "Extended License").

2.4 Due Diligence. BIOGEN shall use commercially reasonable efforts, at
-------------
least equivalent to those efforts which BIOGEN uses with respect to its own
products, to develop, test, obtain regulatory approval of, market and sell
Licensed Products with respect to each Licensed Clone; provided, however, that
BIOGEN shall not be required hereby to be actively developing [XXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] at any
one time. Failure to use

[Confidential Treatment Requested]

<PAGE>

diligent efforts as set forth herein for a given Licensed Clone shall give
CURAGEN the right, but not the obligation, to terminate BIOGEN's license
hereunder with respect to such Licensed Clone.

2.5 Reservation of Rights. Notwithstanding anything in this Agreement to
---------------------
the contrary, CURAGEN hereby retains for itself the right to use each Licensed
Clone and the proteins derived therefrom for as part of a general library of
nucleic acids, which library is used for research purposes.

2.6 Sublicenses. BIOGEN shall have the right to grant sublicenses to all or
-----------
any portion of its rights under any license granted herein to any Affiliate or
Sublicensee, provided, however, that BIOGEN shall remain obligated to ensure
payment of royalty and milestone obligations as set forth in Article 3.

3. CONSIDERATION

3.1 License Fees. Upon exercise of an Option pursuant to Section 7.1.2 of
------------
the Research Agreement for any Optioned Clone, BIOGEN shall pay to CURAGEN the
license fee specified in the Research Agreement which shall be as set forth
below:
<TABLE>
<CAPTION>

License Type $ (thousands)
------------ -------------
<S> <C>
Exclusive license under Section 2.1(a) [XXX]
Exclusive license under Section 2.1(b) [XXX]
Non-exclusive license under Section 2.1(c) [XXX]
</TABLE>

No license fees shall be due with respect to [XXXXXXXXXXXX] licensed during the
Exclusive Evaluation Period of the [XXXX] [XXXXXX]. Additionally, [XXXXXXXX]
fees shall be due with respect to the [XXXXXXXXX] Optioned Clones which are
licensed hereunder.

3.2 Milestone Payments for Therapeutic or Prophylactic Products.
-----------------------------------------------------------

[Confidential Treatment Requested]

<PAGE>

3.2.1 Milestone Payments under Exclusive License. BIOGEN shall make the
------------------------------------------
following milestone payments to CURAGEN for each therapeutic or prophylactic
Licensed Product under an exclusive license under Section 2.1(a) or Section
2.1(b):

(a) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days following
the date BIOGEN or an Affiliate or Sublicensee files the first
Investigational New Drug application (or foreign equivalent) with the
FDA (or equivalent foreign regulatory agency) for the Licensed
Product ("IND");

(b) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days following
the date BIOGEN or an Affiliate or Sublicensee commences the first
Phase III or Phase II/III clinical trial in any country for the
Licensed Product;

(c) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days following
the date BIOGEN or an Affiliate or Sublicensee submits the first
Biologics License Application, Product License Application, New Drug
Application or other application for approval to sell the Licensed
Product to the FDA (or equivalent foreign regulatory agency) for the
Licensed Product;

(d) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days following
the date BIOGEN or an Affiliate or Sublicensee receives FDA (or
equivalent foreign regulatory agency) approval of the Licensed
Product for commercial sale; and

(e) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within
forty-five (45) days following the end of the first calendar year in
which annual gross sales of such Licensed Product exceed [XXXXX
XXXXXXXX] provided that such event has occurred prior to the end of
the fifth full calendar year following first commercial sale in the
United States or Europe of such Licensed Product.

3.2.2 Milestone Payments under Non-exclusive License. BIOGEN shall make the
----------------------------------------------
following milestone payments to CURAGEN for each therapeutic or prophylactic
Licensed Product covered by a non-exclusive license under Section 2.1(c):

[Confidential Treatment Requested]

<PAGE>

(a) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10)
days following the date BIOGEN or an Affiliate or Sublicensee files
the first Investigational New Drug application (or foreign
equivalent) with the FDA (or equivalent foreign regulatory agency)
for the Licensed Product ("IND");

(b) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days
following the date BIOGEN or an Affiliate or Sublicensee commences
the first Phase III or Phase II/III clinical trial in any country for
the Licensed Product;

(c) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10)
days following the date BIOGEN or an Affiliate or Sublicensee submits
the first Biologics License Application, Product License Application,
NDA or other application for approval to sell the Licensed Product to
the FDA (or equivalent foreign regulatory agency) for the Licensed
Product;

(d) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days following
the date BIOGEN or an Affiliate or Sublicensee receives FDA (or
equivalent foreign regulatory agency) approval of the Licensed
Product for commercial sale; and

(e) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10) days following
the end of the first calendar year in which annual gross sales of
such Licensed Product exceed [XXXXXXXXXXX] provided that such event
has occurred prior to the end of the fifth full calendar year
following first commercial sale in the United States or Europe of
such Licensed Product.

3.2.3 [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
[XXXXXXXXXXXXXXX]

3.3 Milestone Payments for Diagnostic Products. BIOGEN shall make the
------------------------------------------
following milestone payment to CURAGEN for each diagnostic Licensed Product
under an exclusive license under Section 2.1(a) or Section 2.1(b):

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] within ten (10)
days following the date BIOGEN or an Affiliate or Sublicensee
receives FDA (or equivalent foreign regulatory agency)
approval of the Licensed Product for commercial sale.

Notwithstanding the foregoing, the milestone payment set forth above shall
not be due with respect to any Licensed Product with a substantially similar
purpose and format to one for which such milestone has already been paid to
CURAGEN.

3.4 Royalties on Licensed Products from Research Project Inventions.
---------------------------------------------------------------
BIOGEN shall pay to CURAGEN a royalty on Net Sales of Licensed Products if the
sequence and/or utility of the relevant Licensed Clone is a Research Project
Invention or if the Licensed Product results from a Research Project Invention
or a Lead using a Licensed Clone which is a Research Project Invention as
follows:

(a) If the Licensed Product is: (1) a recombinant protein form of a
naturally occurring protein or a modified form or fragment thereof ("Protein
Product"), (2) a product involving insertion of nucleic acid into a human host
in order to induce cells in such host to express the protein encoded by such
nucleic acid for therapeutic benefit, or a product involving ex vivo insertion
of nucleic acid into human cells where such cells are then reimplanted into a
human to express the protein encoded by such nucleic acid for therapeutic
benefit ("Gene Therapy Product"), (3) a product designed to activate the
expression of an endogenous gene ("Gene Activation Product"), (4) a product
which is an oligonucleotide which binds to mRNA in vivo to inhibit or block
-------
protein production ("Anti-sense/ribozyme Product"), or (5) an antibody to the
protein encoded by a Licensed Clone ("Antibody Product"), the royalty rate on
Net Sales of such Licensed Product shall be as follows:

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXX]

(b) If the Licensed Product is a small molecule discovered or developed
using a Licensed Clone or the protein expressed thereby as a target, which
target is non-exclusively licensed by BIOGEN pursuant to the provisions of
Section 2.1(c), the royalty rate on Net Sales of such Licensed Product shall be:

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

such Licensed Product shall be negotiated in good faith by the Parties prior to
the commencement of pre-clinical regulatory testing of such Licensed Product;
provided, however, that in no event shall the negotiated royalty rates be less
than those set forth in Section 3.4(b) above.

(d) If the Licensed Product is derived from, or is a chemical, structural
or functional analog of, a Lead identified by CURAGEN and provided to BIOGEN
pursuant to an exclusive license granted pursuant to the provisions of Section
2.1 (a) or (b), the royalty rate on Net Sales of such Licensed Product shall be:

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

(e) If the Licensed Product is a diagnostic product or any product other
than one whose royalty rate is set forth in Section 3.4(a), (b), (c) or (d)
above, then the royalty rate on Net Sales of such Licensed Product shall be:

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXX]

Notwithstanding the foregoing, in no event shall BIOGEN be obligated
pursuant to this subsection (e) to pay to CURAGEN more than [XXXXXXXXXXXXXXXXX]
of the running royalties received by BIOGEN or its Affiliates from a Sublicensee
with respect to any such Licensed Product.

(f) Royalties due to CURAGEN pursuant to subsections (a), (b), (c), (d)
or (e) above for a given Licensed Product [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] may be reduced by (i) [XXXXXXXXXXXXXXXXX] of
any royalties paid to third parties by BIOGEN on net sales of such Licensed
Product under licenses that are required [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] and
(ii) [XXXXXXXXXXXXX] of any royalties in excess of a total of [XXXXXXXXXX
XXXX] paid to third parties by BIOGEN on net sales of such Licensed Product
under licenses [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. Royalties due
to CURAGEN pursuant to subsections (a), (b), (c), (d) or (e) above for a given
Licensed Product [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] of any royalties paid to third parties by
BIOGEN on net sales of such Licensed Product under licenses [XXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]. [XXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

3.5 Royalties on Licensed Products from CURAGEN Project Inventions.
--------------------------------------------------------------
BIOGEN shall pay to CURAGEN a royalty on Net Sales of Licensed Products if (i)
the sequence and/or utility of the relevant Licensed Clone is a CURAGEN Project
Invention or if the Licensed Product results from a CURAGEN Project Invention or
a Lead developed using a Licensed Clone which is a CURAGEN Project Invention, or
(ii) the manufacture, use or sale of the Licensed Product is covered by an
Extended License, as follows:

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX]

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXX]

(c) If the Licensed Product is a small molecule discovered or developed
using a Licensed Clone or the protein expressed thereby as a target (and is not
derived from, or a chemical, structural or functional analog of, a Lead), which
target is exclusively licensed by BIOGEN pursuant to the provisions of Sections
2.1(a) or (b), the royalty rate on Net Sales of such Licensed Product shall be
negotiated in good faith by the Parties prior to the commencement of
pre-clinical regulatory testing of such Licensed Product; provided, however,
that in no event shall the negotiated royalty rates be less than those set forth
in Section 3.5(b) above.

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXX]

[Confidential Treatment Requested]

<PAGE>

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXX

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

(e) If the Licensed Product is a diagnostic product or any product other
than one whose royalty rate is set forth in Section 3.5(a), (b), (c) or (d)
above, then the royalty rate on Net Sales of such Licensed Product shall be:

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

(e) above for a given Licensed Product [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] of any royalties paid
to third parties by BIOGEN on net sales of such Licensed Product under licenses
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXX]

3.6 One Royalty. Only one royalty, calculated at the highest applicable
-----------
royalty rate hereunder, shall be payable to CURAGEN hereunder for each sale of a
Licensed Product.

3.7 Payment Terms.
-------------
(a) Royalty payments shall be made to CURAGEN in United States Dollars
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXX] Each royalty payment shall be accompanied by a
report summarizing the total Net Sales for each Licensed Product [XXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXX]

(b) All royalties shall be payable in full in the United States in United
States Dollars, regardless of the countries in which sales are made. For the
purpose of computing Net Sales for Licensed Products sold in a currency other
than United States dollars, such currency shall be converted into United States
dollars at the exchange rate for buying U.S. dollars set forth in The Wall
--------
Street Journal for the last business day of the calendar quarter.
- --------------

3.8 Royalty Term. BIOGEN shall pay royalties with respect to each
------------
Licensed Product on a country by country basis until (i) the expiration or
revocation or complete rejection of the last to expire or to be revoked or to be
completely rejected of any Valid Claim of a Patent Right covering such Licensed
Product in such country, or (ii) ten (10) years from the first commercial sale
of such Licensed Product in such country, whichever is later. Following such
period, BIOGEN shall have a fully paid-up, irrevocable license in such country
under the relevant Patent Rights and Inventions and CURAGEN Background
Inventions, to make, have made, use,

[Confidential Treatment Requested]

<PAGE>

have used, sell, have sold, offer for sale, import and have imported such
Licensed Product in such country.

3.9 Overdue Royalties. Royalties not paid within the time period set
-----------------
forth in this Article 3 shall bear interest at a rate of [XXXXXXXXXXXXXXXXXX
XXXXXXX] from the due date until paid in full.

3.10 Records Retention. Audits. BIOGEN, its Affiliates and Sublicensees
-------------------------
shall keep for three (3) years from the date of each payment of royalties
complete and accurate records of sales by BIOGEN and its Affiliates and
Sublicensees of each Licensed Product in sufficient detail to allow the accruing
royalties to be determined accurately. CURAGEN shall have the right for a period
of three (3) years after receiving any report or statement with respect to
royalties due and payable to appoint an independent certified public accountant
reasonably acceptable to BIOGEN to inspect the relevant records of BIOGEN and
its Affiliates and Sublicensees to verify such report or statement. BIOGEN and
its Affiliates and Sublicensees shall each make its records available for
inspection by such independent certified public accountant during regular
business hours at such place or places where such records are customarily kept,
upon reasonable notice from CURAGEN, solely to verify the accuracy of the
reports and payments. Such inspection right shall not be exercised more than
once in any calendar year nor more than once with respect to sales of any
Licensed Product in any given payment period. CURAGEN agrees to hold in strict
confidence all information concerning royalty payments and reports, and all
information learned in the course of any audit or inspection, except to the
extent necessary for CURAGEN to reveal such information in order to enforce its
rights under this Agreement or if disclosure is required by law, regulation or
judicial order. The results of each inspection, if any, shall be binding on both
Parties. CURAGEN shall pay for such inspections, except that in the event there
is any upward adjustment in aggregate royalties payable for any year shown by
such inspection of more than [XXXXXXXXXXXXXX] of the amount paid, BIOGEN shall
pay for such inspection.

3.11 Tax Withholding. CURAGEN agrees that any tax burden levied by any
---------------
countries foreign to the United States covered by this Agreement on receipt by
CURAGEN of royalties from BIOGEN under this Agreement shall be borne by CURAGEN.
In the event that

[Confidential Treatment Requested]

<PAGE>

such tax is required to be withheld by BIOGEN, its Affiliates, licensees or
Sublicensees, it shall deliver to CURAGEN a statement including the amount of
tax withheld and justification therefor, and such other information as may be
necessary for United States foreign tax credit purposes.

4. TREATMENT OF CONFIDENTIAL INFORMATION

4.1 Confidential Information. During the term of this Agreement, each
------------------------
Party may disclose to the other proprietary technical and business information
(collectively, "Confidential Information"). For a period of [XXXXXXXXXX] after
the receipt of any such Confidential Information, the receiving Party shall keep
confidential all such Confidential Information of the other Party and will not
disclose such Confidential Information of the other Party to third parties by
publication or otherwise. Each Party further agrees not to use Confidential
Information of the other Party for any purpose other than exercising any rights
granted to it or reserved by it hereunder. Notwithstanding the foregoing, it is
understood and agreed that the receiving Party's obligations of confidentiality
and nonuse herein shall not apply to any information which:

(a) is, at the time of disclosure by the disclosing Party
hereunder, or thereafter becomes, a part of the public domain or
publicly known or available through no fault or negligence of the
receiving Party or any of its Affiliates; or

(b) was otherwise in the receiving Party's lawful possession prior
to disclosure by the disclosing Party, as demonstrated by the
receiving Party's written records; or

4.2 Press Release and Regulatory Filings. The Parties shall mutually
------------------------------------
agree on a press release announcing the execution of this Agreement and on any
confidential treatment request to be filed with the Securities and Exchange
Commission with respect to this Agreement.

[Confidential Treatment Requested]

<PAGE>

Once any written statement is approved for disclosure by both Parties, either
Party may make subsequent public disclosures of the contents of such statement
without the further approval of the other Party.

5. PROVISIONS CONCERNING THE FILING, PROSECUTION AND
MAINTENANCE OF PATENT RIGHTS

5.1 Patent Filing. During the term of this Agreement, with respect to any
-------------
Patent Rights or Inventions licensed hereunder:

(a) Upon inclusion of a Licensed Clone or Lead under the terms of this
Agreement, CURAGEN and BIOGEN shall meet to discuss the feasibility of filing
requests for divisional patent applications in order to create Patent Rights
relating solely to Licensed Clones or Leads which are exclusively licensed
hereunder and not to other Clones or Inventions. CURAGEN shall cause such
actions to be taken if the Parties reasonably agree that such actions are
feasible and desirable.

(b) BIOGEN shall have the right to prepare, file, prosecute, obtain and
maintain, at its expense, all Patent Rights relating solely to Licensed Clones
or Leads which are exclusively licensed hereunder. CURAGEN agrees to provide
reasonable assistance and cooperation to BIOGEN to facilitate such filing,
prosecution and maintenance. BIOGEN agrees that any such preparation, filing,
prosecution and maintenance shall be conducted with reasonable diligence and
that CURAGEN shall be kept fully informed of the progress thereof and provided
with copies of all material documents pertaining thereto. CURAGEN shall,
whenever possible, be given the opportunity to review and comment in advance on
any patent filings or other correspondence with the patent office during such
periods and BIOGEN shall consider incorporating any comments provided by CURAGEN
in good faith.

(c) Except as provided in (b) above, CURAGEN shall have the first right
(but not the obligation) to prepare, file, prosecute, obtain and maintain patent
applications and patents on Inventions relating to the Licensed Clones or Leads
which are licensed hereunder at its sole expense. BIOGEN agrees to provide
reasonable assistance and cooperation to CURAGEN to

23
<PAGE>

facilitate such filing, prosecution and maintenance. CURAGEN agrees that any
such preparation, filing, prosecution and maintenance shall be conducted with
reasonable diligence and that BIOGEN shall be kept fully informed of the
progress thereof and provided with copies of all material documents pertaining
thereto during the term of this agreement. BIOGEN shall, whenever possible, be
given the opportunity to review and comment in advance on any patent filings or
other correspondence with the patent office during such periods and CURAGEN
shall consider incorporating any comments provided by BIOGEN in good faith.

(d) CURAGEN may elect not to exercise its first right to prepare, file,
prosecute, obtain and maintain patent applications and patents on Inventions as
described in Section 5.1(c) above at any time for any such patent applications
and patents by giving written notice thereof to BIOGEN. Such notice shall
specifically identify the patent application(s) and/or patent(s) for which
CURAGEN wishes to relinquish such first right. Following the receipt of such
notice, BIOGEN shall have the right to prepare, file, prosecute, obtain and
maintain the patent application(s) and patent(s) identified in the notice, at
its sole expense, on behalf of the owner of the Invention, subject to the rights
granted herein, during the term of this Agreement.

(e) The Parties shall mutually agree before permitting any patent
application or patent within Patent Rights exclusively licensed hereunder to
lapse as well as before authorizing any amendment to any patent application or
patent within such Patent Rights that would irrevocably limit the lawful scope
of the Patent Rights.

(f) BIOGEN may elect not to exercise its right to prepare, file, prosecute,
obtain and maintain patent applications and patents on Inventions or Leads as
described in Section 5.1(b) above at any time for any such Patent Rights by
giving written notice thereof to CURAGEN. Such notice shall specifically
identify the patent application(s) and/or patent(s) for which BIOGEN wishes to
relinquish such right. Following the receipt of such notice, CURAGEN shall have
the right to prepare, file, prosecute, obtain and maintain the patent
application(s) and patent(s) identified in the notice, at its sole expense, and
CURAGEN shall thereafter be deemed the sole owner of any such application or
patent, and any such patents and patent applications shall be removed from
operation of this Agreement.

(g) No Party shall have any obligation under this Agreement to pay any fees
or costs: (i) for bringing a lawsuit or other action to enforce any of the
Patent Rights against an actual or

24
<PAGE>

suspected infringement or (ii) for any other Party to obtain for its own benefit
independent business or legal advice concerning any of the Patent Rights.

5.2 Notice of Infringement. If, during the term of this Agreement or the
----------------------
term of any license hereunder, either Party learns of any infringement or
threatened infringement by a third party of the patents within Patent Rights,
such Party shall promptly notify the other Party and shall provide such other
Party with available evidence of such infringement.

5.3 Infringement. BIOGEN shall have the first right (but not the
------------
obligation), at its own expense, to bring suit (or other appropriate legal
action) against any actual or suspected infringement of the Patent Rights
licensed hereunder provided that BIOGEN has an exclusive license to the
infringed claim(s) of any such Patent Right pursuant to Article 2. If BIOGEN
does not take such action within one hundred twenty (120) days after written
notice from CURAGEN of the infringement, CURAGEN shall have the right (but not
the obligation), at its own expense, to bring suit against such infringement.
Any amount recovered, whether by judgment or settlement, shall first be applied
to reimburse the costs and expenses (including attorneys' fees) of the Party
bringing suit, then to the costs and expenses (including attorneys' fees), if
any, of the other Party. Any amounts remaining shall be allocated [XXXXXXXXXXX
XXXXXX] to the Party bringing suit and [XXXXXXXXXX] to the other Party or
shall be allocated one-half to each Party if the suit is brought jointly.

5.4 Cooperation. Each Party shall, at the expense of the other Party,
-----------
execute all papers and perform such other acts as may be reasonably required to
maintain any infringement suit brought in accordance with Section 5.3 above
(including giving legal consent for bringing such suit, and agreeing to be named
as a plaintiff or otherwise joined in such suit), and at its option and expense,
may be represented in such suit by counsel of its choice.

6. TERM AND TERMINATION

6.1. Termination Provisions.
----------------------
(a) This Agreement and the licenses granted herein may be terminated by
CURAGEN upon any breach by BIOGEN of any material obligation or condition,
effective thirty (30) days

[Confidential Treatment Requested]

<PAGE>

after giving written notice to BIOGEN of such termination in the case of a
payment breach and sixty (60) days after giving written notice to BIOGEN of such
termination in the case of any other breach, which notice shall describe such
breach in reasonable detail; provided, however, that a breach of Section 2.4
shall only give rise to the termination rights specified therein. The foregoing
notwithstanding, if the default or breach is cured or shown to be non-existent
within the aforesaid thirty (30) or sixty (60) day period, the notice shall be
deemed automatically withdrawn and of no effect.

6.2 Effect of Termination.
---------------------

(a) Upon termination of this Agreement under Section 6.1, all relevant
licenses and sublicenses granted by CURAGEN to BIOGEN hereunder shall terminate
automatically and BIOGEN shall promptly transfer to CURAGEN all related Licensed
Clones, Leads, Data Sets and CURAGEN Proprietary Material in its possession
without retaining any copies thereof, as well as any full-length sequence data
relating to such Licensed Clone(s) and a summary of any safety information
generated by or at the direction of BIOGEN with respect to products derived from
such Licensed Clone(s) or Leads. In addition, upon any termination pursuant to
Section 6.1(a), BIOGEN shall be deemed without any further action to have
granted to CURAGEN an exclusive, worldwide, royalty-free license (including the
right to grant sublicenses), under BIOGEN's ownership interest in any Inventions
and Patent Rights covering or related to the relevant Licensed Clone(s) or Leads
to develop, have developed, make, have made, use, have used, offer for sale,
sell, have sold, import and have imported any and all products in all fields.

(b) Documentation. At the request of CURAGEN, BIOGEN shall execute and
-------------
deliver such bills of sale, assignments and licenses and other documents, if
any, as may be

26
<PAGE>

necessary to fully vest in CURAGEN all right, title and interest to which it is
entitled as aforesaid pursuant to this Section 6.2.

(c) Payment Obligations. BIOGEN shall have no obligation to make any
milestone or royalty payment to CURAGEN that has not accrued prior to the
effective date of such termination, but shall remain liable for all obligations
accruing prior to termination.

6.3 Termination by BIOGEN. BIOGEN may terminate this Agreement, and the
---------------------
rights and obligations hereunder, or may remove any Licensed Clone and the
licenses related thereto from operation of this Agreement, in its sole
discretion at any time by giving written notice thereof to CURAGEN. Such
termination shall be effective fifteen (15) days following the date such
notice is received by CURAGEN and shall have all consequences as set forth in
Section 6.2 above, but only with respect to the specified Licensed Clone(s), as
if this Agreement had been terminated pursuant to Section 6.1(a).

6.4 Remedies. If either Party shall fail to perform or observe or otherwise
--------
breaches any of its material obligations under this Agreement, in addition to
any right to terminate this Agreement, the non-defaulting Party may elect to
obtain other relief and remedies available under law.

6.5 Surviving Provisions. Notwithstanding any provision herein to the
--------------------
contrary, the rights and obligations set forth in Article 4, Sections 6.2 and
6.4, and Article 7 hereof, as well as any rights or obligations otherwise
accrued, shall survive the expiration or termination of the term of this
Agreement.

7. MISCELLANEOUS

7.1 CURAGEN Representations. CURAGEN represents and warrants that: (a) the
-----------------------
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all appropriate CURAGEN
corporate action; (b) CURAGEN is under no obligation which is inconsistent with
this Agreement; and (c) CURAGEN has the full right and legal capacity to grant
the rights to BIOGEN pursuant to Article 2 above without violating the rights of
any third party.

[Confidential Treatment Requested]

<PAGE>

7.2 BIOGEN Representations. BIOGEN represents and warrants that: (a) the
----------------------
execution and delivery of this Agreement and the performance of the transactions
contemplated hereby have been duly authorized by all appropriate BIOGEN
corporate action; and (b) BIOGEN is under no obligation which is inconsistent
with this Agreement.

7.3 No Warranties.
-------------
(a) Nothing in this Agreement is or shall be construed as:

(i) a warranty or representation by CURAGEN as to the validity or
scope of any application or patent within the Patent Rights;

(ii) a warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this Agreement is
or will be free from infringement of patents, copyrights, and other
rights of third parties.

(b) Except as expressly set forth in this Agreement, NEITHER PARTY MAKES
ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, THAT ANY LICENSED PRODUCT WILL BE SUCCESSFULLY
DEVELOPED OR MARKETED, OR THAT THE DEVELOPMENT, MANUFACTURE, SALE, IMPORTATION
OR USE OF THE LICENSED PRODUCT(S) WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK, OR OTHER RIGHTS, OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

7.4 Liability. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
---------
OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST

28
<PAGE>

PROFITS OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES

7.5 Notices. Any notices, requests, deliveries, approvals or consents
-------
required or permitted to be given under this Agreement to BIOGEN or CURAGEN
shall be in writing and shall be personally delivered or sent by telecopy (with
written confirmation to follow via United States first class mail), overnight
courier providing evidence of receipt or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below (or to such address as may be specified in writing to the other Party
hereto):

CURAGEN: 555 Long Wharf, 11th Floor
New Haven, CT 06511
Attn: Executive Vice President
Telecopy: (203) 401-3333

BIOGEN: 14 Cambridge Center
Cambridge, MA 02142
Attn: Director, Marketing and Business Development
Telecopy: (617) 679-2804

with copies to: Vice President - General Counsel
Telecopy: (617) 679-2838

7.6 Governing Law. This Agreement will be construed, interpreted and
-------------
applied in accordance with the laws of the State of Connecticut (excluding its
body of law controlling conflicts of law).

7.7 Limitations. Except as set forth elsewhere in this Agreement, neither
-----------
Party grants to the other Party any right or license to any of its intellectual
property.

29
<PAGE>

7.8 Entire Agreement. This is the entire Agreement between the Parties with
----------------
respect to the subject matter herein. No modification shall be effective unless
in writing and signed by the Parties.

7.9 Waiver. The terms or conditions of this Agreement may be waived only by
------
a written instrument executed by the Party waiving compliance. The failure of
either Party at any time or times to require performance of any provision hereof
shall in no manner affect its rights at a later time to enforce the same. No
waiver by either Party of any condition or term shall be deemed as a continuing
waiver of such condition or term or of another condition or term.

7.10 Headings. Section and subsection headings are inserted for convenience
--------
of reference only and do not form part of this Agreement.

7.11 Assignment. This Agreement may not be assigned by either Party without
----------
the consent of the other, except that each Party may, without such consent,
assign this Agreement and the rights, obligations and interests of such Party,
in whole or in part, to any of its Affiliates, to any purchaser of all or
substantially all of its assets in the line of business to which this Agreement
pertains or to any successor corporation resulting from any merger or
consolidation of such Party with or into such corporations.

7.12 Force Majeure. Neither Party shall be liable for failure of or delay
-------------
in performing obligations set forth in this Agreement, and neither shall be
deemed in breach of its obligations, if such failure or delay is due to natural
disasters or any causes beyond the reasonable control of such Party. In event of
such force majeure, the Party affected thereby shall use reasonable efforts to
cure or overcome the same and resume performance of its obligations hereunder.

7.13 Construction. The Parties hereto acknowledge and agree that: (i) each
------------
Party and its counsel reviewed and negotiated the terms and provisions of this
Agreement and have contributed to its revision; (ii) the rule of construction to
the effect that any ambiguities are resolved against the drafting Party shall
not be employed in the interpretation of this Agreement; and (iii) the terms and
provisions of this Agreement shall be construed fairly as to all Parties

30
<PAGE>

hereto and not in a favor of or against any Party, regardless of which Party was
generally responsible for the preparation of this Agreement.

7.14 Severability. If any provision(s) of this Agreement are or become
------------
invalid, are ruled illegal by any court of competent jurisdiction or are deemed
unenforceable under then current applicable law from time to time in effect
during the term hereof, it is the intention of the Parties that the remainder of
this Agreement shall not be affected thereby provided that a Party's rights
under this Agreement are not materially affected. The Parties hereto covenant
and agree to renegotiate any such term, covenant or application thereof in good
faith in order to provide a reasonably acceptable alternative to the term,
covenant or condition of this Agreement or the application thereof that is
invalid, illegal or unenforceable, it being the intent of the Parties that the
basic purposes of this Agreement are to be effectuated.

7.15 Status. Nothing in this Agreement is intended or shall be deemed to
------
constitute a partner, agency, employer-employee, or joint venture relationship
between the Parties.

7.16 Indemnification.
---------------

(a) BIOGEN shall indemnify, defend and hold harmless CURAGEN, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "CURAGEN Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the CURAGEN
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments of third parties, including without limitation personal
injury and product liability matters (except to the extent that such claims,
suits, actions, demands or judgments result from a material breach of this
Agreement, or the negligence or willful misconduct on the part of CURAGEN or are
the subject matter of CURAGEN'S indemnification of BIOGEN as set forth in
Section 7.16(b)) arising out of or relating to any actions of BIOGEN or any
Affiliate, licensee, sublicensee, distributor or agent of BIOGEN in the
development, testing, production, manufacture, promotion, import, sale or use by
any person of any Licensed Product manufactured or sold by BIOGEN or by an
Affiliate, licensee, sublicensee, distributor or agent of BIOGEN.

31
<PAGE>

(b) CURAGEN shall indemnify, defend and hold harmless BIOGEN, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "BIOGEN Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the BIOGEN
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments of third parties, including without limitation personal
injury matters (except to the extent that such claims, suits, actions, demands
or judgments result from a material breach of this Agreement, or the negligence
or willful misconduct on the part of BIOGEN) arising directly out of the use by
BIOGEN or CURAGEN of CURAGEN'S technology under the Research Agreement, except
to the extent such claims, suits, actions, demands or judgments are based on the
use of the samples or information provided to CURAGEN by BIOGEN under the
Research Agreement.

32
<PAGE>

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representative in two (2) originals.

BIOGEN, INC. CURAGEN CORPORATION

By: By:
------------------------------ ------------------------------

Title: Title:
----------------------------- -----------------------------

33
<PAGE>

SCHEDULE I
(To be completed for each Licensed Clone)

Licensed Clone:
- ---------------

Type of License:
- ----------------

Project Data Set
- ----------------
or
- --
CURAGEN Data Set
- ----------------
Pertaining to Licensed Clone:
- -----------------------------

CURAGEN Proprietary
- -------------------
Material Pertaining to
- ----------------------
Licensed Clone:
- ---------------

CURAGEN Patent Rights
- ---------------------
Pertaining to Licensed Clone:
- -----------------------------

Rights under
- ------------
Extended License:
- -----------------

Signed this day of
------ -------------, -----
CURAGEN CORPORATION

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

BIOGEN, INC.

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

34
<PAGE>

APPENDIX D
----------

Terms of Subscription Agreements

QEA/Gene Calling
- ----------------

Subscriber will receive secure access to CuraGen's QEA/GeneCalling subscription
database through the GeneScape( data base and software. Access will be provided
for up to [XXX] users on equipment to be provided by Subscriber.

CURAGEN will support and maintain the software provided for such access and will
use commercially reasonable efforts to update and maintain the database and to
keep it reasonably available for use.

Options and Licenses to clones identified using the database shall be provided
on terms substantially similar to those contained in this Agreement and the
License Agreement.

MIM/Path Calling
- ----------------

Subscriber will receive access to the MIM/PathCalling database through the
GeneScape(R) data base and software. Access will be provided for up to [XXX]
users on equipment to be provided by Subscriber.

CURAGEN will support and maintain the software provided for such access and will
use commercially reasonable efforts to update and maintain the database and to
keep it reasonably available for use.

Options and Licenses to clones identified using the database shall be provided
on terms substantially similar to those contained in this Agreement and the
License Agreement.

GeneTools
- ---------

Pursuant to any subscription agreement as described above Subscriber will also
receive secure access to the GeneTools database through the GeneScape(R)
software. Access will be provided for up to [XXX] users on equipment to be
provided by Subscriber.

[Confidential Treatment Requested]

<PAGE>

EXHIBIT 10.15

CuraGen Corporation has omitted from this Exhibit 10.15 portions of the
Agreement for which CuraGen Corporation has requested confidential treatment
from the Securities and Exchange commission. The portions of the Agreement for
which confidential treatment has been requested are marked with X's in brackets
and such confidential portions have been filed separately with the Securities
and Exchange Commission.

Execution Copy
RESEARCH AND OPTION AGREEMENT

This Research and Option Agreement ("Agreement") is made effective as of
November 20, 1997 ("Effective Date") by and between GENENTECH, INC., a Delaware
corporation having its principal business office at 1 DNA Way, South San
Francisco, CA 94080 ("GENENTECH"), and CURAGEN CORPORATION, a Delaware
corporation with its principal place of business at 555 Long Wharf Drive, 11th
Floor, New Haven, Connecticut 06511 ("CURAGEN"). GENENTECH and CURAGEN are each
hereafter referred to individually as a "Party" and together as the "Parties".

WHEREAS, GENENTECH desires to have access to CURAGEN's genomics
technologies (including GeneScape(R), QEA/GeneCalling, MIM/PathCalling and all
additional services provided by CURAGEN) and to have CURAGEN apply such
technologies to certain GENENTECH Proprietary Material in order to expedite the
discovery of information which may lead to the development of novel
pharmaceutical products;

WHEREAS, GENENTECH and CURAGEN have previously collaborated on genomics
projects pursuant to the terms of that certain Research Services and Evaluation
Agreement dated June 12, 1996 and that certain Research and License Agreement
dated December 27, 1996 (together, the "Collaboration Agreements");

WHEREAS, GENENTECH and CURAGEN wish to initiate the performance of certain
additional research by GENENTECH and CURAGEN;

WHEREAS, GENENTECH wishes to obtain an option to evaluate and license the
inventions obtained or made by GENENTECH and/or CURAGEN in the performance of
the previous Collaboration Agreements and the performance of the research
pursuant to this Agreement, as well as an option to evaluate and license certain
other inventions of CURAGEN;

[Confidential Treatment Requested]
<PAGE>

WHEREAS, CURAGEN wishes to retain rights to data and inventions made by
GENENTECH and CURAGEN hereunder and not licensed by GENENTECH;

WHEREAS, GENENTECH wishes to make an equity investment in CURAGEN Common
Stock in the amount of Five Million Dollars ($5,000,000), such investment to be
made in a private placement contemporaneously with the initial public offering
of CURAGEN's Common Stock;

WHEREAS, GENENTECH will also agree to loan CURAGEN up to Twenty-Six Million
Dollars ($26,000,000) on the terms and conditions as set forth herein; and

WHEREAS, GENENTECH and CURAGEN therefore agree to undertake the foregoing,
all under the terms and conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the Parties hereby agrees as follows:

1. DEFINITIONS

Whenever used in the Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

1.1 "AFFILIATE" shall mean any corporation, firm, limited liability
company, partnership or other entity which directly or indirectly controls or is
controlled by or is under common control with a Party to this Agreement.
"Control" means ownership, directly or through one or more Affiliates, of fifty
percent (50%) or more of the shares of stock entitled to vote for the election
of directors, in the case of a corporation, or fifty percent (50%) or more of
the equity interests in the case of any other type of legal entity, status as a
general partner in any partnership, or any other arrangement whereby a party
controls or has the right to control the Board of Directors or equivalent
governing body of a corporation or other entity.

2
<PAGE>

1.2 "CLONE" shall mean a segment of DNA representing a whole or partial
gene whose sequence or utility is determined from the analysis of one or more
Data Sets or from the Extended Research during the term of this Agreement.

1.3 "CURAGEN BACKGROUND INVENTIONS" shall mean all patent rights and
know-how of CURAGEN, other than those relating primarily to Inventions, which
CURAGEN has the right to license and which would be infringed by the activities
of GENENTECH permitted by this Agreement or by the development, manufacture,
use, sale or importation of a Licensed Product by GENENTECH; provided, however,
that CURAGEN Background Inventions shall expressly exclude (i) any patent rights
or know-how relating to Clones not licensed by GENENTECH pursuant to an executed
License Agreement and (ii) any patent rights or know-how arising from any
CURAGEN collaboration with a third party, except to the extent permitted
thereby.

1.4 "CURAGEN DATA" shall mean all information obtained by CURAGEN from
the processing of specified CURAGEN samples, including QC data, QEA/GeneCalling
data, MIM/PathCalling data, sequence data and any other information obtained or
generated by CURAGEN in the performance of a discrete CURAGEN Project outside
the performance of the Research Program.

1.5 "CURAGEN DATA SET" shall mean all CURAGEN Data resulting from a
discrete CURAGEN Project that CURAGEN can make exclusively available to
GENENTECH.

1.6 "CURAGEN PROJECT" shall mean a particular project undertaken by
CURAGEN on its own outside the Research Program to process and analyze a
specified set of samples which do not contain GENENTECH Proprietary Material,
and as to which CURAGEN is free to grant rights to GENENTECH hereunder.

1.7 "CURAGEN PROJECT INVENTION" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN in the
performance of a CURAGEN Project that results in CURAGEN Data that becomes part
of an Exclusive Data Set, that is based on, incorporates or makes material use
of the corresponding CURAGEN Data.

1.8 "CURAGEN PROJECT PATENT RIGHTS" shall mean Patent Rights containing a
claim or claims covering CURAGEN Project Inventions. CURAGEN Project Patent
Rights shall

3
<PAGE>

also include Patent Rights containing a claim or claims covering CURAGEN Project
Inventions exclusively licensed in by CURAGEN, with the right to sublicense, now
or in the future.

1.9 "CURAGEN PROJECT PROPRIETARY MATERIAL" shall mean all substances
made by CURAGEN in the performance of CURAGEN Projects, including mRNA pools.
CURAGEN Project Proprietary Material shall include, without limitation, QEA
fragments, MIM constructs and materials derived or constructed from QEA
fragments and MIM constructs, including, without limitation, fragment and full
length cDNA clones made by CURAGEN in the performance of a CURAGEN Project.

1.10 "CURAGEN ROYALTY PRODUCT" shall have the meaning set forth in Section
7.7.

1.11 "DATA SET," which may be either a Project Data Set or a CURAGEN Data
Set, shall mean all Project Data resulting from a discrete Research Project or
all CURAGEN Data resulting from a discrete CURAGEN Project, respectively.

1.12 "EXCLUSIVE DATA SET" shall mean any Project Data Set during the
corresponding Exclusive Evaluation Period as provided in Section 2.4.1 or any
CURAGEN Data Set during the corresponding Exclusive Evaluation Period as
provided in Section 2.5.2.

1.13 "EXCLUSIVE EVALUATION PERIOD" shall have the meaning set forth in
Section 2.4.1 or 2.5.2.

1.14 "EXTENDED RESEARCH" shall mean the research undertaken by CURAGEN
pursuant to Sections 2.4.1, 2.5.2 and/or 7.1.3 hereof.

1.15 "EXTENDED RESEARCH DATA" shall mean all information and results
obtained by CURAGEN from its performance of Extended Research.

1.16 "EXTENDED RESEARCH INVENTIONS" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN in the
performance of Extended Research, other than such discoveries, inventions, know-
how or trade secrets that are deemed to be defined as Research Project
Inventions pursuant to the terms of this Agreement or an executed License
Agreement.

4
<PAGE>

renewals thereof, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, whether owned now or hereafter, solely or
jointly by CURAGEN, and wherein at least one claim of such patent right covers
an Extended Research Invention.

1.18 "FTE" shall mean the equivalent of a full year of effort on a full
time basis of a researcher possessing skills and experience necessary to carry
out applicable tasks under the Research Program.

1.19 "GENENTECH PROPRIETARY MATERIAL" shall mean substances made by
GENENTECH or provided by GENENTECH to CURAGEN in the performance of the Research
Program, including without limitation (a) tissue samples provided by GENENTECH
to CURAGEN and (b) the nucleic acids and other substances actually contained in
such tissue samples, and (c) full length genes cloned by GENENTECH.

1.20 "GENESCAPE(R)" shall mean the web-based software and database product
for accessing and storing Data Sets generated through the application of
CURAGEN's QEA/GeneCalling and MIM/PathCalling technologies.

1.21 "INVENTION" shall mean either a CURAGEN Project Invention or a
Research Project Invention.

1.22 "KNOW-HOW INFORMATION" shall have the meaning set forth in Section
2.1.4(c).

1.23 "KNOW-HOW INFORMATION PRODUCT" shall have the meaning set forth in
Section 2.1.4(c).

1.24 "LICENSED CLONE" shall mean any Clone licensed by GENENTECH pursuant
to an executed License Agreement.

1.25 "LICENSED PRODUCT", as to each Clone, shall mean:

[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

1.26 "LICENSE AGREEMENT" shall mean a license agreement in the form of
Appendix C attached hereto executed by the Parties upon exercise of any Option
- ----------
pursuant to Section 7.

1.27 "MIM/PATHCALLING" shall mean the technology employed by CURAGEN for
identifying protein-protein interactions from libraries of cDNAs.

1.28 "NET SALES" shall mean [XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

1.29 "OPTIONED CLONE" shall have the meaning set forth in Section 7.1.

1.30 "OPTION PERIOD" shall have the meaning set forth in Section 7.3.

1.31 "PATENT COORDINATORS" shall mean a patent attorney or patent agent
representing CURAGEN and a patent attorney or patent agent representing
GENENTECH, as further described in Section 6.2.

1.32 "PATENT RIGHTS" means the rights and interests in and to issued
patents and pending patent applications in any country, including, but not
limited to, all provisional applications, substitutions, continuations,
continuations-in-part (solely to the extent claims of such continuations-in-part
cover Inventions) , divisions, and renewals, all letters patent granted thereon,
and all reissues, reexaminations and extensions thereof, whether owned now or
hereafter, solely or jointly by a Party, wherein at least one claim of such
patent right covers an Invention.

1.33 "PREVIOUSLY COMMITTED CLONE" shall mean any Clone which, at the
relevant time under Section 7.1.1, (a) is subject to a license or an option
previously granted by CURAGEN to any third party, or (b) a third party
collaborator of CURAGEN or subscriber to CURAGEN's GeneCalling or PathCalling
database has requested CURAGEN to full-length clone such Clone or has itself
commenced full-length cloning of such Clone and notified

Confidential Treatment Requested
<PAGE>

CURAGEN thereof, and provided that such third party still retains evaluation,
option or license rights to such Clone pursuant to the terms of a written
agreement with CURAGEN.

1.34 "PRIME RATE" shall mean the prime rate of interest as reported by
Citibank, N.A. In the event that Citibank, N.A. ceases to report such a rate,
the term "Prime Rate" shall mean the generally prevailing base corporate lending
rate of Fleet National Bank.

1.35 "PROJECT DATA" shall mean all information obtained by CURAGEN from the
processing of GENENTECH Proprietary Material in a particular Research Project,
including QC data, QEA/GeneCalling data, MIM/PathCalling data, sequence data and
any other information obtained or generated by CURAGEN in the performance of
each Research Project in the Research Program.

1.36 "PROJECT DATA SET" shall mean all Project Data resulting from a
discrete Research Project.

1.37 "QEA/GENECALLING" shall mean the software, database and other
technologies employed by CURAGEN for tagging and identifying the expression
level of specific gene fragments within a cDNA pool.

1.38 "RESEARCH COMMITTEE" or "RC" shall have the meaning set forth in
Section 2.2.1.

1.39 "RESEARCH PLAN" shall mean the written description of the Research
Program to be performed by CURAGEN and GENENTECH under this Agreement, as
further described in Section 2.1.3. The Research Plan may specify one or more
independent Research Projects.

1.40 "RESEARCH PROJECT" shall mean a particular project to process and
analyze a specified set of samples approved pursuant to Section 2.1.3. Each
individual Research Project shall involve the analysis of [XXXXX] samples,
unless otherwise agreed by the Parties.

1.41 "RESEARCH PROJECT INVENTION" shall mean any discovery, invention,
know-how or trade secret conceived or made (a) by employees of CURAGEN or
GENENTECH or jointly by employees of both in the performance of the Research
Program, (b) by GENENTECH employees in performing the specific following
activities utilizing any Data Set: (i) QEA and MIM data analysis, confirmation
of QEA or MIM data, fragment cloning and sequencing of a Clone, and (ii) full-
length cloning of a Clone, or (c) any discovery, invention, know-how or trade
secret deemed to be a Research Project Invention pursuant to the terms of this
Agreement or an

Confidential Treatment Requested
<PAGE>

executed License Agreement. Research Project Inventions shall not include
inventions conceived or made solely by GENENTECH outside of the Research Program
except as specifically set forth in (b) above.

1.42 "RESEARCH PROJECT PATENT RIGHTS" shall mean Patent Rights containing a
claim or claims covering Research Project Inventions.

1.43 "RESEARCH PROJECT PROPRIETARY MATERIAL" shall mean all substances made
by CURAGEN in the performance of the Research Program other than mRNA pools
extracted from GENENTECH Proprietary Material. Research Project Proprietary
Material shall include, without limitation, QEA fragments, MIM constructs and
materials derived or constructed from QEA fragments and MIM constructs,
including, without limitation, fragment and full length cDNA clones made by
CURAGEN in the performance of a Research Project.

1.44 "RESEARCH PROGRAM" shall mean the Research Projects to be performed by
CURAGEN and GENENTECH under this Agreement as described in the Research Plan and
amendments thereto.

1.45 "RESEARCH TERM" shall have the meaning set forth in Section 2.3.1.

1.46 "RETAINED GENE" shall have the meaning set forth in Section 7.7.

1.47 "TERM" shall have the meaning set forth in Section 8.1.

1.48 "TERRITORY" shall mean the world.

1.49 "VALID CLAIM(S)" shall mean an unexpired claim of any issued patent
within Patent Rights which has not been finally declared invalid or
unenforceable by a patent office or by a court or other body of competent
jurisdiction in any unappealed or unappealable decision and which has not been
lost through an interference or opposition proceeding.

2. RESEARCH PROGRAM

2.1 IMPLEMENTATION OF RESEARCH PROGRAM.
----------------------------------

2.1.1 Basic Provisions of Program.
---------------------------

(a) The objective of the Research Program will be to generate Project
Data Sets by performing Research Projects utilizing GENENTECH
Proprietary Material. CURAGEN and GENENTECH shall each use
commercially reasonable efforts to

10
<PAGE>

perform such tasks as are set forth in the Research Plan, including
the provision of such facilities, samples and materials (including
GENENTECH Proprietary Material), equipment and consultants as each
deems necessary to the achievement of such Research Plan. In carrying
out the Research Program, CURAGEN shall devote an average of at least
[XXXXX] FTEs per year to the Research Program over its five year
duration (the "Staffing Level") unless GENENTECH and CURAGEN have
agreed on an increase in the Staffing Level as provided in (b) below.

(b) GENENTECH may request an increase in the Staffing Level of up to
[XXXXX] additional FTEs per year to be devoted to the Research
Program, subject to the agreement of CURAGEN. CURAGEN will use
commercially reasonable efforts to increase the staffing level if
mutually agreed as promptly as practical. Once the Staffing Level is
increased, it may not be decreased [XXXXX] without the consent of
CURAGEN, which consent may be withheld at CURAGEN's sole discretion.

2.1.2 Collaborative Efforts and Reports.
---------------------------------

(a) The Parties agree that the successful execution of the Research
Program will require the collaborative use of both Parties' areas of
expertise. Each Party shall keep the RC fully informed about the
status of the portions of the Research Program they respectively
perform including, without limitation, summaries of their direct uses
of the Project Data itself for so long as GENENTECH shall have an
option to license such Project Data hereunder. CURAGEN shall promptly
provide GENENTECH with a description of Project Data Sets from
completed Research Projects. All information provided hereunder will
be treated as Confidential Information of the disclosing Party
pursuant to the provisions of Article 4.

(b) Scientists at CURAGEN and GENENTECH shall cooperate in the performance
of the Research Program and, subject to any confidentiality
obligations to third parties, shall exchange information and materials
as necessary to carry out the Research Program, subject to the
provisions of Section 4. Each Party will attempt

Confidential Treatment Requested
<PAGE>

to accommodate any reasonable request of the other Party to send or
receive personnel for purposes of collaborating or exchanging
information under the Research Program. Such visits and/or access will
have defined purposes and be scheduled in advance.

(c) CURAGEN will give written notice to GENENTECH and the RC promptly upon
completion of the Project Data Set from each Research Project.
"Completion" of a Project Data Set shall occur upon generation of all
completed QEA/GeneCalling data or MIM/PathCalling data from a Research
Project as contemplated by the Research Plan. Provision of access to
such data shall be promptly provided to GENENTECH through the
GeneScape(R) database.

(d) CURAGEN shall set up and maintain, throughout the Research Term, a
secure partition of its GeneScape(R) database and software for the
exclusive use of GENENTECH and CURAGEN solely for the purpose of
identifying genes from Exclusive Data Sets, and shall provide online
E-mail and telephone help during normal business hours in the use
thereof to GENENTECH. CURAGEN and GENENTECH shall jointly set up and
maintain a secure connection to said partition of the GeneScape(R)
database and software in order to give GENENTECH on-line access
thereto.

(e) GENENTECH will also receive, at its request, access to CURAGEN's
QEA/GeneCalling and MIM/PathCalling subscription databases and to
GeneTools pursuant to one or more subscription agreements to be
executed by the Parties with terms substantially as described in
Appendix E hereto. [XXXXX] Such subscription
----------

Confidential Treatment Requested
<PAGE>

agreements may be terminated by GENENTECH at any time, without
affecting the Research Program, either in their entirety or with
respect to any database at GENENTECH's sole discretion upon three (3)
months prior written notice. GENENTECH shall have no rights to use the
GeneScape(R) database and software except as expressly set forth
herein or in an executed database subscription agreement.

(f) If, after receiving access to any Data Set under the terms of this
Agreement, GENENTECH becomes aware that analysis of such Data Set has
led GENENTECH to file a patent application on, or to full-length
sequence, any Clone whose sequence or utility was identified from such
Data Set, GENENTECH shall promptly notify the RC of such patent filing
or sequencing. Any full-length Clone sequenced by GENENTECH after the
identification of such Clone from a Data Set shall be a Research
Project Invention, unless at the time of such sequencing, such full-
length sequence: (i) is in the public domain, (ii) is in the
possession of GENENTECH (as can be documented by written or computer
records), or (iii) is independently developed by GENENTECH (as can be
documented by written or computer records). If CURAGEN becomes aware
that analysis of a Data Set during GENENTECH's Exclusive Evaluation
Period pertaining to such Data Set has led CURAGEN to file a patent
application on, or to full-length sequence, any Clone whose sequence
or utility was identified from such Data Set, CURAGEN shall promptly
notify the RC of such patent filing or sequencing, and any full-length
Clone sequenced by CURAGEN after the identification of such Clone from
a Data Set shall be deemed a Research Project Invention, unless at the
time of such sequencing, such full-length sequence: (i) is in the
public domain, (ii) is in the possession of CURAGEN (as can be
documented by written or computer records), or (iii) is independently
developed by CURAGEN (as can be documented by written or computer
records).

2.1.3 Research Plans.
--------------

The Research Plan for the first twelve months of the Research Program shall
be agreed upon by the Parties within thirty (30) days of the Effective Date and
shall include the initial

[Confidential Treatment Requested]
<PAGE>

Research Projects and plans to implement the installation of access to the
GeneScape(R) database and software for GENENTECH. Every [XXXXX] during the
Research Term or at any time on request of either GENENTECH or CURAGEN, the
Research Plan shall be updated by CURAGEN and GENENTECH to cover the next
[XXXXX] and shall be approved by the RC no later than thirty (30) days before
the end of each semi-annual period. The Research Plan shall set forth specific
Research Projects for the period covered by the Research Plan. For each Research
Project, the Research Plan will be deemed to include the following activities:
[XXXXX] GENENTECH shall not perform the activities specified in (i)-(iii) above
except as part of the Research Program, or as permitted in Section 2.4.3, in an
executed License Agreement, or in a subscription agreement. During any Exclusive
Evaluation Period for a Data Set, CURAGEN shall not utilize such Data Set in
performing the activities specified in (i)-(iii) except as part of the Research
Program. The RC will consider adjustments in the Research Plan at any time upon
the request of GENENTECH or CURAGEN. Notwithstanding the foregoing, no project
shall become a Research Project without the express consent of both GENENTECH
and CURAGEN; provided, however, that CURAGEN shall consent to any reasonable
proposed Research Project which is not substantially similar to a project that
is ongoing, planned internally solely by CURAGEN, the subject of active
negotiation with a third party or subject to a prior commitment to a third
party, all the above as evidenced by written or computer records, and which
would not violate a prior restriction under an agreement with a third party.
During the Research Term, once a Research Project becomes part of the Research
Plan, such Research Project will not be discontinued (unless such
discontinuation is approved by the RC) regardless of any other negotiations or
commitments with third parties.

2.1.4 Exclusivity.
-----------

(a) CURAGEN agrees that, commencing upon inclusion of a Research Project
in the Research Plan, and continuing through the duration of any
subsequent Exclusive Evaluation Period, CURAGEN shall not undertake to
perform a substantially similar research project with any third party.

Confidential Treatment Requested
<PAGE>

(b) CURAGEN agrees that during any Exclusive Evaluation Period, CURAGEN
will not grant access to any Exclusive Data Set to any other party and
that during any Option Period, CURAGEN shall not grant to any third
party rights to any Optioned Clone or to any Licensed Products related
to such Optioned Clone. In addition, CURAGEN shall not, during any
Exclusive Evaluation Period, grant a third party any rights to option
or to license a Clone contained in the corresponding Exclusive Data
Set (i) which GENENTECH has requested CURAGEN to full-length clone or
(ii) for which GENENTECH has commenced full-length cloning and
notified CURAGEN thereof, or to option or license Licensed Products
relating to such a Clone. Notwithstanding the provisions of Article 4,
upon the expiration of any Exclusive Evaluation Period for any
Exclusive Data Set, CURAGEN shall have the right, at its sole option,
to make such Data Set and, subject to the provisions of Section 2.4.4,
reasonable descriptions of the data contained therein available to
third parties or to put the Data Set and such descriptions in the
subscription portion of the GeneScape(R) database. CURAGEN may perform
research or collaborate with third parties and grant to third parties
the right to exploit the results of any such research or
collaborations without restriction other than as expressly provided in
this Agreement or in an executed License Agreement.

(c) CURAGEN acknowledges that during the Research Program GENENTECH may
obtain useful proprietary information from Research Projects, Project
Data, CURAGEN Projects, CURAGEN Data and CURAGEN's databases and other
information which is not covered by a Valid Claim of a Research
Project Patent Right or a CURAGEN Project Patent Right (collectively,
"Know-How Information"). Without limitation, Know-How Information may
include identification of pathways involved in diseases or protein-
protein interactions involved in diseases, which involvement was not
previously known by GENENTECH. GENENTECH shall have a right to use
Know-How Information for all purposes and CURAGEN hereby grants
GENENTECH a nonexclusive, worldwide, sublicensable license to use
Know-How Information for such

15
<PAGE>

purposes. In the event that GENENTECH or a Sublicensee develops a
product which is not covered by a Valid Claim of a Research Project
Patent Right, a Valid Claim of a CURAGEN Project Patent Right or a
Valid Claim of an Extended Research Patent Right and is not licensed
to GENENTECH under a License Agreement or an executed subscription
agreement, and which was discovered by GENENTECH or a Sublicensee
based directly and materially on its use of such Know-How Information
(a "Know-How Information Product"), GENENTECH shall pay to CURAGEN a
[XXXXX] on Net Sales of such Know-How Information Product. Without
limitation, GENENTECH's development of a product which has the
intended biological activity of modifying the outcome of a pathway by
binding to a protein or inhibiting protein function and such pathway
was directly identified in a Research Project, such product would be a
Know-How Information Product subject to the [XXXXX] set forth
above, provided that such pathway identification makes a direct and
material contribution to the development of such product.
Notwithstanding the above, the obligation above to pay a [XXXXX] to
CURAGEN on Net Sales of Know-How Information Products shall not apply
to GENENTECH if, at the time of receipt by GENENTECH from CURAGEN and
first use by GENENTECH in the discovery of such Know-How Information
Product, such Know-How Information: (i) was in the public domain; (ii)
was known to, or in the possession or control of, GENENTECH (as
demonstrated by its written or computer records); (iii) had already
been obtained by GENENTECH from sources independent of CURAGEN; or
(iv) was developed by GENENTECH independently of such Know-How
Information (as can be demonstrated by written or computer records).
The right contained in this paragraph does not include any license
under any patent claims owned or controlled in whole or in part by
CURAGEN.

(d) GENENTECH agrees that, until any such information is in the public
domain other than as a result of a disclosure by GENENTECH in
violation of this Agreement, an executed subscription agreement or an
executed License

Confidential Treatment Requested
<PAGE>

Agreement, or until GENENTECH discovers or obtains such information
independently of CURAGEN without use of CURAGEN Data Sets or
Inventions or knowledge thereof, GENENTECH will only utilize Project
Data, CURAGEN Data, CURAGEN Project Proprietary Material, Research
Project Proprietary Material, Inventions or Patent Rights as expressly
provided herein or in an executed License Agreement or executed
subscription agreement. CURAGEN agrees that CURAGEN will not utilize
any GENENTECH Proprietary Material, Project Data, Research Project
Proprietary Material, Research Project Inventions or Research Project
Patent Rights other than as expressly provided herein.

(e) Royalty payments due pursuant to subsection (c) above shall be made to
CURAGEN in United States Dollars quarterly within sixty (60) days
following the end of each calendar quarter for which royalties are
due. Each royalty payment shall be accompanied by a report
summarizing the total Net Sales for each Know-How Information Product
during the relevant three-month period and the calculation of
royalties, if any, due thereon pursuant to this Section 2.1.4. All
royalties shall be payable in full in the United States in United
States Dollars, regardless of the countries in which sales are made.
For the purpose of computing Net Sales for Know-How Information
Products sold in a currency other than United States dollars, such
currency shall be converted into United States dollars at the exchange
rate for buying U.S. dollars set forth in The Wall Street Journal for
-----------------------
the last business day of the calendar quarter.

(f) GENENTECH shall pay royalties with respect to each Know-How
Information Product on a country by country basis for a period of
[XXXXX] from the first commercial sale of such Know-How Information
Product in such country. Following such period, GENENTECH shall have a
fully paid-up, irrevocable license in such country to make, have made,
use, have used, sell, have sold, offer for sale, import and have
imported such Know-How Information Product in such country.

Confidential Treatment Requested
<PAGE>

(g) OVERDUE ROYALTIES. Royalties not paid within the time period set
-----------------
forth in this Section 2.1.4 shall bear interest at [XXXXX] accruing
monthly, from the due date until paid in full.

(h) RECORDS RETENTION. AUDITS. GENENTECH shall keep for [XXXXX] from the
date of each payment of royalties complete and accurate records of
sales by GENENTECH of each Know-How Information Product in sufficient
detail to allow the accruing royalties to be determined accurately.
CURAGEN shall have the right for a period of [XXXXX] after receiving
any report or statement with respect to royalties due and payable to
appoint an independent certified public accountant reasonably
acceptable to GENENTECH to inspect the relevant records of GENENTECH
to verify such report or statement. GENENTECH shall make its records
available for inspection by such independent certified public
accountant during regular business hours at such place or places where
such records are customarily kept, upon reasonable notice from
CURAGEN, solely to verify the accuracy of the reports and payments.
Such inspection right shall not be exercised more than once in any
calendar year nor more than once with respect to sales of any Know-How
Information Product in any given payment period. CURAGEN agrees to
hold in strict confidence all information concerning royalty payments
and reports, and all information learned in the course of any audit or
inspection, except to the extent necessary for CURAGEN to reveal such
information in order to enforce its rights under this Agreement or if
disclosure is required by law, regulation or judicial order. The
results of each inspection, if any, shall be binding on both Parties.
CURAGEN shall pay for such inspections, except that in the event there
is any upward adjustment in aggregate royalties payable for any year
shown by such inspection of more than [XXXXX] of the amount paid,
GENENTECH shall pay for such inspection.

2.1.5 Research License. CURAGEN hereby grants to GENENTECH a non-
----------------
exclusive license under CURAGEN Background Inventions and CURAGEN's interest in
any Inventions solely during the Term hereof and to the extent necessary to
allow GENENTECH to perform its

Confidential Treatment Requested
<PAGE>

obligations under the Research Program and to exercise the rights granted
herein, including without limitation, the evaluation hereunder of Research
Project Data, CURAGEN Data and Clones.

2.1.6 Software License. Any access granted to the GeneScape(R) database
----------------
and software hereunder, or any components thereof, is granted according to the
following terms:

The GeneScape(R) database, software and display screens are protected by
copyright, patent, trade secret and other intellectual property laws. CURAGEN
hereby grants to GENENTECH and its employees a non-exclusive non-transferable
license to access the GeneScape(R) database and software solely for the purposes
of and during the Term of this Agreement. GENENTECH shall access Project Data
Sets and CURAGEN Data Sets only through the GeneScape(R) database and software
provided by CURAGEN. GENENTECH shall not copy the GeneScape(R) database,
software or display screens except as occurs during the normal course of
CURAGEN-provided access. In particular, GENENTECH will not retain such normal
copies for a time not reasonably related to CURAGEN-provided access. GENENTECH
shall not reverse engineer, decompile, or disassemble the GeneScape(R) software
or display screens. The GeneScape(R) database and software embody trade secrets
of CURAGEN that are considered Confidential Information of CURAGEN and subject
to the provisions of Article 6 hereof.

2.2 RESEARCH COMMITTEE.
------------------

2.2.1 Establishment and Functions of the RC.
-------------------------------------

(a) CURAGEN and GENENTECH shall establish a "Research Committee" (the
"RC"). The RC will act on behalf of the two companies and will be
responsible for the planning and monitoring of the Research Program.
In particular, the activities of the RC shall include reviewing
progress in the Research Program and recommending necessary
adjustments to the Research Program, including any Research Project
substitutions deemed desirable based on results and on GENENTECH's
commercial interest, as the research and development progresses.

19
<PAGE>

(b) In planning and monitoring the Research Program, the RC shall assign
tasks and responsibilities taking into account each Party's respective
specific capabilities and expertise in order in particular to avoid
duplication and enhance efficiency and synergies. The RC shall also
monitor the assignment of CURAGEN employees to the Research Program
and the allocation of such CURAGEN employees to specific Research
Projects.

2.2.2 RC Membership.
-------------

CURAGEN and GENENTECH each shall appoint, in their sole discretion, three
(3) members to the RC, which shall include a Co-Chair to be designated by
GENENTECH and a Co-Chair to be designated by CURAGEN. Substitutes or alternates
for the Co-Chairs or other RC members may be appointed at any time by notice in
writing to the other Party. The Parties may mutually agree to change the size
of the RC as long as there shall be an equal number of representatives of each
party on the RC. The initial Co-Chairs and other RC members shall be designated
by the parties upon execution of this Agreement. CURAGEN shall appoint a
Project Coordinator, who shall be reasonably satisfactory to GENENTECH, to serve
as the principal CURAGEN liaison with GENENTECH for the Research Program. Such
Project Coordinator will be one of CURAGEN's members of the RC.

2.2.3 Meetings.
--------

The RC shall meet once a year in New Haven, Connecticut, and once a year in
South San Francisco, California unless the Parties agree otherwise. Any
additional meetings shall be held at places and on dates selected by the Co-
Chairs of the RC. The RC shall also conduct two meetings a year by conference
call, or as otherwise agreed by the RC members. In addition, the RC may act
without a formal meeting by a written memorandum signed by the Co-Chairs of the
RC. Whenever any action by the RC is called for hereunder during a time period
in which the RC is not scheduled to meet, the Co-Chairs of the RC shall cause
the RC to take the action in the requested time period by calling a special
meeting, conference call or by action without a meeting. Subject to the
obligations set forth in Section 4, representatives of each Party, in addition
to the members of the RC, may attend RC meetings at the invitation of either
Party with the prior approval of the other Party, which shall not be
unreasonably withheld.

2.2.4 Minutes.
-------

20
<PAGE>

The RC shall keep accurate minutes of its deliberations which record all
proposed decisions and all actions recommended or taken. Drafts of the minutes
shall be delivered to the Co-Chairs of the RC within twenty (20) days after the
meeting. The Party hosting the meeting shall be responsible for the preparation
and circulation of the draft minutes. Draft minutes shall be edited by the Co-
Chairs and shall be issued in final form only with their approval and agreement
as evidenced by their signatures on the minutes.

2.2.5 Quorum; Voting; Decisions.
-------------------------

At each RC meeting, at least two (2) member(s) appointed by each Party
present in person or by telephone shall constitute a quorum and decisions shall
be made by majority vote. Each RC member shall have one vote on all matters
before the RC, provided that the member or members of each Party present at an
RC meeting shall have the authority to cast the votes of any of such Party's
members on the RC who are absent from the meeting. Notwithstanding the
foregoing, the objective of the Parties to this Agreement is that decisions of
the RC shall be made by consensus. However, except as otherwise set forth
herein, in the event that the RC is unable to resolve any matter before it as
set forth above, such matter shall be resolved by GENENTECH, taking into
reasonable consideration the best interests of both GENENTECH and CURAGEN.
Notwithstanding the foregoing, no project shall become a Research Project
without the express consent of both GENENTECH and CURAGEN; provided, however,
that CURAGEN shall consent to any reasonable proposed Research Project which is
not substantially similar to a project that is ongoing, planned internally
solely by CURAGEN, the subject of active negotiation with a third party or
subject to a prior commitment to a third party, all the above as evidenced by
written or computer records, and which would not violate a prior restriction
under an agreement with a third party.

2.2.6 Expenses.
--------

CURAGEN and GENENTECH shall each bear all expenses of their respective RC
members related to their participation on the RC and attendance at RC meetings.

2.2.7 Record Keeping.
--------------

Throughout the Term of this Agreement the Parties will maintain a list of
Research Projects and start dates and completion dates thereof, Exclusive Data
Sets, Exclusive Evaluation

21
<PAGE>

Periods and extensions thereof, Option Periods and extensions thereof and
Optioned Clones. Such task shall be performed by the RC unless otherwise
mutually agreed by the Parties.

2.3 RESEARCH TERM.
-------------

2.3.1 Term of the Research Program.
----------------------------

The Research Program shall expire five (5) years after the Effective Date
unless extended as provided below or unless earlier terminated by either Party
by virtue of termination of the Research Program or this Agreement pursuant to
the provisions of Sections 2.3.3 or 2.3.4 and/or Article 8 (the "Research
Term").

2.3.2 Extension of the Research Program.
---------------------------------

The Research Term may be extended upon prior [XXXXX] written notice by
mutual agreement of the Parties on terms to be agreed upon between the Parties.

2.3.3 Termination of the Research Program.
-----------------------------------

(a) GENENTECH may terminate the Research Program at its sole discretion
effective upon the 18 month anniversary of the Effective Date by
giving written notice to CURAGEN within one (1) month prior to such
date and by: (i) paying CURAGEN up to Three Million Seven Hundred
and Fifty Thousand Dollars ($3,750,000) in cash within thirty (30)
days of giving CURAGEN such written notice of termination and/or
(ii) forgiving up to Three Million Seven Hundred and Fifty Thousand
Dollars ($3,750,000) of any outstanding balance under the Loan
pursuant to a written instrument delivered to CURAGEN within thirty
(30) days of giving CURAGEN such written notice of termination, in
any combination of (i) and (ii) such that the combined payment and
forgiveness amounts total Three Million Seven Hundred and Fifty
Thousand Dollars ($3,750,000). In the event that, as of one month
following such termination date (the "Section 2.3.3(a) Balance
Date"), the outstanding balance under the Loan is less than
$3,750,000, GENENTECH will forgive the amount of such outstanding
balance and may, in lieu of or in addition to paying cash as
specified in (i) above, elect to pay the balance of the $3,750,000
by transferring back to CURAGEN within ten (10) days of the Section
2.3.3(a) Balance Date, shares of CURAGEN stock received by GENENTECH
pursuant to the terms of the Note at the value (as determined

[Confidential Treatment Requested]
<PAGE>

pursuant to the terms of the Note) as of the Section 2.3.3(a)
Balance Date in an amount necessary to bring the combined
forgiveness, cash payment and payment in stock amounts to a total of
$3,750,000. Any such early termination of the Research Program shall
automatically terminate any ongoing Exclusive Evaluation Periods
hereunder. In addition, all but [XXXXX] existing on the effective
date of such termination shall be terminated and GENENTECH may elect
which [XXXXX] shall survive upon notice given to CURAGEN prior to
termination. All of GENENTECH's rights under this Agreement with
respect to such [XXXXX] shall be unaffected by any such termination
and any License Agreement executed prior to any such termination
shall survive such termination.

(b) Provided that GENENTECH has elected to proceed under Section
2.3.4(a)(iii) on the third anniversary of the Effective Date,
GENENTECH may terminate the Research Program at its sole discretion
at any time after the third anniversary of the Effective Date upon
three (3) months prior written notice to CURAGEN. Any such early
termination of the Research Program shall not affect GENENTECH's
rights under any Exclusive Evaluation Periods or any Option Periods
then ongoing, any License Agreement executed between the Parties
prior to such termination or any Options that have been exercised
prior to such termination for which the License Agreement has not
yet been executed; provided, however, that any surviving Exclusive
Evaluation Periods shall not be extendible pursuant to Section
2.4.2.

2.3.4 Rights at Third and Fifth Anniversary
-------------------------------------

(a) Upon the third anniversary of the Effective Date, unless previously
terminated, GENENTECH shall have three choices for how to proceed
with respect to continuation or termination of the Research Program
and/or this Agreement:

(i) GENENTECH may, by written notice given within thirty (30) days
prior to such third anniversary date, terminate the Research
Program and this Agreement and all licenses granted pursuant to
any executed License

Confidential Treatment Requested
<PAGE>

Agreement and all Exclusive Evaluation Periods and Options
granted pursuant to this Agreement. No payment will be due
CURAGEN.

(ii) GENENTECH may terminate the Research Program by written notice
given within thirty (30) days prior to such third anniversary
date, but if GENENTECH: (x) pays CURAGEN up to $7,500,000 in
cash within 30 days of the third anniversary date and/or (y)
forgives up to $7,500,000 of any outstanding balance under the
Loan (as defined in Section 3.2 below) pursuant to a written
instrument delivered to CURAGEN within 30 days of such third
anniversary date, in any combination of (x) and (y) such that
the combined payment and forgiveness amounts total $7,500,000,
then GENENTECH's termination of the Research Program shall not
affect GENENTECH's rights under any Exclusive Evaluation
Periods or any Option Periods then ongoing, any License
Agreement executed between the Parties prior to such
termination, or any Options that have been exercised by
GENENTECH prior to such termination for which the License
Agreement has not yet been executed; provided, however, that
any such Exclusive Evaluation Periods shall not be extendible
pursuant to Section 2.4.2. In the event that, as of one month
following such termination date (the "Section 2.3.4(a)(ii)
Balance Date"), the outstanding balance under the Loan is less
than $7,500,000, GENENTECH will forgive the amount of such
outstanding balance and may, in lieu of or in addition to
paying cash as specified in (x) above, elect to pay the balance
of the $7,500,000 by transferring back to CURAGEN within ten
(10) days of the Section 2.3.4(a)(ii) Balance Date, shares of
CURAGEN stock received by GENENTECH pursuant to the terms of
the Note at the value (as determined pursuant to the terms of
the Note) as of the Section 2.3.4(a)(ii) Balance Date in an
amount necessary to bring the combined forgiveness, cash
payment and payment in stock amounts to a total of $7,500,000.
All provisions of this Agreement governing such Exclusive
Evaluation
24

[Confidential Treatment Requested]
<PAGE>

Periods, Option Periods, Options and related license rights
shall continue in full force and effect.

(iii) GENENTECH may continue with the Research Program and this
Agreement in their entirety and retain its rights in any
Exclusive Evaluation Periods and any Option Periods then
ongoing, any License Agreement executed between the parties
prior to such termination and any Options that have been
exercised by GENENTECH prior to such early termination for
which the License Agreement has not yet been executed. Under
this choice, GENENTECH shall: (x) pay CURAGEN up to $7,500,000
in cash within 30 days of the third anniversary date and/or
(y) forgive up to $7,500,000 of any outstanding balance under
the Loan pursuant to a written instrument delivered to CURAGEN
within 30 days of such third anniversary date, in any
combination of (x) and (y) such that the combined payment and
forgiveness amounts total $7,500,000. In the event that, as of
one month following such termination date (the "Section
2.3.4(a)(iii) Balance Date"), the outstanding balance under
the Loan is less than $7,500,000, GENENTECH will forgive the
amount of such outstanding balance and may, in lieu of or in
addition to paying cash as specified in (x) above, elect to
pay the balance of the $7,500,000 by transferring back to
CURAGEN within ten (10) days of the Section 2.3.4(a)(iii)
Balance Date, shares of CURAGEN stock received by GENENTECH
pursuant to the terms of the Note at the value (as determined
pursuant to the terms of the Note) as of the Section
2.3.4(a)(iii) Balance Date in an amount necessary to bring the
combined forgiveness, cash payment and payment in stock
amounts to a total of $7,500,000. Under this Section
2.3.4(a)(iii) only, the maximum principal amount on the Loan
shall increase to Twenty-Six Million Dollars as described in
Section 3.2(a).

(b) In the event that the Research Program does not terminate as set
forth in Section 2.3.3 or Section 2.3.4(a)(i) or (ii), upon the
fifth anniversary of the Effective Date,

[Confidential Treatment Requested]
<PAGE>

the Research Program, this Agreement and all licenses to any
Licensed Clones optioned pursuant to Section 7.1 from an Exclusive
Data Set which was completed after the third anniversary of the
Effective Date and all licenses to any Licensed Clones licensed to
GENENTECH without an Option from any such Exclusive Data Set
completed after the third anniversary of the Effective Date, shall
terminate as of such fifth anniversary date unless GENENTECH: (i)
pays CURAGEN up to an additional Seven Million Five Hundred Thousand
Dollars ($7,500,000) in cash within thirty (30) days of such fifth
anniversary date and/or (ii) forgives up to an additional Seven
Million Five Hundred Thousand Dollars ($7,500,000) of any
outstanding balance under the Loan pursuant to a written instrument
delivered to CURAGEN within thirty (30) days of such fifth
anniversary date, in any combination of (i) and (ii) such that the
combined payment and forgiveness amounts total an additional Seven
Million Five Hundred Thousand Dollars ($7,500,000). In the event
that, as of such termination date, the outstanding balance under the
Loan is less than $7,500,000, GENENTECH will forgive the amount of
such outstanding balance and may, in lieu of or in addition to
paying cash as specified in (i) above, elect to pay the balance of
the $7,500,000 by transferring back to CURAGEN within ten (10) days
of such termination date, shares of CURAGEN stock received by
GENENTECH pursuant to the terms of the Note at the value (as
determined pursuant to the terms of the Note) as of such termination
date in an amount necessary to bring the combined forgiveness, cash
payment and payment in stock amounts to a total of $7,500,000. Such
termination shall not affect GENENTECH's rights under any Exclusive
Evaluation Period, Option Period or License Agreement then ongoing
which relates to a Data Set completed prior to the third anniversary
of the Effective Date, and all provisions of this Agreement
governing such Exclusive Evaluation Periods, Option Periods, Options
and related license rights shall continue in full force and effect.

Confidential Treatment Requested
<PAGE>

2.3.5 Effect of Termination.
---------------------

(a) Upon any termination of the Research Program pursuant to Section
2.3.3 or 2.3.4, GENENTECH shall grant to CURAGEN a license as set
forth in Section 7.5 under GENENTECH's rights in Research Project
Patent Rights and Research Project Inventions to the extent not
previously granted to CURAGEN or not expressly retained by GENENTECH
pursuant to the terms of Sections 2.3.3 or 2.3.4 of this Agreement.
[XXXXX]

(b) Any termination of the Research Program under Section 2.3.3 or
Section 2.3.4 shall be without prejudice to the rights of either
Party against the other, then accruing or otherwise accrued under
this Agreement and upon any such termination, all remaining
GENENTECH Proprietary Material provided to CURAGEN under this
Agreement shall be returned to GENENTECH or destroyed, except as
provided in Section 7.5, and all remaining CURAGEN Project
Proprietary Material and Research Project Proprietary Material
provided to GENENTECH under this Agreement shall be returned to
CURAGEN or destroyed, except for any CURAGEN Project Proprietary
Material or Research Project Proprietary Material licensed pursuant
to an executed License Agreement or which is the subject of a
surviving Evaluation Period or Option.

2.4 PROJECT DATA EVALUATIONS.
------------------------

2.4.1 Exclusive Access. From the time at which a Research Project is
----------------
begun and continuing through a [XXXXX] which shall commence at the beginning of
the calendar quarter following the calendar quarter in which delivery of a
proper notice of a complete Project Data Set is made pursuant to Section
2.1.2(c) and access to such complete Project Data Set is given to GENENTECH (the
"Exclusive Evaluation Period"), GENENTECH shall have the right

Confidential Treatment Requested
<PAGE>

to use all Project Data, Research Project Inventions and Research Project
Material related to such Research Project to evaluate Clones and the proteins
encoded thereby and derived therefrom for potential licensing. During each
Exclusive Evaluation Period, CURAGEN (a) shall not use such Project Data Set
(which, during such Exclusive Evaluation Period shall be an Exclusive Data Set)
and related Research Project Proprietary Material for any purpose other than
conducting the Research Program hereunder and (b) shall keep such Project Data
Set and related Research Project Inventions and Research Project Proprietary
Material confidential and will not disclose or transfer the Project Data Set, or
related Research Project Inventions and Research Project Proprietary Material to
third parties by publication or otherwise, without the prior written consent of
GENENTECH. Notwithstanding the foregoing, CURAGEN shall have the right during
such Exclusive Evaluation Period to use, but not to transfer to third parties
(except pursuant to an agreement with a third party who has identified such
Clone independently of the Project Data), all Clones or the proteins derived
therefrom, outside of the Research Program as part of CURAGEN's libraries for
internal, general, non-directed research purposes (including, without
limitation, full length cloning, expression analysis, protein-protein
interactions and drug screening). For example, but without limitation, inclusion
of the Clone together with other clones in research to determine multiple
protein-protein interactions, or inclusion of the Clone together with other
clones in a screen against one or more molecules to determine inhibition would
be "non-directed" research, whereas activities associated with choosing a
specific Clone and conducting research to elucidate the biological activity of
such Clone (e.g., generating antibodies to the Clone, testing the Clone or
protein encoded thereby in preclinical models, enriching libraries with such
Clone to purposefully look for proteins which bind to such Clone) would be
considered "directed" research and CURAGEN shall not be permitted to perform
such activities under this Section 2.4.1. CURAGEN shall keep GENENTECH
reasonably informed of the results of any such research and patent applications
and patents relating to such research on a confidential and timely basis in
order to allow GENENTECH to make informed decisions regarding the exercise of
its option and license rights hereunder. All inventions conceived or made during
such research which relate to the Clone, the proteins derived therefrom
(including antibodies), homologs or mutants with substantially the same
biological activity as such Clone, or uses thereof, shall be deemed Research
Project Inventions subject to GENENTECH's option

28
<PAGE>

rights for such Clone under Article 7. All other inventions from such research
shall be Extended Research Inventions and GENENTECH will have rights to such
Extended Research Inventions and Extended Research Patent Rights resulting
therefrom as provided in Article 7 hereof and in Section 2.3 of the License
Agreement attached hereto as Appendix C.

2.4.2 Extensions. GENENTECH may elect to extend the Exclusive Evaluation
----------
Period for any Project Data Set that has become an Exclusive Data Set, and all
rights thereunder, for an additional twelve (12) months by giving written notice
to CURAGEN and making a payment of [XXXXX] to CURAGEN prior to expiration of the
initial Exclusive Evaluation Period for such Project Data Set. An Exclusive
Evaluation Period will be automatically extended for up to three months in order
to allow the completion of any reasonable requests for confirmation of data made
by GENENTECH during the primary twelve-month period of such Exclusive Evaluation
Period.

2.4.3 Non-exclusive Access. Following the expiration of the
--------------------
Exclusive Evaluation Period for a Project Data Set, GENENTECH shall continue to
have non-exclusive access to such Project Data Set solely through the
GeneScape(R) database and solely for the purpose of identifying Clones of
interest to GENENTECH in such Data Set, or to the extent otherwise set forth in
an executed subscription agreement. However, the preceding restriction shall
not apply to any information which becomes part of the public domain other than
as a result of a disclosure by GENENTECH in violation of this Agreement, an
executed License Agreement or an executed subscription agreement.

2.4.4. Data Annotations. Upon the expiration of the Exclusive Evaluation
----------------
Period for each Project Data Set, CURAGEN shall furnish to GENENTECH reasonable
descriptions of the Project Data Set to be included as annotations in the
GeneScape(R) database with the Project Data Set. GENENTECH shall have a period
of [XXXXX] to review such descriptions and advise CURAGEN of reasonable
objections. CURAGEN shall not include in the GeneScape(R) database any
descriptions, or portions thereof, to which GENENTECH reasonably objects.
CURAGEN shall not include any Confidential Information of GENENTECH (as defined
in Section 4.1 below) in any annotation.

[Confidential Treatment Requested]
<PAGE>

2.5 CURAGEN PROJECTS.
----------------

2.5.1 Access. GENENTECH shall have the option, for such reasonable period
------
or periods as CURAGEN may specify, to review specified proprietary CURAGEN Data
Sets and related CURAGEN Project Inventions, which are offered by CURAGEN in its
sole discretion to GENENTECH for review and to request exclusive access thereto.
Such option shall be exercisable as set forth in Section 2.5.2 below.

2.5.2 Exclusive Evaluation Option. Subject to any rights which CURAGEN
---------------------------
may grant or have granted to third parties, GENENTECH may request at any time
during the time period specified by CURAGEN (as described in Section 2.5.1) that
it receive exclusive access to any CURAGEN Data Set offered to GENENTECH
pursuant to Section 2.5.1. Such exclusive access to such CURAGEN Data Set shall
be granted to GENENTECH for an Exclusive Evaluation Period of [XXXXX] commencing
upon CURAGEN's receipt of written notice from GENENTECH and payment of an
exclusive evaluation fee of [XXXXX], unless GENENTECH is notified by CURAGEN at
any time prior to CURAGEN's receipt of GENENTECH's written notice that exclusive
access to such CURAGEN Data Set is no longer available as a result of CURAGEN's
agreements with third parties existing at the time of the request. During each
Exclusive Evaluation Period, CURAGEN (a) shall not use such CURAGEN Data Set
(which, during such Exclusive Evaluation Period shall be an Exclusive Data Set)
and related CURAGEN Project Proprietary Material for any purpose other than
conducting the Research Program hereunder and (b) shall keep such CURAGEN Data
Set and related CURAGEN Project Inventions and CURAGEN Project Proprietary
Material confidential and will not disclose or transfer the CURAGEN Data Set, or
related CURAGEN Project Inventions and CURAGEN Project Proprietary Material to
third parties by publication or otherwise, without the prior written consent of
GENENTECH. Notwithstanding the foregoing, CURAGEN shall have the right during
such Exclusive Evaluation Period to use, but not transfer to third parties
(except pursuant to an agreement with a third party who has identified such
Clone independently of the CURAGEN Data) all Clones or the proteins derived
therefrom, outside of the Research Program as part of CURAGEN's libraries for
internal, general, non-directed research purposes (including, without
limitation, full length cloning, protein-protein interactions and drug
screening). For example, but without limitation, inclusion of the Clone together
with other clones in research to

Confidential Treatment Requested
<PAGE>

determine multiple protein-protein interactions, or inclusion of the Clone
together with other clones in a screen against one or more molecules to
determine inhibition would be "non-directed" research, whereas activities
associated with choosing a specific Clone and conducting research to elucidate
the biological activity of such Clone (e.g., generating antibodies to the Clone,
testing the Clone or protein encoded thereby in preclinical models, enriching
libraries with such Clone to purposefully look for proteins which bind to such
Clone) would be considered "directed" research and CURAGEN shall not be
permitted to perform such activities under this Section 2.5.2. Such research
shall be Extended Research, and GENENTECH shall have rights to such Extended
Research and Extended Research Inventions and Extended Research Patent Rights
resulting therefrom as provided in Article 7 hereof and in Section 2.3 of the
License Agreement attached hereto as Appendix C. CURAGEN shall keep GENENTECH
----------
reasonably informed of the results of any such Extended Research and Extended
Research Patent Rights on a confidential and timely basis in order to allow
GENENTECH to make informed decisions regarding the exercise of its option and
license rights hereunder.

2.5.3 Extensions. GENENTECH may elect to extend the Exclusive Evaluation
----------
Period for any CURAGEN Data Set for an additional [XXXXX] by giving written
notice to CURAGEN and making a second payment of [XXXXX] to CURAGEN prior to
expiration of the initial Exclusive Evaluation Period for such CURAGEN Data Set.
An Exclusive Evaluation Period will be automatically extended for up to [XXXXX]
in order to allow the completion of any reasonable requests for confirmation of
data made by GENENTECH during the primary [XXXXX] period of such Exclusive
Evaluation Period. Following the expiration of the Exclusive Evaluation Period
for a CURAGEN Data Set, GENENTECH shall have no access to or right to use such
CURAGEN Data Set, other than as expressly permitted in an executed License
Agreement.

2.6 DATA FROM PREVIOUS PROJECTS. Pursuant to the Collaboration
---------------------------
Agreements, CURAGEN has generated the data sets listed on Appendix D hereto and
----------
has provided such data sets to GENENTECH. Notwithstanding any other provision
of the Collaboration Agreements between the Parties, such data sets shall be
deemed Project Data Sets for all purposes hereunder and shall be deemed
completed as of the date indicated for each data set on Appendix D. GENENTECH
----------
shall have exclusive access to all such Project Data Sets for Exclusive
Evaluation

Confidential Treatment Requested
<PAGE>

Periods commencing on such indicated completion dates and continuing as provided
in Section 2.4, and shall have evaluation and option rights as otherwise
provided for Project Data Sets herein.

3. FINANCIAL TERMS

3.1 EQUITY INVESTMENT. GENENTECH agrees to make an equity investment in
-----------------
CURAGEN in the amount of Five Million Dollars ($5,000,000), such investment to
be made in a transaction exempt from registration under the Securities Act of
1933 pursuant to the terms of a stock purchase agreement in substantially the
form of Appendix F hereto.

3.2 LOAN COMMITMENT. As partial consideration for rights granted
---------------
hereunder, GENENTECH hereby commits to the following:

(a) GENENTECH shall, subject to the terms set forth below, make funds
available to CURAGEN for general corporate purposes in the form of a
loan or loans to CURAGEN in an amount up to Twenty-One Million Dollars
($21,000,000.00) (the "Loan"). Unless this Agreement or the Research
Program has been terminated for any reason (except that in the event
of termination pursuant to Section 2.3.3(a) or 2.3.4(a), CURAGEN shall
be permitted to continue to draw down the Loan for a period of thirty
(30) days following any such notice of termination under Section
2.3.3(a) or Section 2.3.4(a)), and subject to the drawdown limits
discussed below, CURAGEN may, in such amounts and at such times as
CURAGEN, in its sole discretion, may determine, draw down the balance
of the Loan over a period of five (5) Loan Years (as defined below)
following the Effective Date. For the purposes of this section, a
"Loan Year" commences on the Effective Date or an anniversary thereof
and terminates twelve months later. GENENTECH shall not be obligated
to advance more than Nine Million Dollars ($9,000,000) in the first
Loan Year, or more than a total Sixteen Million Dollars ($16,000,000)
in the first two Loan Years or to advance any funds under the Loan at
any time during which an Event of Default (as defined in the Note) has
occurred and is continuing under the Note (defined below).
Additionally, in the event that a temporary restraining order or
preliminary injunction is entered against CURAGEN by a court of
competent jurisdiction, the effect of which is to enjoin CURAGEN from
utilizing its

Confidential Treatment Requested
<PAGE>

proprietary genomics technologies such that it is substantially unable
to perform the Research Program, for as long as such temporary
restraining order or preliminary injunction remains outstanding
GENENTECH shall not be obligated to advance any funds under the Loan.
GENENTECH's obligation to advance any funds under the Loan shall
terminate upon the earlier to occur of (i) the last day of the fifth
Loan Year, (ii) CURAGEN's receipt of notice of termination or the
expiration of the Research Program or this Agreement, or (iii)
termination or the expiration of the Research Program or this
Agreement, except that in the event of termination pursuant to Section
2.3.3(a) or 2.3.4(a), CURAGEN shall be permitted to continue to draw
down the Loan for a period of thirty (30) days following notice of
such termination under Section 2.3.3(a) or Section 2.3.4(a).
Notwithstanding the foregoing, if GENENTECH has elected to continue
this Agreement pursuant to Section 2.3.4(a)(iii), the maximum
principal amount of the Loan will be increased to a total of Twenty-
Six Million Dollars ($26,000,000.00), and CURAGEN may thereafter draw
down the balance of such principal amount subject to the conditions
described above.

(b) On the Effective Date, CURAGEN shall execute and deliver to GENENTECH
an unsecured note, substantially in the form set forth in Appendix B
----------
attached hereto and made a part hereof (the "Note"), evidencing the
Loan. The schedule attached to the Note shall be revised each time
any amount is drawn down under the Loan and each time any amount is
repaid.

(c) In the event that CURAGEN makes any repayment hereunder in CURAGEN
Convertible Non-Voting Common Stock and CURAGEN is eligible to file a
registration statement on Form S-3 (or successor short form) at the
time of repayment, then within [XXXX] of the repayment date, CURAGEN
shall file a registration statement on Form S-3 covering the resale by
GENENTECH of the shares issuable upon conversion of any shares of
Convertible Non-Voting Common Stock so delivered to GENENTECH.

Confidential Treatment Requested
<PAGE>

3.3 ADDITIONAL RESEARCH FUNDING.
---------------------------

In partial consideration of the work to be done by CURAGEN in the Research
Program, GENENTECH will pay CURAGEN non-refundable research payments of [XXXXX]
[XXXXX] in the Staffing Level above [XXXXX] FTEs. Such payments will be made
quarterly in advance, commencing on the first day of any calendar quarter in
which the Staffing Level is to increase above [XXXXX], and on or before the
first day of each calendar quarter thereafter. [XXXXX] In the event that the
Staffing Level is to change during any calendar quarter, such payment shall be
pro-rated accordingly, if necessary, based on the above-specified level of
funding per FTE. GENENTECH will fund its own activities under the Research
Program.

3.4 ADDITIONAL ADVANCE.
------------------

Notwithstanding the provisions of Section 3.2(a), in the event that, during
the term of the Loan, CURAGEN completes a public offering of shares of CURAGEN
Common Stock after any portion of the Note has been converted to CURAGEN Series
F Preferred Stock (the "Conversion Shares") pursuant to Section 6 of the Note,
GENENTECH shall, upon the written request of CURAGEN received within thirty (30)
days of such event (the "Redemption Notice"), advance to CURAGEN, under the
terms of the Note and Section 3.2(a) hereof, the aggregate Redemption Price (as
defined in the Certificate of Designation for the Series F Preferred Stock) of
the Conversion Shares (the "Redemption Amount"). CURAGEN shall use the
Redemption Amount received from GENENTECH solely for the purpose of repurchasing
the Conversion Shares from GENENTECH. CURAGEN shall repurchase the Conversion
Shares, and GENENTECH shall sell and deliver the Conversion Shares to CURAGEN,
for a price equal to the Redemption Amount contemporaneously with the advance of
the Redemption Amount.

Confidential Treatment Requested
<PAGE>

4. TREATMENT OF CONFIDENTIAL INFORMATION

4.1 CONFIDENTIAL INFORMATION. During the course of the Research Program,
------------------------
or in discussions concerning Exclusive Data Sets, each Party may disclose to the
other proprietary technical, research and business information, including but
not limited to information contained in Data Sets (which Data Set information
shall be deemed Confidential Information of CURAGEN), (collectively,
"Confidential Information"). For a period of [XXXXX] after the receipt of any
such Confidential Information, except as expressly permitted hereunder, the
receiving Party shall keep confidential all such Confidential Information of the
other Party and will not disclose such Confidential Information of the other
Party to third parties by publication or otherwise. Each Party further agrees
not to use Confidential Information of the other Party for any purpose other
than conducting or evaluating research hereunder, evaluating and analyzing Data
Sets or exercising any rights granted to it or reserved by it under this
Agreement. Notwithstanding the foregoing, it is understood and agreed that the
receiving Party's obligations of confidentiality and nonuse herein shall not
apply to any information which:

(a) is, at the time of disclosure by the disclosing Party hereunder, or
thereafter becomes, a part of the public domain or publicly known or
available through no fault or negligence of the receiving Party or any
of its Affiliates; or

(b) was otherwise in the receiving Party's lawful possession prior to
disclosure by the disclosing Party, as demonstrated by the receiving
Party's written records; or

(c) is lawfully disclosed to the receiving Party on a non-confidential
basis by a third party who is not in violation of an obligation of
confidentiality to the disclosing Party relative to such information.

Each Party may disclose the other Party's Confidential Information to the extent
reasonably necessary to comply with applicable government law or regulations,
provided that prompt notice of any such disclosure shall be given to the other
Party. Information disclosed other than in written or electronic form shall be
subject to the terms of this Section 4.1 only if confirmed in

Confidential Treatment Requested
<PAGE>

writing to other Party within thirty (30) days of initial disclosure and
specifying with particularity that Confidential Information disclosed other than
in written form which is subject to the provisions of this Section 4.1.

4.2 PUBLICATIONS. It is expected that each Party may wish to publish the
-------------
results of the research under this Agreement. In order to safeguard intellectual
property rights, the Party wishing to publish or otherwise publicly disclose the
results of its research hereunder shall first submit a draft of the proposed
manuscripts to the RC for each Party's review, comment and consideration of
appropriate patent action at least [XXXXX] prior to any submission for
publication or other public disclosure. Within [XXXXX] of receipt of the
prepublication materials, the RC will advise the Party seeking publication as to
whether a patent application will be prepared and filed or whether trade secret
protection should be pursued and, if so, the RC will, in cooperation with both
parties, determine the appropriate timing and content of any such publications.
CURAGEN shall have the right to reasonably withhold consent for publications
based primarily upon CURAGEN Projects. CURAGEN shall also have the right to
reasonably withhold consent for publication of QEA/GeneCalling or
MIM/PathCalling data. Each Party shall have the right to reasonably withhold
consent for publication of its own Confidential Information provided to the
other Party hereunder. Consent to all other publications regarding Clones shall
be governed by the RC as indicated above in this Section.

4.3 PRESS RELEASE AND REGULATORY FILINGS. The Parties shall mutually
-------------------------------------
agree on a press release announcing the execution of this Agreement and on any
confidential treatment request to be filed with the Securities and Exchange
Commission with respect to this Agreement. Once any such written statement is
approved for disclosure by both Parties, either Party may make subsequent public
disclosures of the contents of such statement without the further approval of
the other Party. Neither Party shall make any disclosure of the terms of this
Agreement except as required by applicable law or as set forth above without the
prior written consent of the other Party.

Confidential Treatment Requested
<PAGE>

5. INTELLECTUAL PROPERTY RIGHTS

5.1 GENENTECH PROPRIETARY MATERIAL. mRNA pools extracted by CURAGEN from
------------------------------
a GENENTECH Proprietary Material in the performance of the Research Program and
full-length genes cloned by GENENTECH using any Clone shall be GENENTECH
Proprietary Material. All other substances made by CURAGEN in the performance
of the Research Program shall be Research Project Proprietary Material and all
other substances made by GENENTECH shall be GENENTECH Proprietary Material.
Except as provided in Section 7.5 or in an executed License Agreement, GENENTECH
Proprietary Material shall remain the property of GENENTECH, and CURAGEN shall
use such GENENTECH Proprietary Material only for the purpose of conducting the
Research Program hereunder or as otherwise permitted herein, and shall not
transfer GENENTECH Proprietary Material to any other person or entity.

5.2 CURAGEN PROJECT PROPRIETARY MATERIAL AND RESEARCH PROJECT PROPRIETARY
---------------------------------------------------------------------
MATERIAL.
- --------

(a) CURAGEN Project Proprietary Material shall remain the property of
CURAGEN and GENENTECH shall use such CURAGEN Project Proprietary
Material only for purposes relating to performance of the Research
Program, evaluation of the CURAGEN Data, the exercise of the option
provided in Section 7.1, or pursuant to the terms of an executed
License Agreement. GENENTECH shall not transfer CURAGEN Project
Proprietary Material to any other person or entity except in
connection with rights granted to GENENTECH pursuant to an executed
License Agreement. CURAGEN shall not transfer to any third party or
otherwise use CURAGEN Project Proprietary Material during an Exclusive
Evaluation Period or Option Period except as otherwise permitted
herein.

(b) Research Project Proprietary Material shall remain the property of
CURAGEN and GENENTECH shall use such Research Project Proprietary
Material only for purposes relating to performance of the Research
Program, evaluation of the Project Data, the exercise of the option
provided in Section 7.1, or pursuant to the terms of an executed
License Agreement. GENENTECH shall not transfer

37
<PAGE>

Research Project Proprietary Material to any other person or entity
except in connection with rights granted to GENENTECH pursuant to an
executed License Agreement. CURAGEN shall not transfer to any third
party or otherwise use Research Project Proprietary Material during an
Exclusive Evaluation Period or Option Period except as otherwise
permitted herein.

5.3 INVENTIONS. Each Party shall promptly disclose to the other Party all
-----------
Inventions. During the term of any Exclusive Evaluation Period or relevant
Option Period, CURAGEN shall not use Research Project Inventions, Project Data,
CURAGEN Project Inventions or CURAGEN Data to support patent filings made by
CURAGEN outside the Research Program without GENENTECH's express prior written
consent. GENENTECH shall not at any time use Research Project Inventions,
Project Data, CURAGEN Project Inventions or CURAGEN Data to support patent
filings made by GENENTECH outside the Research Program except to the extent that
such filings relate to Licensed Clones or corresponding Licensed Products.
Except as set forth in Sections 5.1 and 5.2, (i) all Research Project
Inventions, and Research Project Patent Rights shall be owned jointly by CURAGEN
and GENENTECH; and (ii) all CURAGEN Project Inventions and CURAGEN Project
Patent Rights shall be owned by CURAGEN. Inventorship of Patent Rights shall be
agreed upon in good faith by the Parties prior to the filing of each new patent
application in accordance with applicable law. The rights and interests of
CURAGEN and GENENTECH in Inventions shall be subject to the provisions of
Article 7.

6. PROVISIONS CONCERNING THE FILING, PROSECUTION AND
MAINTENANCE OF PATENT RIGHTS

6.1 APPLICABILITY. The provisions of this Section 6 shall be applicable
-------------
to all Inventions and Patent Rights unless and until (i) they become subject to
a License Agreement, whereupon the License Agreement will govern the rights of
the parties with respect to the subject matter thereof, or (ii) the relevant
Research Project is completed and the relevant Exclusive Evaluation Period
expires and the relevant Option Period, if any, expires, whereupon this Section
6 shall cease to apply with respect to Inventions and Patent Rights relating to
such Research Project or License Agreement.

38
<PAGE>

6.2 PATENT FILING.
-------------

(a) CURAGEN shall have the responsibility to prepare, file, prosecute,
obtain and maintain U.S. and foreign patent applications and patents
on Inventions at its sole expense. Initial patent filings shall be
made in the form of a regular CFR Rule 1.51 U.S. Priority patent
application or a provisional application, as determined by the Patent
Coordinators. The Patent Coordinators for each Party will be
designated by such Party from time to time. Patent applications will
be perfected by making, as soon as available, an ATCC deposit of at
least such Clone(s) as reasonably agreed by the Patent Coordinators,
and by making any subsequent application filings necessary to perfect
U.S. or foreign priority patent rights in the countries of Europe that
are members of the European Patent Organization, Japan, Canada, Mexico
and at least such other countries as mutually agreed by the Parties.
GENENTECH agrees to provide reasonable and timely assistance and
cooperation to CURAGEN to facilitate such filing, prosecution and
maintenance, including without limitation, the execution of
appropriate powers of attorney. CURAGEN agrees that any such
preparation, filing, prosecution and maintenance shall be conducted
diligently and in a timely fashion. GENENTECH shall be kept fully
informed by CURAGEN of the progress of all patent filings and
prosecution hereunder and shall be provided with copies of all
material documents pertaining thereto including, without limitation,
information regarding inventorship, sequences and sequence listings,
serial numbers, filing dates, foreign filing licenses and copies of
patent applications, until the end of the Exclusive Evaluation Period,
and for any Invention which becomes subject to an Option, until the
end of the Option Period. GENENTECH shall be given the opportunity,
whenever practical, to review and comment in advance on any patent
filings or other correspondence with the patent office during such
periods and CURAGEN shall use reasonable efforts to incorporate any
comments provided by GENENTECH. CURAGEN shall pursue its priority to
claims on Inventions by filing all necessary interferences and
opposition papers, motions and the like.

39
<PAGE>

Any proposed interference settlement agreement relating to Inventions
subject to potential Option by GENENTECH hereunder will be reviewed by
the RC.

(b) If CURAGEN is unable to file patent applications as set forth in
Section 6.2(a) on a timely basis despite diligent efforts concerning
Inventions made regarding Clones where the majority of the sequencing
of such Clones has taken place at GENENTECH, GENENTECH shall have the
option to prepare, file, prosecute, obtain and maintain patent
applications and patents on Inventions in the same manner as described
in Section 6.2(a) above at any time for any such Inventions by giving
written notice thereof to GENENTECH. Following the receipt of such
notice and the election of such option by GENENTECH, GENENTECH shall
have the right to prepare, file, prosecute, obtain and maintain the
patent application(s) and patent(s) identified in the notice, at its
sole expense, on behalf of the owner of the Invention, subject to the
rights granted herein, until the end of the Exclusive Evaluation
Period, and for any Invention which becomes subject to an Option,
until the end of the Option Period. CURAGEN shall be given the
opportunity to review and comment in advance on any patent filings or
other correspondence with the patent office during such periods and
GENENTECH shall use reasonable efforts to incorporate any comments
provided by CURAGEN.

(c) The Parties shall mutually agree before permitting any patent
application or patent within Patent Rights to lapse as well as before
authorizing any amendment to any patent application or patent within
Patent Rights that would irrevocably limit the lawful scope of the
Patent Rights, until the end of the Exclusive Evaluation Period, and
for any Invention which becomes subject to an option, until the end of
the Option Period.

(d) No Party shall have any obligation under this Agreement to pay any
fees or costs: (i) for bringing a lawsuit or other action to enforce
any of the Patent Rights against an actual or suspected infringement
or (ii) for any other Party to obtain for its own benefit independent
business or legal advice concerning any of the Patent Rights.

40
<PAGE>

6.3 NOTICE OF INFRINGEMENT. If either Party learns of any infringement
----------------------
or threatened infringement by a third party of the patents within Patent Rights,
such Party shall promptly notify the other Party and shall provide such other
Party with available evidence of such infringement.

6.4 INFRINGEMENT. CURAGEN shall have all rights, at its own expense, to
------------
bring suit (or other appropriate legal action) against any actual or suspected
infringement of the Patent Rights except as may be provided in a License
Agreement executed by the Parties.

6.5 COOPERATION. Each Party shall execute all papers and perform such
-----------
other acts as may be reasonably required to file and prosecute any patent
applications as provided in Section 6.2 and to maintain any infringement suit
brought in accordance with Section 6.4 above (including giving legal consent for
bringing such suit, and agreeing to be named as a plaintiff or otherwise joined
in such suit), and at its option and expense, may be represented in such suit by
counsel of its choice.

7. OPTION TO GENENTECH

7.1 OPTION GRANT.
------------

7.1.1 Option. Subject to rights third parties have obtained by virtue of
------
access to other CURAGEN Data Sets, data sets resulting from written agreements
between CURAGEN and third parties, or the subscription portion of the
GeneScape(R) database prior to GENENTECH's election, CURAGEN hereby grants to
GENENTECH the right to elect an exclusive option (the "Option") to license all
Inventions and know-how relating to any Clone whose sequence or utility is
determined in whole or in part by GENENTECH or CURAGEN from the use of an
Exclusive Data Set or which is identified by GENENTECH pursuant to the rights
granted in Section 2.4.3, and which is not a Previously Committed Clone. Such
Option shall give GENENTECH the right to obtain, at GENENTECH's sole discretion
and as further described in the License Agreement, either (a) subject to the
rights reserved by CURAGEN in Section 7.1.3 hereof, an exclusive license to the
Clone specified in GENENTECH's notice of exercise (the "Optioned Clone") and to
all Research Project Patent Rights, CURAGEN Project Patent Rights, Inventions,
Extended Research Inventions, Extended Research Patent Rights and know-how to
the extent that they relate to such Optioned Clone or Licensed Products related
to such Optioned

41
<PAGE>

Clone, to develop, make, have made, use, have used, sell, offer for sale, have
sold, import and have imported any and all products, in the Territory, for any
and all human uses; (b) a non-exclusive license to the Optioned Clone under all
Research Project Patent Rights, CURAGEN Project Patent Rights, Inventions and
know-how, to the extent that they relate to such Optioned Clone, solely for use
of the Optioned Clone or the protein encoded thereby as a reagent for
discovering or developing Licensed Products and to develop, make, have made,
use, have used, sell, offer for sale, have sold, import and have imported
Licensed Products; or (c) subject to the rights reserved by CURAGEN in Section
7.1.3 hereof, an exclusive license to all Research Project Patent Rights,
CURAGEN Project Patent Rights, Inventions, Extended Research Inventions,
Extended Research Patent Rights and know-how to the extent that they relate to a
"known" Optioned Clone or Licensed Products related to such Optioned Clone, to
develop, make, have made, use, have used, sell, offer for sale, have sold,
import and have imported any and all products, in the Territory, for any and all
human uses. Such Option shall be exercisable at any time during the Option
Period specified in Section 7.3. If any Previously Committed Clone is or becomes
available for licensing by GENENTECH on an exclusive or non-exclusive basis,
CURAGEN shall so notify GENENTECH and GENENTECH shall have the right to obtain
an option to license any available rights on the terms set forth in the form of
License Agreement attached hereto as Appendix C.

7.1.2 Option Election.
---------------

Such Option shall be elected by GENENTECH by giving written notice to
CURAGEN within the Exclusive Evaluation Period for such Exclusive Data Set,
which shall specify in detail the Optioned Clone to be included within the terms
of any such Option and which shall be accompanied by the payment of any Option
Fee as specified in Section 7.2. Each Optioned Clone, and the term of the
corresponding Option Period, shall be listed on Appendix A hereto from time to
----------
time. Notwithstanding the foregoing, GENENTECH may request such an Option from
Project Data Sets after expiration of the Exclusive Evaluation Period, which
Option shall be granted by CURAGEN upon payment of the Option Fee specified in
Section 7.2, unless prohibited by written agreements with third parties.

7.1.3 Reservation of Rights. Notwithstanding the foregoing, during any
---------------------
Option Period, CURAGEN shall retain for itself the right to use, but not to
transfer to third parties (except

42
<PAGE>

pursuant to an agreement with a third party who has identified such Optioned
Clone independently of the related Data Set) the Optioned Clone or the protein
derived therefrom outside of the Research Program as part of CURAGEN's libraries
for internal, general, non-directed research purposes (including, without
limitation, full length cloning, expression analysis, protein-protein
interactions and drug screening). For example, but without limitation, inclusion
of the Clone together with other clones in research to determine multiple
protein-protein interactions, or inclusion of the Clone together with other
clones in a screen against one or more molecules to determine inhibition would
be "non-directed" research, whereas activities associated with choosing a
specific Clone and conducting research to elucidate the biological activity of
such Clone (e.g., generating antibodies to the Clone, testing the Clone or
protein encoded thereby in preclinical models, enriching libraries with such
Clone to purposefully look for proteins which bind to such Clone) would be
considered "directed" research and CURAGEN shall not be permitted to perform
such activities under this Section 7.1.3. All inventions conceived or made
during such research which relate to any Clone whose sequence or utility is
determined from the analysis of a Project Data Set, the proteins derived
therefrom (including antibodies), homologs or mutants with substantially the
same biological activity as such Clone, or uses thereof, shall be deemed
Research Project Inventions if licensed by GENENTECH. All other inventions from
such research shall be Extended Research Inventions and GENENTECH will have
rights to such Extended Research Inventions and Extended Research Patent Rights
resulting therefrom as provided in this Article 7 and in Section 2.3 of the
License Agreement attached hereto as Appendix C. CURAGEN shall keep GENENTECH
reasonably informed of the results of any such research using an Optioned Clone
and patent applications and patents relating to such research on a timely basis
in order to allow GENENTECH to make informed decisions regarding the exercise of
its option and license rights hereunder.

7.2 OPTION FEE. An Option Fee of [XXXXX] per Optioned Clone shall be due
----------
upon the election of an Option with respect to any Clone from any Exclusive Data
Set; provided, however, that [XXXXX]

Confidential Treatment Requested
<PAGE>

7.3 OPTION PERIOD. Each Option shall remain in effect for a period of
-------------
[XXXXX] from receipt by CURAGEN of GENENTECH's written notice of its election of
such Option and payment of any required Option Fee (the "Option Period");
provided, however, that any Option Period may be extended for one additional
[XXXXX] period upon payment by GENENTECH of an additional [XXXXX] per Optioned
Clone.

7.4 OPTION EXERCISE. During each Option Period, upon notice to CURAGEN
---------------
and upon payment of the corresponding license fee, GENENTECH shall have the
right to receive a license to the Optioned Clone under the terms and conditions
set forth in an executed License Agreement and CURAGEN shall grant such license
to GENENTECH. The license fee for a license described in Section 7.1.1, clause
(a) shall be [XXXXX] and the license fee for a license described in Section
7.1.1, clause (b) or (c), shall be [XXXXX]. The License Agreement shall be
executed in substantially the form attached hereto upon exercise of the first
Option and shall be amended from time to time in accordance with the terms
hereof and thereof as additional Options are exercised.

7.5 REVERSION OF RIGHTS. CURAGEN shall retain all rights to all Project
-------------------
Data, CURAGEN Data, Extended Research Data, CURAGEN Project Proprietary
Material, Research Project Proprietary Material, Inventions, Extended Research
Inventions, Patent Rights and Extended Research Patent Rights not expressly
granted to GENENTECH hereunder. Upon expiration of any Exclusive Evaluation
Period for any Research Project or CURAGEN Project CURAGEN shall recover and
retain, with respect to Clones whose sequence or utility was determined from
such project and that are not optioned by GENENTECH, all of CURAGEN's rights to
the corresponding Exclusive Data Set, Extended Research Data, CURAGEN Project
Proprietary Material or Research Project Proprietary Material and corresponding
Inventions, Extended Research Inventions, Patent Rights and Extended Research
Patent rights thereon, other than such rights granted to GENENTECH as provided
in Sections 2.1.4(c), 2.4.3 or 7.1.2 or, with respect to Optioned Clones,
Section 2.1.5. In the event that upon the expiration of any Option Period any
corresponding Option has not been exercised by GENENTECH, all of CURAGEN's
rights in the corresponding Optioned Clone and related Project Data, CURAGEN
Data, Extended Research Data, CURAGEN Project Proprietary Material, Research
Project Proprietary Material, Inventions, Extended Research Inventions, Patent
Rights and Extended Research Patent Rights

Confidential Treatment Requested
<PAGE>

thereon shall revert to CURAGEN, other than such rights granted to GENENTECH as
provided in Sections 2.1.4(c), 2.4.3 or 7.1.2, or with respect to Optioned
Clones, Section 2.1.5. Notwithstanding the foregoing, nothing contained in this
Section 7.5 shall be deemed to limit any rights of GENENTECH expressly provided
in an executed License Agreement. In addition, GENENTECH shall (a) upon the
expiration of each Exclusive Evaluation Period, without any further action on
its part, be deemed to have granted to CURAGEN an exclusive (except for uses by
GENENTECH permitted in Sections 2.1.4(c), 2.4.3 and 7.1.2) license, with the
right to sublicense, for all purposes under GENENTECH's rights in Research
Project Inventions and Research Project Patent Rights relating to any Clone
whose sequence or utility was determined in whole or in part from the use of the
corresponding Data Set and which is not the subject of any Option or License
Agreement and (b) upon the expiration of each Option Period, without any further
action on its part, be deemed to have granted to CURAGEN a license as set forth
in (a) above with respect to each Optioned Clone for which an Option has not
been exercised. Such licenses from GENENTECH to CURAGEN shall be [XXXX]. Upon
the request of CURAGEN, GENENTECH shall provide to CURAGEN available GENENTECH
Proprietary Material which is a full-length gene cloned by GENENTECH using any
Clone described in (a) above and which is not contained in a proprietary vector.
For the avoidance of doubt, CURAGEN shall have no rights to any patents or
patent applications of GENENTECH which relate to inventions (including
inventions related to Clones) made outside the Research Program and CURAGEN
shall only have exclusive rights to Research Project Inventions and Research
Project Patent Rights as expressly provided herein.

7.6 NO OTHER RIGHTS. No rights to Data Sets or Clones under Patent
---------------
Rights, Inventions, Extended Research Patent Rights or Extended Research
Inventions are granted to GENENTECH hereunder except as expressly set forth
herein or in an executed License Agreement. CURAGEN shall receive no rights to
Data Sets or Clones under GENENTECH's interests in Research Project Patent
Rights or Research Project Inventions except as expressly set forth herein or in
an executed License Agreement.

7.7 ROYALTIES TO GENENTECH.
----------------------

(a) Solely with respect to any novel, full-length gene cloned as part of a
Research Project and not licensed by GENENTECH pursuant to an executed
License Agreement, which gene (a "Retained Gene") is covered by
Research Project Patent Rights, CURAGEN shall pay royalties to
GENENTECH with respect to each Licensed Product developed and
commercialized by CURAGEN and its Affiliates and sublicensees from any
Clone which is a Retained Gene (a "CURAGEN Royalty Product") on a
country-by-country basis as follows:

(i) If the CURAGEN Royalty Product is as described in Subsections
(a)-(c) of the definition of Licensed Product, the royalty rate
on Net Sales of such CURAGEN Royalty Product shall be as
follows:

[XXX] if the manufacture, use, importation or sale in such
country of such CURAGEN Royalty Product by a third party
would infringe a Valid Claim of a Research Project
Patent Right.

(ii) If the CURAGEN Royalty Product is as described in Subsections
(d)-(i) of the definition of Licensed Product, the royalty rate
on Net Sales of such CURAGEN Royalty Product shall be:

[XXX] if the manufacture, use, importation or sale in such
country of such CURAGEN Royalty Product by a third party
would infringe a Valid Claim of a Research Project
Patent Right.

(iii) Royalties due to GENENTECH pursuant to subsections (i) and (ii)
above for a given CURAGEN Royalty Product may be reduced by
[XXX] of any royalties paid to third parties by CURAGEN on net
sales of such CURAGEN Royalty Product under patent licenses that
are required in order to allow CURAGEN to manufacture, use and
sell such CURAGEN Royalty Product; provided, however, that such
reductions shall in no event reduce the royalty for such CURAGEN
Royalty Product payable pursuant to such subsection by more
than [XXX].

(b) Notwithstanding the foregoing, in the event that the Retained Gene was
at any time during the Term of this Agreement an Optioned Clone, or
was ever a Licensed Clone, the royalty due to GENENTECH pursuant to
Section 7.7(a) shall be [XXX].

(c) Notwithstanding the foregoing, in the event that CURAGEN Royalty
Products are sold by sublicensees of CURAGEN, and the royalty received
by CURAGEN under such sublicense is less than two times the applicable
royalty due to GENENTECH pursuant to Section 7.7(a) and (b) hereof,
the amount payable to GENENTECH under this Section 7.7 shall be [XXX]
of (i) royalties, (ii) licenses fees and (iii) product development
milestone payments based on the sublicensee's performance, received by
CURAGEN or its Affiliates. For the avoidance of doubt (x) equity
payments, (y) research funds and (z) milestone payments based on
CURAGEN'S research performance, received by CURAGEN or its Affiliates
from a sublicensee shall not be included in such calculation. CURAGEN
shall not intentionally structure any sublicense agreement in order to
shift payments from categories (i), (ii) or (iii) to categories (x),
(y) or (z), so as to reduce amounts payable to GENENTECH hereunder.
Copies of all executed sublicenses of CURAGEN's rights hereunder shall
be provided to GENENTECH.

(d) Only one royalty, calculated at the highest applicable royalty rate
hereunder, shall be payable to GENENTECH hereunder for each sale of
a CURAGEN Royalty Product, regardless of the number of patents, patent
applications or Valid Claims directed to or covering such CURAGEN
Royalty Product.

(e) Royalty payments shall be made to GENENTECH in United States Dollars
quarterly within sixty (60) days following the end of each calendar
quarter for which royalties are due. Each royalty payment shall be
accompanied by a report summarizing the total Net Sales for each
CURAGEN Royalty Product during the relevant three-month period and
the calculation of royalties, if any, due thereon pursuant to this
Section 7.7. All royalties shall be payable in full in the United
States in United States Dollars, regardless of the countries in which
sales are made. For the purpose of computing Net Sales for CURAGEN
Royalty Products sold in a currency other than United States dollars,
such currency shall be converted into United States dollars at the
exchange rate for buying U.S. dollars set forth in The Wall Street
---------------
Journal for the last business day of the calendar quarter.
-------

(f) CURAGEN shall pay royalties with respect to each CURAGEN Royalty
Product on a country by country basis until (i) the expiration or
revocation or complete rejection of the last to expire or to be
revoked or to be completely rejected of any Valid Claim of a GENENTECH
Patent Right covering such CURAGEN Royalty Product in such country, or
(ii) ten (10) years from the first commercial sale of such CURAGEN
Royalty Product in such country, whichever is later. Following such
period, CURAGEN shall have a fully paid-up, irrevocable license in
such country under the relevant GENENTECH Patent Rights to make, have
made, use, have used, sell, have sold, offer for sale, import and have
imported such CURAGEN Royalty Product in such country.

(g) OVERDUE ROYALTIES. Royalties not paid within the time period set forth
-----------------
in this Section 7.7 shall bear interest at [XXX] accruing monthly,
from the due date until paid in full.

(h) RECORDS RETENTION. AUDITS. CURAGEN shall keep for [XXX] from the date
-------------------------
of each payment of royalties complete and accurate records of sales by
CURAGEN of each CURAGEN Royalty Product in sufficient detail to allow
the accruing royalties to be determined accurately. GENENTECH shall
have the right for a period of [XXX] after receiving any report or
statement with respect to royalties due an payable to appoint an
independent certified public accountant reasonably acceptable to
CURAGEN to inspect the relevant records of CURAGEN to verify such
report or statement. CURAGEN shall make its records available for
inspection by such independent certified public accountant during
regular business hours at such place or places where such records are
customarily kept, upon reasonable notice from GENENTECH, solely to
verify the accuracy of the reports and payments. Such inspection right
shall not be exercised more than once in any calendar year nor more
than once with respect to sales of any CURAGEN Royalty Product in any
given payment period. GENENTECH agrees to hold in strict confidence
all information concerning royalty payments and reports, and all
information learned in the course of any audit or inspection, except
to the extent necessary for GENENTECH to reveal such information in
order to enforce its rights under this Agreement or if disclosure is
required by law, regulation or judicial order. The results of each
inspection, if any, shall be binding on both Parties. GENENTECH shall
pay for such inspections, except that in the event there is any upward
adjustment in aggregate royalties payable for any year shown buy such
inspection of more than [XXX] of the amount paid, CURAGEN shall pay
for such inspection.

[Confidential Treatment Requested]

<PAGE>

[Confidential Treatment Requested]
<PAGE>

[XXXX]

8. TERM AND TERMINATION

8.1 TERM. The term of this Agreement shall be for the duration of the
----
Research Term plus the length of all surviving Exclusive Evaluation Periods and
any permitted extensions thereof and the length of all surviving Option Periods
and any permitted extensions thereof or until the date on which GENENTECH no
longer has access to Project Data Sets hereunder, whichever is later (the
"Term").

8.2 TERMINATION.
-----------

(a) This Agreement, the Research Program, and the rights granted herein
may be terminated by either Party upon any breach by the other Party
of any material obligation or condition, effective fifteen (15) days
after giving written notice to the other Party of such termination in
the case of a payment breach and sixty (60) days after giving written
notice to the other Party of such termination in the case

Confidential Treatment Requested
<PAGE>

of any other breach, which notice shall describe such breach in
reasonable detail. The foregoing notwithstanding, if the default or
breach is cured or shown to be non-existent within the aforesaid
fifteen (15) or sixty (60) day period, the notice shall be deemed
automatically withdrawn and of no effect.

(b) If either Party files for protection under bankruptcy laws, makes an
assignment for the benefit of creditors, appoints or suffers
appointment of a receiver or trustee over its property, files a
petition under any bankruptcy or insolvency act or has any such
petition filed against it which is not discharged within sixty (60)
days of the filing thereof, then the other party may terminate the
Research Program and this Agreement effective upon giving written
notice to such Party.

8.3 TERMINATION AFTER INJUNCTION. In addition to the rights set forth in
----------------------------
Section 8.2, GENENTECH may terminate the Research Program effective thirty (30)
days after giving written notice to CURAGEN in the event that a final non-
appealable injunction is entered against CURAGEN by a court of competent
jurisdiction the effect of which is to enjoin CURAGEN from utilizing its
proprietary genomics technologies such that it is substantially unable to
perform the Research Program. Any such termination shall not affect GENENTECH's
rights hereunder with respect to any Exclusive Evaluation Period or Option
Period then ongoing, or any License Agreement executed by the Parties prior to
such termination. Upon any such termination the Note shall become due in
accordance with its terms.

8.4 ADDITIONAL EFFECTS OF TERMINATION.
---------------------------------

(a) Upon termination of this Agreement by a Party pursuant to Section
8.2(a) due to a payment breach by the other Party with respect to
payments due on a specific product pursuant to Section 2.1.4(c) and
(e) or Section 7.7. hereof (but not any other breach), all relevant
rights and licenses granted by such terminating Party to the breaching
Party under such Section regarding the specific product shall
immediately and automatically terminate and revert to the terminating
Party, subject to the breaching Party's right to sell any remaining
quantities of product remaining in its inventories as of the date of
termination.

(b) Upon termination of this Agreement by a Party pursuant to Section
8.2(a) due to a breach other than a payment breach covered by Section
8.4(a), the Research

50
<PAGE>

Program shall end. If CURAGEN is the terminating Party, all Exclusive
Evaluation Periods and all Option Periods shall terminate, but all
License Agreements previously executed shall continue. If GENENTECH is
the terminating Party, all of GENENTECH's rights under Exclusive
Evaluation Periods, Option Periods and License Agreements then ongoing
shall continue in accordance with their terms, and the Note shall
become due in accordance with its terms.

(c) Documentation. At the request of the terminating Party, the breaching
-------------
Party shall execute and deliver such bills of sale, assignments and
licenses and other documents as may be necessary to fully vest in the
non-breaching Party all right, title and interest to which it is
entitled as aforesaid pursuant to this Section 8.4.

(d) Payment Obligations. The breaching Party shall have no obligation to
-------------------
make any payment to the terminating Party that has not accrued prior
to the effective date of such termination except for royalties on
remaining inventory, but shall remain liable for all obligations
accruing prior to termination.

8.5 REMEDIES. If either Party shall fail to perform or observe or
--------
otherwise breaches any of its material obligations under this Agreement, in
addition to any right to terminate this Agreement, the non-defaulting Party may
elect to obtain other relief and remedies available under law.

8.6 SURVIVING PROVISIONS. Notwithstanding any provision herein to the
--------------------
contrary, the rights and obligations set forth in Sections 2.1.6, 2.3.5, 3.2,
3.4, Articles 4, 5, and 6, and Sections 7.5, 8.4 and 8.6, and Article 9 hereof,
as well as any rights and obligations otherwise accrued, shall survive the
expiration of the Term or any termination of this Agreement. In addition, the
rights and obligations set forth in Sections 2.1.4 (c)-(h) and Section 7.7 shall
survive the expiration or termination of this Agreement, unless otherwise
terminated as specified in Section 8.4 above, and the rights and obligations
with respect to ongoing Exclusive Evaluation Periods and Option Periods shall
survive as described elsewhere in this Agreement.

51
<PAGE>

9. MISCELLANEOUS

9.1 CURAGEN REPRESENTATIONS AND COVENANTS. CURAGEN represents and
-------------------------------------
warrants that: (a) the execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have been duly authorized by
all appropriate CURAGEN corporate action; (b) CURAGEN is under no obligation
which is inconsistent with this Agreement; (c) CURAGEN employees are
contractually bound to assign all rights in inventions and know-how arising from
their employment to CURAGEN; (d) there are no adverse proceedings claims or
actions pending, or to the best of CURAGEN's knowledge, threatened relating to
CURAGEN's genomics technologies, including without limitation, GeneScape,
QEA/GeneCalling, MIM/PathCalling and all additional services to be provided by
CURAGEN to GENENTECH hereunder, and at the time of disclosure and access thereof
to GENENTECH, to the best of CURAGEN's knowledge, CURAGEN shall have the full
right and legal capacity to disclose and provide access to such CURAGEN genomics
technologies to GENENTECH and to itself use such technologies to perform its
obligations under this Agreement without violating the rights of third parties;
and (e) CURAGEN has the full right and legal capacity to grant the rights to
GENENTECH pursuant to Article 7 without violating the rights of any third party.
CURAGEN covenants that it will not enter into any agreement with any third party
that is inconsistent with the terms of this Agreement. Subject to CURAGEN's
obligation not to enter into any agreement that is inconsistent with the terms
of this Agreement, CURAGEN shall use commercially reasonable efforts to obtain,
at its sole cost, any rights, licenses, approvals or permissions related to its
genomics technology and know-how that are required, now or in the future, to
carry out its obligations to conduct the Research Projects hereunder and to
provide its services and genomics technologies to GENENTECH hereunder and to
grant GENENTECH the intellectual property rights under Article 7 above. Nothing
in this Agreement shall be interpreted as obligating either Party to
commercialize technology made hereunder or to perform any additional work beyond
that set forth in the Research Plan.

9.2 GENENTECH REPRESENTATIONS. GENENTECH represents and warrants that:
-------------------------
(a) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly authorized by all appropriate
GENENTECH corporate

52
<PAGE>

action; (b) GENENTECH is under no obligation which is inconsistent with this
Agreement, and (c) GENENTECH has the full right and legal capacity to grant the
rights to CURAGEN pursuant to Article 7 without violating the rights of any
third party. Nothing in this Agreement shall be interpreted as obligating either
Party to commercialize technology made hereunder or to perform any additional
work beyond that set forth in the Research Plan.

9.3 NO WARRANTIES.
-------------

(a) Nothing in this Agreement is or shall be construed as:

(i) a warranty or representation by CURAGEN or GENENTECH as to
the validity or scope of any application or patent within
the Patent Rights;

(ii) a warranty or representation that anything made, used, sold
or otherwise disposed of under any license granted pursuant
to this Agreement is or will be free from infringement of
patents, copyrights, and other rights of third parties.

(b) Except as expressly set forth in this Agreement, NEITHER PARTY MAKES
ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR OF NON-
INFRINGEMENT OF ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER RIGHTS, OR
ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

9.4 LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
---------
OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
OR EQUITABLE THEORY FOR (I) ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE
DAMAGES OR LOST PROFITS OR (II) COST OF PROCUREMENT OF SUBSTITUTE GOODS,
TECHNOLOGY OR SERVICES.

9.5 NOTICES. Any notices, requests, deliveries, approvals or consents
-------
required or permitted to be given under this Agreement to GENENTECH or CURAGEN
shall be in writing

53
<PAGE>

and shall be personally delivered or sent by telecopy (with written confirmation
to follow via United States first class mail), overnight courier providing
evidence of receipt or certified mail, return receipt requested, postage
prepaid, in each case to the respective address specified below (or to such
address as may be specified in writing to the other Party hereto):

CURAGEN: 555 Long Wharf, 11th Floor
New Haven, CT 06511
Attn: Vice President, Business Development
Telecopy: (203) 401-3333

GENENTECH: 1 DNA Way
South San Francisco, CA 94080
Attn: Corporate Secretary
Telecopy: (650) 952-9881

9.6 GOVERNING LAW. This Agreement will be construed, interpreted and
-------------
applied in accordance with the laws of the State of New York (excluding its body
of law controlling conflicts of law).

9.7 LIMITATIONS. Except as set forth elsewhere in this Agreement, neither
-----------
Party grants to the other Party any right or license to any of its intellectual
property.

9.8 ENTIRE AGREEMENT. This is the entire Agreement between the Parties
----------------
with respect to the subject matter hereof and supersedes all prior agreements
between the Parties with respect to the subject matter hereof. No modification
shall be effective unless in writing with specific reference to this Agreement
and signed by the Parties.

9.9 WAIVER. The terms or conditions of this Agreement may be waived only
------
by a written instrument executed by the Party waiving compliance. The failure
of either Party at any time or times to require performance of any provision
hereof shall in no manner affect its rights at a later time to enforce the same.
No waiver by either Party of any condition or term shall be deemed as a
continuing waiver of such condition or term or of another condition or term.

54
<PAGE>

9.10 HEADINGS. Section and subsection headings are inserted for
--------
convenience of reference only and do not form part of this Agreement.

9.11 ASSIGNMENT. This Agreement may not be assigned by either Party
----------
without the consent of the other, except that each Party may, without such
consent, assign this Agreement and the rights, obligations and interests of such
Party, in whole or in part, to any of its wholly-owned subsidiaries, to any
purchaser of all or substantially all of its assets in the line of business to
which this Agreement pertains, or of all of its capital stock, or to any
successor corporation resulting from any merger or consolidation of such Party
with or into such corporation.

9.12 FORCE MAJEURE. Neither Party shall be liable for failure of or delay
-------------
in performing obligations set forth in this Agreement, and neither shall be
deemed in breach of its obligations, if such failure or delay is due to natural
disasters or any causes beyond the reasonable control of such Party. In event
of such force majeure, the Party affected thereby shall use reasonable efforts
to cure or overcome the same and resume performance of its obligations
hereunder.

9.13 CONSTRUCTION. The Parties hereto acknowledge and agree that: (i)
------------
each Party and its counsel reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting Party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all Parties hereto and not in a favor of or against any Party, regardless
of which Party was generally responsible for the preparation of this Agreement.

9.14 SEVERABILITY. If any provision(s) of this Agreement are or become
------------
invalid, are ruled illegal by any court of competent jurisdiction or are deemed
unenforceable under then current applicable law from time to time in effect
during the Term hereof, it is the intention of the Parties that the remainder of
this Agreement shall not be affected thereby provided that a Party's rights
under this Agreement are not materially affected. The Parties hereto covenant
and agree to renegotiate any such term, covenant or application thereof in good
faith in order to provide a reasonably acceptable alternative to the term,
covenant or condition of this Agreement or the application thereof that is
invalid, illegal or unenforceable, it being the intent of the Parties that the
basic purposes of this Agreement are to be effectuated.

55
<PAGE>

9.15 STATUS. Nothing in this Agreement is intended or shall be deemed to
------
constitute a partner, agency, employer-employee, or joint venture relationship
between the Parties.

9.16 INDEMNIFICATION.
---------------

(a) GENENTECH shall indemnify, defend and hold harmless CURAGEN, its
Affiliates and their respective directors, officers, employees, and
agents and their respective successors, heirs and assigns (the
"CURAGEN Indemnitees"), against any liability, damage, loss or expense
(including reasonable attorneys' fees and expenses of litigation)
incurred by or imposed upon the CURAGEN Indemnitees, or any of them,
in connection with any claims, suits, actions, demands or judgments
("Claims") of third parties, for personal injury and product liability
matters (except in cases where such Claims result from a willful
material breach of this Agreement or the gross negligence or willful
misconduct on the part of a CURAGEN Indemnitee or are the subject
matter of CURAGEN's indemnification of GENENTECH as set forth in
Section 9.16(b)) arising out of the performance of the Research
Program by GENENTECH or arising out of or relating to any actions of
GENENTECH or any Affiliate, licensee, sublicensee, distributor agent
of GENENTECH in the development, testing, production, manufacture,
promotion, import, sale or use by any person of any Know-How
Information Product manufactured or sold by GENENTECH or by an
Affiliate, licensee, sublicensee, distributor or agent of GENENTECH.

(b) CURAGEN shall indemnify, defend and hold harmless GENENTECH, its
Affiliates and their respective directors, officers, employees, and
agents and their respective successors, heirs and assigns (the
"GENENTECH Indemnitees"), against any liability, damage, loss or
expense (including reasonable attorneys' fees and expenses of
litigation) incurred by or imposed upon the GENENTECH Indemnitees, or
any of them, in connection with any Claims of third parties, for
personal injury matters and product liability matters (except to the
extent such Claims result from a material breach of this Agreement or
the gross negligence or willful misconduct on the part of GENENTECH or
are the subject matter of GENENTECH's indemnification of CURAGEN as
set forth in Section 9.16(a))

56
<PAGE>

arising out of the performance of the Research Program by CURAGEN or
arising out of or relating to any actions of CURAGEN or any Affiliate,
licensee, sublicensee, distributor agent of CURAGEN in the
development, testing, production, manufacture, promotion, import, sale
or use by any person of any product manufactured or sold by CURAGEN or
by an Affiliate, licensee, sublicensee, distributor or agent of
CURAGEN.

(c) GENENTECH's obligation to indemnify, defend and hold the CURAGEN
Indemnitees harmless pursuant to Section 9.16(a), and CURAGEN's
obligation to indemnify, defend and hold the GENENTECH Indemnitees
harmless pursuant to Section 9.16(b), are conditioned on the
indemnified Party: (i) providing written notice to the indemnifying
Party of any Claim arising out of the indemnified activities promptly
after the indemnified Party has knowledge of such Claim, (ii)
permitting the indemnifying Party to assume, at its discretion, sole
and full control of the investigation, preparation, defense, trial and
settlement in connection with such Claim, (iii) assisting and
cooperating with the indemnifying Party, at the indemnifying Party's
reasonable expense, in the investigation of, preparation for and
defense of any such Claim, and (iv) not compromising, negotiating or
settling such Claim without the indemnifying Party's prior written
consent.

9.17 COUNTERPARTS.
------------

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

57
<PAGE>

IN WITNESS WHEREOF, the Parties have this Agreement to be by their duly
authorized representation in two (2) originals.

GENENTECH, INC. CURAGEN CORPORATION

By: /s/ By: /s/
--------------------------- ---------------------------------
Title: _______________________ Title: EXECUTIVE VICE PRESIDENT
------------------------------

58
<PAGE>

APPENDIX A
----------

OPTIONED CLONES

59
<PAGE>

APPENDIX B
----------

NOTE

60
<PAGE>

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH IT IS CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
APPLICABLE STATE SECURITIES LAWS AND NEITHER MAY BE TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS SUCH SECURITIES HAVE BEEN REGISTERED UNDER THE ACT AND SUCH
LAWS OR REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED AND
AN OPINION OF COUNSEL SATISFACTORY TO THE BORROWER IS FURNISHED TO THE BORROWER
TO THE EFFECT THAT REGISTRATION UNDER THE ACT IS NOT REQUIRED.

PROMISSORY NOTE

UP TO $26,000,000.00 __________, 1997

FOR VALUE RECEIVED, the undersigned, CURAGEN CORPORATION (the "Borrower"),
having an address of 555 Long Wharf Drive, 11th Floor, New Haven, Connecticut
06511, hereby promises to pay to GENENTECH, INC. (the "Lender"), having an
address at 1 DNA Way, South San Francisco, CA 94080 , the principal sum of up
to

TWENTY SIX MILLION DOLLARS ($26,000,000)

or such lesser sum which may from time to time be advanced pursuant to the terms
of the section of the Research and Option Agreement dated November 20, 1997
between the Borrower and the Lender (the "Agreement") entitled "Section 3.2-Loan
Commitment", together with interest thereon in accordance with the terms hereof.
Capitalized terms used herein and not defined herein have the meanings assigned
to them in the Agreement.
<PAGE>

1. Payments
--------

(a) The Borrower shall pay the accrued interest and principal balance
of this Note, which represents the Loan, in full within [XXXXX]
of the last day of the fifth Loan Year (the "Maturity Date"),
subject to the extension of the Maturity Date pursuant to Section
1(c) below.

(b) This Note may be prepaid by the Borrower at any time, subject to
Section 1(c) below, without premium or penalty.

(c) Payments made pursuant to paragraph (a) or (b) shall be paid in
cash, or, at any time after the last day of the first Loan Year,
at the option of Borrower, subject to Section 7 of this Note, in
shares of Convertible Non-Voting Common Stock, $.01 par value per
share (the "Non-Voting Common Stock"), of the Borrower, valued at
the then Fair Market Value of CuraGen Common Stock (as defined
below) having the rights, preferences and privileges set forth in
the form of the Restated Certificate of Incorporation attached
hereto as Exhibit 1. The Borrower may prepay any amounts due
---------
under this Note, upon written notice to the Lender specifying the
prepayment date, in shares of Non-Voting Common Stock at any time
after the last day of the first Loan Year as long as the Lender's
Beneficial Ownership (as defined below) is less than 10% prior to
such prepayment. In the event that the Borrower proposes a
prepayment by issuing shares of Non-Voting Common Stock under
this Note at a time when the Lender's Beneficial Ownership is
equal to or exceeds 10%, the Lender may request in writing that
the Borrower refrain from issuing

-2-

Confidential Treatment Requested
<PAGE>

additional shares of Non-Voting Common Stock until the earliest
to occur of (i) two (2) years from the date of the issuance which
caused the Lender's Beneficial Ownership to be equal to or exceed
10% (the "Additional Issuance Date"), (ii) the date which is
thirty (30) days from the date on which Lender's Beneficial
Ownership falls below 10% and (iii) the Maturity Date; provided,
that, in the event that the Additional Issuance Date occurs after
the last day of the third Loan Year and prior to the Maturity
Date, then the Lender may, at its option, extend the Maturity
Date to a date two (2) years from the Additional Issuance Date.
As used in this Note (i) the term "Beneficial Ownership" shall
have the meaning set forth in Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "1934 Act") and (ii) the term "Fair
Market Value of CuraGen Common Stock" shall mean the average of
the closing prices of the Borrower's Common Stock as reported by
the Nasdaq Stock Market or, if not traded on the Nasdaq Stock
Market, by such other principal securities exchange on which the
Borrower's shares of Common Stock are traded, as applicable, over
the 20 trading days preceding the date on which a payment is made
by issuance of Non-Voting Common Stock. Notwithstanding the
foregoing, at any time prior to the date on which CuraGen Common
Stock is first registered under the 1934 Act, any payments made
pursuant to paragraph (a) or (b) above shall be paid in cash, or
at the option of the Borrower, in shares of a new series of
Preferred Stock, $.01 par value per share (the "Preferred
Stock"), of the Borrower having substantially the same rights,
preferences and privileges as the Borrower's Series A Preferred
Stock (other than with respect to (i) the applicable conversion
rate, (ii) those certain adjustments to the

-3-
<PAGE>

applicable conversion rate set forth in Section 5(c)(ii) of
Exhibit A of the Restated Certificate of Incorporation of the
Borrower dated June 24, 1997 and (iii) voting rights), valued at
the price at which the Borrower sold shares of Preferred Stock in
the round of equity financing immediately preceding such
prepayment date raising in excess of $3,000,000 from investors
not involved in a collaborative relationship with the Borrower
(the "Preferred Stock Value"). Delivery of any shares of Non-
Voting Common Stock or Preferred Stock shall take place no later
than five (5) days after the repayment date and shall be subject
to execution by the parties of an agreement containing customary
representations and provisions to comply with Federal and state
securities laws, as mutually agreed by the parties.

2. Interest
--------

Interest shall accrue on the outstanding principal balance hereunder at a
rate per annum equal to [XXXXX]. As used herein, the term [XXXXX]. The
applicable rate of interest for this Note shall be adjusted quarterly according
to [XXXXX]. Interest shall accrue and be compounded quarterly commencing on the
three-month anniversary of the date of the first advance under the Loan and
shall continue to accrue and be compounded every calendar quarter thereafter
until all amounts due hereunder have been paid in full.

-4-

Confidential Treatment Requested
<PAGE>

3. Recording of Advances, Repayments and Conversions
-------------------------------------------------

The advances described in the Agreement and made by the Lender to the
Borrower, and all repayments made on the account of principal hereof and all
conversions of the principal hereof and accrued interest hereon into shares of
the Borrower's capital stock shall be recorded by the Lender on the Schedule
attached hereto which is a part of this Note; provided, however, that the
failure of the Lender so to record on this Note (or any error in recording on
this Note) shall not affect the Borrower's obligations hereunder.

4. Subordination
-------------

This Note shall be subordinated to [XXXXX]

5. Acceleration and Conversion if Borrower is Public
-------------------------------------------------

If at any time after the date that CuraGen Common Stock is first registered
under the 1934 Act, the Market Capitalization of the Borrower is, for a period
of ten (10) consecutive Trading Days, less than two (2) times the aggregate
unpaid principal amount and accrued unpaid interest under this Note, the
Borrower shall promptly give written notice (to be delivered by hand or
facsimile transmission) of such occurrence to the Lender. The Lender may, at its
option exercisable at any time within fifteen (15) business days of the receipt
of such notice from the

-5-

Confidential Treatment Requested
<PAGE>

Borrower (the "Acceleration Option"), declare all amounts owed hereunder
immediately due and payable by giving the Borrower written notice of such
declaration. Within fifteen (15) days of the Borrower's receipt of the Lender's
notice of exercise of the Acceleration Option, the Borrower shall make repayment
in full of the outstanding principal balance and accrued interest of this Note
in cash, or, at the option of the Borrower and subject to Section 7 of this
Note, in shares of Non-Voting Common Stock valued at the then Fair Market Value
of CuraGen Common Stock. For purposes hereof, (i) the Borrower's "Market
Capitalization" shall be equal to an amount determined by multiplying the number
of shares of the Borrower's Common Stock and Non-Voting Common Stock outstanding
on any Trading Day by the average of the closing prices of the Borrower's Common
Stock as reported by the Nasdaq Stock Market or, if not traded on the Nasdaq
Stock Market, by such other principal securities exchange on which shares are
traded, as applicable, over the twenty (20) trading days preceding such date;
and (ii) "Trading Days" shall mean days when trading is available on the Nasdaq
Stock Market or on the principal securities exchange on which the Borrower's
Common Stock may be traded.

If the Borrower does not repay this Note in full upon exercise by the
Lender of the Acceleration Option in accordance with the preceding paragraph,
the entire unpaid principal amount of the Note and all unpaid accrued interest
hereon shall automatically be converted into shares of Non-Voting Common Stock
on the sixteenth day after Borrower's receipt of notice of the exercise by the
Lender of the Acceleration Option (such date, the "Automatic Conversion Date"),
subject to Section 7 of this Note. Notwithstanding the foregoing limitation,
Lender reserves the right to convert the remaining loan balance into shares of
Non-Voting Common Stock in excess of the 19.8% limitation provided in Section 7
of this Note. The number of shares of Non-Voting Common Stock into which this
Note shall be converted shall be determined by dividing the sum of the aggregate
unpaid principal amount of this Note and the unpaid accrued

-6-
<PAGE>

interest hereon on the Automatic Conversion Date by the Fair Market Value of
CuraGen Common Stock on the Automatic Conversion Date.

If this Note is automatically converted as provided above, written notice
thereof shall be delivered by the Borrower to the Lender, which notice shall
specify the Automatic Conversion Date, the Fair Market Value of CuraGen Common
Stock on the Automatic Conversion Date, the unpaid principal amount of and
unpaid accrued interest on the Note converted and, if such conversion is of the
Note in full, calling upon such Lender to surrender to the Borrower, in the
manner and at the place designated, the originally-executed Note. Upon any such
conversion of this Note in full, the Lender shall surrender this Note, duly
endorsed, at the principal executive office of the Borrower. At its expense, the
Borrower shall, as soon as practicable thereafter, issue and deliver to the
Lender at such principal office a certificate or certificates for the number of
shares of Non-Voting Common Stock to which the Lender shall be entitled upon
such conversion. Any conversion of this Note hereunder shall be deemed to have
been made at the close of business, California time, on the applicable
Conversion Date, and at and after such time the Lender shall be treated for all
purposes as the record holder of such shares of Non-Voting Common Stock.

Upon payment of this Note in full, the Borrower shall be forever released
from all its obligations and liabilities under this Note.

The Borrower shall at all times reserve and keep available for issuance out
of its authorized but unissued shares of Non-Voting Common Stock such number of
shares as shall from time to time be sufficient to effect the conversion of the
Note into shares of Non-Voting Common Stock, and if such reserve shall not be
sufficient to effect the conversion of the entire outstanding principal amount
of and accrued interest on this Note, without limitation of such other remedies
as shall be available to the Lender, the Borrower will use commercially
reasonable efforts to take such corporate actions as may, in the opinion of its
counsel, be

-7-
<PAGE>

necessary to increase its authorized but unissued shares of Non-Voting Common
Stock. In addition, the Borrower shall at all times reserve and keep available
for issuance out of its authorized but unissued shares of Common Stock, such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of the shares of Non-Voting Common Stock into Common
Stock, and if such reserve shall not be sufficient to effect the conversion of
the shares of Non-Voting Common Stock, without limitation of such other remedies
as shall be available to the Lender, the Borrower will use its commercially
reasonable efforts to take such corporate actions as may, in the opinion of
counsel, be necessary to increase its authorized but not outstanding shares of
Common Stock to such number of shares as shall be sufficient for such purposes.

6. Conversion to Preferred Stock if Borrower is not Public
-------------------------------------------------------

If at any time prior to the date on which CuraGen's Common Stock is first
registered under the 1934 Act, the ratio (the "Ratio") of [XXXXX] then (A) the
Borrower shall promptly provide written notice thereof to the Lender and (B)
subject to Section 7 of this Note, the Lender may, by written notice to the
Borrower (the "Series F Conversion Notice"), convert that portion of the
indebtedness represented by this Note into shares of Series F Non-Voting
Convertible Preferred Stock, $.01 par value per share (the "Series F Preferred
Stock"), of the Borrower as may be necessary to increase the Ratio to [XXXXX]
at a conversion price equal to one (1) share of Series F Preferred Stock

-8-

Confidential Treatment Requested

<PAGE>

for each $100 of outstanding principal and accrued interest surrendered for
conversion. The Series F Preferred Stock shall have the rights, preferences and
privileges as set forth in the form of Certificate of Designation attached
hereto as Exhibit 2.
---------

Upon any such conversion of this Note in full, the Lender shall surrender
this Note, duly endorsed, at the principal executive office of the Borrower. At
its expense, the Borrower shall, as soon as practicable thereafter, issue and
deliver to the Lender at such principal office a certificate or certificates for
the number of shares of Series F Preferred Stock to which the Lender shall be
entitled upon such full or partial conversion. Any conversion of this Note under
this Section 6 shall be deemed to have been made at the close of business,
California time, on the Series F Conversion Date (as defined below), and at and
after such times the Lender shall be treated for all purposes as the record
holder of such shares of Series F Preferred Stock. As used herein, the term
"Series F Conversion Date" shall mean the date on which the Certificate of
Designation establishing the Series F Preferred Stock has been accepted for
filing by the Delaware Secretary of State.

The Borrower shall at all times after the Series F Conversion Date reserve
and keep available for issuance out of its authorized but unissued shares of
Series F Preferred Stock such number of shares of Series F Preferred Stock as
shall be sufficient to effect the conversion of the Note into shares of Series F
Preferred Stock, and if at any time such reserve shall not be sufficient to
effect the conversion of the entire outstanding principal amount of, and accrued
interest on, this Note, without limitation of such other remedies as shall be
available to the Lender, the Borrower will use commercially reasonable efforts
to take such corporate actions as may, in the opinion of counsel, be necessary
to increase its authorized but unissued shares of Series F Preferred Stock. The
Borrower shall at all times after the Series F Conversion Date reserve and keep
available for issuance out of its authorized but unissued shares of Common Stock
such number of shares as shall from time to time be sufficient to effect the
conversion of

-9-
<PAGE>

the outstanding shares of Series F Preferred Stock into shares of Common Stock,
and if such reserve shall not be sufficient to effect the conversion of the
aggregate number of shares of Series F Preferred Stock then outstanding plus
accrued dividends thereon, without limitation of such other remedies as shall be
available to the Lender, the Borrower will use commercially reasonable efforts
to take such corporate actions as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock.

7. Limitation on Conversion of Principal and Interest
--------------------------------------------------

If the payment or conversion of any indebtedness represented by this Note
into shares of Non-Voting Common Stock, Preferred Stock or Series F Preferred
Stock would cause the Lender's Percentage Interest (as defined below) to exceed
19.8%, the Lender may, by written notice to the Borrower, require the Borrower
to make that portion of such conversion or payment in cash as is necessary to
reduce the Lender's Percentage Interest to less than 19.8%. If, at any time
during the term of this Note, the Lender's Percentage Interest (as defined
below) exceeds 19.8%, the Lender may, upon written notice to the Borrower,
require the Borrower to repurchase that number of shares of Non-Voting Common
Stock, Preferred Stock or Series F Preferred Stock, at the Borrower's option, as
is necessary to maintain the Lender's Percentage Interest at less than 19.8%.
The price of such repurchase shall be equal to (i) the Fair Market Value of
CuraGen Common Stock, with respect to a repurchase of Non-Voting Common Stock,
(ii) the Preferred Stock Value with respect to a repurchase of Preferred Stock
or (iii) $100 per share with respect to a repurchase of Series F Preferred
Stock. As used herein the term "Lender's Percentage Interest" shall mean the
result obtained by dividing (i) the aggregate amount of shares
of the capital stock of the Borrower held by the Lender with present voting
privileges plus the aggregate amount of shares of Non-Voting Common Stock held
by the Lender by (ii) the

-10-
<PAGE>

aggregate amount of then outstanding shares of the capital stock of the Borrower
whose holders have present voting privileges plus the aggregate amount of then
outstanding shares of Non-Voting Common Stock held by holders other than the
Lender.

8. Adjustments in Event of Reclassification or Reorganization
----------------------------------------------------------

In the event the Borrower reclassifies its Common Stock or consolidates
with or merges into another person or otherwise reorganizes its capital
structure or conveys or transfers all or substantially all of its assets (each,
a "Reorganization Event"), then and in each such event, the shares of Non-Voting
Common Stock, Preferred Stock or Series F Preferred Stock issued under this Note
shall be convertible into the kind and amount of shares of stock and other
securities and property that were receivable by a holder of Common Stock upon
such Reorganization Event.

9. Events of Default
-----------------

Subject to Section 4 hereof, the Lender may declare the entire unpaid
principal amount of, and all accrued but unpaid interest on, this Note,
immediately due and payable, effective upon written notice to the Borrower, if
any of the following events shall occur (individually an "Event of Default"):

(i) Payment of Note. Default in the payment of this Note when due.
---------------

(ii) Bankruptcy, Insolvency, etc. Commenced by the Borrower. If the
------------------------------------------------------
Borrower:

-11-
<PAGE>

(a) shall commence any proceeding in bankruptcy or seek
reorganization, arrangement, readjustment of its debts, dissolution,
liquidation, winding-up, composition or any other relief under the
United States Bankruptcy Act, as amended, or under any other
insolvency, reorganization, liquidation, dissolution, arrangement,
composition, readjustment of debt or any other similar act or law, of
any jurisdiction, domestic or foreign, now or hereafter existing;

(b) shall admit its inability to pay its debts as they mature
in any petition or pleading in connection with any such proceeding;

(c) shall apply for, or, in writing, consent to or acquiesce
in, an appointment of a receiver, conservator, trustee or similar
officer for it or for all or substantially all of its assets;

(d) shall make a general assignment for the benefit of
creditors; or

(e) shall admit in writing its inability to pay its debts as
they mature.

(iii) Bankruptcy, Insolvency, etc. Commenced Against the Borrower.
-----------------------------------------------------------
If any proceedings are commenced or any other action is taken
against the Borrower in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts, dissolution,
liquidation, winding-up, composition or any other relief under
the United States Bankruptcy Act, as amended, or under any
other insolvency, reorganization, liquidation, dissolution,
arrangement, composition, readjustment of debt or any other

-12-
<PAGE>

similar act or law, of any jurisdiction, domestic or foreign,
now or hereafter existing, or a receiver, conservator, trustee
or similar officer for the Borrower or for all or substantially
all of its assets is appointed; and in each such case, such
event continues for sixty (60) days undismissed, unbounded and
undischarged.

(iv) Certain Terminations of the Agreement. Termination of the
-------------------------------------
Agreement by the Lender in accordance with Section 8.2(a) or
Section 8.3 of the Agreement.

10. Any notice required or permitted under this Note shall be given in
writing and in accordance with Section 9.5 of the Agreement.

11. If any action at law or in equity is necessary to enforce or interpret
the terms of this Note, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements to any other relief to which
such party may be entitled.

12. The Borrower hereby waives presentment, demand, protest or notice of
any kind in connection with this Note. No failure on the part of the Lender in
exercising any right or remedy hereunder, and no single, partial or delayed
exercise by the Lender of any right or remedy shall preclude the full and timely
exercise by the Lender at any time of any right or remedy of the Lender
hereunder without notice. No course of dealing or other conduct, no oral
agreement or representation made by the Lender or usage of trade shall operate
as a waiver of any right or remedy of the Lender. This Note and the Agreement
contain the entire agreement between the parties with respect to the subject
matter hereof, and supersedes every course of

-13-
<PAGE>

dealing, other conduct, oral agreement or representation previously made by the
Lender. In the event that any court of competent jurisdiction shall determine
that any provision, or portion thereof, contained in this Note shall be
unenforceable in any respect, then such provision shall be deemed limited to the
extent that such court deems it enforceable, and the remaining provisions of
this Note shall nevertheless remain in full force and effect.

13. None of the terms or provisions of this Note may be excluded,
modified, or amended except by a written instrument duly executed on behalf of
both the Borrower and the Lender expressly referring hereto and setting forth
the provision so excluded, modified or amended. No waiver or forbearance of any
of the rights and remedies of the Lender hereunder shall be effective unless
made specifically in a writing signed by the Lender, and any such waiver or
forbearance shall be effective only in the specific instance and for the
specific purpose for which given.

14. This Note is the "Note" referred to in the Agreement and is entitled
to all of the rights and benefits referred to therein.

15. This Note is delivered to the Lender at its principal office in South
San Francisco, California, shall be governed by, and construed and enforced in
accordance with, the laws of the state of California, without regard to its
principles of conflicts of laws.

-14-
<PAGE>

IN WITNESS WHEREOF, the Borrower has caused this Note to be executed by its
duly authorized officer as of the date first above written.

Witness: CURAGEN CORPORATION

_________________________________ by:________________________________
(Signature)

___________________________________
(Print or type name)

its:_______________________________
(Title or Capacity)

-15-
<PAGE>

SCHEDULE TO PROMISSORY NOTE

DATED ___________, 1997

FROM CURAGEN CORPORATION

TO GENENTECH, INC.

IN THE AMOUNT OF UP TO $26,000,000

Amount Amount Amount CuraGen Genentech
Date Drawn Repaid Converted Acknowledgement Acknowledgement
- ---- ----- ------ --------- --------------- ---------------

-16-
<PAGE>

EXHIBIT 1
---------

RESTATED
CERTIFICATE OF INCORPORATION
OF
CURAGEN CORPORATION

Adopted in accordance with the
provisions of Sections 242 and 245
of the General Corporation Law of the State of Delaware
-------------------------------------------------------

CuraGen Corporation, a Delaware corporation, hereby certifies as follows:

1. The name of the corporation is CuraGen Corporation. The date of the
filing of its original Certificate of Incorporation with the Secretary of State
of the State of Delaware was November 22, 1991.

3. The text of the Certificate of Incorporation is hereby amended and
restated to read in its entirety as follows:

FIRST: The name of the corporation is CuraGen Corporation (the
"Corporation").

FOURTH:

A. Designation and Number of Shares.
--------------------------------

B. Preferred Stock
---------------

(a) The distinctive designation and number of shares comprising such
series, which number may (except where otherwise provided by the Board of
Directors in creating such series) be increased or decreased (but not below
the number of shares then outstanding) from time to time by action of the
Board of Directors;

(b) The rate of dividends, if any, on the shares of that series,
whether dividends shall be (i) non-cumulative, (ii) cumulative to the
extent earned or (iii) cumulative (and, if cumulative, from which date or
dates), whether dividends shall be payable in cash, property or rights, or
in shares of the Corporation's capital stock, and the relative rights of
priority, if any, of payment of dividends on shares of that series over
shares of any other series or class;

(c) Whether the shares of that series shall be redeemable and, if so,
the terms and conditions of such redemption, including the date or dates
upon or after which they shall be redeemable, and the amount per share
payable in case of redemption (which amount may vary under different
conditions and at different redemption dates) or the property or rights,
including securities of any other corporation, payable in case of
redemption;

(d) Whether the series shall have a sinking fund for the redemption
or purchase of shares of that series and, if so, the terms and amounts
payable into such sinking fund;

(e) The rights to which the holders of the shares of that series
shall be entitled in the event of the voluntary or involuntary liquidation,
dissolution or winding-up of the

2
<PAGE>

Corporation, and the relative rights of priority, if any, of payment of
shares of that series in any such event;

(f) Whether the shares of that series shall be convertible into or
exchangeable for shares of stock of any other class or any other series
and, if so, the terms and conditions of such conversion or exchange,
including the rate or rates of conversion or exchange, the date or dates
upon or after which they shall be convertible or exchangeable, the period
or periods during which they shall be convertible or exchangeable, the
event or events upon or after which they shall be convertible or
exchangeable or at whose option they shall be convertible or exchangeable,
and the method (if any) of adjusting the rates of conversion or exchange in
the event of a stock split, stock dividend, combination of shares or
similar event;

(g) Whether the issuance of any additional shares of such series, or
of any shares of any other series, shall be subject to restrictions as to
issuance, or as to the powers, preferences or rights of any such additional
shares of such series or shares of such other series;

(h) Whether or not the shares of that series shall have voting
rights, the extent of such voting rights on specified matters or on all
matters, the number of votes to which the holder of a share of such series
shall be entitled in respect of such share, whether such series shall vote
generally with the Common Stock on all matters or (either generally or upon
the occurrence of specified circumstances) shall vote separately as a class
or with other series of Preferred Stock; and

(i) Any other preferences, privileges and powers and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions of such series, as the Board of Directors may
deem advisable and as shall not be inconsistent with the provisions of this
Restated Certificate of Incorporation and to the full extent now or
hereafter permitted by the Delaware General Corporation Law.

C. Common Stock and Non-Voting Common Stock.
----------------------------------------

1. Dividends. The holders of record of Common Stock and the Non-Voting
---------
Common Stock shall be entitled to receive, when, if and as declared by the Board
of Directors, such dividends of cash, property or stock of the Corporation as
the Board of Directors shall from time to time declare, subject to the following
rights and restrictions and the rights and restrictions set forth in paragraph
(C)(2) of this Article FOURTH:

(a) No cash dividends shall be declared and paid on the Common Stock
unless at the same time an equal cash dividend is declared and paid, per
share, on the Non-Voting Common Stock. No cash dividends shall be declared
and paid on the Non-Voting Common Stock unless at the same time an equal
cash dividend is declared and paid, per share, on the Common Stock.

3
<PAGE>

(b) No dividend of property (including capital stock of the
Corporation) shall be declared and paid on the Common Stock unless a
dividend of an equal amount of the same property has also been declared and
paid, per share, on the Non-Voting Common Stock. No dividend of property
(including capital stock of the Corporation) shall be declared and paid on
the Non-Voting Common Stock unless a dividend of an equal amount of the
same property has also been declared and paid, per share, on the Common
Stock.

3. Liquidation. In the event of any liquidation, dissolution or
-----------
winding up of the Corporation, whether voluntary or involuntary, after payment
or provision for payment of the debts and other liabilities of the Corporation
and the amounts to which the holders of any Preferred Stock shall be entitled,
the holders of Common Stock and Non-Voting Common Stock shall be entitled
(together as one class) to share ratably in the remaining assets of the
Corporation.

4. Voting. The holders of the Common Stock are entitled to one vote
------
for each share held. Except as provided under the Delaware General Corporation
Law, the holders of the Non-Voting Common Stock are not entitled to vote. There
shall be no cumulative voting.

5. Conversion of Non-Voting Common Stock.
--------------------------------------

(a) Optional Conversion. Each share of Non-Voting Common Stock shall
be convertible, at the option of the holder thereof, at any time and from
time to time, into shares of Common Stock at the rate of one share of
Common Stock for each share of Non-Voting Common Stock by surrendering the
certificate or certificates for such shares of Non-Voting Common Stock,
together with written notice that such holder elects to convert all or any
portion of the shares of Non-Voting Common Stock represented by such
certificate or certificates, to the office of the transfer agent (which
shall be the principal office of the Corporation if it serves as its own
transfer agent). Such notice shall state the names of the nominees, if any,
in which such holder wishes the certificate or certificates for the shares
of Common Stock to be issued. The date of receipt of such certificates and
notice by the transfer agent (or by the Corporation if it serves as its own
transfer agent) shall be the conversion date. The Corporation shall, as
soon as practicable after such conversion date, issue and deliver at such
office to such holder of Non-Voting Common Stock, or to its nominees, a
certificate or certificates for the number of shares of Common Stock to
which such holder shall be entitled, together with cash in lieu of any
fraction of a share.

(b) Automatic Conversion. (i) Except as provided in paragraph
--------------------
5(b)(ii), upon the transfer of beneficial ownership of any shares of Non-
Voting Common Stock, such shares shall automatically, with no further
action being required by any party to such transfer or otherwise, be
converted into shares of Common Stock at the rate of one share of Common
Stock for each share of Non-Voting Common Stock.

(ii) The provisions of paragraph 5(b)(i) shall not apply, and Non-
Voting Common Stock shall be issued to a transferee of Non-Voting Common
Stock upon the transfer of

4
<PAGE>

beneficial ownership of any shares thereof, if such transfer is made to (i)
a majority- owned subsidiary of Genentech, Inc., a Delaware corporation
("Genentech"), (ii) a corporation ("Genentech Parent") of which Genentech
is a wholly owned subsidiary or (iii) a wholly owned subsidiary of
Genentech Parent (in any such case, a "qualifying transfer"); provided that
--------
if such transfer is made to a wholly owned subsidiary of Genentech or of
Genentech Parent, as the case may be, and such wholly owned subsidiary
ceases to be a wholly owned subsidiary of Genentech or of Genentech Parent,
as the case may be, then such shares shall automatically, with no further
action being required by any party, be converted into shares of Common
Stock at the rate of one share of Common Stock for each share of Non-Voting
Common Stock. Upon any qualifying transfer, the transferor shall provide
written certification to the transfer agent for the Common Stock and Non-
Voting Common Stock of such facts which constitute such transfer as a
"qualifying transfer" and, absent prima facie evidence that such
certification is false, the Corporation or any transfer agent shall accept
such certification as being correct and shall not be required to conduct
any investigation with respect thereto.

FIFTH: The Corporation is to have perpetual existence.

B. The directors of the Corporation need not be elected by written ballot
unless the By-Laws so provide.

B. On or prior to the Effective Time, the Board of Directors of the
Corporation shall divide the directors into three classes, as nearly equal in
number as reasonably possible, with the term of office of the first class to
expire at the 1998 annual meeting of stockholders or any special meeting in lieu
thereof, the term of office of the second class to expire at the 1999 annual
meeting of stockholders or any special meeting in lieu thereof, and the term of
office of the third class to expire

5
<PAGE>

at the 2000 annual meeting of stockholders or any special meeting in lieu
thereof. At each annual meeting of stockholders or special meeting in lieu
thereof following such initial classification, directors elected to succeed
those directors whose terms expire shall be elected for a term of office to
expire at the third succeeding annual meeting of stockholders or special meeting
in lieu thereof after their election and until their successors are duly elected
and qualified.

NINTH: A. To the fullest extent permitted by the Delaware General
Corporation Law as the same now exists or may hereafter be amended, the
Corporation shall indemnify, and advance expenses to, its directors, officers
and any person who is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation, or of a
partnership, joint venture, trust or other enterprise, if such person was or is
made a party to or is

6
<PAGE>

threatened to be made a party to or is otherwise involved (including, without
limitation, as a witness) in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director or officer of the Corporation or is or was serving
at the request of the Corporation as a director, officer, trustee, employee or
agent of another corporation, or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan;
provided, that except with respect to proceedings to enforce rights to
- --------
indemnification or as is otherwise required by law, the By-Laws of the
Corporation may provide that the Corporation shall not be required to indemnify,
and advance expenses to, any director, officer or other person in connection
with a proceeding (or part thereof) initiated by such director, officer or other
person, unless such proceeding (or part thereof) was authorized by the Board of
Directors. The Corporation, by action of its Board of Directors, may provide
indemnification or advance expenses to employees and other agents of the
Corporation or other persons only on such terms and conditions and to the extent
determined by the Board of Directors in its sole and absolute discretion.

7
<PAGE>

Section 174 or successor provisions of the Delaware General Corporation Law; or
(iv) for any transaction from which the director derived an improper personal
benefit. This provision shall not eliminate or limit the liability of a director
for any act or omission if such elimination or limitation is prohibited by the
Delaware General Corporation Law. No amendment to or repeal of this provision
shall apply to or have any effect on the liability or alleged liability of any
director for or with respect to any acts or omissions of such director occurring
prior to such amendment or repeal. If the Delaware General Corporation Law is
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.

[THIS SPACE INTENTIONALLY LEFT BLANK]

8
<PAGE>

IN WITNESS WHEREOF, the Corporation has caused this certificate to be
signed by its Chairman of the Board of Directors, President and Chief Executive
Officer this _______ day of __________ 1997.

CURAGEN CORPORATION

By:_________________________________________
Jonathan M. Rothberg, Ph.D.
Its Chairman of the Board, President
and Chief Executive Officer

9
<PAGE>

EXHIBIT 2
---------

CERTIFICATE OF DESIGNATION, PREFERENCES, AND RIGHTS OF
SERIES F NON-VOTING CONVERTIBLE PREFERRED STOCK

CURAGEN CORPORATION

CURAGEN CORPORATION, a Delaware corporation (the "Company"), DOES HEREBY
CERTIFY:

That, pursuant to authority conferred on the Board of Directors of the
Company by the Certificate of Incorporation of the Company and pursuant to the
provisions of Section 151 of Title 8 of the Delaware Code, said Board of
Directors, by the affirmative vote of at least a majority of its members,
adopted a resolution providing for the powers, designation, preferences and
relative, participating, optional or other rights, and qualifications,
limitations or restrictions thereof, of __________ (____________) shares of the
Company's Preferred Stock, par value $.01 per share, which resolution is as
follows:

"RESOLVED: That pursuant to the authority granted to and vested in
--------
the Board of Directors of this Company in accordance with the
provisions of its Restated Certificate of Incorporation, as
amended, the Board of Directors hereby designates a series of
Preferred Stock of the Company, par value $.01 per share (the
"Preferred Stock"), consisting of _________ (______________)
shares of the authorized, unissued Preferred Stock of the
Company, as the Series F Non-Voting Convertible Preferred Stock
(the "Series F Preferred"), and hereby fixes such designation
and number of shares, and the powers, preferences and relative,
participating, optional or other rights, and qualifications,
limitations and restrictions thereof, as set forth below, and
that the officers of the Company, and each acting singly, are
hereby authorized, empowered and directed to execute and file
with the Secretary of State of the State of Delaware a
Certificate of Designation, Preferences and Rights of Series F
Non-Voting Convertible Preferred Stock, as the officer or
officers shall deem necessary and advisable to carry out the
purposes of this resolution."

Series F Preferred. The powers, preferences, and relative, participating,
------------------
optional or other rights, and qualifications, limitations and restrictions
thereof, with respect to the Series F Preferred, par value $.01 per share, are
as follows:

1. Designation and Amount. The shares of such series shall be designated
----------------------
as "Series F Non-Voting Convertible Preferred Stock" (the "Series F Preferred"),
and the number of shares constituting the Series F Preferred shall be
__________________(____________).
<PAGE>

2. Dividends. Subject to the provisions of law and this Certificate of
---------
Incorporation, the holders of shares of Series F Preferred shall be entitled to
receive, out of funds legally available therefor, in preference to the holders
of Series A Convertible Preferred Stock (the "Series A Preferred"), Series B
Redeemable Preferred Stock (the "Series B Preferred"), Series C Convertible
Preferred Stock (the "Series C Preferred"), Series D Convertible Preferred Stock
(the "Series D Preferred") and Series E Preferred Stock (the "Series E
Preferred"), and any other class or series of the capital stock of the Company
ranking junior to the Series F Preferred Stock as to the payment of dividends,
quarterly dividends equal to the Series F Dividend Rate (as hereinafter
defined), payable when and as declared by the Board of Directors, and, whether
or not declared, with respect to liquidation under Section 4(a), conversion
under Section 5(a) or redemption under Section 6(a). Such dividends shall accrue
and be cumulative from the date of issuance of each share of Series F Preferred
Stock, whether or not declared. As used herein, the term "Series F Dividend
Rate" shall mean that dividend rate as is equal to (i) the prime rate of
interest as reported from time to time by Citibank, N.A. (or, if Citibank, N.A.
ceases to report such rate, the generally prevailing base lending rate of Fleet
National Bank) (ii) plus one percent (1%).

3. Voting Rights. Except as otherwise provided by the Delaware General
-------------
Corporation Law, the holders of shares of Series F Preferred shall not be
entitled to vote in, or to receive notice of, any meeting of the stockholders of
the Company.

4. Liquidation, Dissolution or Winding Up.
--------------------------------------

(a) In the event of the voluntary or involuntary liquidation, dissolution
or winding up of the Company, or in the event of its insolvency, before any
distribution or payment is made to any holders of any shares of the Common Stock
or any other class or series of capital stock of the Company designated to be
junior to the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series D Preferred, the Series E Preferred and the Series F
Preferred and subject to the liquidation rights and preferences of any class or
series of capital stock of the Company designated to be senior to, or on parity
with, the Series A Preferred, the Series B Preferred, the Series C Preferred,
the Series D Preferred the Series E Preferred and the Series F Preferred, the
holders of outstanding shares of the Series A Preferred, the Series B Preferred,
the Series C Preferred, the Series D Preferred, the Series E Preferred and the
Series F Preferred shall be entitled to have set apart for them, or to be paid
first out of the assets of the Company available for distribution to holders of
the Company's capital stock of all classes, an amount in cash equal to (i) $5.86
per share of Series A Preferred and Series C Preferred, plus all declared but
unpaid dividends, (ii) $10.00 per share of Series B Preferred, plus all accrued
but unpaid dividends, whether or not declared, on the Series B Preferred, (iii)
$7.50 per share of Series D Preferred, plus all declared but unpaid dividends,
(iv) $10.00 per share of the Series E Preferred, plus all accrued but unpaid
dividends, whether or not declared and (v) $100.00 per share of the Series F
Preferred, plus all accrued but unpaid dividends, whether or not declared (and
in all instances specified in (i), (ii), (iii), (iv) and (v) subject to
equitable adjustment in the event of any stock dividend, stock split,

2
<PAGE>

combination reorganization, recapitalization or other similar event affecting
such shares). If, upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company, the assets of the Company available for distribution
to stockholders shall be insufficient to set aside for or to pay such amounts to
the holders of shares of Series A Preferred, Series B Preferred, Series C
Preferred, Series D Preferred, the Series E Preferred and Series F Preferred the
total amount of the Company's assets which is available to be paid to
stockholders of the Company shall be distributed ratably among the holders of
the Series A Preferred, the Series B Preferred, the Series C Preferred, the
Series D Preferred, the Series E Preferred and the Series F Preferred in
proportion to their preferential liquidation amounts as specified above, subject
to the liquidation rights and preferences of any other class or series of
capital stock of the Company designated to be senior to, or on a parity with,
the Series A Preferred, the Series B Preferred, the Series C Preferred, the
Series D Preferred, the Series E Preferred and the Series F Preferred, and no
distribution shall be made to or set apart for the holders of Common Stock or
any other class or series of capital stock of the Company which at such time is
junior to the Series A Preferred, the Series B Preferred, the Series C
Preferred, the Series D Preferred, the Series E Preferred and the Series F
Preferred as to liquidation rights and preferences. If the assets of the Company
available for distribution to stockholders exceed such amounts, the balance of
such assets shall be paid to or set aside for payment ratably among the holders
of any class or series of capital stock of the Company designated to be junior
to the Series A Preferred, the Series B Preferred, the Series C Preferred, the
Series D Preferred, the Series E Preferred and the Series F Preferred in
accordance with their relative rights and preferences, and thereafter, to the
holders of Common Stock.

(b) The merger or consolidation of the Company into or with another
corporation, or the sale or other conveyance of all or substantially all of the
assets of the Company to another entity, shall be deemed, at the option of any
holder of shares of Series F Preferred, a liquidation, dissolution or winding up
of the Company for purposes of this Section 4 as to such holder.

5. Conversion.
----------

(a) Subject to the terms and conditions of this Section 5, at any time
after the issuance of the Series F Preferred, the holder of each share of Series
F Preferred shall have the right, at such holder's option, to convert any such
shares of Series F Preferred into such number of fully paid and non-assessable
shares of Common Stock of the Company as is determined by dividing the Series F
Issue Price (as defined below) by the Conversion Price (as defined below). Such
option to convert shares of Series F Preferred into shares of Common Stock may
be exercised as to all or any portion of such shares of Series F Preferred by,
and only by, giving written notice to the Company at its principal office that
the holder elects to convert a stated number of shares of Series F Preferred
into Common Stock and by surrendering for such purpose to the Company at its
principal office the certificate representing such shares of Series F Preferred,
duly endorsed or accompanied by proper instruments to evidence the conversion
election. At the time of such surrender, the persons exercising such option to
convert shall be deemed to be the holders of the shares of Common Stock issuable
upon such conversion, notwithstanding that the stock transfer books of the
Company may

3
<PAGE>

then be closed or that certificates representing such shares of Common Stock
shall not then be actually delivered to such person. All rights with respect to
the Series F Preferred so converted (other than the right to receive declared or
accrued (whether or not declared) but unpaid dividends thereon which may, at the
option of the Company, be paid in additional shares of Common Stock) will then
terminate. As promptly as practicable after the receipt of the written notice
referred to in the preceding paragraph and surrender of the certificate or
certificates for the share or shares of Series F Preferred to be converted, the
Company shall issue and deliver, or cause to be issued and delivered, to the
holder of the shares being converted, a certificate or certificates registered
in the holder's name or designee, for the number of whole shares of Common Stock
issuable upon the conversion of such share or shares of Series F Preferred. In
case the number of shares of Series F Preferred represented by the certificate
or certificates surrendered for conversion pursuant to this Section 5 exceeds
the number of shares converted, the Company shall, upon such conversion, execute
and deliver to the holder at the expense of the Company a new certificate or
certificates for the number of shares of Series F Preferred represented by the
certificate or certificates surrendered which are not to be converted. As used
herein, the "Series F Issue Price" shall mean $100 per share and the term
"Conversion Price" shall mean the fair market value of the shares of Common
Stock of the Company at the time of conversion, determined as follows: if the
shares of Common Stock are traded on the Nasdaq Stock Market the average of the
closing prices as reported by the Nasdaq Stock Market or, if not traded on the
Nasdaq Stock Market, by such other principal securities exchange on which the
shares are traded, as applicable, over the twenty (20) days preceding the date
on which conversion will be made or, if not traded on any other exchange, the
price per share which the Company could obtain from a willing buyer for shares
of Common Stock sold by the Company, as determined in good faith by the Board of
Directors of the Company.

(b) Capital Reorganization, Merger or Sale of Assets. If at any time or
------------------------------------------------
from time to time there shall be a capital reorganization of the Common Stock or
a consolidation or merger of the Company, or a sale of all or substantially all
of the assets of the Company (a "Reorganization"), then, as a part of and as a
condition to such Reorganization, provision shall be made so that the holders of
shares of the Series F Preferred shall thereafter be entitled to receive upon
conversion of the shares of the Series F Preferred the same kind and amount of
stock or other securities or property (including cash) of the Company, or of the
successor corporation resulting from such Reorganization, to which such holder
would have been entitled if such holder had converted its shares of the Series F
Preferred immediately prior to the effective time of such Reorganization. In any
such case, appropriate adjustment shall be made in the application of the
provisions of this Section 5 to the end that the provisions of this Section 5
(including adjustment of the Conversion Price then in effect and the number of
shares of Common Stock or other securities issuable upon conversion of the
shares of the Series F Preferred) shall be applicable after such Reorganization
in as nearly equivalent manner as may be reasonably practicable. In the case of
a transaction to which both this Subsection 5(b) and Subsection 4(b) hereof
apply, the holders of at least a majority of the outstanding shares of the
Series F Preferred upon the occurrence of a Reorganization shall have the option
to elect treatment either under this Subsection 5(b) or under Subsection 4(b)
hereof, notice of which election shall be given in writing to the Company not
less than fifteen (15) business days

4
<PAGE>

prior to the effective date of such Reorganization or not less than fifteen (15)
days after the Company has given notice to the holders of the Series F Preferred
Stock of such Reorganization, whichever is later. If no such election is timely
made, the provisions of Subsection 4(b) and not of this Subsection 5(b) shall
apply.

(i) No Fractional Shares. The number of shares of Common Stock issuable
--------------------
upon conversion of any shares of Series F Preferred shall be rounded to the
nearest whole number, and no fractional shares of Common Stock, and no payment
in lieu thereof, shall be issued upon any such conversion.

(ii) Common Stock Reserved. The Company shall at all times reserve and
---------------------
keep available out of its authorized but unissued Common Stock the full number
of shares of Common Stock deliverable upon the conversion of all then
outstanding shares of Series F Preferred.

(iii) Status of Converted or Unissued Series F Preferred. Shares of Series
--------------------------------------------------
F Preferred that have been issued and reacquired in any manner, including upon
conversion of such shares, shall (upon compliance with any applicable provisions
of the laws of the State of Delaware) have the status of authorized and unissued
shares of the Company's Preferred Stock, par value $.01 per share, undesignated
as to series and may be redesignated and reissued as part of any series of the
Preferred Stock.

(iv) Certificate as to Adjustments. Upon the occurrence of each
-----------------------------
adjustment or readjustment of the number of shares receivable pursuant to this
Section 5, the Company at its expense shall promptly compute such adjustment or
readjustment in accordance with the terms hereof and furnish to each holder of
Series F Preferred a certificate setting forth such adjustment or readjustment
and showing in detail the facts upon which such adjustment or readjustment is
based. The Company shall, upon the written request at any time of any holder of
Series F Preferred, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, and (ii) the
number of shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of each series of Series F
Preferred.

6. (a) Redemption. The Company may, at any time after the date of
----------
its Initial Public Offering (as defined below) redeem from each holder of Series
F Preferred, at a price equal to the Series F Issue Price, plus any accrued but
unpaid dividends thereon, whether or not declared (the "Redemption Price"), one
hundred percent (100%) of the shares of Series F Preferred held by such holder
on such date. The Company will provide each holder of Series F Preferred with a
written request setting forth its desire to redeem shares of Series F Preferred.
Upon issuance of any such redemption request, the Company will become obligated
to redeem at the time of redemption specified therein (the "Redemption Date")
all shares of Series F Preferred specified therein. In case

5
<PAGE>

less than all shares of Series F Preferred represented by any certificate are
redeemed in any redemption pursuant to this Section 6, a new certificate will be
issued representing the unredeemed shares of Series F Preferred without cost to
the holder thereof. As used herein, the term "Initial Public Offering" shall
mean a firm commitment underwritten public offering of the Common Stock of the
Company pursuant to a registration statement filed with and declared effective
by the Securities and Exchange Commission under the Securities Act of 1933, as
amended.

(b) Status of Redeemed Shares. Unless there shall have been a default
-------------------------
in payment of the Redemption Price, no shares of redeemed Series F Preferred
shall be entitled to any dividends accrued after the Redemption Date, and on
such Redemption Date all rights of the holder of such redeemed shares as a
stockholder of the Company by reason of the ownership of such shares will cease,
except the right to receive the Redemption Price of such shares, without
interest, plus any declared or accrued (whether or not declared) unpaid
dividends accruing prior to the Redemption Date upon presentation and surrender
of the certificate representing such shares, and such redeemed shares will not
from and after such Redemption Date be deemed to be outstanding.

7. No Impairment. The Company shall not, by amendment of its
-------------
Certificate of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company but shall at all
times in good faith assist in the carrying out of all the provisions of this
Certificate of Designation and in the taking of all such action as may be
necessary or appropriate in order to protect the rights and preferences of the
holders of Series F Preferred against impairment in accordance with this
Certificate of Designation and the Delaware General Corporation Law.

8. Certain Amendments to the Company's Certificate of Incorporation.
----------------------------------------------------------------
So long as any shares of Series F Preferred Stock shall be outstanding, the
Company shall not, without first obtaining the affirmative vote or written
consent of the holders of a majority of the outstanding shares of Series F
Preferred Stock, voting separately as a class, amend or repeal any provision of,
or add any provision to, the Company's Certificate of Incorporation, including
any amendment, repeal or addition to the Company's Certificate or Incorporation
effected through a merger, if such action would adversely affect or change the
preferences, rights, privileges or powers of the Series F Preferred Stock, or
increase or decrease (other than by conversion) the total number of authorized
shares of Series F Preferred Stock.

6
<PAGE>

IN WITNESS WHEREOF, the Company has caused this Certificate of Designation
to be signed by its President and Chief Executive Officer this ____day of ____,
____.

CURAGEN CORPORATION

By:________________________________
Jonathan M. Rothberg, Ph.D.
President and Chief
Executive Officer

7
<PAGE>

APPENDIX C
----------

FORM OF LICENSE AGREEMENT
<PAGE>

LICENSE AGREEMENT

This License Agreement ("Agreement") is made effective as of
_______________ ("Effective Date") by and between GENENTECH, INC., a Delaware
corporation having its principal business office at 1 DNA Way, South San
Francisco, CA 94080 ("GENENTECH"), and CURAGEN CORPORATION, a Delaware
corporation with its principal place of business at 555 Long Wharf Drive, 11th
Floor, New Haven, Connecticut 06511 ("CURAGEN"). GENENTECH and CURAGEN are each
hereafter referred to individually as a "Party" and together as the "Parties".

WHEREAS, GENENTECH wishes to obtain a license to certain inventions made or
owned by CURAGEN as provided in that certain Research and Option Agreement
between the Parties hereto dated as of November 20, 1997 which is attached
hereto (the "Research Agreement");

WHEREAS, CURAGEN has agreed to provide such license under the terms and
conditions set forth herein.

1. DEFINITIONS

Whenever used in the Agreement with an initial capital letter, the terms
defined in this Section 1 shall have the meanings specified.

the election of directors, in the case of a corporation, or fifty percent (50%)
or more of the equity interests in the case of any other type of legal entity,
status as a general partner in any partnership, or any other arrangement whereby
a Party controls or has the right to control the Board of Directors or
equivalent governing body of a corporation or other entity.

1.3 "CURAGEN BACKGROUND INVENTIONS" shall mean all patent rights and know-
how of CURAGEN, other than those relating primarily to Inventions, which CURAGEN
has the right to license and which would be infringed by, or is reasonably
necessary for, the development, manufacture, use, sale or importation of any
product developed by GENENTECH pursuant to the licenses granted hereunder;
provided, however, that CURAGEN Background Inventions shall expressly exclude:
(i) any patent rights and know-how relating to Clones not licensed by GENENTECH
pursuant to this Agreement and (ii) any patent rights or know-how arising from
any CURAGEN collaboration with a third party, except to the extent permitted
thereby.

1.4 "CURAGEN DATA" shall mean, with respect to a Licensed Clone, all
information pertaining to such Licensed Clone obtained from the processing of
specified CURAGEN samples, including QC data. QEA/GeneCalling data,
MIM/PathCalling data, sequence data and any other information obtained or
generated by CURAGEN in the performance of the CURAGEN Project relating to such
Licensed Clone.

1.5 "CURAGEN DATA SET" shall mean all CURAGEN Data resulting from a
discrete CURAGEN Project that CURAGEN can make exclusively available to
GENENTECH.

2
<PAGE>

1.7 "CURAGEN PROJECT INVENTION" shall mean any discovery, invention, know-
how or trade secret conceived or made by employees of CURAGEN (i) in the
performance of a CURAGEN Project that results in CURAGEN Data that becomes part
of an Exclusive Data Set, that is based on, incorporates or makes material use
of the corresponding CURAGEN Data or (ii) relating to a Lead generated outside
of the Extended Research.

1.8 "CURAGEN PROJECT PATENT RIGHTS" shall mean Patent Rights containing a
claim or claims covering CURAGEN Project Inventions. CURAGEN Project Patent
Rights shall also include Patent Rights containing a claim or claims covering
CURAGEN Project Inventions exclusively licensed in by CURAGEN, with the right to
sublicense, now or in the future.

1.9 "CURAGEN PROJECT PROPRIETARY MATERIAL" shall mean, with respect to a
Licensed Clone, all substances made by CURAGEN in the performance of the CURAGEN
Project relating to such Licensed Clone, including mRNA pools. CURAGEN Project
Proprietary Material shall include, without limitation, QEA fragments, MIM
constructs and materials derived or constructed from QEA fragments and MIM
constructs, including, without limitation, fragment and full length cDNA clones
made by CURAGEN.

1.10 "DATA SET," which may be either a Project Data Set or a CURAGEN Data
Set, with respect to a Licensed Clone, shall mean all Project Data resulting
from the discrete Research Project relating to the Licensed Clone or all CURAGEN
Data resulting from the discrete CURAGEN Project relating to the Licensed Clone,
respectively.

1.11 "EXCLUSIVE DATA SET" shall mean any Project Data Set during the
corresponding Exclusive Evaluation Period as provided in Section 2.4 of the
Research Agreement or any CURAGEN Data Set during the corresponding Exclusive
Evaluation Period as provided in Section 2.5.2 of the Research Agreement.

1.12 "EXCLUSIVE EVALUATION PERIOD" shall have the meaning set forth in
Section 2.4 or 2.5.2 of the Research Agreement.

1.13 "EXTENDED LICENSE PATENT RIGHTS" shall have the meaning set forth in
Section 2.3.

3
<PAGE>

1.14 "EXTENDED RESEARCH" shall mean, as to each Licensed Clone, the
research undertaken by CURAGEN before or after the Effective Date hereof
pursuant to Sections 2.4.1, 2.5.2 and/or 7.1.3 of the Research Agreement
relating to or using such Licensed Clone.

1.15 "EXTENDED RESEARCH DATA" shall mean all information and results
obtained by CURAGEN from its performance of Extended Research.

1.16 "EXTENDED RESEARCH INVENTIONS" shall mean any discovery, invention,
know-how or trade secret conceived or made by employees of CURAGEN in the
performance of Extended Research, other than such discoveries, inventions,
know-how or trade secrets that are deemed to be defined as Research Project
Inventions pursuant to the terms of the Research Agreement or this Agreement.

1.17 "EXTENDED RESEARCH PATENT RIGHTS" shall mean all rights and interests
in and to issued patents and pending patent applications in any country,
including, but not limited to, all provisional applications, substitutions,
continuations, continuations-in-part (solely to the extent that the claims of
such continuations-in-part cover Extended Research Inventions), divisions, and
renewals thereof, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof, whether owned now or hereafter solely or
jointly by CURAGEN, and wherein at least one claim of such patent right covers
an Extended Research Invention, and including, without limitation, those
Extended Research Patent Rights listed on Schedule I attached hereto.

1.18 "GENESCAPE"(R) shall mean the web-based software and database product
for accessing and storing Data Sets generated through the application of
CURAGEN's QEA/GeneCalling and MIM/PathCalling.

1.19 "INVENTION," as to each Licensed Clone, shall mean CURAGEN Project
Inventions and Research Project Inventions relating to the Licensed Clone.

1.20 "KNOW- HOW" shall mean: (a) as to each Licensed Clone, all unpatented
Project Data, Research Project Inventions, CURAGEN Data and CURAGEN Project
Inventions relating to such Licensed Clone; (b) as to each Lead, all unpatented
information, inventions, discoveries

4
<PAGE>

and trade secrets relating to the Lead; and (c) as to Extended Research using a
Licensed Clone, all unpatented Extended Research Data and all Extended Research
Inventions relating thereto.

1.21 "LEAD" shall mean, as to each Licensed Clone, a small molecule which
was discovered or developed to bind to a protein or inhibit protein function,
and which was developed directly and materially from the use of a Licensed Clone
or the protein encoded thereby by CURAGEN outside of the Research Program prior
to the point in time at which the Clone became a Licensed Clone, including,
without limitation, in the course of the Extended Research.

1.22 "LICENSED CLONE" shall have the meaning set forth in Section 2.1.

1.23 "LICENSED PRODUCT," as to each Licensed Clone, shall mean:

[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

1.24 "MIM/PATHCALLING" shall mean the technology employed by CURAGEN for
identifying protein-protein interactions from libraries of cDNAs.

1.25 "NET SALES" shall mean [XXXXX]

[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

[XXXXX]
[XXXXX]
[XXXXX]
[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

1.26 "OPTIONED CLONE" shall have the meaning set forth in Section 7.1 of
the Research Agreement.

1.27 "PATENT COORDINATORS" shall mean a patent attorney or patent agent
representing CURAGEN and a patent attorney or patent agent representing
GENENTECH, as further described in Section 5.1.

1.28 "PATENT RIGHTS" shall mean, as to each Licensed Clone, all rights and
interests in and to issued patents and pending patent applications in any
country, including, but not limited to, all provisional applications,
substitutions, continuations, continuations-in-part (solely to the extent that
the claims of such continuations-in-part cover Research Project Inventions or
CURAGEN Project Inventions), divisions, and renewals thereof, all letters patent
granted thereon, and all reissues, reexaminations and extensions thereof,
whether owned now or hereafter, solely or jointly by a Party, and wherein at
least one claim of such patent right covers an Invention, and including, without
limitation, those Patent Rights listed on Schedule I attached hereto.

1.29 "PRIME RATE" shall mean the prime rate of interest as reported by
Citibank, N.A. In the event that Citibank, N.A. ceases to report such a rate,
the term "Prime Rate" shall mean the generally prevailing base corporate lending
rate of Fleet National Bank.

1.30 "PROJECT DATA" shall mean all information obtained from the processing
of GENENTECH Proprietary Material in a particular Research Project, including QC
data, expression data, sequence data and any other information obtained or
generated by CURAGEN in the performance of the Research Project relating to such
Licensed Clone.

1.31 "PROJECT DATA SET" shall mean all Project Data resulting from a
discrete Research Project.

Confidential Treatment Requested
<PAGE>

1.32 "QEA/GENECALLING" shall mean the technology employed by CURAGEN for
tagging and identifying the expression level of specific gene fragments within a
cDNA pool.

1.33 "RESEARCH PROGRAM" shall mean the Research Projects to be performed by
CURAGEN and GENENTECH under the Research Agreement.

1.34 "RESEARCH PROJECT" shall mean a particular project to process and
analyze a specified set of samples under the Research Agreement.

1.35 "RESEARCH PROJECT INVENTION" shall mean any discovery, invention,
know-how or trade secret conceived or made: (a) by employees of CURAGEN or
GENENTECH or jointly by employees of both in the performance of the Research
Program, (b) by GENENTECH employees in performing the following specific
activities utilizing any Data Set: (i) QEA or MIM data analysis, confirmation
of QEA or MIM data, fragment cloning and sequencing of a Clone, and (ii) full-
length cloning of a Clone, or (c) any discovery, invention, know-how or trade
secret deemed to be a Research Project Invention pursuant to the terms of the
Research Agreement or this Agreement. Research Project Inventions shall not
include inventions conceived or made solely by GENENTECH outside of the Research
Program, except as specifically set forth in (b) above.

1.36 "RESEARCH PROJECT PATENT RIGHTS" shall mean Patent Rights containing a
claim or claims covering Research Project Inventions.

1.37 "RESEARCH PROJECT PROPRIETARY MATERIAL" shall mean, with respect to a
Licensed Clone, all substances made by CURAGEN in the performance of the
Research Project relating to such Licensed Clone other than mRNA pools extracted
from GENENTECH Proprietary Material. Research Project Proprietary Material
shall include, without limitation, QEA fragments, MIM constructs and materials
derived or constructed from QEA fragments and MIM constructs, including, without
limitation, fragment and full length cDNA clones made by CURAGEN.

9
<PAGE>

1.38 "SUBLICENSEE" shall mean any non-Affiliate third party sublicensed by
GENENTECH under the license granted to GENENTECH hereunder, to make, have made,
use, have used, offer to sell, sell, have sold, import or have imported any
Licensed Product.

1.39 "TERM" shall have the meaning set forth in Section 3.10.

1.40 "TERRITORY" shall mean the world.

1.41 "VALID CLAIM(S)" shall mean an unexpired claim of any issued patent
within Patent Rights or Extended License Patent Rights which has not been
finally declared invalid or unenforceable by a patent office or by a court or
other body of competent jurisdiction in any unappealed or unappealable decision
and which has not been lost through an interference or opposition proceeding.

2. LICENSE GRANT

2.1 LICENSE GRANT. Upon exercise of an Option pursuant to Section 7.4 of
-------------
the Research Agreement for any Optioned Clone, GENENTECH shall elect one of the
types of licenses set forth below. The Parties shall indicate such election and
complete the information for such Optioned Clone on Schedule I attached hereto
and incorporated herein, and sign such Schedule I. Such Optioned Clone shall
thereafter be deemed a Licensed Clone. With respect to the license types set
forth in (a) and (b) below, GENENTECH shall also indicate on Schedule I its
election , if any, to obtain an exclusive license hereunder to CURAGEN's rights
and interests in any Lead relating to such Licensed Clone.

(a) For each Licensed Clone and corresponding Lead(s) listed on Schedule I
for which this Section 2.1(a) exclusive license is elected, subject to
the rights reserved to CURAGEN in Section 2.5 below, CURAGEN hereby
grants to GENENTECH an exclusive license (even as to CURAGEN) in the
Territory, to develop, make, have made, use, have used, sell, have
sold, offer for sale, import and have imported any and all products
for any and all human uses, under: (x) all Patent

10
<PAGE>

Rights, Inventions, Know-How, CURAGEN Project Proprietary Material and
Research Project Proprietary Material that pertain to such Licensed
Clone, related Licensed Products and the uses thereof, including but
not limited to Patent Rights claiming whole or partial sequences or
utility; and (y) all Patent Rights and Know-How of CURAGEN which
CURAGEN has the right to license to GENENTECH relating to Leads
discovered or developed using such Licensed Clone or the protein
encoded thereby as a target, and which GENENTECH has elected to
license. Such license shall be for the Term specified in Section 3.10,
unless terminated as set forth in this Agreement.

(b) For each Licensed Clone and corresponding Lead(s) listed on Schedule I
for which this Section 2.1(b) exclusive license is elected and which
were "known" by third parties prior to the exercise of the
corresponding Option as determined pursuant to subsection (d) below,
subject to the rights reserved to CURAGEN in Section 2.5 below,
CURAGEN hereby grants to GENENTECH an exclusive license (even as to
CURAGEN) in the Territory, to develop, make, have made, use, have
used, sell, have sold, offer for sale, import and have imported any
and all products for any and all human uses, under: (x) all Patent
Rights, Inventions, Know-How, CURAGEN Project Proprietary Material and
Research Project Proprietary Material that pertain to such Licensed
Clone, related Licensed Products and the uses thereof, including but
not limited to Patent Rights claiming whole or partial sequences or
utility; and (y) all Patent Rights and Know-How of CURAGEN which
CURAGEN has the right to license to GENENTECH relating to Leads
discovered or developed using the Licensed Clone or the protein
encoded thereby as a target, and which GENENTECH has elected to
license. Such license shall be for the Term specified in Section
3.10, unless terminated as set forth in this Agreement.

(c) For each Licensed Clone listed on Schedule I for which this Section
2.1(c) non-exclusive license is elected and for Licensed Products
related to such Licensed Clone that are discovered or developed by
GENENTECH, CURAGEN hereby

11
<PAGE>

grants to GENENTECH a non-exclusive license in the Territory to use
such Licensed Clone or the protein encoded thereby as a reagent for
discovering or developing Licensed Products and to develop, make, have
made, use, have used, sell, have sold, offer for sale, import and have
imported Licensed Products for any and all human uses, under all
Patent Rights, Inventions, Know-How, Research Project Proprietary
Materials and CURAGEN Project Proprietary Materials pertaining to such
Licensed Clone, related Licensed Products and the uses thereof,
including but not limited to Patent Rights claiming whole or partial
sequences or utility. Such license shall be for the Term specified in
Section 3.10, unless terminated as set forth in this Agreement.

(d) The Parties shall mutually agree in good faith on whether any Licensed
Clone is "known" by third parties prior to the exercise of an Option,
based primarily on the availability of whole or substantially whole
coding domains substantially the same as such Licensed Clone in
publicly available literature, patent applications or databases or on
knowledge of such information by GENENTECH as evidenced by written or
computer records. Licensed Clones which are "known" only as a result
of either a previous Research Project or a CURAGEN Project from which
GENENTECH received access to an Exclusive Data Set from which the
Licensed Clone was optioned, and are not "known" to third parties or
to GENENTECH other than through any public disclosure of research
results related to such Research Project or CURAGEN Project, shall not
be deemed "known" for the purposes hereof.

2.2 NON-EXCLUSIVE LICENSE. CURAGEN hereby grants to GENENTECH a non-
---------------------
exclusive license, coterminous with each license grant in Section 2.1, under
CURAGEN Background Inventions solely to the extent necessary to allow GENENTECH
to practice the license granted in Section 2.1 and for no other purpose.

2.3 EXTENDED LICENSE. Any license granted to GENENTECH under Section
----------------
2.1(a) or (b) shall also include, with respect to each Licensed Clone and
corresponding Lead(s) listed on

12
<PAGE>

Schedule I, an exclusive license under the know-how, patents and patent
applications set forth below to the extent CURAGEN has the right to grant such
license (an "Extended License"); provided, however, that GENENTECH may elect, at
its sole discretion, not to accept a license under any Extended License Patent
Rights (as defined below), such election to be made within sixty (60) days of
the license grant to the corresponding Licensed Clone, or within sixty (60) days
of CURAGEN's notice to GENENTECH of the filing of any patent application within
Extended License Patent Rights for patent applications filed after execution of
this Agreement with respect to the relevant Licensed Clone:

(a) Any patents or patent applications (including all provisional
applications, substitutions, continuations, continuations-in-part, divisions and
renewals thereof, all letters patent granted thereon, and all reissues,
reexaminations and extensions thereof) owned by CURAGEN that result from any
activities other than the Research Program (x) that are not Extended Research
Patent Rights and do not arise from CURAGEN's exercise of its rights under
Section 2.5 hereof but claim any Licensed Product relating to such Licensed
Clone, provided that CURAGEN is not utilizing the invention or inventions
claimed in such patent or application in a preclinical or clinical development
project being actively planned or conducted by CURAGEN (alone or in
collaboration with any third party) on the date such Licensed Clone was optioned
by GENENTECH pursuant to the Research Agreement as evidenced by written or
computer records; or (y) that are Extended Research Patent Rights arising from
the use of such Licensed Clone ((x) and (y) collectively, the "Extended License
Patent Rights"); and

(b) Know-How as described in Section 1.20(c).

2.4 DUE DILIGENCE. GENENTECH agrees to use commercially reasonable
-------------
efforts in pursuing research and development of at least one Licensed Product
based upon each Licensed Clone in a manner similar to other products in research
and development at GENENTECH at a similar development stage and of similar
commercial value. If GENENTECH ceases to use such commercially reasonable
efforts for a commercially unreasonable period of time with respect to at least
one Licensed Product for any Licensed Clone, CURAGEN shall have the right to
terminate the license granted to GENENTECH hereunder with respect to such
Licensed Clone

13
<PAGE>

only, provided that: (a) CURAGEN refunds to GENENTECH on the effective date of
such termination all licensing and milestone payments which have previously been
paid to CURAGEN hereunder for such Licensed Clone and (b) that CURAGEN pays to
GENENTECH royalties on Net Sales of Licensed Products based upon such Licensed
Clone that are sold by CURAGEN, its Affiliates and its sublicensees under the
same royalty rates and terms as are set forth in Section 7.7 of the Research
Agreement. Such termination by CURAGEN shall be effective sixty (60) days after
giving GENENTECH written notice of such termination, describing the lack of
diligence and shall have the consequences set forth in Section 6.2. The
foregoing notwithstanding, if such breach of diligence is shown to be non-
existent within the aforesaid sixty (60) day period, CURAGEN'S notice shall be
deemed automatically withdrawn and of no effect.

2.5 RESERVATION OF RIGHTS. Notwithstanding anything in this Agreement to
---------------------
the contrary, CURAGEN hereby retains for itself the right to use each Licensed
Clone and the protein encoded thereby for CURAGEN's internal, general, non-
directed, research purposes (including, without limitation, full-length cloning,
expression analysis, protein-protein interactions and drug screening). For
example, but without limitation, inclusion of the Licensed Clone together with
other clones in research to determine multiple protein-protein interactions, or
inclusion of the Licensed Clone together with other clones in a screen against
one or more molecules to determine inhibition would be "non-directed" research,
whereas activities associated with choosing a specific Licensed Clone and
working to elucidate the biological activity of such Licensed Clone (e.g.,
generating antibodies to the Licensed Clone, testing the Licensed Clone or
protein encoded thereby in preclinical models, enriching libraries with such
Licensed Clone to purposefully look for proteins which bind to such Licensed
Clone) would be considered "directed" research and CURAGEN would not be
permitted to perform such activities under this Section 2.5. CURAGEN shall
promptly report to GENENTECH a summary of all such research results. Any
inventions conceived or made during such research which relate to the sequence
or utility of the Licensed Clone, the proteins derived therefrom (including
antibodies), homologs and mutants with substantially the same biological
activity as such Licensed Clone or protein, or antibodies or small molecules
which interact with such Licensed

14
<PAGE>

Clone or protein or homolog or mutant thereof, shall be deemed Research Project
Inventions and shall be subject to the licenses granted pursuant to Section
2.1(a) or (b) hereof, without payment of any additional license or option fee by
GENENTECH. With respect to all other inventions resulting from such research, in
the event that such Licensed Clone is subject to an exclusive license hereunder,
CURAGEN shall, prior to disclosure to any other party, offer all such inventions
and related research results to GENENTECH as a CURAGEN Project pursuant to the
provisions of Section 2.5 of the Research Agreement for an initial Exclusive
Evaluation Period of ninety (90) days, which shall be granted to GENENTECH upon
its request at no additional fee. Extensions of such Exclusive Evaluation
Period, Options, extensions of Options and the exercise of Options shall be
governed by Section 2.5 and Article 7 of the Research Agreement. Notwithstanding
any other provisions of this Agreement or the Research Agreement, any such
inventions which are ultimately licensed by GENENTECH after exercise of the
above-granted rights pursuant to Section 2.5 and Article 7 of the Research
Agreement relating to research performed under Section 2.5 of this Agreement
shall be deemed Research Project Inventions for all purposes under this License
Agreement, including, without limitation, the determination of royalties.

2.6 SUBLICENSES. GENENTECH shall have the right to grant sublicenses to
-----------
all or any portion of its rights under any license granted herein to any
Affiliate or Sublicensee, provided, however, that GENENTECH shall remain
obligated to ensure payment of royalty and milestone obligations as set forth in
Article 3.

3. CONSIDERATION

3.1 LICENSE FEES. Upon exercise of an Option pursuant to Section 7.1.2 of
------------
the Research Agreement for any Optioned Clone and execution of Schedule I by the
Parties with respect to such Optioned Clone and corresponding Lead(s), GENENTECH
shall pay to CURAGEN a license fee as set forth below:

LICENSE TYPE $ (THOUSANDS)
------------ -------------

[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]
[XXXXX]

3.2 MILESTONE PAYMENTS FOR THERAPEUTIC OR PROPHYLACTIC PRODUCTS.
-----------------------------------------------------------

3.2.1 Milestone Payments under Exclusive License. GENENTECH shall
------------------------------------------
make the following milestone payments to CURAGEN for each therapeutic or
prophylactic Licensed Product covered by an exclusive license under Section
2.1(a):

(a) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee files the first Investigational New Drug
application (or foreign equivalent) with the FDA (or equivalent
foreign regulatory agency) for the Licensed Product ("IND");

(b) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee commences the first Phase III or Phase II/III
clinical trial in any country for the Licensed Product;

(c) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee submits the first Biologics License
Application, Product License Application, New Drug Application or
other application for approval to sell the Licensed Product to the FDA
(or equivalent foreign regulatory agency) for the Licensed Product;

(d) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee receives FDA approval of the Licensed Product
for commercial sale in the United States;

(e) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee first receives all required regulatory
approval to commence sales of the Licensed Product in Germany, France,
Italy, Spain, the United Kingdom or Japan; and

Confidential Treatment Requested
<PAGE>

(f) [XXXXX] within forty-five (45) days following the end of the first
calendar year in which Net Sales of such Licensed Product exceed
[XXXXX].

3.2.2 Milestone Payments under Exclusive License. GENENTECH shall
------------------------------------------
make the following milestone payments to CURAGEN for each therapeutic or
prophylactic Licensed Product covered by an exclusive license under Section
2.1(b) but only in the event that a therapeutic or prophylactic use for such
Licensed Product is a Research Project Invention, a Curagen Research Project
Invention or an Extended Research Invention licensed hereunder:

(b) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee commences the first Phase III or Phase II/III
clinical trial in any country for the Licensed Product for a use
covered by the exclusive licenses granted herein;

(d) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee receives FDA approval of the Licensed Product
for commercial sale for a use covered by the exclusive licenses
granted herein;

Confidential Treatment Requested
<PAGE>

(e) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee first receives approval to commence sales of
the Licensed Product for a use covered by the exclusive licenses
granted herein in Germany, France, Italy, Spain, the United Kingdom or
Japan; and

(f) [XXXXX] within forty-five (45) days following the end of the first
calendar year in which Net Sales of such Licensed Product for a use
covered by the exclusive licenses granted herein exceed [XXXXX].

3.2.3 Milestone Payments under Non-exclusive License. GENENTECH
----------------------------------------------
shall make the following milestone payments to CURAGEN for each therapeutic or
prophylactic Licensed Product covered by a non-exclusive license under Section
2.1(c):

(b) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee commences the first Phase III or Phase II/III
clinical trial in any country for the Licensed Product;

(c) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee submits the first Biologics License
Application, Product License Application, NDA or other application for
approval to sell the Licensed Product to the FDA (or equivalent
foreign regulatory agency) for the Licensed Product;

(d) [XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee receives FDA (or equivalent foreign
regulatory agency) approval of the Licensed Product for commercial
sale; and

Confidential Treatment Requested
<PAGE>

(e) [XXXXX] within thirty (30) days following the end of the first
calendar year in which Net Sales of such Licensed Product exceed
[XXXXX].

3.3 MILESTONE PAYMENTS FOR DIAGNOSTIC PRODUCTS. GENENTECH shall make the
------------------------------------------
following milestone payment to CURAGEN for each Licensed Product described in
Subsection (h) of the definition of Licensed Products covered by an exclusive
license under Section 2.1(a) or 2.1(b):

[XXXXX] within thirty (30) days following the date GENENTECH or an
Affiliate or Sublicensee receives FDA (or equivalent foreign
regulatory agency) approval of the Licensed Product for commercial
sale.

3.4 ROYALTIES ON LICENSED PRODUCTS LICENSED EXCLUSIVELY TO GENENTECH AND
--------------------------------------------------------------------
COVERED SOLELY BY RESEARCH PROJECT PATENT RIGHTS. GENENTECH shall pay to
- ------------------------------------------------
CURAGEN a royalty on Net Sales of Licensed Products in those countries where the
manufacture, use, importation or sale of such Licensed Product by a third party
(i) would infringe a Valid Claim of a Research Project Patent Right and (ii)
would not infringe a Valid Claim of an Extended License Patent Right or a
CURAGEN Project Patent Right, as follows:

[XXXXX]

Confidential Treatment Requested
<PAGE>

(d) Royalties due to CURAGEN pursuant to subsections (a), (b) and (c)
above for a given Licensed Product may be reduced by [XXXXX] of any
royalties paid to third parties by GENENTECH, its Affiliates or
Sublicensees on net sales of such Licensed Product that are required
in order to allow GENENTECH, its Affiliates or Sublicensees to
manufacture, use or sell such Licensed Product; provided, however,
that such reductions shall in no event reduce the royalty for such
Licensed Product payable pursuant to such subsection by more than
[XXXXX].

3.5 ROYALTIES ON LICENSED PRODUCTS LICENSED EXCLUSIVELY TO GENENTECH AND
--------------------------------------------------------------------
COVERED BY RESEARCH PROJECT PATENT RIGHTS AND CURAGEN PROJECT PATENT RIGHTS OR
- ------------------------------------------------------------------------------
EXTENDED LICENSE PATENT RIGHTS. GENENTECH shall pay to CURAGEN a royalty on Net
- ------------------------------
Sales of Licensed Products in those countries where the manufacture, use,
importation or sale of such Licensed Product by a third party (i) would infringe
a Valid Claim of a Research Project Patent Right and (ii) would infringe a Valid
Claim of an Extended License Patent Right or a CURAGEN Project Patent Right, as
follows:

(a) If the Licensed Product is as described in subsections (a)-(c) or (e)
of the definition of Licensed Product, the royalty rate on Net Sales
of such Licensed Product shall be as follows:

[XXXXX]

(b) If the Licensed Product is as described in subsections (d) or (f) of
the definition of Licensed Product, or is a product as described in
subsection (g) of the definition of Licensed Product and is not
discovered from material use of a Lead by GENENTECH, its Affiliates or
Sublicensees, the royalty rate on Net Sales of such Licensed Product
shall be:

Confidential Treatment Requested
<PAGE>

[XXXXX]

(c) If the Licensed Product is as described in subsection (g) of the
definition of Licensed Product and is discovered from the material use
by GENENTECH, its Affiliates or Sublicensees of a Lead identified by
CURAGEN and provided to GENENTECH pursuant to an exclusive license
granted pursuant to the provisions of Section 2.1(a) or (b), the
royalty rate on Net Sales of such Licensed Product shall be:

[XXXXX]

(d) If the Licensed Product is as described in subsections (h) or (i) of
the definition of Licensed Product, the royalty rate on Net Sales of
such Licensed Product shall be [XXXXX].

(e) Royalties due to CURAGEN pursuant to subsections (a), (b) , (c) and
(d) above for a given Licensed Product may be reduced by [XXXXX] of
any royalties paid to third parties by GENENTECH, its Affiliates or
Sublicensees on net sales of such Licensed Product that are required
in order to allow GENENTECH, its Affiliates or Sublicensees to
manufacture, use or sell such Licensed Product; provided, however,
that such reductions shall in no event reduce the royalty for such
Licensed Product payable pursuant to such subsection by more than
[XXXXX].

3.6 ROYALTIES ON LICENSED PRODUCTS LICENSED EXCLUSIVELY TO GENENTECH AND
--------------------------------------------------------------------
COVERED SOLELY BY CURAGEN PROJECT PATENT RIGHTS OR EXTENDED LICENSE PATENT
- ---------------------------------------------------------------------------
RIGHTS. GENENTECH shall pay to CURAGEN a royalty on Net Sales of Licensed
- ------
Products in those

Confidential Treatment Requested
<PAGE>

countries where the manufacture, use, importation or sale of such Licensed
Product by a third party (i) would not infringe a Valid Claim of a Research
Project Patent Right and (ii) would infringe a Valid Claim of an Extended
License Patent Right or a CURAGEN Project Patent Right, as follows:

(a) If the Licensed Product is as described in subsections (a)-(c) or (e)
of the definition of Licensed Product, the royalty rate on Net Sales
of such Licensed Product shall be as follows:

[XXXXX]

(c) If the Licensed Product is as described in subsection (g) of the
definition of Licensed Product and is discovered from material use by
GENENTECH, its Affiliates or Sublicensees of a Lead identified by
CURAGEN and provided to GENENTECH pursuant to an exclusive license
granted pursuant to the provisions of Section 2.1(a) or (b), the
royalty rate on Net Sales of such Licensed Product shall be:

Confidential Treatment Requested
<PAGE>

[XXXXX]

(d) If the Licensed Product is as described in subsections (h) or (i) of
the definition of Licensed Product, the royalty rate on Net Sales of
such Licensed Product shall be [XXXXX].

(e) Royalties due to CURAGEN pursuant to subsections (a), (b), (c) and (d)
above for a given Licensed Product may be reduced by [XXXXX] of any
royalties paid to third parties by GENENTECH, its Affiliates or
Sublicensees on net sales of such Licensed Product that are required
in order to allow GENENTECH, its Affiliates or Sublicensees to
manufacture, use or sell such Licensed Product; provided, however,
that such reductions shall in no event reduce the royalty for such
Licensed Product payable pursuant to such subsection by more than
[XXXXX].

3.7 LICENSED PRODUCTS NON EXCLUSIVELY LICENSED TO GENENTECH OR EXCLUSIVELY
----------------------------------------------------------------------
LICENSED BUT NOT COVERED BY PATENT RIGHTS OR EXTENDED LICENSE PATENT RIGHTS.
- ----------------------------------------------------------------------------
For Licensed Products that are discovered under a license to GENENTECH pursuant
to Section 2.1(c) above, or that are licensed exclusively to GENENTECH hereunder
and are made, used or sold by GENENTECH, its Affiliates or Sublicensees, where
the manufacture, use, importation or sale of such Licensed Product by a third
party would not infringe a Valid Claim of any Patent Right or Extended License
Patent Right, GENENTECH shall pay to CURAGEN a royalty on Net Sales as follows:

(a) For Licensed Products as described in subsections (a)-(c) or (e) of
the definition of Licensed Product, the royalty rate on Net Sales of
such Licensed Product shall be [XXXXX].

Confidential Treatment Requested
<PAGE>

(b) For Licensed Products as described in subsections (d) or (f) of the
definition of Licensed Product or as described in subsection (g) of
the definition of Licensed Product which are not discovered from
material use of a Lead by GENENTECH, its Affiliates or Sublicensees,
the royalty rate on Net Sales of such Licensed Product shall be
[XXXXX].

(c) For Licensed Products as described in subsection (g) of the definition
of Licensed Product which are discovered from material use by
GENENTECH, its Affiliates or Sublicensees of a Lead, the royalty rate
on Net Sales of such Licensed Products shall be [XXXXX].

(d) For Licensed Products as described in subsections (h) or (i) of the
definition of Licensed Product, the royalty rate on Net Sales of such
Licensed Products shall be [XXXXX].

(e) Royalties due to CURAGEN pursuant to subsections (a), (b) , (c),
and (d) above for a given Licensed Product may be reduced by [XXXXX]
of any royalties paid to third parties by GENENTECH, its Affiliates or
Sublicensees on net sales of such Licensed Product that are required
in order to allow GENENTECH, its Affiliates or Sublicensees to
manufacture, use or sell such Licensed Product; provided, however,
that such reductions shall in no event reduce the royalty for such
Licensed Product payable pursuant to such subsection by more than
[XXXXX].

3.8 ONE ROYALTY. Only one royalty, calculated at the highest applicable
-----------
royalty rate hereunder, shall be payable to CURAGEN hereunder for each sale of a
Licensed Product, regardless of the number of patents, patent applications or
Valid Claims directed to or covering such Licensed Product.

3.9 PAYMENT TERMS.
-------------

(a) Royalty payments shall be made to CURAGEN in United States Dollars
quarterly within sixty (60) days following the end of each calendar
quarter for which

Confidential Treatment Requested
<PAGE>

royalties are due. Each royalty payment shall be accompanied by a
report summarizing the total Net Sales for each Licensed Product
during the relevant three-month period and the calculation of
royalties, if any, due thereon pursuant to this Article 3.

(b) All royalties shall be payable in full in the United States in United
States Dollars, regardless of the countries in which sales are made.
For the purpose of computing Net Sales for Licensed Products sold in a
currency other than United States dollars, such currency shall be
converted into United States dollars at the exchange rate for buying
U.S. dollars set forth in The Wall Street Journal for the last
-----------------------
business day of the calendar quarter.

3.10 ROYALTY TERM. GENENTECH shall pay royalties with respect to each
------------
Licensed Product on a country-by-country basis until [XXXXX]. The term of each
license under this Agreement (the "Term") shall commence upon execution of
Schedule I with respect thereto, and shall continue as long as any royalties are
due hereunder for Licensed Products under such license. Following such period,
unless the license pertaining to such Licensed Product has previously been
terminated, GENENTECH shall have a fully paid-up, irrevocable license in such
country under the Patent Rights, Extended License Patent Rights, Inventions,
Know-How and CURAGEN Background Inventions relating to the relevant Licensed
Clone, to make, have made, use, have used, sell, have sold, offer for sale,
import and have imported such Licensed Product in such country.

3.11 OVERDUE ROYALTIES. Royalties not paid within the time period set
-----------------
forth in this Article 3 shall bear interest at [XXXXX], accruing monthly, from
the due date until paid in full.

3.12 RECORDS RETENTION. AUDITS. GENENTECH, its Affiliates and
--------------------------
Sublicensees shall keep for [XXXXX] from the date of each payment of royalties
complete and accurate records

Confidential Treatment Requested
<PAGE>

of sales by GENENTECH and its Affiliates and Sublicensees of each Licensed
Product in sufficient detail to allow the accruing royalties to be determined
accurately. CURAGEN shall have the right for a period of [XXXXX] after receiving
any report or statement with respect to royalties due and payable to appoint an
independent certified public accountant reasonably acceptable to GENENTECH to
inspect the relevant records of GENENTECH and its Affiliates and Sublicensees to
verify such report or statement. GENENTECH and its Affiliates and Sublicensees
shall each make its records available for inspection by such independent
certified public accountant during regular business hours at such place or
places where such records are customarily kept, upon reasonable notice from
CURAGEN, solely to verify the accuracy of the reports and payments. Such
inspection right shall not be exercised more than once in any calendar year nor
more than once with respect to sales of any Licensed Product in any given
payment period. CURAGEN agrees to hold in strict confidence all information
concerning royalty payments and reports, and all information learned in the
course of any audit or inspection, except to the extent necessary for CURAGEN to
reveal such information in order to enforce its rights under this Agreement or
if disclosure is required by law, regulation or judicial order. The results of
each inspection, if any, shall be binding on both Parties. CURAGEN shall pay for
such inspections, except that in the event there is any upward adjustment in
aggregate royalties payable for any year shown by such inspection of more than
[XXXXX] of the amount paid, GENENTECH shall pay for such inspection.

4. TREATMENT OF CONFIDENTIAL INFORMATION

4.1 CONFIDENTIAL INFORMATION. During the Term of this Agreement, each
------------------------
Party may disclose to the other proprietary technical, research and business
information (collectively, "Confidential Information"). For a period of [XXXXX]
after the receipt of any such Confidential Information, the receiving Party
shall keep confidential all such Confidential Information of the other Party and
will not disclose such Confidential Information of the other Party to third
parties by publication or otherwise. Each Party further agrees not to use
Confidential Information of the other Party for any purpose other than
exercising any rights granted to it or reserved by it under this Agreement.
Notwithstanding the foregoing, it is

Confidential Treatment Requested
<PAGE>

understood and agreed that the receiving Party's obligations of confidentiality
and nonuse herein shall not apply to any information which:

(a) is, at the time of disclosure by the disclosing Party hereunder, or
thereafter becomes, a part of the public domain or publicly known or
available through no fault or negligence of the receiving Party or any
of its Affiliates; or

(b) was otherwise in the receiving Party's lawful possession prior to
disclosure by the disclosing Party, as demonstrated by the receiving
Party's written records; or

Each Party may disclose the other Party's Confidential Information to the extent
reasonably necessary to comply with applicable government laws or regulations,
provided that prompt notice of any such disclosure shall be given to the other
Party.

Information disclosed other than in written or electronic form shall be
subject to the terms of this Section 4.1 only if confirmed in writing to other
Party within thirty (30) days of initial disclosure and specifying with
particularity that Confidential Information disclosed other than in written form
which is subject to the provisions of this Section 4.1.

4.2 PRESS RELEASE AND REGULATORY FILINGS. The Parties shall mutually
-------------------------------------
agree on a press release announcing the execution of this Agreement and on any
confidential treatment request to be filed with the Securities and Exchange
Commission with respect to this Agreement. Neither Party shall make any
disclosure of the terms of this Agreement except as required by applicable law
or as set forth above without the prior written consent of the other Party.
Once any written statement is approved for disclosure by both Parties, either
Party may make subsequent public disclosures of the contents of such statement
without the further approval of the other Party.

27
<PAGE>

5. PROVISIONS CONCERNING THE FILING, PROSECUTION AND

MAINTENANCE OF PATENT RIGHTS

5.1 PATENT FILING. During the Term of this Agreement, with respect to any
-------------
Patent Rights, Extended Patent Rights, Inventions or Extended Research
Inventions licensed hereunder:

(a) Upon granting an exclusive license to GENENTECH hereunder for a
Licensed Clone, Lead(s), Extended Research Invention or Extended
License Patent Right, CURAGEN and GENENTECH shall file requests for
CFR Rule 1.60 continuation patent applications in order to create
patent rights relating solely to Licensed Clones, Leads, Extended
Research Inventions and Extended License Patent Rights which are
exclusively licensed hereunder and not to other Clones or inventions.
CURAGEN shall cause such actions to be taken unless the Parties
reasonably agree that such actions are not feasible or desirable.

(b) GENENTECH shall have the right to prepare, file, prosecute, obtain and
maintain, at its expense, all Patent Rights and Extended License
Patent Rights relating solely to Licensed Clones or Licensed Products
relating to Licensed Clones or Leads which are exclusively licensed
hereunder. Initial patent filings shall be made in the form of a
regular CFR Rule 1.51 U.S. Priority patent application or a
provisional application, as determined by the Patent Coordinators. The
Patent Coordinators for each Party will be designated by such Party
from time to time. Patent applications will be perfected by making, as
soon as available, an ATCC deposit of Licensed Clone(s) and making any
subsequent application filings necessary to perfect U.S. or foreign
priority patent rights in the countries of Europe that are members of
the European Patent Organization, Japan, Canada, Mexico and at least
such other countries as mutually agreed by the Parties. CURAGEN agrees
to provide reasonable assistance and cooperation to GENENTECH to
facilitate such filing, prosecution and maintenance including, without
limitation, the execution of appropriate powers of attorney. GENENTECH
agrees that any such preparation, filing, prosecution and

28
<PAGE>

maintenance shall be conducted diligently and in a timely fashion and
that CURAGEN shall be kept reasonably informed of the progress
thereof. Upon request GENENTECH will provide copies of the following
documents to CURAGEN: information regarding inventorship, sequences
and sequence listings, serial numbers, filing dates, foreign filing
licenses, copies of patent applications and official correspondence
with the patent office. CURAGEN shall, whenever practical, be given
the opportunity to review and comment in advance on any patent filings
or other correspondence with the patent office during such periods and
GENENTECH shall use reasonable efforts to incorporate any comments
provided by CURAGEN. GENENTECH shall, if warranted in its commercially
reasonable judgment, pursue its priority to claims on Inventions by
filing all necessary interferences and opposition papers, motions and
the like. GENENTECH shall conduct any interference proceeding in good
faith, applying its commercially reasonable efforts to prevail
therein. CURAGEN shall be given the opportunity to review and comment
upon any proposed settlement of an interference relating to Patent
Rights or Extended Patent Rights subject to license hereunder.
GENENTECH will consider CURAGEN's comments in good faith, but shall
have the right to enter into a good faith settlement of the
interference.

(c) Except as provided in (b) above, CURAGEN shall have the responsibility
to prepare, file, prosecute, obtain and maintain patent applications
and patents on Inventions and Extended Research Inventions licensed
hereunder, relating to the Licensed Clones and Leads which are
licensed hereunder at its sole expense. GENENTECH agrees to provide
reasonable assistance and cooperation to CURAGEN to facilitate such
filing, prosecution and maintenance. CURAGEN agrees that any such
preparation, filing, prosecution and maintenance shall be conducted as
outlined in subsection (b) above and shall be conducted with
reasonable diligence and that GENENTECH shall be kept fully informed
of the progress thereof and provided with copies of all material
documents pertaining thereto during the term of this Agreement.
GENENTECH shall, whenever

29
<PAGE>

possible, be given the opportunity to review and comment in advance on
any patent filings or other correspondence with the patent office
during such periods and CURAGEN shall consider incorporating any
comments provided by GENENTECH in good faith.

(d) The Parties shall mutually agree before permitting any patent
application or patent within Patent Rights or Extended License Patent
Rights exclusively licensed hereunder to lapse as well as before
authorizing any amendment to any patent application or patent within
such Patent Rights or Extended License Patent Rights that would
irrevocably limit the lawful scope of the Patent Rights or Extended
License Patent Rights.

(e) Before GENENTECH elects to abandon its right to prepare, file,
prosecute, obtain and maintain patent applications and patents as
described in Section 5.1(b), it shall give at least thirty (30) days
prior written notice thereof to CURAGEN. Such notice shall
specifically identify the patent application(s) and/or patent(s) for
which GENENTECH wishes to relinquish such right. Following the receipt
of such notice, CURAGEN shall have the right to prepare, file,
prosecute, obtain and maintain the patent application(s) and patent(s)
identified in the notice, at its sole expense, and any such patents
and patent applications shall be removed from operation of this
Agreement. In addition, GENENTECH shall be deemed without any further
action to have granted to CURAGEN an exclusive, worldwide license
(including the right to grant sublicenses), under GENENTECH's
ownership interest in any such patents and applications to develop,
have developed, make, have made, use, have used, offer for sale, sell,
have sold, import and have imported any and all products in all fields
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXX.

(f) No Party shall have any obligation under this Agreement to pay any
fees or costs: (i) for bringing a lawsuit or other action to enforce
any of the Patent Rights or Extended License Patent Rights against an
actual or suspected infringement or (ii)

Confidential Treatment Requested
30
<PAGE>

for any other Party to obtain for its own benefit independent business
or legal advice concerning any of the Patent Rights or Extended
License Patent Rights.

5.2 NOTICE OF INFRINGEMENT. If, during the Term of this Agreement or the
----------------------
term of any license hereunder, either Party learns of any infringement by a
third party of the patents within Patent Rights or Extended License Patent
Rights exclusively licensed hereunder, such Party shall promptly notify the
other Party and shall provide such other Party with available evidence of such
infringement.

5.3 INFRINGEMENT.
------------

(a) GENENTECH shall have the first right (but not the obligation), at its
own expense, to take appropriate action to enforce Patent Rights or
Extended License Patent Rights licensed exclusively to GENENTECH
hereunder in the event of any actual or suspected infringement of such
rights. GENENTECH may, in its sole judgment, institute suit against
any such infringer or alleged infringer and control and defend and
settle such suit in a manner consistent with the terms and provisions
hereof. If GENENTECH has not commenced reasonable action to enforce
such Patent Rights and Extended License Patent Rights, in the case of
significant infringement, or has ceased to pursue such action within
one hundred twenty (120) days after written notice from CURAGEN of the
infringement, which notice includes all of CURAGEN's then available
supporting evidence and a request by CURAGEN that action should be
taken against such alleged infringer, CURAGEN shall have the right
(but not the obligation), at its own expense, to bring suit against
such infringement. Any amount recovered, whether by judgment or
settlement, shall first be applied to reimburse the costs and expenses
(including attorneys' fees) of the Party bringing suit, and then to
reimburse the costs and expenses (including attorneys' fees), if any,
of the other Party and then to reimburse CURAGEN for any royalties
withheld by GENENTECH as provided in Section 5.3(b) below, which shall
be paid with interest as specified in Section 3.11. [XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX]

(b) In the event that GENENTECH brings any suit in any country as
permitted in Section 5.3(a) above with respect to a Material
Infringement as defined in (c) below, GENENTECH shall be entitled to
reduce royalties payable to CURAGEN hereunder with respect to Licensed
Products substantially similar to the product alleged to be infringing
the Patent Right(s) or Extended License Patent Right(s) which are the
subject of the suit in such country and for so long as a Material
Infringement exists, by [XXXXX] of the amounts otherwise due hereunder
with respect to such Licensed Products in such country.

(c) For purposes of this Section 5.3, a Material Infringement shall be
deemed to exist with respect to a Licensed Product on a country-by-
country basis when sales by a third party of allegedly infringing
products in such country reach a level of [XXXXX] or more of the
combined sales of such allegedly infringing product(s) and sales of
the Licensed Product in such country.

5.4 COOPERATION. Each Party shall execute all papers and perform such
-----------
other acts as may be reasonably required to cooperate with the Party bringing
any infringement suit brought in accordance with Section 5.3 above (including
giving legal consent for bringing such suit, and agreeing to be named as a
plaintiff or otherwise joined in such suit), and at its option and expense, may
be represented in such suit by counsel of its choice.

6. TERM AND TERMINATION

6.1. TERMINATION PROVISIONS.
----------------------

The Term of any license hereunder shall be as specified in Section 3.10,
unless terminated as set forth below:

(a) Any license hereunder with respect to any Licensed Clone and the
related Leads, Extended Research Inventions or Extended License Patent
Rights, may be

Confidential Treatment Requested
<PAGE>

terminated by either Party upon any material breach by the other Party
of any material obligation or condition of such license, effective
thirty (30) days after giving written notice to the breaching Party of
such termination in the case of a payment breach and sixty (60) days
after giving written notice to the breaching Party of such termination
in the case of any other breach, which notice shall describe such
breach in reasonable detail; provided, however, that a breach of
Section 2.4 shall only give rise to the termination rights specified
therein. The foregoing notwithstanding, if the default or breach is
cured or shown to be non-existent within the aforesaid thirty (30) or
sixty (60) day period, the notice shall be deemed automatically
withdrawn and of no effect.

(b) If either Party files for protection under bankruptcy laws, makes an
assignment for the benefit of creditors, appoints or suffers
appointment of a receiver or trustee over its property, files a
petition under any bankruptcy or insolvency act or has any such
petition filed against it which is not discharged within sixty (60)
days of the filing thereof, then the other Party may terminate this
Agreement by notice to such Party.

(c) The licenses granted hereunder with respect to certain Licensed Clones
shall terminate as specified in Section 2.3.4 of the Research
Agreement without any requirement of further action by CURAGEN
hereunder.

6.2 EFFECT OF TERMINATION.
---------------------

(a) Upon termination of a license or licenses granted hereunder by CURAGEN
pursuant to Section 6.1(a), (b) or (c) or under Section 2.4 with
respect to any Licensed Clone, all relevant rights to such Licensed
Clone and the related Leads, Extended Research Inventions and Extended
License Patent Rights included in any such license(s) granted by
CURAGEN to GENENTECH hereunder under which GENENTECH is in breach
shall immediately and automatically revert to CURAGEN, subject to
GENENTECH's right to sell any remaining quantities of Licensed Product
remaining in its inventories as of the date of termination. All

Confidential Treatment Requested
<PAGE>

remaining license rights granted to GENENTECH hereunder shall remain
in full force and effect. GENENTECH shall promptly transfer to
CURAGEN such Licensed Clones, Data Sets and CURAGEN Proprietary
Material in its possession without retaining any copies thereof, as
well as any full-length sequence data of such Licensed Clone(s). In
addition, upon any termination pursuant to Section 6.1(a) or (c) or
Section 2.4, GENENTECH shall be deemed without any further action to
have granted to CURAGEN an exclusive, worldwide, license (including
the right to grant sublicenses), under GENENTECH's ownership interest
in any Research Project Inventions and Research Project Patent Rights
covering or related to the relevant Licensed Clone(s) for which
GENENTECH's license rights have been terminated to develop, have
developed, make, have made, use, have used, offer for sale, sell, have
sold, import and have imported any and all products in all fields with
royalties payable only as set forth in Section 7.7 of the Research
Agreement.

(b) Documentation. At the request of CURAGEN, GENENTECH shall execute and
-------------
deliver such bills of sale, assignments and licenses and other
documents as may be necessary to fully vest in CURAGEN all right,
title and interest to which it is entitled as aforesaid pursuant to
this Section 6.2.

(c) Payment Obligations. GENENTECH shall have no obligation to make any
-------------------
milestone or royalty payment to CURAGEN that has not accrued prior to
the effective date of any termination, except for royalties due on
sales of remaining inventory, but shall remain liable for all
obligations accruing prior to termination.

(d) In the event of a material breach by CURAGEN of any material
obligation or condition under this Agreement relating to any license
hereunder with respect to any Licensed Clone, in lieu of terminating
this Agreement as provided in Section 6.1(a), GENENTECH may, effective
sixty (60) days after giving written notice to CURAGEN, which notice
shall describe such breach in reasonable detail, elect to maintain the
license to the Licensed Clone to which the breach relates with a
[XXXXX]

Confidential Treatment Requested
<PAGE>

[XXXXX] reduction in the royalties otherwise due hereunder with
respect to Licensed Products relating to such Licensed Clone. The
foregoing notwithstanding, if the material breach is cured or shown to
be non-existent within the aforesaid sixty (60) day period, such
notice and election shall be deemed automatically withdrawn and of no
effect.

6.3 OTHER TERMINATION BY GENENTECH. GENENTECH may terminate this
-------------------------------
Agreement, or any license or licenses granted hereunder with respect to any
Licensed Clone(s), Lead(s) or Extended Research Inventions or Extended License
Patent Rights, and the related rights and obligations hereunder, in its sole
discretion at any time by giving written notice thereof to CURAGEN. Such
termination shall be effective fifteen (15) days following the date such notice
is received by CURAGEN and shall have all consequences as set forth in Section
6.2 above, but only with respect to such Licensed Clone or Lead, as if this
Agreement had been terminated pursuant to Section 6.1(a).

6.4 REMEDIES. If either Party shall fail to perform or observe or
---------
otherwise breaches any of its material obligations under this Agreement, in
addition to any right to terminate this Agreement, the non-defaulting Party may
elect to obtain other relief and remedies available under law.

6.5 SURVIVING PROVISIONS. Notwithstanding any provision herein to the
---------------------
contrary, the rights and obligations set forth in Sections 3.9, 3.11 and 3.12,
Article 4, Sections 6.2 and 6.4, and Article 7 hereof, as well as any rights and
obligations otherwise accrued, shall survive the expiration or termination of
this Agreement.

7. MISCELLANEOUS

7.1 CURAGEN REPRESENTATIONS. CURAGEN represents and warrants that: (a)
-----------------------
the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly authorized by all appropriate
CURAGEN corporate action; (b) CURAGEN is under no obligation which is
inconsistent with this Agreement; and (c)

Confidential Treatment Requested
<PAGE>

CURAGEN has the full right and legal capacity to grant the rights to GENENTECH
pursuant to Article 2 above without violating the rights of any third party.

7.2 GENENTECH REPRESENTATIONS. GENENTECH represents and warrants that:
-------------------------
(a) the execution and delivery of this Agreement and the performance of the
transactions contemplated hereby have been duly authorized by all appropriate
GENENTECH corporate action; and (b) GENENTECH is under no obligation which is
inconsistent with this Agreement.

7.3 NO WARRANTIES.
-------------

(a) Nothing in this Agreement is or shall be construed as:

(i) a warranty or representation by CURAGEN or GENENTECH as to the
validity or scope of any application or patent within the Patent
Rights;

(ii) a warranty or representation that anything made, used, sold or
otherwise disposed of under any license granted in this Agreement
is or will be free from infringement of patents, copyrights, and
other rights of third parties.

(b) Except as expressly set forth in this Agreement, NEITHER PARTY MAKES
ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER
EXPRESS OR IMPLIED. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE
DEVELOPMENT, MANUFACTURE, SALE, IMPORTATION OR USE OF THE LICENSED
PRODUCT(S) WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR
OTHER RIGHTS, OR ANY OTHER EXPRESS OR IMPLIED WARRANTIES.

7.4 LIABILITY. NOTWITHSTANDING ANYTHING ELSE IN THIS AGREEMENT OR
---------
OTHERWISE, NEITHER PARTY WILL BE LIABLE WITH RESPECT TO ANY SUBJECT MATTER OF
THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
OR EQUITABLE THEORY FOR (I) ANY

36
<PAGE>

INDIRECT, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS OR (II)
COST OF PROCUREMENT OF SUBSTITUTE GOODS, TECHNOLOGY OR SERVICES

7.5 NOTICES. Any notices, requests, deliveries, approvals or consents
-------
required or permitted to be given under this Agreement to GENENTECH or CURAGEN
shall be in writing and shall be personally delivered or sent by telecopy (with
written confirmation to follow via United States first class mail), overnight
courier providing evidence of receipt or certified mail, return receipt
requested, postage prepaid, in each case to the respective address specified
below (or to such address as may be specified in writing to the other Party
hereto):

CURAGEN: 555 Long Wharf, 11th Floor
New Haven, CT 06511
Attn: Vice President, Business Development
Telecopy: (203) 401-3333

GENENTECH: 1 DNA Way
South San Francisco, CA 94080
Attn: Corporate Secretary
Telecopy: (650) 952-9881

7.6 GOVERNING LAW. This Agreement will be construed, interpreted and
-------------
applied in accordance with the laws of the State of New York (excluding its body
of law controlling conflicts of law).

7.7 LIMITATIONS. Except as set forth elsewhere in this Agreement, neither
-----------
Party grants to the other Party any right or license to any of its intellectual
property.

7.8 ENTIRE AGREEMENT. This is the entire Agreement between the Parties
----------------
with respect to the subject matter herein. No modification shall be effective
unless in writing and signed by the Parties.

37
<PAGE>

7.9 WAIVER. The terms or conditions of this Agreement may be waived only
------
by a written instrument executed by the Party waiving compliance. The failure
of either Party at any time or times to require performance of any provision
hereof shall in no manner affect its rights at a later time to enforce the same.
No waiver by either Party of any condition or term shall be deemed as a
continuing waiver of such condition or term or of another condition or term.

7.10 HEADINGS. Section and subsection headings are inserted for
--------
convenience of reference only and do not form part of this Agreement.

7.11 ASSIGNMENT. This Agreement may not be assigned by either Party
----------
without the consent of the other, except that each Party may, without such
consent, assign this Agreement and the rights, obligations and interests of such
Party, in whole or in part, to any of its wholly-owned subsidiaries, to any
purchaser of all or substantially all of its assets in the line of business to
which this Agreement pertains, or of all of its capital stock, or to any
successor corporation resulting from any merger or consolidation of such Party
with or into such corporation.

7.12 FORCE MAJEURE. Neither Party shall be liable for failure of or delay
-------------
in performing obligations set forth in this Agreement, and neither shall be
deemed in breach of its obligations, if such failure or delay is due to natural
disasters or any causes beyond the reasonable control of such Party. In event
of such force majeure, the Party affected thereby shall use reasonable efforts
to cure or overcome the same and resume performance of its obligations
hereunder.

7.13 CONSTRUCTION. The Parties hereto acknowledge and agree that: (i)
------------
each Party and its counsel reviewed and negotiated the terms and provisions of
this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting Party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all Parties hereto and not in a favor of or against any Party, regardless
of which Party was generally responsible for the preparation of this Agreement.

7.14 SEVERABILITY. If any provision(s) of this Agreement are or become
------------
invalid, are ruled illegal by any court of competent jurisdiction or are deemed
unenforceable under then

38
<PAGE>

current applicable law from time to time in effect during the Term hereof, it is
the intention of the Parties that the remainder of this Agreement shall not be
affected thereby provided that a Party's rights under this Agreement are not
materially affected. The Parties hereto covenant and agree to renegotiate any
such term, covenant or application thereof in good faith in order to provide a
reasonably acceptable alternative to the term, covenant or condition of this
Agreement or the application thereof that is invalid, illegal or unenforceable,
it being the intent of the Parties that the basic purposes of this Agreement are
to be effectuated.

7.15 STATUS. Nothing in this Agreement is intended or shall be deemed to
------
constitute a partner, agency, employer-employee, or joint venture relationship
between the Parties.

7.16 INDEMNIFICATION.
---------------

(a) GENENTECH shall indemnify, defend and hold harmless CURAGEN, its
Affiliates and their respective directors, officers, employees, and agents and
their respective successors, heirs and assigns (the "CURAGEN Indemnitees"),
against any liability, damage, loss or expense (including reasonable attorneys'
fees and expenses of litigation) incurred by or imposed upon the CURAGEN
Indemnitees, or any of them, in connection with any claims, suits, actions,
demands or judgments ("Claims") of third parties for personal injury and product
liability matters (except in cases where such Claims result from a willful
material breach of this Agreement or the gross negligence or willful misconduct
on the part of a CURAGEN Indemnitee) arising out of or relating to any actions
of GENENTECH or any Affiliate, licensee, sublicensee, distributor or agent of
GENENTECH in the development, testing, production, manufacture, promotion,
import, sale or use by any person of any Licensed Product manufactured or sold
by GENENTECH or by an Affiliate, licensee, sublicensee, distributor or agent of
GENENTECH.

(b) GENENTECH's obligation to indemnify, defend and hold the CURAGEN
Indemnitees harmless pursuant to Section 9.16(a) are conditioned on the
indemnified Party: (i) providing written notice to the indemnifying Party of
any Claim arising out of the indemnified activities promptly after the
indemnified Party has knowledge of such Claim, (ii) permitting the indemnifying
Party to assume, at its discretion, sole and full control of the investigation,

39
<PAGE>

preparation, defense, trial and settlement in connection with such Claim, (iii)
assisting and cooperating with the indemnifying Party, at the indemnifying
Party's reasonable expense, in the investigation of, preparation for and defense
of any such Claim, and (iv) not compromising, negotiating or settling such Claim
without the indemnifying Party's prior written consent.

7.17 COUNTERPARTS.
------------

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized representative in two (2) originals.

GENENTECH, INC. CURAGEN CORPORATION

By: ______________________________ By: ______________________________

Title: ___________________________ Title: ___________________________

40
<PAGE>

SCHEDULE I

(To be completed for each Licensed Clone)

LICENSED CLONE:
- ---------------

TYPE OF LICENSE:
- ----------------

PROJECT DATA SET
- ----------------
OR
- --
CURAGEN DATA SET
- ----------------
PERTAINING TO LICENSED CLONE:
- -----------------------------

CURAGEN PROPRIETARY
- -------------------
MATERIAL PERTAINING TO
- ----------------------
LICENSED CLONE:
- ---------------

CURAGEN PATENT RIGHTS
- ---------------------
PERTAINING TO LICENSED CLONE:
- -----------------------------

RIGHTS UNDER
- ------------
EXTENDED LICENSE:
- -----------------

Signed this ______ day of __________________, _____

CURAGEN CORPORATION

By: ______________________________________

Name:
Title:

GENENTECH, INC.

By: ______________________________________

Name:
Title:

41
<PAGE>

APPENDIX D
----------

EXISTING DATA SETS

[XXXXX]

Confidential Treatment Requested
<PAGE>

APPENDIX E
----------

TERMS OF SUBSCRIPTION AGREEMENTS

QEA/Gene Calling
- ----------------

Subscriber will receive secure access to CURAGEN's QEA/GeneCalling subscription
database through the GeneScape( data base and software. Access will be provided
for up to [XXXXX] users on equipment to be provided by Subscriber.

CURAGEN will support and maintain the software provided for such access and will
use commercially reasonable efforts to update and maintain the database and to
keep it reasonably available for use.

Options and Licenses to clones identified using the database shall be provided
on terms substantially similar to those contained in this Agreement and the
License Agreement.

MIM/Path Calling
- ----------------

Subscriber will receive access to the MIM/PathCalling database through the
GeneScape(R) data base and software. Access will be provided for up to [XXXXX]
users on equipment to be provided by Subscriber.

CURAGEN will support and maintain the software provided for such access and will
use commercially reasonable efforts to update and maintain the database and to
keep it reasonably available for use.

Options and Licenses to clones identified using the database shall be provided
on terms substantially similar to those contained in this Agreement and the
License Agreement.

GeneTools
- ---------

Confidential Treatment Requested
<PAGE>

APPENDIX F
----------

STOCK PURCHASE AGREEMENT

<PAGE>

CURAGEN CORPORATION

STOCK PURCHASE AGREEMENT

DATED AS OF ____________, 1997

<PAGE>

CURAGEN CORPORATION

STOCK PURCHASE AGREEMENT

THIS AGREEMENT is dated as of ___________, 1997 by and between CURAGEN
CORPORATION (the "Company"), a Delaware corporation with principal offices at
555 Long Wharf Drive, 11/th/ Floor, New Haven, CT, 06511 and Genentech, Inc.
(the "Purchaser"), a Delaware corporation with principal offices at 1 DNA Way,
South San Francisco, CA 94080.

WHEREAS the Company wishes to obtain equity financing and the Purchaser is
willing, on the terms and conditions contained in this Agreement, to purchase
Shares of the Company.

IN CONSIDERATION of the mutual covenants contained in this Agreement, the
parties agree as follows:

SECTION 1. Authorization of Sale of the Shares. The Company has authorized
------------------------------------
the sale to the Purchaser of that number of shares (the "Shares") of the Common
Stock, $.01 par value per share (the "Common Stock"), of the Company, as is
equal to the quotient obtained by dividing $5,000,000 by the Offering Price (as
defined below).

SECTION 2. Agreement to Sell and Purchase Shares. At the Closing (as
--------------------------------------
defined in Section 3), the Company will sell to the Purchaser, and the Purchaser
will buy from the Company, upon the terms and conditions hereinafter set forth,
the Shares, at a purchase price per Share equal to the Offering Price for an
aggregate purchase price of $5,000,000 (the "Purchase Price"). As used herein,
the term "Offering Price" shall mean the price per share of the shares of Common
Stock sold to the public in connection with the closing by the Company of its
initial public offering (the "Public Offering Closing") pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Securities Act").

SECTION 3. Closings.
--------

3.1 Delivery of the Shares at the Closing. The completion of the
--------------------------------------
purchase and sale of the Shares being purchased and sold pursuant to this
Agreement (the "Closing") shall occur at the offices of Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., One Financial Center, Boston, Massachusetts
02111 contemporaneously with the Public Offering Closing (the "Closing
<PAGE>

Date"), or such other time and place as shall be agreed to by the Company and
the Purchaser. At the Closing, the Purchaser shall pay to the Company an amount
in cash or by wire transfer equal to the Purchase Price and the Company shall
deliver to the Purchaser one or more stock certificates representing the Shares
purchased by the Purchaser, each such certificate to be registered in the name
of the Purchaser. The Company's obligation to close the transaction shall be
subject to the following conditions, any of which may be waived by the Company:
(a) receipt by the Company of a certified or official bank check or checks or
wire transfer of funds in the full amount of the Purchase Price for the Shares
being purchased hereunder; (b) execution and delivery by the Purchaser of the
Registration Rights Agreement substantially in the form attached as Exhibit 1
---------
(the "Registration Rights Agreement"); and (c) the accuracy of the
representations and warranties made by the Purchaser and the fulfillment of
those undertakings of the Purchaser to be fulfilled prior to the Closing. The
Purchaser's obligation to close the transaction shall be subject to the
fulfillment of the following conditions: (a) the occurrence of the Public
Offering Closing, (b) the execution and delivery by the Company of the
Registration Rights Agreement; (c) the receipt by the Purchaser of an opinion of
Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to the Company, in
form and substance reasonably satisfactory to the Purchaser; (d) the receipt by
the Purchaser of a certificate, signed by the Secretary of the Company, in the
form attached hereto as Exhibit 2, (e) the receipt by the Purchaser, of a
---------
certificate, dated as of the Closing Date, as to the good standing of the
Company in the state of Delaware, (f) the receipt by the Purchaser of a stock
certificate, representing the Shares, and (g) the accuracy of the
representations and warranties made by the Company herein as of the Closing as
though such representations and warranties had been made on and as of Closing
and the fulfillment of those undertakings of the Company to be fulfilled prior
to Closing, and Purchaser's receipt of a certificate executed by the Senior Vice
President of the Company in the form attached hereto as Exhibit 3 certifying as
---------
to the same. This Agreement and the Registration Rights Agreement are
collectively referred to herein as the "Transaction Documents".

3.2. Delivery of Preferred Shares at Subsequent Closing. In the event
---------------------------------------------------
that the Public Offering Closing does not occur on or before May 30, 1999, then
the Company may, at its option, sell to the Purchaser, and the Purchaser will
buy from the Company, on or before June 30, 1999 (the "Subsequent Closing
Date"), upon the terms and conditions hereinafter set forth, that number of
Preferred Shares (as defined below) of the Company as is equal to the quotient
obtained

2
<PAGE>

by dividing $5,000,000 by the Private Placement Price (as defined below). As
used herein (i) the term "Preferred Shares" shall mean the shares of a new
series of Preferred Stock, $.01 par value per share (the "Preferred Stock"),
having substantially the same rights, preferences and privileges as the
Company's Series A Preferred Stock (other than with respect to (i) the
applicable conversion rate and (ii) those certain adjustments to the applicable
conversion rate set forth in Section 5(c)(ii) of Exhibit A of the Restated
Certificate of Incorporation of the Company dated June 24, 1997) and (ii) the
term "Private Placement Price" shall mean a price per share based upon the price
per share at which the Company sold shares of Preferred Stock in the round of
equity financing immediately preceding the Subsequent Closing Date raising in
excess of $3,000,000 from investors not involved in a collaborative relationship
with the Company. At the Subsequent Closing, the Purchaser shall pay to the
Company an amount in cash or by wire transfer equal to the Private Placement
Price and the Company shall deliver to the Purchaser one or more stock
certificates representing the Preferred Shares purchased by the Purchaser, each
such certificate to be registered in the name of the Purchaser. The Company's
obligation to close the transaction shall be subject to the following
conditions, any of which may be waived by the Company: (a) receipt by the
Company of a certified or official bank check or checks or wire transfer of
funds in the full amount of the Private Placement Price for the Preferred Shares
being purchased hereunder; (b) execution and delivery by the Purchaser of an
amendment to that certain Amended and Restated Registration Rights Agreement
dated as of March 27, 1997, as amended May 16, 1997 (the "Registration Rights
Amendment"); and (c) the accuracy of the representations and warranties made by
the Purchaser as of the Subsequent Closing Date and the fulfillment of those
undertakings of the Purchaser to be fulfilled prior to the Subsequent Closing.
The Purchaser's obligation to close the transaction shall be subject to the
fulfillment of the following conditions: (a) the execution and delivery by the
Company of the Registration Rights Amendment; (b) the receipt by the Purchaser
of an opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel to
the Company, in form and substance reasonably satisfactory to the Purchaser; (c)
the receipt by the Purchaser of a certificate, signed by the Secretary of the
Company, in the form attached hereto as Exhibit 2; (d) the receipt by the
---------
Purchaser, of a certificate, dated as of the Subsequent Closing Date, as to the
good standing of the Company in the state of Delaware; (e) the receipt by the
Purchaser of a stock certificate, representing the Preferred Shares; and (f) the
accuracy of the representations and warranties made by the Company herein as of
the Subsequent Closing as though such representations and warranties had been
made on and as of Subsequent Closing and the fulfillment of those undertakings
of the

3
<PAGE>

Company to be fulfilled prior to the Subsequent Closing, and Purchaser's receipt
of a certificate executed by the Senior Vice President of the Company in the
form attached hereto as Exhibit 3 certifying as to the same. Except as otherwise
---------
provided herein, any such sale of Preferred Shares shall be upon the same terms
and conditions as those contained herein for the Shares; provided that all
references in this Agreement to the "Closing" and the "Closing Date" shall mean
and refer to the "Subsequent Closing" and the "Subsequent Closing Date"; all
references in this Agreement (other than in Sections 1, 2 and 3) to the "Shares"
shall mean and refer to the "Preferred Shares" and all references to the
"Transaction Documents" in this Agreement shall mean and refer to this Agreement
and the Registration Rights Amendment.

SECTION 4. Representations, Warranties and Covenants of the Company. As
---------------------------------------------------------
used herein, "best knowledge" shall mean and include a) actual knowledge of any
officers or directors of the Company and b) that knowledge which a prudent
businessperson would have obtained in the management of his or her business
using due inquiry. The Company hereby represents and warrants to, and covenants
with, the Purchaser as follows:

4.1. Organization. The Company is duly organized, validly existing
-------------
and in good standing under the laws of the State of Delaware. The Company has
full corporate power and authority to own, operate and occupy its properties and
to conduct its business as presently conducted and is registered or qualified to
do business and in good standing in each jurisdiction in which it owns or leases
property or transacts business and where the failure to be so qualified would
have a material adverse effect upon the business, financial condition,
properties or operations of the Company. The Company owns and holds all of the
outstanding capital stock of Genescape, Inc. No other person has any rights to
acquire any interest (equity or otherwise) in Genescape, Inc. As of the date
hereof, Genescape has conducted no business or other activities (other than
activities related to its inception) and holds no assets. Other than Genescape,
Inc., the Company does not own, directly or indirectly, any interest in any
corporation, association, or other entity. The Company is not a participant in
any joint venture, partnership or similar arrangement. The Company has delivered
to the Purchaser an accurate and complete copy of its Certificate of
Incorporation and all Amendments thereto, including without limitation, all
Certificates of Designation filed with the Secretary of State of Delaware.

4.2. Due Authorization. The Company has all requisite corporate power
------------------
and authority to execute, deliver and perform its obligations under the
Transaction Documents, and the

4
<PAGE>

Transaction Documents have been duly authorized and validly executed and
delivered by the Company and constitute legal, valid and binding agreements of
the Company enforceable against the Company in accordance with their terms.

4.3. Non-Contravention. The execution and delivery of the Transaction
------------------
Documents, the issuance and sale of the Shares to be sold by the Company
hereunder, the fulfillment of the terms of the Transaction Documents and the
consummation of the transactions contemplated by the Transaction Documents will
not conflict with or constitute a violation of, or default or give rise to any
benefits or an acceleration of any rights of any third party (with the passage
of time or otherwise) under, any material agreement or instrument to which the
Company is a party or by which it is bound or the charter, by-laws or other
organizational documents of the Company nor result in the creation or imposition
of any lien, encumbrance, claim, security interest or restriction whatsoever
upon any of the material properties or assets of the Company or an acceleration
of indebtedness pursuant to any obligation, agreement or condition contained in
any material bond, debenture, note or any other evidence of indebtedness or any
material indenture, mortgage, deed of trust or any other agreement or instrument
to which the Company is a party or by which it is bound or to which any of the
property or assets of the Company is subject, nor conflict with, or result in a
violation of, any law, administrative regulation, ordinance or order of any
court or governmental agency, arbitration panel or authority applicable to the
Company. No consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body is required for the valid issuance and sale of the
Shares to be sold pursuant to the Agreement, other than such as have been or
will be made or obtained.

4.4. Capitalization. As of the date hereof, the Company has the total
---------------
authorized capitalization described on Schedule 4.4 attached hereto. The Shares
------------
to be sold pursuant to this Agreement have been duly authorized, and when issued
and paid for in accordance with the terms of this Agreement will be validly
issued, fully paid and non-assessable and free of restrictions on transfer,
other than restrictions on their transfer under the Transaction Documents and
under applicable state and federal securities laws. The outstanding shares of
capital stock of the Company have been duly and validly issued and are fully
paid and non-assessable. Except as set forth on Schedule 4.4, no options,
------------
warrants, puts, calls, commitments, convertible exchangeable securities, or
similar rights for issuance of new or additional securities exist with respect
to the Company.

5
<PAGE>

Schedule 4.4 contains a true and complete list of each stockholder,
- ------------
warrantholder and optionholder of the Company as of the date hereof.

4.5 Contracts and Other Commitments. Except as disclosed on Schedule
-------------------------------- --------
4.5 the Company does not have any contract, agreement, lease, commitment, or
- ---
proposed transaction, written or oral, absolute or contingent, other than (i)
contracts for the purchase of goods, supplies and services that were entered
into in the ordinary course of business and that do not involve individually
more than $200,000, (ii) sales contracts entered into in the ordinary course of
business, and (iii) contracts terminable at will by the Company on no more than
thirty (30) days' notice without cost or liability to the Company and that do
not involve any employment or consulting arrangement and are not material to the
conduct of the Company's business. For the purpose of this paragraph, employment
and consulting contracts and contracts with labor unions, and license agreements
and any other agreements relating to the acquisition or disposition of the
Company's technology (other than standard end-user license agreements) shall not
be considered to be contracts entered into in the ordinary course of business.

4.6 Related-Party Transactions. No employee, officer, or director of
---------------------------
the Company or member of his or her immediate family is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them, except that the Company is obligated to pay
approximately $21,000 in interest that accrued on promissory notes issued in
1993 to members of the Rothberg family, which notes were converted into Common
Stock at the end of 1993. To the best of the Company's knowledge, none of such
persons has any direct or indirect ownership interest in any firm or corporation
with which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation that competes with the Company, except
that employees, officers, or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. To the best of the Company's knowledge, no officer or director
or any member of their immediate families is, directly or indirectly, interested
in any material contract with the Company.

4.7 Registration Rights. Except as provided in the Registration
--------------------
Rights Agreement dated as of June 25, 1997 by and between the Company and a
certain stockholder, the Amended and Restated Registration Rights Agreement
dated as of March 27, 1997, by and among the Company and certain stockholders of
the Company, as amended, and as provided to Connecticut Innovations,

6
<PAGE>

Incorporated and the holders of warrants to purchase 11,111 shares of Common
Stock in separate agreements, the Company is not obligated to register under the
Securities Act any of its presently outstanding securities or any of its
securities that may be subsequently issued.

4.8 Permits. The Company has all franchises, permits, licenses, and
--------
any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, or financial condition of the Company and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted. The Company is not
in default in any material respect under any of such franchises, permits,
licenses or other similar authority.

4.9 Compliance With Other Instruments. The Company is not in
----------------------------------
violation or default in any material respect of any provision of its Certificate
of Incorporation or Bylaws or in any material respect of any provision of any
mortgage, indenture, agreement, instrument, or contract to which it is a party
or by which it is bound or, to the best of its knowledge, of any federal or
state judgment, order, writ, decree, statute, rule, or regulation applicable to
the Company. The execution, delivery, and performance by the Company of the
Transaction Documents and the consummation of the transactions contemplated
hereby and thereby will not result in any such violation or be in material
conflict with or constitute, with or without the passage of time or giving of
notice, either a material default under any such provision or an event that
results in the creation of any material lien, charge, or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture, or
non-renewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations, or any of its assets or
properties.

4.10 Litigation. There is no action, suit, proceeding, or
-----------
investigation, to the best of the Company's knowledge, pending or currently
threatened against the Company that questions the validity of the Transaction
Documents or the right of the Company to enter into such agreements, or to
consummate the transactions contemplated hereby or thereby, or that might
result, either individually or in the aggregate, in any material adverse change
in the assets, business, properties, prospects, or financial condition of the
Company, or in any material change in the current equity ownership of the
Company. The foregoing includes, without limitation, any action, suit,
proceeding, or investigation pending or currently threatened involving the prior
employment of any of the Company's employees, their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers, their obligations under any agreements with prior
employers, or negotiations by the Company with potential backers

7
<PAGE>

of, or investors in, the Company or its proposed business. The Company is not a
party to, or to the best of its knowledge, named in any order, writ, injunction,
judgment, or decree of any court, government agency, or instrumentality. There
is no action, suit, or proceeding by the Company currently pending or that the
Company currently intends to initiate.

4.11 Offering. Subject in part to the truth and accuracy of the
---------
Purchaser's representations set forth in Section 5.1 of this Agreement, the
offer, sale and issuance of the Shares as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act, and neither the
Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.

4.12 Title to Property and Assets; Leases. The Company owns no real
-------------------------------------
estate and leases facilities in Branford, Connecticut, New Haven, Connecticut
and Alachua, Florida. Except (i) as reflected in the Financial Statements (as
defined in paragraph 4.13), (ii) for liens for current taxes not yet delinquent,
(iii) for liens imposed by law and incurred in the ordinary course of business
for obligations not past due to carriers, warehousemen, laborers, materialmen
and the like, (iv) for liens in respect of pledges or deposits under workers'
compensation laws or similar legislation or (v) for minor defects in title, none
of which, individually or in the aggregate, materially interferes with the use
of such property, the Company owns its property and assets free and clear of all
mortgages, liens, claims, and encumbrances. With respect to the property and
assets it leases, the Company is in compliance with such leases and, to the best
of its knowledge, holds a valid leasehold interest free of any liens, claims, or
encumbrances, subject to clauses (i)-(v) above.

4.13 Financial Statements and Preliminary Financial Statements. The
----------------------------------------------------------
Company has delivered to the Purchaser its audited financial statements (balance
sheet and profit and loss statement, statement of stockholders' equity and
statement of cash flows including notes thereto) at December 31, 1994, 1995 and
1996 for the fiscal years then ended and its unaudited financial statements for
the nine-month period ended September 30, 1997 (the "Financial Statements"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated and with each other. The Financial Statements fairly present the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein. Except as set forth in the Financial
Statements, the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to September 30, 1997 and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under

8
<PAGE>

generally accepted accounting principles to be reflected in the Financial
Statements, which, in both cases, individually do not exceed $125,000, and in
the aggregate do not exceed $800,000, other than commitments set forth on
Schedule 4.13 . Except as disclosed in the Financial Statements, the Company is
- -------------
not a guarantor or indemnitor of any indebtedness of any other person, firm, or
corporation. The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with generally
accepted accounting principles.

4.14 Changes. To the best of the Company's knowledge, since September
--------
30, 1997, there has not been:

a) any change in the assets, liabilities, financial condition, business
prospects or operating results of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse;

(b) any damage, destruction or loss, whether or not covered by insurance,
materially and adversely affecting the business, properties, prospects, or
financial condition of the Company (as such business is presently conducted and
as it is proposed to be conducted);

(d) any satisfaction or discharge of any lien, claim, or encumbrance or
payment of any obligation by the Company, except in the ordinary course of
business and that is not material to the business, properties, prospects, or
financial condition of the Company (as such business is presently conducted and
as it is proposed to be conducted);

(e) any material change to a material contract or arrangement by which the
Company or any of its assets is bound or subject;

(f) any material change in any compensation arrangement or agreement with
any employee, officer, director or stockholder;

(g) any sale, assignment, or transfer of any patents, trademarks,
copyrights, trade secrets, or other intangible assets;

(h) any resignation or termination of employment of any key officer of the
Company; and the Company, to the best of its knowledge, does not know of the
impending resignation of termination of employment of any such officer;

(i) receipt of notice that there has been a loss of, or material order
cancellation by, any major customer of the Company;

9
<PAGE>

(j) any mortgage, pledge, transfer of a security interest in, or lien,
created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;

(k) any loans or guarantees made by the Company to or for the benefit of
its employees, officers, or directors, or any members of their immediate
families, other than travel advances and other advances made in the ordinary
course of its business;

(l) any declaration, setting aside, or payment or other distribution in
respect of any of the Company's capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by the Company;

(m) to the best of the Company's knowledge, any other event or condition of
any character that might materially and adversely affect the business,
properties, prospects, or financial condition of the Company (as such business
is presently conducted and as it is proposed to be conducted); or

(n) any agreement or commitment by the Company to do any of the things
described in this paragraph 4.14.

4.15 Patents and Trademarks. The Company owns or possesses sufficient
-----------------------
legal rights to all patents, trademarks, service marks, trade names, copyrights,
trade secrets, licenses, information, and proprietary rights and processes
presently used by the Company in its business (the "CuraGen Intellectual
Property Rights"). To the best knowledge of the Company, the CuraGen
Intellectual Property Rights are the only intellectual property rights necessary
for its business as now conducted and as proposed to be conducted and, to the
best knowledge of the Company, do not conflict with, or infringe the rights of
others. The Company has provided to Purchaser a complete list of patents and
pending patent applications of the Company. Except for agreements with its own
employees or consultants, substantially in the form referenced in paragraph 4.18
below, there are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company bound by or a party to any
options, licenses, or agreements of any kind with respect to the patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, and proprietary rights and processes of any other person or entity.
The Company has not received any communications alleging that the Company has
violated or, by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, copyrights, trade secrets, or
other proprietary rights or processes of any other person or entity. The Company
is not aware that any of its employees is obligated under any contract
(including licenses, covenants, or commitments of any nature) or other
agreement, or subject to any judgment, decree, or order of any court or
administrative agency, that would interfere with the use

10
<PAGE>

of such employee's best efforts to promote the interests of the Company or that
would conflict with the Company's business as proposed to be conducted. Neither
the execution nor delivery of this Agreement, nor the carrying on of the
Company's business by the employees of the Company, nor the conduct of the
Company's business as proposed, will, to the best of the Company's knowledge,
conflict with or result in a breach of the terms, conditions, or provisions of,
or constitute a default under, any contract, covenant, or instrument under which
any of such employees is now obligated. The Company does not believe it is or
will be necessary to use any inventions of any of its employees (or persons it
currently intends to hire) made prior to their employment by the Company.

4.16 Manufacturing and Marketing Rights. The Company has not granted
-----------------------------------
rights to manufacture, produce, assemble, license, market, or sell its products
to any other person or entity and is not bound by any agreement that affects the
Company's exclusive right to develop, manufacture, assemble, distribute, market,
or sell its products.

4.17 Employees: Employee Compensation. To the best of the Company's
---------------------------------
knowledge, there is no strike, or labor dispute or union organization activities
pending or threatened between it and its employees. None of the Company's
employees belongs to any union or collective bargaining unit. To the best of
its knowledge, the Company has complied in all material respects with all
applicable state and federal equal opportunity and other laws related to
employment. To the best of the Company's knowledge, no employee of the Company
is or will be in violation of any judgment, decree, or order, or any term of any
employment contract, patent disclosure agreement, or other contract or agreement
relating to the relationship of any such employee with the Company, or any other
party because of the nature of the business conducted or to be conducted by the
Company or to the use by the employee of his best efforts with respect to such
business. The Company is not a party to or bound by any currently effective
employment contract, deferred compensation agreement, bonus plan, incentive
plan, profit sharing plan, retirement agreement, or other employee compensation
agreement. The Company is not aware that any officer or key employee, or that
any group of key employees, intends to terminate their employment with the
Company, nor does the Company have a present intention to terminate the
employment of any of the foregoing. Subject to general principles related to
wrongful termination of employees, the employment of each officer and employee
of the Company is terminable at the will of the Company.

11
<PAGE>

4.18 Proprietary Information and Inventions Agreements. Each employee
--------------------------------------------------
and officer of the Company has executed an Employee Confidential Information and
Invention Agreement substantially in the form or forms which have been delivered
to counsel for the Purchaser. Each scientific consultant of the Company has
executed a confidentiality agreement with the Company.

4.19 Tax Returns, Payments, and Elections. The Company has filed all
-------------------------------------
tax returns and reports as required by law. These returns and reports are true
and correct in all material respects. The Company has paid all taxes and other
assessments due, except those contested by it in good faith. The provision for
taxes of the Company as shown in the Financial Statements is adequate for taxes
due or accrued as of the date thereof. The Company has not elected pursuant to
the Internal Revenue Code of 1986, as amended ("Code"), to be treated as an S
corporation or a collapsible corporation pursuant to Section 1362(a) or Section
341(f) of the Code, nor has it made any other elections pursuant to the Code
(other than elections that relate solely to methods of accounting, depreciation,
or amortization) that would have a material effect on the business, properties,
prospects, or financial condition of the Company. The Company has never had any
tax deficiency proposed or assessed against it and has not executed any waiver
of any statute of limitations on the assessments or collection of any tax or
governmental charge. None of the Company's federal income tax returns and none
of its state income or franchise tax or sales or use tax returns has ever been
audited by governmental authorities. Since the date of the Financial Statements,
the Company has made adequate provisions on its books of account for all taxes,
assessments, and governmental charges with respect to its business, properties,
and operations for such period. The Company has withheld or collected from each
payment made to each of its employees, the amount of all taxes, including, but
not limited to, federal income taxes, Federal Insurance Contribution Act taxes
and Federal Unemployment Tax Act taxes required to be withheld or collected
therefrom, and has paid the same to the proper tax receiving officers or
authorized depositories.

4.20 Insurance. The Company has in full force and effect fire and
----------
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed. The Company has in full force and effect
term life insurance, payable to the Company, on the lives of each of Jonathan M.
Rothberg and Gregory T.Went in the amount of $1,000,000 each. The Company has in
full

12
<PAGE>

force and effect products liability and errors and omissions insurance in
amounts customary for companies similarly situated.

4.21 Environmental and Safety Laws. To the best of its knowledge, the
------------------------------
Company is not in violation of any applicable statute, law, or regulation
relating to the environment or occupational health and safety, and to the best
of its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law, or regulation.

4.22 Investigation. It shall be no defense to an action for breach of
--------------
this Agreement that the Purchaser or its agents have (or have not) made
investigations into the affairs of the Company or that the Company could not
have known of the misrepresentation or breach of warranty.

4.23 Disclosure. To the best of the Company's knowledge, neither this
-----------
Agreement nor any other written statements or certificates made or delivered in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading.

SECTION 5. Representations, Warranties and Covenants of the Purchaser.
-----------------------------------------------------------

5.1. The Purchaser represents and warrants to, and covenants with,
the Company, as of the date hereof and as of the Closing Date, that: (i) the
Purchaser is an "accredited investor" as defined in Regulation D under the
United States Securities Act of 1933, as amended (the "Securities Act"); and
also is knowledgeable and experienced in making investments in private placement
transactions such as the purchase of the Shares; (ii) the Purchaser is acquiring
the Shares set forth above for its own account for investment and with no
present intention of distributing any of such Shares except pursuant to an
effective registration statement under the Securities Act covering the sale, and
no arrangement or understanding exists with any other person regarding the
distribution of any of such Shares; (iii) the Purchaser will not, directly or
indirectly, voluntarily offer, sell, pledge, transfer or otherwise dispose of
(or solicit any offers to buy, purchase or otherwise acquire or take a pledge
of) any of the Shares except (a) in the event of an effective registration
statement under the Securities Act, (b) upon delivery of an opinion of counsel
(which shall be in form and substance reasonably satisfactory to the Company)
that such registration is not required, (c) in connection with a sale, transfer
or other disposition made pursuant to Section 144 of the Securities Act or (d)
to a wholly owned subsidiary of the Purchaser, in the case of (a), (c) and (d)
above, no opinion of counsel shall be required; and (iv) the Purchaser has had
an opportunity to
13
<PAGE>

ask questions and receive answers from the management of the Company regarding
the Company, its business and the offering of the Shares.

5.2. The Purchaser further represents and warrants to, and covenants
with, the Company that (i) the Purchaser has full right, power, authority and
capacity to enter into the Transaction Documents and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of the Transaction Documents, and (ii)
upon the execution and delivery of the Transaction Documents, such Transaction
Documents shall constitute valid and binding obligations of the Purchaser
enforceable in accordance with their terms.

5.3. The Purchaser acknowledges and understands that the Purchaser
must bear the economic risk of its investment in the Shares for an indefinite
period of time because the Shares have not been registered under the Securities
Act and, therefore, cannot be sold unless subsequently registered under the
Securities Act or an exemption from such registration is available. The
certificates representing the Shares issued to Purchaser will bear a legend in
substantially the following form:

THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF, IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN
OPINION OF COUNSEL (WHICH SHALL BE IN FORM AND SUBSTANCE REASONABLY
SATISFACTORY TO THE COMPANY) REASONABLY SATISFACTORY TO THE COMPANY
(WHICH MAY BE THE PURCHASER'S IN-HOUSE COUNSEL), THAT SUCH
REGISTRATION IS NOT REQUIRED, UNLESS SUCH SALE, TRANSFER OR OTHER
DISPOSITION IS MADE PURSUANT TO RULE 144 OF THE SECURITIES ACT, IN
WHICH CASE SUCH SALE, TRANSFER OR OTHER DISPOSITION MAY BE MADE AND NO
OPINION OF COUNSEL SHALL BE REQUIRED, OR EXCEPT AS OTHERWISE PERMITTED
UNDER A CERTAIN COMMON STOCK PURCHASE AGREEMENT DATED NOVEMBER __ 1997
BETWEEN THE COMPANY

14
<PAGE>

AND THE ORIGINAL HOLDER, A COPY OF WHICH IS AVAILABLE UPON REQUEST
FROM THE COMPANY FOR INSPECTION.

The Company agrees to remove such legend from the certificates representing the
Shares issued to Purchaser at such time as such Shares may be legally sold under
Rule 144 (or any successor rule) without registration under the Securities Act,
at the request of the Purchaser and upon receipt from the Purchaser of an
opinion, which shall be in form and substance reasonably satisfactory to the
Company, of counsel reasonably satisfactory to the Company (which may be the
Purchaser's in-house counsel), that such legend may be removed.

The Purchaser agrees that any sale, transfer, pledge, hypothecation or
other disposition of the Shares shall be made in compliance with such legend.

SECTION 6. Survival of Representations, Warranties and Agreements.
-------------------------------------------------------
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Shares being purchased, and the payment therefor.

SECTION 7. No Fee. The parties hereto hereby represent that there are no
-------
brokers or finders entitled to compensation in connection with the transactions
contemplated hereby.

SECTION 8. Notices. All notices, requests, consents and other
--------
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission, (iii) sent by overnight
courier, or (iv) sent by registered or certified mail, return receipt requested,
postage prepaid:

(a) if to the Company, to:

CuraGen Corporation
555 Long Wharf Drive, 11/th/ Floor
New Haven, CT 06511
Attention: Vice President of Business Development

with a copy to:

Jeffrey M. Wiesen, Esq.
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, Massachusetts 02110

15
<PAGE>

(b) if to the Purchaser, to:

Genentech, Inc.
1 DNA Way
South San Francisco, CA 94080
Attn: Corporate Secretary

All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telex, telecopy or facsimile transmission, at the time that
receipt thereof has been acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day following the day
such notice is delivered to the courier service, or (iv) if sent by registered
or certified mail, on the 5th business day following the day such mailing is
made.

SECTION 9. Changes. Any term of this Agreement may be amended or
--------
compliance therewith waived only with the written consent of both parties
hereto.

SECTION 10. Assignment. The rights and obligations under this Agreement
-----------
may not be assigned by either party hereto without the prior written consent of
the other party.

SECTION 11. Benefit. All statements, representations, warranties,
--------
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed to
create any rights or obligations except among the parties hereto, and no person
or entity shall be regarded as a third-party beneficiary of this Agreement.

SECTION 12. Expenses. Each of the parties hereto shall pay its own fees
---------
and expenses (including the fees of any attorneys, accountants, appraisers or
others engaged by such party) in connection with this Agreement and the
transactions contemplated hereby whether or not the transactions contemplated
hereby are consummated.

SECTION 13. No Waiver; Cumulative Remedies. No failure or delay on the
-------------------------------
part of any party to this Agreement in exercising any right, power or remedy
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right, power or remedy preclude

16
<PAGE>

any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

SECTION 14. Headings. The headings of the various sections of this
---------
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.

SECTION 15. Transfer Taxes. CuraGen will reimburse the Purchaser for any
---------------
transfer taxes incurred in connection with the issuance of the Shares.

SECTION 16. Severability. In case any provision contained in this
-------------
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.

SECTION 17. Governing Law. This Agreement shall be governed by and
--------------
construed in accordance with (a) the internal laws of the State of Delaware
without giving effect to principles of conflicts of law, and (b) United States
federal law.

SECTION 18. Counterparts. This Agreement may be executed in counterparts,
-------------
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.

SECTION 19. Further Assurances. From and after the date of this Agreement,
-------------------
upon the request of the Purchaser or the Company, the Company and the Purchaser
shall execute and deliver such instruments, documents and other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement and the Shares.

17
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the __day of ________, 1997.

GENENTECH, INC.

By:_____________________________________
Name:
Title:

CURAGEN CORPORATION

By:____________________________________
Name:
Title:

18
<PAGE>

EXHIBIT 1
---------

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is made and entered
into as of ______________, by and among CuraGen Corporation, a Delaware
corporation (the "Company") with principal offices at 555 Long Wharf Drive, 11th
Floor, New Haven, CT 06511 and Genentech, Inc., a Delaware corporation (the
"Stockholder") with principal offices at 1 DNA Way, South San Francisco, CA
94080.

RECITALS

WHEREAS, the Company has issued to the Stockholder _____________ shares of
its Common Stock, $.01 par value per share (the "Common Stock"), pursuant to a
Stock Purchase Agreement dated as of even date herewith (the "Purchase
Agreement"); and

WHEREAS, the Stockholder has agreed to advance to the Company a loan in the
aggregate principal amount of up to $26,000,000 which loan is evidenced by a
Promissory Note, dated ________________, (the "Note") and which may be repaid,
at the Company's option, in shares of Non-Voting Common Stock or which, under
certain circumstances, may be converted to shares of Series F Preferred Stock;
and

WHEREAS, among the conditions to the consummation of the transactions
contemplated by the Purchase Agreement is the execution and delivery of a
Registration Rights Agreement providing for the registration rights described
herein.

NOW THEREFORE, in consideration of the foregoing and the mutual promises
herein contained the parties agree as follows:

AGREEMENT

1. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION RIGHTS

1.1 CERTAIN DEFINITIONS
-------------------

As used in this Agreement, the following terms shall have the meanings set
forth below:

(a) "Commission" shall mean the Securities and Exchange Commission or any
other federal agency at the time administering the Securities Act.

(b) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, or any similar successor federal statute and the rules and regulations
thereunder, all as the same shall be in effect from time to time.
<PAGE>

(c) "Holder" shall mean the Stockholder and any transferee to whom the
registration rights conferred by this Agreement have been transferred in
compliance with Section 1.2 and Section 1.8 hereof.

(d) "Non Voting Common Stock" shall the shares of Non-Voting Common Stock
$.01 par value per share, of the Company issued to the Stockholder pursuant to
the terms of the Note.

(e) "Registrable Securities" shall mean (i) shares of Common Stock, (ii)
shares of Common Stock issued or issuable upon conversion of the Non-Voting
Common Stock or Series F Preferred Stock, and (iii) any shares of Common Stock
issued as a dividend or other distribution with respect to or in exchange for or
in replacement of the shares referenced in (i) or (ii) above; provided however,
that Registrable Securities shall not include any shares of Common Stock (i)
which have previously been registered or which have been sold to the public, or
which have been sold in a private transaction in which the transferor's rights
under this Agreement are not assigned, or (ii) with respect to which the
registration rights under this Agreement have terminated under Section 1.15 of
this Agreement.

(f) The terms "register," "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and the declaration or ordering of the
effectiveness of such registration statement.

(g) "Registration Expenses" shall mean all expenses incurred in effecting
any registration pursuant to this Agreement, including, without limitation, all
registration, qualification, and filing fees, printing expenses, escrow fees,
fees and disbursements of counsel for the Company, blue sky fees and expenses,
and expenses of any regular or special audits incident to or required by any
such registration, but shall not include Selling Expenses.

(h) "Restricted Securities" shall mean any Registrable Securities required
to bear the legends set forth in Section 1.2(b) hereof.

(i) "Rule 144" shall mean Rule 144 as promulgated by the Commission under
the Securities Act, as such Rule may be amended from time to time, or any
similar successor rule that may be promulgated by the Commission.

(j) "Rule 145" shall mean Rule 145 as promulgated by the Commission under
the Securities Act as such Rule may be amended from time to time, or any similar
successor rule that may be promulgated by the Commission.

(k) "Securities Act" shall mean the Securities Act of 1933, as amended, or
any similar successor federal statute and the rules and regulations thereunder,
all as the same shall be in effect from time to time.

(l) "Selling Expenses" shall mean all underwriting discounts, selling
commissions and stock transfer taxes applicable to the sale of Registrable
Securities and fees

2
<PAGE>

and disbursements of counsel for any Holder (other than the fees and
disbursements of counsel included in Registration Expenses).

(m) "Series F Preferred Stock" shall mean shares of the Series F Non-Voting
Convertible Preferred Stock, $.01 par value per share, of the Company issued to
the Stockholder pursuant to the terms of the Note.

1.2 RESTRICTIONS ON TRANSFER
------------------------

(a) Each Holder agrees not to make any disposition of all or any portion of
the Registrable Securities unless and until (i) there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such registration
statement, (ii) the transferee has agreed in writing for the benefit of the
Company prior to such transfer, and as a condition thereof, delivers to the
Company a written instrument by which such transferee agrees to be bound by this
Section 1.2, provided and to the extent such Section is then applicable, and (A)
such Holder shall have notified the Company of the proposed disposition and
shall have furnished the Company with a detailed statement of the circumstances
surrounding the proposed disposition, and (B) if requested by the Company, such
Holder shall have furnished the Company with an opinion of counsel, reasonably
satisfactory to the Company, that such disposition will not require registration
of such shares under the Securities Act or (iii) the disposition is made
pursuant to Rule 144. It is agreed that the Company will not require opinions
of counsel for transactions made pursuant to Rule 144.

Notwithstanding the provisions of 1.2(i), (ii) and (iii) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by a Holder which is (A) a partnership to its partners or retired partners (who
retire after the date hereof) in accordance with partnership interests, of (B)
to the Holder's family member or trust for the benefit of an individual Holder,
provided such transfer is without consideration and the transferee will be
subject to the terms of this Section 1.2 to the same extent as if he were an
original Holder hereunder.

(b) Each certificate representing Registrable Securities shall (unless
otherwise permitted by the provisions of this Agreement) be stamped or otherwise
imprinted with legends substantially similar to the following (in addition to
any legend required under applicable state securities laws):

3
<PAGE>

TRANSFER OR OTHER DISPOSITION IS MADE PURSUANT TO RULE 144 OF THE SECURITIES
ACT, IN WHICH CASE NO OPINION OF COUNSEL SHALL BE REQUIRED, OR EXCEPT AS
OTHERWISE PERMITTED UNDER A CERTAIN STOCK PURCHASE AGREEMENT DATED NOVEMBER__,
1997 AMONG THE COMPANY, THE ORIGINAL HOLDER AND OTHERS, A COPY OF WHICH IS
AVAILABLE UPON REQUEST FROM THE COMPANY FOR INSPECTION.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE REGISTRATION
RIGHTS AGREEMENT DATED NOVEMBER__, 1997, AS AMENDED, A COPY OF WHICH IS
AVAILABLE FOR INSPECTION AT THE OFFICES OF THE COMPANY OR MAY BE AVAILABLE UPON
REQUEST.

(c) The Company shall be obligated to reissue promptly unlegended
Registrable Securities at the request of any Holder thereof if the Holder shall
have obtained an opinion of counsel (which counsel may be counsel to the
Company) reasonably acceptable to the Company to the effect that the Registrable
Securities proposed to be disposed of may lawfully be so disposed of without
registration, qualification or legend.

(d) Any legend endorsed on any Registrable Securities pursuant to
applicable state securities laws and any stop-transfer instructions with respect
to any Registrable Securities shall be removed upon receipt by the Company of an
order of the appropriate blue sky authority authorizing such removal.

1.3 REGISTRATION ON FORM S-3
------------------------

(a) After the effective date of the Company's initial public offering (the
"Offering Effective Date"), the Company shall use its best efforts to qualify
for registration on Form S-3 or any comparable or successor form or forms.
After the Company has qualified for the use of Form S-3, the Holder of
Registrable Securities shall have the right, at any time on or after the first
anniversary of the Offering Effective Date, to request registrations on Form S-3
(such request shall be in writing and shall state the number of shares of
Registrable Securities to be disposed of and the intended methods of disposition
of such shares by such Holder); provided, however, that the Company shall not be
-------- -------
obligated to effect any such registration if (i) the Holder, together with the
holders of any other securities of the Company entitled to inclusion in such
registration, propose to sell Registrable Securities and such other securities
(if any) on Form S-3 at an aggregate price to the public of less than $500,000;
(ii) in a given twelve-month period, the Company has effected two (2) such
registrations, (iii) it is to be effected more than ten (10) years after the
Offering Effective Date; or (iv) the Company shall have furnished to such Holder
a certificate signed by the President of the Company stating that in the good
faith judgment of the Board of Directors of the Company, it would be materially
detrimental to the Company for such registration statement to be filed in the
near future and that it has, therefore, determined to defer the filing of such
registration statement, in which case the Company shall have the right to defer
such filing for a period of not more than one hundred eighty (180) days after
receipt of the request of the Holder; provided, that the Company shall not defer
--------
its obligation in this manner more than once in any twelve-month period.

4
<PAGE>

(b) The Company shall not be obligated to effect, or to take any action to
effect, any such registration pursuant to this Section 1.3:

(i) In any particular jurisdiction in which the Company would
be required to execute a general consent to service of process in
effecting such registration, qualification or compliance, unless the
Company is already subject to service in such jurisdiction and except
as may be required by the Securities Act;

(ii) After the Company has initiated ten (10) such registrations
for the Holder pursuant to this Section 1.3 (counting for these
purposes only registrations which have been declared or ordered
effective and pursuant to which securities have been sold and
registrations which have been withdrawn by the Holder as to which the
Holder have not elected to bear the Registration Expenses pursuant to
Section 1.5 hereof and would, absent such election, have been required
to bear such expenses);

(iii) During the period starting with the date sixty (60) days
prior to the Company's good faith estimate of the date of filing of and
ending on a date one hundred eighty (180) days after the effective date
of, a Company-initiated registration, including a demand registration
initiated by the Company on behalf of any holder of demand registration
rights; provided that the Company is actively employing in good faith
all reasonable efforts to cause such registration statement to become
effective; or

(iv) If the Company shall have effected a registration pursuant
to Section 1.3(a) within one hundred eighty (180) days preceding the
Company's receipt of the Holder's request.

(c) Subject to the foregoing, upon delivery by the Holder of the notice
described in Section 1.3(a) above, the Company shall (i) promptly give written
notice of the proposed registration to all other Holders (if any) and (ii) as
soon as practicable, use its best efforts to effect such registration
(including, without limitation, filing post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with the Securities Act) as would permit or facilitate
the sale and distribution of all or such portion of such Registrable Securities
as are specified in such request, together with all or such portion of the
Registrable Securities of any other Holder joining in such request as are
specified in a written request received by the Company within twenty (20) days
after such written notice from the Company is mailed or delivered. The
registration statement filed pursuant to the request of the Holder may, subject
to the provisions of Sections 1.3(b) and 1.10 hereof, include other securities
of the Company with respect to which registration rights have been granted, and
may include securities of the Company being sold for the account of the Company.

5
<PAGE>

(d) All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to Section 1.3 hereof shall be borne by the
Company.

(e) If the registration requested pursuant to Section 1.3 is underwritten,
the rights of the Holder to registration pursuant to Section 1.3 shall be
conditioned upon such Holder's participation in such underwriting and the
inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. The Holder may elect to include in such underwriting
all or a part of its Registrable Securities. Notwithstanding the foregoing, the
Company shall not be obligated to register the Registrable Securities of any
Holder who fails promptly to provide to the Company such information as the
Company may reasonably request at the time to enable the Company to comply with
applicable laws or regulations or to facilitate preparation of the registration
statement.

(f) If the Company shall request inclusion in any registration pursuant to
Section 1.3 of securities being sold for its own account, or if other persons
shall request inclusion in any registration pursuant to Section 1.3, the Holder
shall offer to include such securities in the underwriting and may condition
such offer on their acceptance of the further applicable provisions of this
Section 1 (including Section 1.10). The Company shall (together with the Holder
and other persons proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
representative of the underwriter or underwriters. Notwithstanding any other
provision of this Section 1.3, if the representative of the underwriters advises
the Holder in writing that marketing factors require a limitation on the number
of shares to be underwritten, the number of shares to be included in the
underwriting or registration shall be allocated as set forth in Section 1.10
hereof. If a person who has requested inclusion in such registration as
provided above does not agree to the terms of any such underwriting, such person
shall be excluded therefrom by written notice from the Company, the underwriter
or the Holder. Any Registrable Securities or other securities excluded shall
also be withdrawn from such registration. If shares are so withdrawn from the
registration and if the number of shares to be included in such registration was
previously reduced as a result of marketing factors pursuant to this Section
1.3(f), then the Company shall offer to all persons who have retained rights to
include securities in the registration the right to include additional
securities in the registration in an aggregate amount equal to the number of
shares so withdrawn, with such shares to be allocated among such persons
requesting additional inclusion in accordance with Section 1.10.

1.4 REGISTRATION PROCEDURES
-----------------------

In the case of each registration effected by the Company pursuant to
Section 1.3, the Company will keep each Holder advised in writing as to the
initiation of each registration and as to the completion thereof. At its
expense, the Company will use its best efforts to:

(a) Keep such registration effective for a period of one hundred eighty
(180) days or until the Holder has completed the distribution described in the
registration statement relating thereto, whichever first occurs; provided,
--------
however, that such 180-day period shall be extended, if necessary, to keep the
- -------
registration statement effective until all such Registrable Securities are

6
<PAGE>

sold, provided that Rule 145, or any successor rule under the Securities Act,
permits an offering on a continuous or delayed basis, and provided further that
applicable rules under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
that (I) includes any prospectus required by Section 10(a)(3) of the Securities
Act or (II) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (I) and
(II) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the Exchange Act in the registration statement;

(b) Prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement;

(c) Furnish such number of prospectuses and other documents incident
thereto, including any amendment of or supplement to the prospectus, as the
Holder from time to time may reasonably request;

(d) Notify each seller of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that as thereafter delivered
to the purchasers of such shares such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;

(e) Cause all such Registrable Securities registered pursuant hereunder to
be listed on each securities exchange on which similar securities issued by the
Company are then listed;

(f) Provide a transfer agent and registrar for all Registrable Securities
registered pursuant to such registration statement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of
such registration; and

(g) Otherwise use its best efforts to comply with all applicable rules and
regulations of the Commission, and make available to its security holders, as
soon as reasonably practicable an earnings statement covering the period of at
least twelve months, but not more than eighteen months, beginning with the first
month after the effective date of the Registration Statement, which earnings
statement shall satisfy the provisions of Section 11(a) of the Securities Act.

7
<PAGE>

1.5 INDEMNIFICATION
---------------

(a) The Company will indemnify each Holder, each of its officers, directors
and partners, legal counsel and accountants and each person controlling such
Holder within the meaning of Section 15 of the Securities Act, with respect to
which registration, qualification, or compliance has been effected pursuant to
this Section 1, and each underwriter, if any, and each person who controls
within the meaning of Section 15 of the Securities Act any underwriter, against
all expenses, claims, losses, damages, and liabilities (or actions, proceedings,
or settlements in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained in any
prospectus, offering circular, or other document (including any related
registration statement, notification, or the like) incident to any such
registration, qualification, or compliance or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each such Holder, each of its officers, directors, partners, legal
counsel, and accountants and each person controlling such Holder, each such
underwriter, and each person who controls any such underwriter for any legal and
any other expenses reasonably incurred in connection with investigating and
defending or settling any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or is based on
any untrue statement or omission based upon written information furnished to the
Company by such Holder or underwriter specifically for use in the preparation
thereof. It is agreed that the indemnity agreement contained in this Section
1.5(a) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld).

(b) Each Holder will, if Registrable Securities held by him are included in
the securities as to which such registration, qualification, or compliance is
being effected, indemnify the Company, each of its directors, officers, legal
counsel, and accountants and each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, each other such Holder, and each of their officers, directors,
and partners, and each person controlling such Holder, against all expenses,
claims, losses, damages and liabilities (or actions, proceedings, or settlements
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any prospectus, offering
circular, or other document (including any related registration statement,
notification, or the like) incident to any such registration, qualification, or
compliance, or based on any omission (or alleged omission) to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and such Holder,
directors, officers, partners, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating and defending or settling any such
claim, loss, damage, liability, or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or

8
<PAGE>

alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by such Holder specifically for use in the
preparation thereof; provided, however, that the obligations of such Holder
hereunder shall not apply to amounts paid in settlement of any such claims,
losses, damages, or liabilities (or actions in respect thereof) if such
settlement is effected without the consent of such Holder (which consent shall
not be unreasonably withheld); and provided that in no event shall any indemnity
under this Section 1.5 exceed the net proceeds from the offering received by
such Holder.

(c) Each party entitled to indemnification under this Section 1.5 (the
"Indemnified Party") shall give notice to the party required to provide
indemnification (the "Indemnifying Party") promptly after such Indemnified Party
has actual knowledge of any claim as to which indemnity may be sought, and shall
permit the Indemnifying Party to assume the defense of such claim or any
litigation resulting therefrom, provided that counsel for the Indemnifying
Party, who shall conduct the defense of such claim or any litigation resulting
therefrom, shall be approved by the Indemnified Party (whose approval shall not
unreasonably be withheld), and the Indemnified Party may participate in such
defense at such party's expense, and provided further that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Indemnifying Party of its obligations under this Section 1.5 to the extent such
failure is not prejudicial. No Indemnifying Party in the defense of any such
claim or litigation shall, except with the consent of each Indemnified Party,
consent to entry of any judgment or enter into any settlement that does not
include as an unconditional term thereof, the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
to such claim or litigation and no Indemnified Party shall consent to entry of
any judgment or settle such claim or litigation without the prior written
consent of the Indemnifying Party. Each Indemnified Party shall furnish such
information regarding itself or the claim in question as an Indemnifying Party
may reasonably request in writing and as shall be reasonably required in
connection with defense of such claim and litigation resulting therefrom.

(d) If the indemnification provided for in this Section 1.5 is held by a
court of competent jurisdiction to be unavailable to an Indemnified Party with
respect to any loss, liability, claim, damage, or expense referred to therein,
then the Indemnifying Party, in lieu to indemnifying such Indemnified Party
hereunder, shall contribute to the amount paid or payable by such Indemnified
Party as a result of such loss, liability, claim, damage, or expense in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense, as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on
indemnification and contribution contained in the underwriting agreement entered
into in

9
<PAGE>

connection with the underwritten public offering are in conflict with the
foregoing provisions, the provisions in the underwriting agreement shall
control.

1.6 INFORMATION BY HOLDER
---------------------

Each Holder of Registrable Securities shall furnish to the Company such
information regarding such Holder and the distribution proposed by such Holder
as the Company may reasonably request in writing and as shall be reasonably
required in connection with any registration, qualification, or compliance
referred to in this Section 1, except to the extent that the furnishing of such
information would violate any law or any contractual arrangement. The Company
shall not be obligated to register the Registrable Securities of any Holder who
fails promptly to provide to the Company such information as the Company may
reasonably request at the time to enable the Company to comply with applicable
laws or regulations or to facilitate preparation of the registration statement,
including any information that the Holder fails to provide on the basis that
such information would violate any law or any contractual arrangement.

1.7 RULE 144 REPORTING
------------------

With a view to making available the benefits of certain rules and
regulations of the Commission that may permit the sale of the Restricted
Securities to the public without registration, the Company agrees to use its
best efforts to:

(a) Make and keep public information regarding the Company available as
those terms are understood and defined in Rule 144 under the Securities Act, at
all times from and after ninety (90) days following the effective date of the
first registration under the Securities Act filed by the Company for an offering
of its securities to the general public;

(b) File with the Commission in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act
at any time after it has become subject to such reporting requirements;

(c) So long as a Holder owns any Restricted Securities, furnish to the
Holder forthwith upon written request a written statement by the Company as to
its compliance with the reporting requirements of Rule 144 (at any time from and
after ninety (90) days following the effective date of the first registration
statement filed by the Company for an offering of its securities to the general
public), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
so filed as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such securities
without registration.

10
<PAGE>

1.8 TRANSFER OR ASSIGNMENT OF REGISTRATION RIGHTS
---------------------------------------------

The rights to cause the Company to register securities granted to a Holder
by the Company under this Section 1 may be transferred or assigned by a Holder
only to a transferee or assignee of not less than 50,000 shares of Registrable
Securities (as presently constituted and subject to subsequent adjustments for
stock splits, stock dividends, reverse stock splits, and the like), provided
that the Company is given written notice at the time of said transfer or
assignment stating the name and address of the transferee or assignee and
identifying the securities with respect to which such registration rights are
being transferred or assigned, and, provided further, that the transferee or
assignee of such rights assumes the obligations of such Holder under this
Section 1 and prior to such transfer, as a condition thereof, delivers to the
Company a written instrument by which such transferee agrees to be bound by this
Agreement.

1.9 "MARKET STAND-OFF" AGREEMENT
----------------------------

If requested by the Company and an underwriter of Common Stock (or other
securities) of the Company, a stockholder shall not sell or otherwise transfer
or dispose of any Common Stock (or other securities) of the Company held by such
stockholder (other than those included in the registration) during the one
hundred eighty (180) day period following the effective date of a registration
statement of the Company filed under the Securities Act, provided that:

(a) if the stockholder is not an "affiliate" (as defined under Rule 144) of
the Company nor does it hold beneficially or of record 10% or more of the
outstanding equity securities of the Company at the time a registration
statement is filed, then such agreement shall only apply to the first such
registration statement of the Company, including securities to be sold on its
behalf to the public in an underwritten offering; and

(b) all officers and directors of the Company enter into similar
agreements.

The obligations described in this Section 1.9 shall not apply to a
registration relating solely to employee benefit plans on Form S-8 or similar
forms that may be promulgated in the future, or a registration relating solely
to a Commission Rule 145 transaction on Form S-4 or similar forms that may be
promulgated in the future. The Company may impose stop-transfer instructions
with respect to the shares (or securities) subject to the foregoing restriction
until the end of said one hundred eighty (180) day period.

1.10 LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS.
---------------------------------------------

From and after the date of this Agreement, the Company shall not, without
the prior written consent of the Holders of a majority of the outstanding
Registrable Securities, enter into any agreement with any holder or prospective
holder of any securities of the Company which would allow such holder or
prospective holder to include such securities in any registration filed under
Section 1.3 hereof, unless under the terms of such agreement, such holder or
prospective holder may include such securities in any such registration only to
the extent that the inclusion of

11
<PAGE>

such securities will not reduce the amount of the Registrable Securities of the
Holders which are included.

1.11 ALLOCATION OF REGISTRATION OPPORTUNITIES
----------------------------------------

In any circumstance in which all of the Registrable Securities and other
shares of Common Stock of the Company (including shares of Common Stock issued
or issuable upon conversion of shares of any currently unissued series of
Preferred Stock of the Company) with registration rights (the "Other Shares")
requested to be included in a registration on behalf of the Holder or other
selling stockholders cannot be so included as a result of limitations of the
aggregate number of shares of Registrable Securities and Other Shares that may
be so included, the number of shares of Registrable Securities and Other Shares
that may be so included shall be allocated among the Holders requesting
inclusion of shares pro rata on the basis of the number of shares of Registrable
Securities and that would be held by such Holders, assuming conversion, that
such Holders had requested to be included in the registration.

No Holder shall have any right to take any action to restrain, enjoin, or
otherwise delay any registration as the result of any controversy that might
arise with respect to the interpretation or implementation of this Section 1.

1.12 TERMINATION OF REGISTRATION RIGHTS
----------------------------------

The right of any Holder to request registration or inclusion in any
registration pursuant to Section 1.3 shall terminate on such date after the
Offering Effective Date as all shares of Registrable Securities held or entitled
to be held upon conversion by such Holder may immediately be sold under Rule 144
during any ninety (90) day period.

2. MISCELLANEOUS

2.1 GOVERNING LAW
-------------

This Agreement shall be governed in all respects by the laws of the State
of Delaware, as if entered into by and between Delaware residents exclusively
for performance entirely within Delaware, and excluding that body of laws
pertaining to conflicts of laws.

2.2 SUCCESSORS AND ASSIGNS
----------------------

Except as otherwise expressly provided herein, the provisions hereof shall
inure to the benefit of and be binding upon the successors, assigns, heirs,
executors and administrators of the parties hereto.

2.3 ENTIRE AGREEMENT; AMENDMENT; WAIVER
-----------------------------------

This Agreement (including the Exhibits hereto) constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof and thereof.

12
<PAGE>

This Agreement supersedes any and all prior understandings as to the subject
matter of this Agreement. Neither this Agreement nor any term hereof may be
amended, waived, discharged or terminated, except by a written instrument signed
by the Company and the Holders of at least fifty percent (50%) of the
Registrable Securities. Any such amendment, waiver, discharge or termination
shall be binding on all the Holders, but in no event shall the obligation of any
Holder hereunder be materially increased, except upon the written consent of
such Holder.

2.4 NOTICES, ETC.
-------------

All notices and other communications required or permitted hereunder shall
be in writing and shall be mailed by United States first class mail, postage
prepaid, or delivered personally by hand or nationally recognized courier
addressed (a) if to the Stockholder, at the address set forth on the first page
of this Agreement, or at such other address as such holder or permitted assignee
shall have furnished to the Company in writing, or (b) if to the Company, at 555
Long Wharf Drive, 11th Floor, New Haven CT 06511, or at such other address as
the Company shall have furnished to each holder in writing. All such notices and
other written communications shall be effective on the date of mailing or
delivery.

2.5 DELAYS OR OMISSIONS
-------------------

No delay or omission to exercise any right, power or remedy accruing to any
Holder, upon any breach or default of the Company under this Agreement shall
impair any such right, power or remedy of such Holder nor shall it be construed
to be a waiver of any such breach or default, or an acquiescence therein, or of
or in any similar breach or default thereafter occurring; nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default therefore or thereafter occurring. Any waiver, permit, consent or
approval of any kind or character on the part of any Holder of any breach or
default under this Agreement or any waiver on the part of any Holder of any
provisions or conditions of this Agreement must be made in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
Holder, shall be cumulative and not alternative.

2.6 RIGHTS; SEPARABILITY
--------------------

Unless otherwise expressly provided herein, a Holder's rights hereunder are
several rights, not rights jointly held with any of the other Holders. In case
any provision of the Agreement shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

2.7 CONFIDENTIAL INFORMATION
------------------------

Each Holder acknowledges that the information received by them pursuant
hereto may be confidential and for its use only, and it will not use such
confidential information in violation of the Exchange Act or reproduce, disclose
or disseminate such information to any other person (other than its employees or
agents having a need to know the contents of such information, and

13
<PAGE>

its attorneys), except in connection with the exercise of rights under this
Agreement, unless the Company has made such information available to the public
generally or such Holder is required to disclose such information by a
governmental body.

2.8 TITLES AND SUBTITLES
--------------------

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

2.9 COUNTERPARTS
------------

This Agreement may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights
Agreement effective as of the day and year first above written.

CURAGEN CORPORATION

By _____________________________
Name:
Title:

GENENTECH, INC.

By _____________________________
Name:
Title:

<PAGE>

Exhibit 10.16

CuraGen Corporation has omitted from this Exhibit 10.16 portions of the
Agreement for which CuraGen Corporation has requested confidential treatment
from the Securities and Exchange Commission. The portions of the Agreement for
which confidential treatment has been requested are marked with X's in brackets
and such confidential portions have been filed separately with the Securities
and Exchange Commission.

1. SUPERCEDES AWARD NOTICE dated ____________________

Restrictions previously imposed remain in effect unless specifically rescinded

- --------------------------------------------------------------------------------
4. PLANT NO 5. ADMINISTRATIVE CODES
5 RO1 HGO1491-02 X7JP

Formerly:
- --------------------------------------------------------------------------------
6. PROJECT PERIOD Mo., Day, Yr. Mo., Day, Yr.
05/01/96 04/30/99

From Through
- --------------------------------------------------------------------------------
7. BUDGET PERIOD Mo., Day, Yr. Mo., Day, Yr.
05/01/97 04/30/98
From Through
- --------------------------------------------------------------------------------

NATIONAL INSTITUTES OF HEALTH
NATIONAL HUMAN GENOME RESEARCH INSTITUTE

NOTICE OF GRANT AWARD
AUTHORIZATION (Legislation Regulation)

42 USC 241 42 CFR 52
RESEARCH
- --------------------------------------------------------------------------------
8. TITLE OF PROJECT (Limit to 56 spaces)

AUTOMATED SEQUENCING SYSTEM FOR THE HUMAN GENOME PROJECT SRC (3)
- --------------------------------------------------------------------------------
9. GRANTEE NAME AND ADDRESS

a. CURAGEN CORPORATION
322 E MAIN ST
b. BRANFORD, CT 06405

d.
- --------------------------------------------------------------------------------
10. DIRECTOR OF PROJECT (PROGRAM DIRECTOR/PRINCIPAL INVESTIGATOR)
(LAST NAME FIRST AND ADDRESS)

WENT, GREGORY PHD
CURAGEN CORPORATION
LONG WHARF MARITIME CENTER
555 LONG WHARF DRIVE 11TH FL
NEW HAVEN, CONNECTICUT 06511

- --------------------------------------------------------------------------------
11. APPROVED BUDGET (Excludes PHS Direct Assurance)
- --------------------------------------------------------------------------------
1 PHS Grant Funds Only
-----
[_] Total project costs including grant funds and all other I
Financial participation -----

(Select one and place NUMERAL in box.)
- --------------------------------------------------------------------------------
a. Salaries and Wages . . . . $ [XXXXXX]

b. Fringe Benefits . . . . . $ [XXXXXX]

c. Total Personnel Costs . . . $ [XXXXXX]

d. Consultant Costs . . . . . . . . . . [XXXXXX]

e. Equipment. . . . . . . . . . . . . . [XXXXXX]

f. Supplies . . . . . . . . . . . . . . [XXXXXX]

g. Travel . . . . . . . . . . . . . . . [XXXXXX]

h. Patient Care -- Inpatient. . . . . . [XXXXXX]

i. -- Outpatient . . . . . [XXXXXX]

j. Alterations and Renovations. . . . . [XXXXXX]

k. Other. . . . . . . . . . . . . . . . [XXXXXX]

l. Consortium/Contractual Costs . . . . [XXXXXX]

m. Trainee Related Expenses . . . . . .

n. Trainee Stipends . . . . . . . . . . [XXXXXX]

o. Trainee Tuition and Fees . . . . . . [XXXXXX]

p. Trainee Travel . . . . . . . . . . . [XXXXXX]

-----------
q. TOTAL DIRECT COSTS $ [XXXXXX]
- --------------------------------------------------------------------------------
r. INDIRECT COSTS Date ? of S&W TADC $ [XXXXXX]
- --------------------------------------------------------------------------------
s. TOTAL APPROVED BUDGET $ [XXXXXX]
- --------------------------------------------------------------------------------
t. SAIR Fee $ [XXXXXX]
- --------------------------------------------------------------------------------
u. Federal Share. . . . . . . . . . . $ [XXXXXX]

v. Non-Federal Share. . . . . . . . . $
- --------------------------------------------------------------------------------
12. AWARD COMPUTATION FOR FINANCIAL ASSISTANCE
- --------------------------------------------------------------------------------
a. Amount of PHS Financial Assistance (from Item 11.v.). . . . $ [XXXXXX]

b. Less Unobligated Balance From Prior Budget Periods. . . . . $ [XXXXXX]

c. Less Cumulative Prior Award(s) This Budget Period . . . . . $ [XXXXXX]

-------------
d. AMOUNT OF FINANCIAL ASSISTANCE THIS ACTION. . . . . . . . . $ [XXXXXX]
- --------------------------------------------------------------------------------
13. RECOMMENDED FUTURE SUPPORT (SUBJECT TO THE AVAILABILITY OF FUNDS AND
SATISFACTORY PROGRESS OF THE PROJECT-
- --------------------------------------------------------------------------------
YEAR TOTAL DIRECT COSTS/STIPENDS YEAR TOTAL DIRECT COSTS/STIPENDS
- --------------------------------------------------------------------------------
a. 03 [XXXXXX] d.

b. e.

c. f.
- --------------------------------------------------------------------------------
14. APPROVED DIRECT ASSISTANCE BUDGET (IN LIEU OF CASH)

a. Amount of PHS Direct Assistance . . . . . . . . . . . $

b. Less Unobligated Balance From Prior Budget Periods. . $

c. Less Cumulative Prior Award(s) This Budget Period . . $

-------------------
d. AMOUNT OF DIRECT ASSISTANCE THIS ACTION . . . . . . . $
- --------------------------------------------------------------------------------
15. PROGRAM INCOME SUBJECT TO 45 CFR PART 74, SUBPART F. OR 45 CFR 92.25.
SHALL BE USED IN ACCORD WITH ONE OF THE FOLLOWING ALTERNATIVES:
(Select One and Place LETTER in box.)

a. DEDUCTION

b. ADDITIONAL COSTS
-----
c. MATCHING A
-----
d. OTHER RESEARCH (Add Deduct Option)

e. OTHER (See REMARKS)
- --------------------------------------------------------------------------------
16. THIS AWARD IS BASED ON AN APPLICATION SUBMITTED TO AND AS APPROVED BY THE
PHS ON THE ABOVE TITLED PROJECT AND IS SUBJECT TO THE TERMS AND CONDITIONS
INCORPORATED EITHER DIRECTLY OR BY REFERENCE IN THE FOLLOWING:

a. The grant program legislation cited above.

b. The grant program regulation cited above.

c. This award notice including terms and conditions, if any, noted below
under REMARKS.

d. PHS Grants Policy Statement including addenda in effect as of the
beginning date of the budget period.

e. 45 CFR Part 74 or 45 CFR Part 92 at applicable.

In the event there are conflicting or otherwise inconsistent policies
applicable to the grant, the above order of precedence shall prevail.
Acceptance of the grant terms and conditions is acknowledged by the grantee
when funds are drawn or otherwise obtained from the grant payment system.
- --------------------------------------------------------------------------------
REMARKS: (Other Terms and Conditions Attached - [X] Yes [_] No)

GRANT SPECIALIST: LINDA HALL 301-402-0733
PROGRAM OFFICIAL: DR. J. PETERSON 301-496-7531

* Indirect costs were calculated as indicated in Term and Condition #11.
** RECOMMENDED FUTURE SUPPORT REFLECTS TOTAL COSTS.

THIS GRANT IS EXCLUDED FROM STREAMLINED NONCOMPETING AWARD PROCEDURES (SNAP).
THIS GRANT IS INCLUDED UNDER EXPANDED AUTHORITIES.
- --------------------------------------------------------------------------------
PHS GRANTS MANAGEMENT OFFICER: (Signature)

/s/ Jean M. Cahill
- --------------------------------------------------------------------------------
(Name/Typed/Print)

JEAN M. CAHILL
- --------------------------------------------------------------------------------
(Title)

GRANTS MANAGEMENT OFFICER
- --------------------------------------------------------------------------------
17. OBJ. CLASS 18. CRS - EIN 19. LIST NO.
41 4E 1061331400A1
- --------------------------------------------------------------------------------
FY CAN DOCUMENT NO. ADMINISTRATIVE CODE
20.a. b. c.

21.a. 97 8427201 b. R1HG01491A c.

22.a. 970423 1710 b. c.
- --------------------------------------------------------------------------------
AMT ACTION FIN ASST. AMT ACTION DIR ASST.
d. e.

d. e.

d. e.
- --------------------------------------------------------------------------------
PHS 5152-5 (Rev. 7/94) (Note: See reverse for payment information.) 13G

NOTICE OF GRANT AWARD

Page 2
5 R01 HG01491-02
WENT, GREGORY T., PH.D.

1. The terms and conditions include the requirements of the Omnibus
Consolidated FY 1997 Appropriations Act (P. L. 104-208) as explained in the NIH
Guide for Grants and Contracts, Volume 26, Number 4, February 7, 1997.

2. The grantee institution may not provide any funds from this award to any
institution with which it has a research subcontract/consortium agreement until
the grantee has ensured that the third party institution has complied with all
applicable certifications and assurances as specified in the PHS Grants Policy
Statement. The grantee is responsible for retaining documentation to this
effect.

3. Applicant organization must comply with the Public Health Service (PHS)
policy relating to distribution of unique research resources produced with PHS
funding (NIH Guide for Grants and Contracts, Vol. 25, no. 23, July 12, 1996).
Grantee should also comply with the NIH-DOE guidelines for access to mapping and
sequencing data and materials resources, adopted by the NIH-DOE joint
subcommittee on December 7, 1992.

4. Allowable costs of activities conducted by for-profit organizations will be
determined by applying the costs principles of Contracts with Commercial
Organizations set forth in 48 CFR 31.2. However, independent research and
development costs (including the indirect costs allocable to them) are
unallowable.

5. Normally, the awardee organization retains the principal worldwide patent
rights to any invention developed with United States government support. Under
Title 37 Code of Federal Regulations Part 401, the Government receives a
royalty-free license for its use, reserves the right to require the patent
holder to license others in certain circumstances, and requires that anyone
exclusively licensed to sell the invention in the

NOTICE OF GRANT AWARD

Page 3
5 R01 HG01491-02
WENT, GREGORY T., PH.D.

United States must normally manufacture it substantially in the United States.
To the extent authorized by Title 35 United States Code Section 205, the
Government will not make public any information disclosing a
Government-supported invention for a 4-year period to allow the awardee
organization a reasonable time to file a patent application, nor will the
Government release any information that is part of that application.

6. Two months after disclosure, any invention developed under this award should
be reported to the Office for Policy on Extramural Research Administration
(OPERA), 6701 Rockledge Drive, MSC 7750, Bethesda, MD 20892-7750, Attn: Sue
Ohata. Phone (301) 435-0678, for disposition of patent rights in accordance with
45 CFR, Parts 6 and 8. Disposition rights on inventions made by small businesses
are subject to Chapter 18 of Title 35 U.S. Code.

7. Prior approval to implement budgetary and programmatic changes, where
required by PHS Policy, must be obtained in writing from the Grants Management
contact shown on this Notice of Grant Award.

8. The indirect cost portion of the commitments is calculated using the current
negotiated indirect cost (IC) rates, as follows:

03 Year
<TABLE>

<S> <C>
Direct Costs: $ [XXXXXX]
IC Calculation:
$ [XXXXXX] (fringe)
$ [XXXXXX]
Total indirect costs: [XXXXXX]
Total costs: $ [XXXXXX]
</TABLE>

9. Effective with the August 25, 1994 issuance of 45 CFR Part 74, certain
expanded authorities were extended to all research grants and cooperative
agreements. Under this grant award, the carryover authority is not authorized.

NOTICE OF GRANT AWARD
(Additional Remarks)

Page 5

If you need assistance from National Center for Human Genome Research during the
course of this grant, please contact the grants management and program staff
whole telephone numbers are shown on the Notice of Grant Award. These
individuals work closely with one another through all phases of each project to
facilitate the award and the administration of the grant. Their functions are
defined as follows:

GRANTS MANAGEMENT CONTACT: The Grants Management Specialist, whose name and
telephone number are indicated in the "Remarks" section of the Notice of Grant
Award, is responsible for all business management matters associated with the
review, negotiation, award, and administration of grants. The Grants Management
Specialist serves as the focal point for receiving and responding to all
questions and correspondence related correspondence giving or denying any prior
approval required by Public Health Service policy or special Terms of Award,
transfer of the grant to another institution, a change in the period of support,
or any actions which commit, or may result in committing the NCHGR to a change
in the amount of funding.

PROGRAM CONTACT: The Health Scientist Administrator, or program official, whose
name and telephone number also are indicated in the "Remarks" section of the
Notice of Grant Award, is responsible for all scientific and technical matters
dealing with the administration of the grant. The Health Scientist Administrator
reviews and monitors scientific progress of the project and provides advice and
assistance relative to all technical problems to ensure that the scientific
objectives of the research program can be pursued effectively and successfully.
All questions or correspondence dealing with research progress, changes in
research direction, unique scientific opportunities, or any other scientific
need should be addressed to the Health Scientist Administrator.

PRIOR APPROVAL: Requests which require the prior approval of the NCHGR must be
submitted in writing to the Grants Management Officer. All requests should
reference the complete grant number, e.g., 1 R01 HG12345-01, and must be signed
by the authorized official of the business office of the grantee institution and
by the principal investigator.

<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES LEAVE BLANK FOR PHS USE ONLY.
-------------------------------------------------------------------------
PUBLIC HEALTH SERVICE Type Activity Number
-------------------------------------------------------------------------
GRANT APPLICATION Review Group Formerly
-------------------------------------------------------------------------
Follow Instruction carefully. Type in the Council/Board (Month, Year) Date Received
unshaded areas only. Type density must be
10 cpi
- ------------------------------------------------------------------------------------------------------------------------
1. TITLE OF PROJECT (Do not exceed 55 typewritten spaces.)
Automated Sequencing System for the Human Genome Project
- ------------------------------------------------------------------------------------------------------------------------
2a. RESPONSE TO SPECIFIC REQUEST FOR APPLICATIONS OR PROGRAM ANNOUNCEMENT [_] NO [X] YES (if "YES", state number)
Number HG-95-004 Title: Improved Electrophoretic DNA Sequencing Technologies
- ------------------------------------------------------------------------------------------------------------------------
2b. TYPE OF GRANT PROGRAM R01 3. PRINCIPAL INVESTIGATOR/PROGRAM DIRECTOR
- ------------------------------------------------------------------------------------------------------------------------
3a. NAME (Last, first, middle) 3b. DEGREE(S) 3c. SOCIAL SECURITY NO.
Went, Gregory T. B.S. Ph.D. ###-##-####
- ------------------------------------------------------------------------------------------------------------------------
3d. POSITION TITLE 3e. MAILING ADDRESS (Street, city, state, zip code)
VICE PRESIDENT
- --------------------------------------------------
3f. DEPARTMENT, SERVICE, LABORATORY, OR EQUIVALENT
CuraGen Corporation 322 East Main Street
- -------------------------------------------------- Branford, CT 06405
3g. MAJOR SUBDIVISION
None
- -------------------------------------------------
3h. TELEPHONE AND FAX (Area code, number and extension
TEL: (203) 481-1104 ext. 31
FAX: (203) 481-1106 --------------------------------------------------------------------
BITNET/INTERNET ADDRESS [email protected]
- ------------------------------------------------------------------------------------------------------------------------
4. HUMAN SUBJECTS IRB 5. VERTEBRATE ANIMALS if "YES" 5b. Animal Welfare
If "Yes" approval 4b. Assurance of IACUE approval date assurance no.
- ----- 4a. ---- exemption no. or date compliance no. ----- 5a. -----
X NO YES X NO YES
- ------------------------------------------------------------------------------------------------------------------------
6. DATES OF ENTIRE PROPOSED PROJECT 7. COSTS REQUESTED FOR INITIAL 8. COSTS REQUESTED FOR ENTIRE
PERIOD BUDGET PERIOD PROPOSED PROJECT PERIOD

From(MMDDYY) Through(MMDDYY) 7a. Direct Costs($) 7b. Total Costs($) 8a. Direct Costs($) 8b. Total Costs
04/01/96 03/31/99 $ [XXXXXX] $ [XXXXXX] $ [XXXXXX] $ [XXXXXX]
- ------------------------------------------------------------------------------------------------------------------------
9. PERFORMANCE SITES (Organizations and addresses) 10. INVENTIONS AND PATENTS (Competing continuation application only)

---- ---- If ---- previously ---- not previously
CuraGen Corporation Cornell University NO YES "YES" reported reported
322 East Main Street College of Engineering ---------------------------------------------------------------
Branford, CT 06405 Clare Hall 11. NAME OF APPLICANT ORGANIZATION
Ithaca, NY 14853-2501
CuraGen Corporation
ADDRESS 322 East Main Street
Suane BioSciences, Inc. The Whitehead Institute for Branford, CT 06405
3916 Trust Way Biomedical Research
Hayworth, CA 94545 Nine Cambridge Center
Cambridge, MA 02142-1479
- ------------------------------------------------------------------------------------------------------------------------
12. TYPE OF ORGANIZATION 13. ENTITY IDENTIFICATION NUMBER Congressional District
[_] Public specify [_] Federal [_] State [_] Local 06-1331400 #3
---------------------------------------------------------------
[_] Private nonprofit 14. BIOMEDICAL RESEARCH SUPPORT GRANT CREDIT
[X] For profit (General) [_] (Small Buiness) Code: Identification:
- ------------------------------------------------------------------------------------------------------------------------
15. NAME OF ADMINISTRATIVE OFFICIAL TO BE NOTIFIED IF 16. NAME OF OFFICIAL SIGNING FOR APPLICANT ORGANIZATION
AWARD IS MADE
Gregory T. Went, Ph.D. Gregory T. Went, Ph.D.
TELEPHONE (203) 481-1104, Ext 31 TELEPHONE (203) 481-1104, Ext 31
FAX (203) 481-1106 FAX (203) 481-1106
TITLE Vice President TITLE Vice President
ADDRESS CuraGen Corporation ADDRESS CuraGen Corporation
322 East Main Street 322 East Main Street
Branford, CT 06405 Branford, CT 06405

BITNET/INTERNET ADDRESS [email protected] BITNET/INTERNET ADDRESS [email protected]
- ------------------------------------------------------------------------------------------------------------------------
17. PRINCIPAL INVESTIGATOR/PROGRAM DIRECTOR SIGNATURE OF PERSON NAMED IN 3a. DATE
ASSURANCE: I agree to accept responsibility (In ink. "Per" signature
for the scientific conduct of the project not acceptable.)
and to provide and to provide the required /s/ Gregory Went 8/25/95
progress reports if a grant is awarded as a
result of this application. Will ful provision
of false information is a criminal offense
(U.S. Code, Title 18, Section 1001). I am aware
that any false, fictitious or fraudulent
statement may, in addition to other remedies
available to the Government, subject me to
civil penalties under the Program Fraud
Civil Remedies Act of 1986 (45 CFR 79).
- ------------------------------------------------------------------------------------------------------------------------
18. CERTIFICATION AND ACCEPTANCE: I certify that the SIGNATURE OF PERSON NAMED IN 15. DATE
statements herein are true and complete to the (In ink. "Per" signature
best of my knowledge, and accept the obligation to not acceptable.)
comply with Public Health Services terms and /s/ Gregory Went 8/25/95
conditions if a grant is awarded as the result of
this application. A willfully false certification
is a criminal offense (U.S. Code, Title 18, Section
1001). I am aware that any false, fictitious, or
fraudulent statement may, in addition to other
remedies available to the Government, subject me
to civil penalties under the Program Fraud Civil
Remedies Act of 1986 (45 CFR 79).
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>

[Confidential Treatment Requested]

<PAGE>

BB
Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

DESCRIPTION: State the application's broad, long-term objectives and specific
aims, making reference to the health relatedness of the project. Describe
concisely the research design and methods for achieving these goals. Avoid
summaries of past accomplishments and the use of the first person. This abstract
is meant to serve as a succinct and accurate description of the proposed work
when separated from the application. DO NOT EXCEED THE SPACE PROVIDED.
- --------------------------------------------------------------------------------
The genetic information encoded in the human genome specifies all life processes
from conception to death, and contains within it the origin of over 3500 known
genetic diseases. It is necessary to substantially reduce the cost and
dramatically raise the speed of producing accurate DNA sequences in order to
determine the sequence of the 3 billion basepairs of DNA that compose the human
genome. This proposal describes a three-year project to develop, integrate and
distribute into parallel sequencing projects a fluorescent sequencing instrument
and software system capable of meeting these logistical and cost demands. This
approach allows for the identification and removal of the major bottlenecks
encountered in producing a fully automated system, without duplication of
mapping, sample processing or informatics efforts ongoing at other HGP
facilities. Current bottlenecks arise primarily from inefficiencies in workflow
and data analysis. Specifically, we will develop and integrate into existing
centers the following: 8-dye bi-directional sequencing methods; solid phase
loading of an advanced electrophoresis instrument; high-throughput and low cost
ready-to-run disposable microeplicated separation sub-systems; sensitive
detection optics; and advanced base-calling software. These advances will enable
the completion of fully automated systems including all the steps necessary to
proceed from a physical map to a finished sequence with a quantifiable measure
of confidence. Full process automation coupled with automated data analysis and
reduced materials cost will enable a 60-fold increase in throughput with the
required 10-fold decrease in cost relative to systems based on currently
available technology. This project is coordinated by CuraGen Corporation and
builds on the automation, data analysis, sequencing instrumentation, and
fabrication experience of collaborators at Soane BioSciences, MIT and Cornell.
The final product of our efforts will be tested and ready for wide-spread
distribution for use in sequencing the human genome.
- --------------------------------------------------------------------------------
PERSONNEL ENGAGED ON PROJECT, INCLUDING CONSULTANTS/COLLABORATORS. Use
continuation pages as needed for ?????? required information in the format shown
below on all individuals participating in the project.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S> <C> <C> <C>
Name Gregory T. Went Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ----------------
Position Title Vice President D.O.B. 7/1/63 Role on Project Prin. Investig.
---------------------------------------------------- ----------------- -----------------
Organization CuraGen Corporation Department
------------------------------------------------------------------------------ -----------------
Name Jonathatn M. Rothberg Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ----------------
Position Title Chief Executeve Officer D.O.B. 4/28/62 Role on Project Scientist
---------------------------------------------------- ----------------- -----------------
Organization CuraGen Corporation Department
------------------------------------------------------------------------------ -----------------
Name Michael P. McKenna Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ----------------
Position Title Senior Research Scientist D.O.B. 3/3/62 Role on Project Scientist
---------------------------------------------------- ----------------- -----------------
Organization CuraGen Corporation Department
------------------------------------------------------------------------------ -----------------
Name Gregory T. Mulhern Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ----------------
Position Title Senior Research Scientist D.O.B. 8/11/67 Role on Project Scientist
---------------------------------------------------- ----------------- -----------------
Organization CuraGen Corporation Department
------------------------------------------------------------------------------ -----------------
Name Darin R. Latimer Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ----------------- -----------------
Position Title Senior Research Engineer D.O.B. 6/1/63 Role on Project Engineer
---------------------------------------------------- ----------------- -----------------
Organization CuraGen Corporation Department
------------------------------------------------------------------------------ -----------------
Name John W. Simpson Degree(s) M.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ----------------
Position Title Senior Research Engineer D.O.B. 3/6/65 Role on Project Engineer
---------------------------------------------------- ----------------- -----------------
Organization CuraGen Corporation Department
------------------------------------------------------------------------------ --------------------
</TABLE>

2
<PAGE>

BB
Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
Name Aleksandar Milosavljevic Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Director of Bioinformatics D.O.B. 04/12/61 Role on Project Scientist
---------------------------------------------------- ---------------- ------------------

Organization CuraGen Corporation Department
----------------------------------------------------------------------------- ------------------

Name Joseph C. Kaufman Degree(s) B.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Director of Software Development D.O.B. 3/25/59 Role on Project Scientist
---------------------------------------------------- ---------------- ------------------

Organization CuraGen Corporation Department
----------------------------------------------------------------------------- ------------------

Name Gordon S. Freckleton Degree(s) B.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Technician D.O.B. 12/03/66 Role on Project
---------------------------------------------------- ---------------- ------------------

Organization CuraGen Corporation Department
----------------------------------------------------------------------------- ------------------

Name To Be Hired Degree(s) Social Security #
------------------------------------------------------------ ------------- ------------------

Position Title Fabrication D.O.B. Role on Project
---------------------------------------------------- ---------------- ------------------

Organization CuraGen Corporation Department
----------------------------------------------------------------------------- ------------------

Name To Be Hired Degree(s) Social Security #
------------------------------------------------------------ ------------- ------------------

Position Title Programmer D.O.B. Role on Project
---------------------------------------------------- ---------------- ------------------

Organization CuraGen Corporation Department
----------------------------------------------------------------------------- ------------------

Name Harold Craighead Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Professor D.O.B. 9/21/52 Role on Project
---------------------------------------------------- ---------------- ------------------

Organization Cornell University Department
----------------------------------------------------------------------------- ------------------

Name Warren Wright Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Research Associate D.O.B. 12/11/50 Role on Project Research Assoc.
---------------------------------------------------- ---------------- ------------------

Organization Cornell University Department
----------------------------------------------------------------------------- ------------------

Name To Be Hired Degree(s) Social Security #
------------------------------------------------------------ ------------- ------------------

Position Title Graduate Student D.O.B. Role on Project
---------------------------------------------------- ---------------- ------------------

Organization Cornell University Department
----------------------------------------------------------------------------- ------------------

Name Herbert H. Hooper Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Vice President of Research D.O.B. 09/01/63 Role on Project Prin. Investig.
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciences, Inc. Department
----------------------------------------------------------------------------- ------------------

Name David S. Soane Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Chairman, Scientific Advisory Board D.O.B. 08/22/51 Role on Project Scientist
---------------------------------------------------- ---------------- ------------------

Organization Soane Technologies, Inc. Department
----------------------------------------------------------------------------- ------------------

Name Goretty Alonso Amigo Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Senior Scientist D.O.B. 10/01/56 Role on Project Scientist
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciencies, Inc. Department
----------------------------------------------------------------------------- ------------------

Name Alexander P. Sassi Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Senior Research Engineer D.O.B. 04/25/67 Role on Project Engineer
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciences, Inc. Department
----------------------------------------------------------------------------- ------------------

Name Daniel Hion Degree(s) B.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Research Biochemist D.O.B. 03/02/70 Role on Project Biochemist
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciences, Inc. Department
---------------------------------------------------- ------------- ------------------

Name Shi Lin Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Postdoctoral D.O.B. 08/24/62 Role on Project Scientist
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciencies, Inc. Department
----------------------------------------------------------------------------- ------------------

Name Jules Moolenaar Degree(s) B.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Designer/Machinist D.O.B. 04/30/33 Role on Project Machinist
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciences, Inc. Department
----------------------------------------------------------------------------- ------------------

Name To Be Determined Degree(s) Social Security #
------------------------------------------------------------ ------------- ------------------

Position Title Polymer Engineer D.O.B. Role on Project
---------------------------------------------------- ---------------- ------------------

Organization Soane BioSciences, Inc. Department
----------------------------------------------------------------------------- ------------------

Name Trevor L. Hawkins Degree(s) Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Research Scientist D.O.B. 03-07-60 Role on Project Prin. Investig.
---------------------------------------------------- ---------------- ------------------

Organization The Whitehead Institute Department
----------------------------------------------------------------------------- ------------------

Name Lincoln D. Stein Degree(s) M.D.,Ph.D. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Director of Informatics Core D.O.B. 01/13/60 Role on Project Scientist
---------------------------------------------------- ---------------- ------------------

Organization The Whitehead Institute of Biomedical Research, MIT Department
----------------------------------------------------------------------------- ------------------

Name David Goon Degree(s) B.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Technical Assistant D.O.B. 12/13/71 Role on Project Technican
---------------------------------------------------- ---------------- ------------------

Organization The Whitehead Institute of Biomedical Research, MIT Department
----------------------------------------------------------------------------- ------------------

Name William Lee Degree(s) B.S. Social Security ####-##-####
------------------------------------------------------------ ------------- ------------------

Position Title Research Specialist D.O.B. 12/23/74 Role on Project Research
---------------------------------------------------- ---------------- ------------------

Organization The Whitehead Institute of Biomedical Research, MIT Department
----------------------------------------------------------------------------- ------------------
</TABLE>

3
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
---------------
- -------------------------------------------------------------------------------

RESEARCH GRANT
TABLE OF CONTENTS

PAGE NUMBERS
------------
<S> <C>
Face Page................................................................................. 1
Description and Personnel................................................................. 2-3
Table of Contents......................................................................... 4
Detailed Budget for Initial Budget Period................................................. 5
Budget for Entire Proposed Project Period................................................. 6-9
Budgets Pertaining to Consortium/Contractual Arrangements................................. 10-21
Biographical Sketch-Principal Investigator/Program Director (Not to exceed two pages)..... 22-23
Other Biographical Sketches (Not to exceed two pages for each)............................ 24-49
Other Support............................................................................. 50-74
Resources and Environment................................................................. 75-78

Research Plan

Introduction to Revised Application (Not to exceed three pages).......................... _______
Introduction to Supplemental Application (Not to exceed one page)......................... _______
1. Specific Aims.................................................................... 79-80
2. Background and Significance...................................................... 80-84
3. Progress Report/Preliminary Studies (Not to exceed 25 pages*).................... 85-92
4. Research Design and Methods...................................................... 92-103
5. Human Subjects................................................................... _______
6. Vertebrate Animals............................................................... _______
7. Consultants/Collaborators........................................................ 104-107
8. Consortium/Contractual Arrangements.............................................. 108-111
9. Literature Cited (Not to exceed six pages)....................................... 112-114
Checklist................................................................................. 115-116
*Type density and size must conform to limits provided in Specific Instructions on page 10.
</TABLE>
Appendix (Five collated sets. No page numbering necessary for Appendix)
Number of publications and manuscripts accepted or submitted for
publication (Not to exceed 10):
Other items (list):
[X] Check if Appendix is
Included

Appendix 1: Color Copies of Figures
Appendix 2: Detailed Cost Analysis

4
<PAGE>

DD Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DETAILED BUDGET FOR INITIAL BUDGET PERIOD FROM FROM THROUGH
DIRECT COSTS ONLY (CuraGen Corporation) 04/01/96 03/31/97
- ------------------------------------------------------------------------------------------------------------------------------
PERSONNEL (Applicant Organization Only) DOLLAR AMOUNT REQUESTED (omit cents)
- ------------------------------------------ INST. -----------------------------------------------
ROLE ON TYPE APPT. % EFFORT BASE SALARY FRINGE
NAME PROJECT (months) ON PROJ. SALARY REQUESTED BENEFITS TOTALS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Principal
Gregory T. Went Investigator 12 [XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Jonathan M. Rothberg CSO/CEO 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Senior
Michael P. McKenna Scientist 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Senior
Gregory T. Mulhern Scientist 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Senior
Darin R. Latimer Engineer 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Senior
John W. Simpson Engineer 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Director of
Aleksandar Milosavljevic Bioinformatics 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Director of
Joseph C. Kaufman Software Dev 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Gordon S. Freckleton Technician 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
To be hired Fabrication 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
To be hired Programmer 12 XXX XXXXXXXX XXXXXXXX XXXXXXXX XXXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------===============================================
SUBTOTALS----------------------------------------- [XXXXXXXX XXXXXXXX XXXXXXXX]
- -------------------------------------------------------------------------------===============================================
<CAPTION>
<S> <C> <C> <C> <C>
CONSULTANT COSTS
[XX]
- ------------------------------------------------------------------------------------------------------------------------------
[XXXXXXXXXXXXXXXXXX]
[XXXXXXXX] [XXXXXX] Optical components [XXXXXX]
[XXXXXXXX] [XXXXXX] Software [XXXXXX]
Lab equipment [XXXXXX] Support hardware [XXXXXX]
Power supplies [XXXXXX] [XXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
SUPPLIES (Itemize by category)
Substrates for fabrication [XXXXXX] Plastic disposables [XXXXXX]
Other fabrication materials/reagents [XXXXXX] Test reagents/chemicals [XXXXXX]
Gel box materials [XXXXXX] Fluorescent labelling [XXXXXX]
DNA sequence supplies [XXXXXX] [XXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
TRAVEL
Sixteen trips per year to conferences and MIT [XXXXXX]
Two trips per year for P.I. for semi-annual project management [XXXXXX] [XXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
PATIENT CARE COSTS INPATIENT [XXXXXX]
---------------------------------------------------------------------------------------------------
OUTPATIENT [XXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
ALTERATIONS AND RENOVATIONS (Itemize by category)
[XXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES (Itemize by category)
Machining/Engineering [XXXXXXXXXXXXXXXXXXXXX] [XXXXXX]
Fabrication - NNF [XXXXXXXXXXXXXXXXXXXXX] [XXXXXX]
Publication Costs [XXXXXX] [XXXXXX]
- -------------------------------------------------------------------------------------------------------------=================
SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD [XXXXXX]
- -------------------------------------------------------------------------------------------------------------=================
CONSORTIUM/CONTRACTUAL COSTS
DIRECT COSTS [XXXXXX]
---------------------------------------------------------- TOTAL---- [XXXXXX]
INDIRECT COSTS [XXXXXX]
- -------------------------------------------------------------------------------------------------------------=================
TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page)---- [XXXXXX]
==============================================================================================================================
</TABLE>

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
<TABLE>
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------
BUDGET FOR ENTIRE PROPOSED PROJECT PERIOD
DIRECT COSTS ONLY (CuraGen Corporation)

- ------------------------------------------------------------------------------------------------------------------
BUDGET CATEGORY INITIAL BUDGET ADDITIONAL YEARS OF SUPPORT REQUESTED
PERIOD --------------------------------------------------------------
TOTALS (from page 4) 2nd 3rd 4th 5th
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERSONNEL:
Salary & fringe benefits
Applicant organization only [XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
CONSULTANT COSTS XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
EQUIPMENT XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
SUPPLIES XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
TRAVEL XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
PATIENT INPATIENT XXXXXXXX XXXXXXXX XXXXXXXX
CARE ------------------------------------------------------------------------------------------------------
COSTS OUTPATIENT XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
ALTERATIONS AND
RENOVATIONS XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
CONSORTIUM/
CONTRACTUAL COSTS XXXXXXXX XXXXXXXX XXXXXXXX
- ------------------------------------------------------------------------------------------------------------------
TOTAL DIRECT COSTS XXXXXXXX XXXXXXXX XXXXXXXX]
- ------------------------------------------------------------------------------------------------------------------
TOTAL DIRECT COSTS FOR ENTIRE PROPOSED PROJECT PERIOD (Item 8a)- [XXXXXXXX]
- ------------------------------------------------------------------------------------------------------------------
JUSTIFICATION (Use continuation pages if necessary):
</TABLE>

From Budget for Initial Period: Describe the specific functions of the
personnel, collaborators, and consultants and identify individuals with
appointments that are less than full time for a specific period of the year,
including VA appointments.

For All Years: Explain and justify purchase of major equipment, unusual supplies
requests, patient care costs, alterations and renovations, tuition remission,
and donor/volunteer costs.

From Budget for Entire Period: Identify with an asterisk (*) on this page and
justify any significant increase or decrease in any category over the initial
budget period. Describe any change in effort of personnel.

For Competing Continuation Applications: Justify any significant increases or
decreases in any category over the current level of support.

See Attached Budget Justifications Pages

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - CuraGen Corporation

PERSONNEL

Management
- ----------
Dr. Gregory T. Went is the principal investigator and will be responsible for
overall project management, scientific direction, and coordination among
collaborating sites. Dr. Went is a cofounder of CuraGen with Dr. Jonathan
Rothberg and has been responsible for research and corporate development. He
currently manages a staff of 24 internally at CuraGen (16 Ph.Ds), as well as 3
subcontracts with leading University researchers. He oversaw the development of
CuraGen's DNA analysis device employed herein. He will devote 20% of his time to
this project.

Dr. Jonathan M. Rothberg is the CEO of CuraGen. Dr. Rothberg's Ph.D. is in
Molecular Biology and he is the Chief Scientific Officer responsible for
CuraGen's molecular biology efforts. He will devote 10% of his time to the
project to insure that novel molecular methods are integrated into the genome
sequencing efforts at MIT. Dr. Rothberg will also oversee all contractual
matters related to this collaboration.

Other personnel will be deployed as described below.

Electrophoresis System
- ----------------------
Dr. Gregory T. Mulhern will lead the prototyping and development of channel
structures and coordinate activities in Dr. Harold Craighead's group. Dr.
Mulhern is a graduate of Berkeley (Howe and Soane groups) and is an expert in
macro aspects of micromachined components. He spent 1 year working at Soane
Technologies during his thesis and that experience will aid project coordination
with Soane BioSciences. Dr. Mulhern is experienced both in replication
technologies and MEMs. Under Dr. Mulhern's direction will be Dr. Darin R.
Latimer who is responsible for all engineering/machining of electrophoresis
components and Mr. John W. Simpson, who is the originator of CuraGen optical,
electrophoresis and base calling technology. A fabrication engineer working
directly with Dr. Mulhern at contract fabrication centers (NNF) will be hired.

Methods development
- -------------------
Dr. Michael P. McKenna is a molecular biologist carrying out the development of
novel fluorescent protocols for DNA sequencing. Dr. McKenna is experienced in
molecular methods, fluorescence and instrument machining. In addition, Dr.
McKenna is well versed in fluorescent dye strategies, coupling chemistries, and
protocol development. Dr. McKenna will be assisted by a full time technician,
Gordon S. Freckleton. Dr. McKenna will act as a visiting scientist at MIT to
insure close collaboration between methods development and sample preparation.

Informatics
- -----------
Mr. Joseph C. Kaufman and Dr. Aleksandar Milosavljevic will lead the refinement
and integration of CuraGen's base calling software into genomic assembly
routines. Mr. Kaufman was the lead programmer on the MacVector product from
Kodak and has extensive experience with commercial software development and
maintenance. Dr. Milosavljevic who is an expert in pattern analysis will
coordinate the algorithm development and evaluation. Mr. Kaufman's and Dr.
Milosavljevic's efforts reduce to 25% and 10% in years 2 and 3. They will be
assisted by a BS/MS computer scientist.

In Years 2 & 3, the salaries have been increased by 5 percent for inflation.

Fringe benefits have been calculated as 14 percent of salary.
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - CuraGen Corporation
Page 2

EQUIPMENT

Lab Equipment Electronics for measuring electrical outputs will be required to
test the developing electrophoresis station. An oscilloscope with probes,
capacitance meters, spectrophotometer (for dye QC) are included. Funding remains
available for years 2 and 3.

Power Supplies For electrophoresis experiments, we requests funds for two high
voltage, high power, power supplies. Funding remains available for years
2 and 3.

Software Maintenance of existing graphics and CAD packages. Funding remains
available for years 2 and 3.

Support Hardware Request for hardware for assembly and testing of electrophores
is station. Funding remains available for years 2 and 3.

SUPPLIES

Substrates for fabrication Wafers (Glass and silicon), 500@ $ 55/piece. Expenses
increase 100% in years 2 and 3 as the efforts gear up.

Other fabrication materials/reagents Etchants, coatings. Expenses increase 100%
in years 2 and 3 as the efforts gear up.

Gel Box materials [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXX]

DNA Sequence supplies [XXXXXXXXXXXXXXXXXXXXXXXX]

Plastic disposables and Test Reagents/chemicals. For general use.

Fluorescent labelling For coupling novel dyes to primers.

TRAVEL

A total of 2 trips to Soane BioSciences @ $1000/each are budgeted for the PI.
Most travel will be to CuraGen, where we have set up a visiting office for Soane
BioSciences. We believe that this level of interaction with our collaborators is
essential. 16 trips (1 week each) are requested to fund travel/expenses
associated with our MIT collaboration. CuraGen has a visiting scientist position
that rotates at MIT.

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - CuraGen Corporation
Page 2

OTHER EXPENSES

Machining/Engineering [XXXXXXXXXXXXXXXXXXX] CuraGen works closely with a number
of design and machining firms in the New Haven area. This number is based on our
historical experience and is adjusted to reflect significant efforts at
delivering a robust and maintenance free system.

Fabrication - NNF [XXXXXXXXXXXXXXXXXXXX] Expense associated with time on
instruments at major fabrication centers, including Cornell's NNF. CuraGen is a
routine user of this facility. Budget increases to 1500 hours in year 2 and
reduces to 1000 hours in year 3.

Publication Costs are estimated at $2,000 per year, as we expect to report on
advances in several technology areas, including separation media, surface design
of plastics for use in DNA electrophoresis, and microreplication methods.

INDIRECT COSTS
Indirect costs are budgeted [XXXXXXX] of direct costs, excluding equipment.

[Confidential Treatment Requested]

<PAGE>

DD Principal investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DETAILED BUDGET FOR INITIAL BUDGET PERIOD FROM THROUGH
DIRECT COSTS ONLY (Cornell University) 04/01/96 03/31/97
- ------------------------------------------------------------------------------------------------------------------------------
PERSONNEL (Applicant Organization Only) DOLLAR AMOUNT REQUESTED (omit cents)
- ------------------------------------------ INST. -----------------------------------------------
ROLE ON TYPE APPT. % EFFORT BASE SALARY FRINGE
NAME PROJECT (months) ON PROJ. SALARY REQUESTED BENEFITS TOTALS
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Principal 12 [XXXX XXXXXX XXXXXX XXXXXX XXXXXXX
Dr. Harold G. Craighead Investigator 12 XXXX XXXXXX XXXXXX XXXXXX XXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Research
Dr. Warren Wright Associate 12 XXXX XXXXXX XXXXXX XXXXXX XXXXXXX
- ------------------------------------------------------------------------------------------------------------------------------
Research 9 XXXX XXXXXX XXXXXX XXXXXX XXXXXXX
Graduate Student Assistant 3 XXXX XXXXXX XXXXXX XXXXXX XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------

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

- -------------------------------------------------------------------------------===============================================
SUBTOTALS----------------------------------------- [XXXXXXXX XXXXXXXXX XXXXXXXXX]
- -------------------------------------------------------------------------------===============================================
<CAPTION>
<S> <C>
CONSULTANT COSTS
[XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
EQUIPMENT (Itemize)
Micropositioning Equip; Photomultiplier tubes, housing and power supply; AR Laser;
Filters & gratings; Optical table; Custom optics arrays [XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
SUPPLIES (Itemize by category)
Substrates, deposition materials, stockroom, machine shop, chemicals and
misc optical components [XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
TRAVEL

See Budget Justifications Pages [XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
PATIENT CARE COSTS INPATIENT [XXXXXXX]
-----------------------------------------------------------------------------------------------------
OUTPATIENT [XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
ALTERATIONS AND RENOVATIONS (Itemize by category)
[XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES (Itemize by category)
Publications [XXXXXXX]
Communications (Xerox, Fax, Postage, Phone Tolls) [XXXXXXX]
NNF Charges (Photolithography, Electron Beam Lithography, Etching, Other Fab) [XXXXXXX]
MSC Charges (AFM, SEM, Computer, Thin Film Deposition, etc.) [XXXXXXX] [XXXXXXX]
- ------------------------------------------------------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD [XXXXXXX]
- ---------------------------------------------------------------------------------------------------------------===============
CONSORTIUM/CONTRACTUAL COSTS
DIRECT COSTS TOTAL ------------ [XXXXXXX]
-----------------------------------------------------------
INDIRECT COSTS [XXXXXXX] [XXXXXXX]
- ---------------------------------------------------------------------------------------------------------------===============
TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page) ------------ [XXXXXXX]
==============================================================================================================================
</TABLE>

[Confidential Treatment Requested]

<PAGE>

EE Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
BUDGET FOR ENTIRE PROPOSED PROJECT PERIOD
DIRECT COSTS ONLY (Cornell University)
- --------------------------------------------------------------------------------------------------------
INITIAL BUDGET ADDITIONAL YEARS OF SUPPORT REQUESTED
BUDGET CATEGORY PERIOD -----------------------------------------------------------
TOTALS (from page 4) 2nd 3rd 4th 5th
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERSONNEL:
Salary & fringe benefits
Applicant organization only [XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
CONSULTANT COSTS XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
EQUIPMENT XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
SUPPLIES XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
TRAVEL XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
PATIENT INPATIENT XXXXXXXX XXXXXXXXX XXXXXXXXX
CARE -------------------------------------------------------------------------------------------
COSTS OUTPATIENT XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
ALTERATIONS AND
RENOVATIONS XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
OTHER EXPENSES XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
CONSORTIUM/
CONTRACTUAL COSTS XXXXXXXX XXXXXXXXX XXXXXXXXX
- --------------------------------------------------------------------------------------------------------
TOTAL DIRECT COSTS XXXXXXXX XXXXXXXXX XXXXXXXXX]
- ------------------------------------------------------------------------------------------==============

TOTAL DIRECT COSTS FOR ENTIRE PROPOSED PROJECT PERIOD (Item 8a)- [XXXXXXX]

- ------------------------------------------------------------------------------------------==============
</TABLE>

JUSTIFICATION (Use continuation pages if necessary):

From budget for Initial Period: Describe the specific functions of the
personnel, collaborators, and consultants and identify individuals with
appointments that are less than full time for a specific period of the year,
including VA appointments.

For All Years: Explain and justify purchase of major equipment, unusual
supplies requests, patient care costs, alterations and renovations, tuition
remission, and donor/volunteer costs.

For Competing Continuation Applications: Justify any significant increases or
decreases in any category over the current level of support.

See Attached Budget Justifications Pages

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - Cornell University

PERSONNEL

The personnel working on this aspect of the project will be Professor Harold
Craighead who will oversee and manage the effort at Cornell. He will be
responsible for overall system design and establishing testing paradigms. Dr.
Warren Wright is a research associate currently at Cornell who has worked with
the group of Professor Craighead on the fabrication and optical [XXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

In Years 2 & 3, the faculty and research associate salaries have been increased
by 4 percent. Graduate student tuition is determined by the University and
increases at a rate of approximately 4%. In academic year 1997-1998, Cornell
will be restructuring its tuition charges which will result in a substantial
reduction in charges for graduate students.

EQUIPMENT

The capital equipment in Year 1 will be used to construct and test the prototype
optical system. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

<TABLE>
<S> <C>
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXX]
</TABLE>

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - Cornell University
Page 2

In Year 2 we will look at optimizing the signal to noise and therefore
throughput of the system and require equipment for analyzing multiple channels
of optical data. Additional optical array components will be required.

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXX]
</TABLE>

In the third year we will be fabricating and testing in-house made components.

SUPPLIES

Substrates, deposition materials, chemicals and misc. optical components. A
major part of this is basic optical components for testing of optical substrates
for our fabricated and custom coated components. In Years 2 & 3, the supplies
costs have been increased by 4 percent for inflation.

TRAVEL

Travel is for three person-trips to scientific conferences and two trips to
CuraGen Corporation each year. In Years 2 & 3, the travel costs have been
increased by 5 percent for inflation.

OTHER EXPENSES

These include local shop, stockroom and lab fees associated with micro-optics
fabrication and testing as well as communication and publication costs
associated with graduate research. In Years 2 & 3, the expenses have been
increased by 4 percent for inflation.

[Confidential Treatment Requested]

<PAGE>

DD Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DETAILED BUDGET FOR INITIAL BUDGET PERIOD FROM THROUGH
DIRECT COSTS ONLY (Soane BioSciences, Inc.) 04/01/96 03/31/97
- -------------------------------------------------------------------------------------------------------------------
PERSONNEL (Applicant Organization Only) % DOLLAR AMOUNT REQUESTED (omit cents)
- ----------------------------------------- TYPE EFFORT INST. ----------------------------------------------
ROLE ON APPT. ON BASE SALARY FRINGE
NAME PROJECT (months) PROJ. SALARY REQUESTED BENEFITS TOTALS
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Principal
Herbert H. Hooper Investigator 12 [XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
David S. Soane Scientist 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
Goretty Alonso Amigo Scientist 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
Molecular
Alexander P. Sassi Biologist 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
Daniel Hion Scientist 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
Polymer
Shi Lin Chemist 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
Designer
Jules Moolenaar Machinist 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX
- -------------------------------------------------------------------------------------------------------------------
Polymer
To be determined Engineer 12 XXX XXXXXXX XXXXXXXXX XXXXXXXXX XXXXXXXXX]
- --------------------------------------------------------------------===============================================
SUBTOTALS----------------------------- [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
- --------------------------------------------------------------------===============================================
<CAPTION>
<S> <C> <C>
CONSULTANT COSTS
[XXXXXXXXX]
- -------------------------------------------------------------------------------------------------------------------
EQUIPMENT (Itemize)
Thin Slab Sequencer [XXXXXXXX]
UV/VIS Spectrophotometer [XXXXXXXX]
Flouorescent Spectrophotometer [XXXXXXXX]
Fabrication of curing &
spin-coating stations [XXXXXXXX] [XXXXXXX]
- -------------------------------------------------------------------------------------------------------------------
SUPPLIES (Itemize by category)
Sequencing Kits, Template, Dyes [XXXXXX]
Monomers, Polymers, Solvents, Buffers [XXXXXX]
Miscellaneous Chemicals & Supplies [XXXXXX] [XXXXXX]
- -------------------------------------------------------------------------------------------------------------------
TRAVEL
Travel to CuraGen Corporation and Key Conferences [XXXXXXX]
- -------------------------------------------------------------------------------------------------------------------
PATIENT CARE COSTS INPATIENT [XXXXXXX]
----------------------------------------------------------------------------------------
OUTPATIENT [XXXXXXX]
- -------------------------------------------------------------------------------------------------------------------
ALTERATIONS AND RENOVATIONS (Itemize by category)
[XXXXXXX]
- -------------------------------------------------------------------------------------------------------------------
OTHER EXPENSES (Itemize by category)
Publication Costs [XXXXXXX]
- -------------------------------------------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD [XXXXXXX]
- -------------------------------------------------------------------------------------------------------============
CONSORTIUM/CONTRACTUAL COSTS
DIRECT COSTS TOTAL---- [XXXXXXX]
-----------------------------------------------------
INDIRECT COSTS [XXXXXXXXXX XXXXXXXXXXX]
- -------------------------------------------------------------------------------------------------------============
TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page)---- [XXXXXX]
- -------------------------------------------------------------------------------------------------------============
</TABLE>

[Confidential Treatment Requested]

<PAGE>

EE Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
BUDGET FOR ENTIRE PROPOSED PROJECT PERIOD
DIRECT COSTS ONLY (Soane BioSciences, Inc.)

- -----------------------------------------------------------------------------------------------------------
BUDGET CATEGORY INITIAL BUDGET PERIOD ADDITIONAL YEARS OF SUPPORT REQUESTED
----------------------------------------------------------
TOTALS (from page 4) 2nd 3rd 4th 5th
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERSONNEL:
Salary & fringe benefits
Applicant organization only [XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
CONSULTANT COSTS XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
EQUIPMENT XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
SUPPLIES XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
TRAVEL XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
PATIENT INPATIENT XXXXXXXX XXXXXXXXX XXXXXXXX
CARE ----------------------------------------------------------------------------------------------
COSTS OUTPATIENT XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
ALTERATIONS AND
RENOVATIONS XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
OTHER EXPENSES XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
CONSORTIUM/
CONTRACTUAL COSTS XXXXXXXX XXXXXXXXX XXXXXXXX
- -----------------------------------------------------------------------------------------------------------
TOTAL DIRECT COSTS XXXXXXXX XXXXXXXXX XXXXXXXX]
- -----------------------------------------------------------------------------------------------------------
TOTAL DIRECT COSTS FOR ENTIRE PROPOSED PROJECT PERIOD (Item 8a)- [XXXXXXXXXX]
- -----------------------------------------------------------------------------------------------------------
JUSTIFICATION (Use continuation pages if necessary):
</TABLE>

For All Years: Explain and justify purchase of major equipment, unusual supplies
requests, patient care costs, alterations and renovations, tuition remission,
and donor/volunteer costs.

For Competing Continuation Applications: Justify any significant increases or
decreases in any category over the current level of support.

See Attached Budget Justifications Pages

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - Soane BioSciences, Inc.

PERSONNEL

Dr. Hooper will be responsible for project management at Soane BioSciences,
Inc., as well as scientific direction, and coordination with the collaborating
sites. Dr. Soane will provide scientific guidance in the areas of
electrophoresis media, polymer formulation, replication and microfabrication.
Other personnel will be deployed as described below.

Media development
- -----------------
Dr. Alex Sassi will lead the media development effort. He is an expert in
hydrogels, including temperature-responsive gels, with considerable
electrophoresis experience. He will be responsible for overall experimental
design, and will directly conduct experiments on gel phase behavior, stability,
and polymerization of media in the microreplicated systems. Danny Hion will
prepare DNA samples and perform sequencing runs to evaluate gel performance,
activities with which he has significant experience. Dr. Steve Lin will be
responsible for monomer synthesis and for synthesizing novel polymer structures,
such as the graft polymers required for the dynamic porosity gels. Dr. Lin is an
expert in monomer and polymer synthesis. It is expected that Dr. Lin will spend
about 50% of his time on media development, and the other half of his time on
Microreplication development.

Microreplication development
- ----------------------------
Dr. Goretty Alonso will lead the Microreplication effort at SBio, which will
consist of developing base-substrate bonding methods, substrate prototyping via
replication, polymer formulation, and channel surface design and testing. Dr.
Alonso is an accomplished polymer scientist with extensive experience in
polymerization methods, formulation, surface modification and capillary
electrophoresis. Dr. Alonso also has extensive experience in hydrogels from
previous research on contact lenses, and she will consult on the gel development
efforts. Dr. Steve Lin will spend 50% time on this project, assisting Dr. Alonso
in the formulation and surface modification efforts. A polymer engineer will be
hired for design and construction of UV curing and spin coating stations, along
with testing of replication processes. Jules Moolenaar, an experienced
mechanical designer and machinist, will assist the polymer engineer during
design and construction of curing and spin-coating stations, performing
requisite machining tasks. Mr. Moolenaar will also machine plastic plates for
testing in the thin slab system, and perform miscellaneous design/machining
tasks.

In Years 2 & 3, the salaries have been increased by 4 percent for inflation.

Fringe benefits have been calculated as 14 percent of salary.

EQUIPMENT

A prototype of CuraGen's thin slab sequencer is budgeted at [XXXXXX], which will
enable efficient evaluation of media separation properties and testing of
plastic substrates. A UV/VIS (Perkin Elmer model Lambda 11 or equivalent) and a
fluorescence spectrophotometer (PE LX50B or equivalent) are budgeted for
characterizing the optical properties of plastic substrate formulations. We have
budgeted the purchase of components for constructing UV curing and spin-coating
stations, including UV lamp, power supply, motor and mechanical parts. The UV
curing station will be used for replication experiments, and for UV
polymerization of media within the microreplicated systems.

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - Soane BioSciences, Inc.
Page 2

SUPPLIES

Sequencing reagents will be needed to evaluate gel performance, and [XXXXXXXXXX
XXXXXXXXXXXXXXXXX] We budgeted [XXXXXXX] for the purchase of monomers, polymers,
solvents and buffers required in both gel development and microreplication
development. Miscellaneous supplies include machine tools, contract analytical
services (e.g., for specialized surface characterization), replacement parts or
necessary accessories for equipment used in this project, etc.

TRAVEL

A total of 7 trips to CuraGen [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXX]

OTHER EXPENSES

Publication costs are estimated at $2,000 per year, as we expect to report on
advances in several technology areas, including separation media, surface design
of plastics for use in DNA electrophoresis, and microreplication methods.

INDIRECT COSTS

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

DD Principal Investigator/Program Director (Last, first, middle)
Went, Gregory, T.
-----------------
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
DETAILED BUDGET FOR INITIAL BUDGET PERIOD FROM THROUGH
DIRECT COSTS ONLY (The Whitehead Institute) 04/01/96 03/31/97
- ---------------------------------------------------------------------------------------------------------------------------
PERSONNEL (Applicant Organization Only) DOLLAR AMOUNT REQUESTED (omit cents)
- --------------------------------------- -----------------------------------------
TYPE
ROLE ON APPT. % EFFORT INST BASE SALARY FRINGE
NAME PROJECT (months) ON PROJ. SALARY REQUESTED BENEFITS TOTALS
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Trevor L. Hawkins Principal Investigator 12 [XX] [XXXXXX] [XXXXXX] [XXXXXXX] [XXXXXXX]
- ---------------------------------------------------------------------------------------------------------------------------
Lincoln D. Stein Research Scientist 12 [XX] [XXXXXX] [XXXXXX] [XXXXXXX] [XXXXXXX]
- ---------------------------------------------------------------------------------------------------------------------------
David Goon Technical Assistant 12 [XX] [XXXXXX] [XXXXXX] [XXXXXXX] [XXXXXXX]
- ---------------------------------------------------------------------------------------------------------------------------
William Lee Research Specialist 12 [XX] [XXXXXX] [XXXXXX] [XXXXXXX] [XXXXXXX]
- ---------------------------------------------------------------------------------------------------------------------------

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

SUBTOTALS---------[XXXXXXX] [XXXXXXXX] [XXXXXXXXX]
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C>
CONSULTANT COSTS
[XXXXX]
- -------------------------------------------------------------------------------
EQUIPMENT (Itemize)
Prototype 9mm spacing coated pins for solid-phase additions
(3 @ $5,000/each)) [XXXXXX]

SUPPLIES (Itemize by category)
Magnetic particles, custom synthesis [XXXXXX]
Sequencing reagents (5,000 @ $1/each) [XXXXXX]
Magnets, donuts, dots, bars, custom [XXXXXX]
Plastic plates, tips, etc. [XXXXXX] [XXXXXX]
- --------------------------------------------------------------------------------
TRAVEL

[XXXXXX]
- --------------------------------------------------------------------------------
PATIENT CARE COSTS INPATIENT [XXXXXX]
-------------------------------------------------------
OUTPATIENT [XXXXXX]
- --------------------------------------------------------------------------------
ALTERATIONS AND RENOVATIONS (Itemize by category)
[XXXXXX]
- --------------------------------------------------------------------------------
OTHER EXPENSES (Itemize by category)
Phone $1,000
Photocopying $200
Mail $500
Publication costs $500 [XXXXXX]
- --------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD [XXXXXX]
- --------------------------------------------------------------------------------
CONSORTIUM/CONTRACTUAL COSTS
DIRECT COSTS TOTAL---- [XXXXXX]
- -----------------------------------------------
INDIRECT COSTS [XXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

TOTAL DIRECT COSTS FOR INITIAL BUDGET PERIOD (Item 7a, Face Page)---- [XXXXXX]
- --------------------------------------------------------------------------------
</TABLE>

[Confidential Treatment Requested]

<PAGE>

EE Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
BUDGET FOR ENTIRE PROPOSED PROJECT PERIOD
DIRECT COSTS ONLY (The Whitehead Institute)

- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

BUDGET CATEGORY INITIAL BUDGET ADDITIONAL YEARS OF SUPPORT REQUESTED
PERIOD ------------------------------------------------------------
TOTALS (from page 4) 2nd 3rd 4th 5th
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PERSONNEL:
Salary & fringe benefits
Applicant organization only [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
CONSULTANT COSTS [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
EQUIPMENT [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
SUPPLIES [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
TRAVEL [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
PATIENT INPATIENT [XXXXXX] [XXXXXX] [XXXXXX]
CARE -------------------------------------------------------------------------------------------
COSTS OUTPATIENT [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
ALTERATIONS AND
RENOVATIONS [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
OTHER EXPENSES [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
SUBTOTAL DIRECT COSTS [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
CONSORTIUM/
CONTRACTUAL COSTS [XXXXXX] [XXXXXX] [XXXXXX]
- ---------------------------------------------------------------------------------------------------------
TOTAL DIRECT COSTS [XXXXXX] [XXXXXX] [XXXXXX]
- -------------------------------------------------------------------------------------------==============
TOTAL DIRECT COSTS FOR ENTIRE PROPOSED PROJECT PERIOD (Item 8a)-- [XXXXXXX]
- -------------------------------------------------------------------------------------------==============
</TABLE>
JUSTIFICATION (Use continuation pages if necessary):

For All Years: Explain and justify purchase of major equipment, unusual
supplies requests, patient care costs, alterations and renovations, tuition
remission, and donor/volunteer costs.

For Competing Continuation Applications: Justify any significant increases or
decreases in any category over the current level of support.

See Attached Budget Justifications Pages

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
---------------
- -------------------------------------------------------------------------------

BUDGET JUSTIFICATIONS - The Whitehead Institute

PERSONNEL

Year 1
Trevor L. Hawkins (Research Scientist and group head of the Center's DNA
sequencing and automation group) [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXX]

Lincoln Stein (Research Scientist) is Director of Informatics at the Whitehead
Institute/MIT Center for Genome Research. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXX]

David Goon (Technical Assistant) will be committed to the project [XXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

William Lee (Research Specialist) will be committed to this project [XXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

Year 2
As above, with the exception of the reduction of David Goon and William Lee to
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXX]

Year 3
As Year 2. In Year 3, the salaries have been increased by 4 percent for
inflation.

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]

<PAGE>

BUDGET JUSTIFICATIONS - The Whitehead Institute
Page 2

EQUIPMENT

Year 1
Qty Item Unit Price Total Price
<S> <C> <C> <C>

3 Prototype 9mm spacing coated pins for
solid-phase additions $5,000 $15,000
<CAPTION>
Our plan for the solid-phase loading is to use a reusable 12 channel
9mm spacing pin set. This allows us to move from any standard 96, 192 or 384
well plate to the gel electrophoresis system without modification. We expect to
make three basic types of pins, one for SPRI, one for Biotin-streptavidin and
one for digoxigenin-anti-digoxigenin.

Year 2
<S> <C> <C> <C>
Qty Item Unit Price Total Price
1 9mm spacing pins for solid or liquid-phase
additions $10,000 $10,000

</TABLE>

The exact design of the 9mm tool head will be the subject of our work
in year 1. At this point we would redesign and improve our best approach from
year 1 to enable us to use the system in year 2. The increased cost of this tool
head reflects the fact that in year 1 we built prototype units.

We will use existing robotic systems for development, to show our strong
commitment to the project.

SUPPLIES

In Years 2 & 3, the supplies costs have been increased by 4 percent for
inflation.

OTHER EXPENSES

In Years 2 & 3, the other expenses will be adjusted 4 percent for inflation.
<PAGE>

FF Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
BIOGRAPHICAL SKETCH
Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Gregory T. Went Vice President

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Carnegie-Mellon University, Pittsburgh, PA B.S. 1985 Chemical Engineering
University of California, Berkeley, Berkeley, CA Ph.D. 1991 Chemical Engineering
Cornell University, Ithaca, NY PostDoc 1993 Chemical Physics
- -------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------

1993-1994 Director of Structural Biology
CuraGen Corporation, Branford, CT

1994-Present Vice President
CuraGen Corporation, Branford, CT

Honors and Awards:
- -----------------

Olin Summer Research Program, 1984
University Honors, 1985

Bibliography:
- ------------

1. "Microfabricated Device for High-Resolution Multiplex DNA Analysis",
G.T.Went, and J.W.Simpson, to be submitted.

2. "Imaging Spectrograph for DNA Analysis",J.W. Simpson, and G.T. Went,
Analytical Chemistry (1995), to be submitted.

3. "Algorithm for DNA Sequence Determination", J.W.Simpson, R.N. Wright, and
G.T. Went, in preparation (1995).

4. "Standard Absorption Isotherms for Nitrogen and Methane on Graphite:
Improved Resolution at Low Pressure", C.L. Rhykerd, G.T. Went, T.M. Duncan
and K.E. Gubbins, submitted for publication, Langmuir (June 1995)

5. "Oxidation of Reduced Platinum Clusters in Pt-NaY Catalysts", B.F. Chmelka,
G.T. Went, R.Csenscits, A.T. Bell, E.E. Petersen, and C.J. Radke, accepted
for publication, Journal of Catalysis (1994).

6. "A Physico-Chemical Study of the Aging of Zeolite Synthesis Gels", D.M.
Ginter, G.T. Went, C.J. Radke, and A.T. Bell, Zeolites 12 (1992) 733.

- --------------------------------------------------------------------------------
<PAGE>

7. "Laser Raman Spectroscopy of NH3 and ND3 adsorbed on TiO2 (Anatase)", G.T.
Went, A.T. Bell, Catalysis Letters 11, 111 (1992).

8. "Quantitative Structural Analysis of Dispersed Vanadia Species in TiO2
(Anatase)- Supported V2O5", G.T. Went, L. Leu, S. Lombardo, A.T. Bell,
Journal of Catalysis 134, 479 (1992).

Invited Presentations (16 total):
- --------------------------------

"Engineering Novel Pharmaceuticals," Invited Lecture, Department of Chemical
Engineering, University of California, Santa Barbara, CA, May 18, 1995.

"Microfabricated Device for DNA Fragment Analysis," Invited Lecture, BioChips
Conference, Washington DC, May 10, 1995.

"Modular Platform for DNA Fragment Analysis," Invited Lecture, DNA Sequencing,
Mapping and Bioinformatics Conference, San Francisco, CA, July, 1994.

"Kinetic, Thermodynamic and Spectroscopic Studies of Surface Phenomena", Invited
Lecture, Department of Chemical Engineering, Purdue University, Purdue, IL,
November, 1992.

Patents:
- -------

"Apparatus and Method for the Generation, Separation, Detection, and Recognition
of Biopolymer Fragments", J.W. Simpson, J.M. Rothberg, and G.T. Went, U.S.
and Foreign Patent Pending.

"Consensus Configurational Bias Monte Carlo Method and System for Pharmacophore
Structure Determination", M.W. Deem, J.M. Rothberg, and G.T. Went, U.S. and
Foreign Patent Pending.

<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Jonathan M. Rothberg Chief Executive Officer

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Carnegie-Mellon University, Pittsburgh, PA B.S. 1985 Chemical Engineering
Yale University, New Haven, CT Ph.D. 1991 Molecular Biology
Yale University, New Haven, CT PostDoc 1993 Molecular Biology
- ------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------

1988-Present Member of the Board of Directors
Laticrete International, Inc., Bethany, CT

1991-Present Chairman of the Board of Directors
CuraGen Corporation, Branford, CT

1993-Present Chief Executive Officer
CuraGen Corporation, Branford, CT

Honors and Awards:
- -----------------

National Research Service Award, NIH, 1985-1989
John Spangler Nicholas Prize for the Outstanding Doctoral candidate in
Experimental Zoology, 1991

Bibliography:
- ------------

1. "Modularity of the Slit Protein", J. M. Rothberg, and S. Artavanis-
Tsakonas, S., J. Mol. Biol. 227, 367-370 (1992).

2. "Gene Patents", J.M. Rothberg, Nature 356, 738 (1992).

3. "slit: an Extracellular Protein Necessary for the Development of Midline
Glia and Axon Pathways of the Central Nervous System contains both EGF and
Flank-LRR-Flank Domains", J.M. Rothberg, Ph.D. Thesis, Yale University
(1991).

4. "slit: an Extracellular Protein Necessary for Development of Midline Glia
and Commissural Axon Pathways Contains both EGF and LRR Domains", J.M.
Rothberg, J.R. Jacobs, C.S. Goodman, and S. Artavanis-Tsakonas, Genes &
Development 4, 2169-2187 (1990).

5. "slit: An EGF-Homologous Locus of D. melanogaster Involved in the
Development of the Embryonic Central Nervous System", J.M. Rothberg, D. A.
Hartley, Z. Walther, and S. Artavanis-Tsakonas, Cell 55, 1047-1059 (1988).

<PAGE>

Patents:
- -------

"Apparatus and Method for the Generation, Separation, Detection, and Recognition
of Biopolymer Fragments", J.W. Simpson, J.M. Rothberg, and G.T. Went, U.S.
and Foreign Patent Pending.

"Consensus Configurational Bias Monte Carlo Method and System for Pharmacophore
Structure Determination", M.W. Deem, J.M. Rothberg, and G.T. Went, U.S. and
Foreign Patent Pending.

"Purified slit Protein and Sequence Elements thereof", J.M. Rothberg, and S.
Artavanis-Tsakonas, US Patent Pending, (1990).

<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Michael P. McKenna Senior Research Scientist

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Carnegie-Mellon University, Pittsburgh, PA B.S. 1984 Molecular Biology
Yale University, New Haven, CT Ph.D. 1993 Biology
- ------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------

1984-1986 Research Associate
Max-Planck-Institute-fur-Entwicklungsbiogiogie, Tubingen, Germany

1992-1994 Graduate Scholar
Miles Biotechnology, West Haven, CT

1994-Present Senior Research Scientist
CuraGen Corporation, Branford, CT

Bibliography:
- ------------
1. "A Single Amino Acid Distinguishes the Interaction of Two Rhinovirus
Stereotypes with Their Receptor, ICAM-1," M.P. McKenna and J. Greve, in
preparation (1994).

2. "Putative Drosophila pheromone-Binding Proteins Expressed in a Subregion of
the Olfactory System," M.P. McKenna, D.S. Heknat-Scafe, P. Gaines, and J.
Carlson, J. Biol. Chem. in press, (1994).

3. "A Simple Chemosensory Response in Drosophila and the Isolation of Acj
Mutants in Which it is Affected," M.P. McKenna, M.P. Monte, S.L. Helfand,
C. Woodard, and J. Carlson, Proc. Nat. Acad. Sci. 86, 8118-8122 (1989).

4. "Growth Cone Behavior on Gradients of Substratum Bound Laminin," M.P.
McKenna, and J. A. Raper, Dev. Biology 130, 232-236 (1988).

5. "A Transient Rise in Cytosolic Calcium Follows Stimulation of Quiescent
Cell with Growth Factors and is Inhabitable with Phorbal Myristate
Acetate," P.L. McNeil, M.P. McKenna, and D. L. Taylor, J. Cell Biology 101,
372-379 (1985).

- --------------------------------------------------------------------------------
<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Gregory T. Mulhern Senior Research Scientist

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Carnegie-Mellon University, Pittsburgh, PA B.S. 1989 Chemical Engineering
University of California, Berkeley, Berkeley, CA Ph.D. 1995 Chemical Engineering
- -------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------
1988 Research Engineer
Air Products and Chemicals, Allentown, PA

1989 Research Assistant
Carnegie Mellon University, Pittsburgh, PA

1994-1995 Project Engineer
Soane Technologies, Inc., Hayward, CA

1995-Present Senior Research Scientist
CuraGen Corporation, Branford, CT

Honors and Awards:
- -----------------

American Institute of Chemical Engineers Chapter Award for Scholastic
Achievement, 1987
Andrew Carnegie Society Award Finalist, 1989
American Institute of Chemists Foundation Award, 1989

- --------------------------------------------------------------------------------
<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Darin R. Latimer Senior Research Engineer

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
University of Saskatchewan, Saskatchewan, Canada B.S. 1986 Chemistry
University of Saskatchewan, Saskatchewan, Canada M.Sc. 1989 Chemistry
University of Arizona, Tuscon, AZ Ph.D. 1994 Chemistry
Cornell University, Ithaca, NY PostDoc 1995 Chemistry
- -------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------

1983-1985 Assistant
Global Thermoelectric Generator Systems, Ltd, Alberta, Canada

1995-Present Senior Research Engineer
CuraGen Corporation, Branford, CT

Bibliography:
- ------------

1. "The Preparation and Crystal Structure of Tetrakis (phenylmethoxy methane",
D.R. Latimer, J.A. Weil, J.W. Quail, and W.T. Robinson, Can. J. Chem., 67,
143 (1989).

2. "The ~B - ~X Laser-Induced Fluroescence Excitation Spectrum of Jet-Cooled
Cl2CS: Origin Location and Partial Vibronic Analysis", M. Ludwiczak, D.R.
Latimer, and R.P. Steer, J. Mol. Spectrosc., 147, 414 (1991).

3. "Ion-molecule Reaction Studies Below 10 K: The State Specific Reactions of
Ar+ (2PJ) with H2, D2 and HD", M. A. Smith, M. Hawley, D.R. Latimer, and N.
A. Melosh, Acta Physica Universitatis Comenianae, XXXIV 3 (1994).

4. "Direct Observation of HSF6+ and the Bracketing of the SF6 Proton Affinityt
5 K", D. R. Latimer and M. A. Smith, J. Chem. Phys., 101, 3410 (1994).

5. "Electronic Energy Transfer Kinetics of Xe+ (2P1/2) at Very Low
Temperature", D. A. Latimer, and M.A.Smith, J. Chem. Phys., 101, 3852
(1994).

6. "Gas-Phase Reactions Relevant for Plasma Deposition of Diamond:
Dissociative Charge Transfer of Ar+ ions with CH4 in the Energy Range From
10-4 from 2 e V", P. Tosi, D. Cappelletti, O. Dmitriev, S. Giordani, D.
Bassi, D. R. Latimer, and M. A. Smith, manuscript in preparation.

- --------------------------------------------------------------------------------
<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
John W. Simpson Senior Research Engineer

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California Institute of Technology, Pasadena, CA B.S. 1987 Mathematics
California Polytechnic State University, San Luis M.S. 1991 Mechanical Eng.
Obispo, CA
- -------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------
1988-1989 Assistant in Research and Instruction
Princeton University, Princeton, NJ

1992 Research Associate
California Polytechnic State University, San Luis Obispo, CA

1994-Present Senior Research Engineer
CuraGen Corporation, Branford, CT

Honors and Awards:
- -----------------
Caltech Prize Scholarship, 1985
Herbert J. Ryser Memorial Scholarship, 1986
Mobil Fellowship and First Year Merit Prize, 1987

Bibliography:
- ------------

1. "Microfabricated Device for High-Resolution Multiplex DNA Analysis",
G.T.Went, and J.W.Simpson, to be submitted.

2. "Imaging Spectrograph for DNA Sequencing", J. W.Simpson and G. T. Went,
manuscript in preparation, Analytical Chemistry (1995).

3. "Algorithm for DNA Sequence Determination," J.W. Simpson, R.N. Wright, and
G.T. Went, in preparation (1995).

Patents:
- -------

"Apparatus and Method for the Generation, Separation, Detection, and Recognition
of Biopolymer Fragments", J.W. Simpson, J.M. Rothberg, and G.T. Went, U.S.
and Foreign Patent Pending.

<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Aleksandar Milosavljevic Director of Bioinformatics

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Belgrade University, Belgrade, Yugoslavia B.S. 1984 Electrical Engineering
Santa Clara University, Santa Clara, CA M.Sc. 1986 Computer Science
University of California, Santa Cruz, Santa Cruz, CA Ph.D 1990 Computer and
Informational Sciences
- --------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------

1984-1985 Research Assistant and Lecturer
Santa Clara University, Santa Clara, CA

1986-1990 Research and Teaching Assistant
University of California, Santa Cruz, Santa Cruz, CA

1990-1991 Adjunct Lecturer
Santa Clara University, Santa Clara, CA

1990-1992 Computer Scientist
Linus Pauling Institute of Science and Medicine, Palo Alto, CA

1992-1995 Assistant Scientist
Argonne National Laboratory, Argonne, IL

1995-Present Director of Bioinformatics
CuraGen Corporation, Branford, CT

Bibliography:
- ------------

1. "Learning in the Presence of Background Knowledge", A. Milosavljevic,
Technical Report UCSC-CRL-87-27, (1987).

2. "A Model of Learning Based on the Principle of Cognitive Economy", A.
Milosavljevic, Technical Report UCSC-CRL-88-33, (1988).

3. "Informed Parsimonious Inference of Prototypical Genetic Sequences", A.
Milosavljevic, D. Haussler, and J. Jurka, Proceedings of the Second
Workshop on Computational Learning Theory, (1989).

4. "Categorization of Macromolecular Sequences by Minimal Length Encoding", A.
Milosavljevic, Ph.D. Thesis (1990).

<PAGE>

5. "Reconstruction and Analysis of Human Alu Genes", A. Milosavljevic, Journal
of Molecular Evolution, 32, 105-121 (1991).

6. "Enhanced Malignant Transformation Induced by Expression of a Distinct
Protein Domain of Ribonucleotide Reductase Large Subunit from Herpes
Simplex Virus Type 2", M., Ali, D. McWeeney, A. Milosavljevic, J. Jurka,
and R. Jariwalla, Proc. Natl. Acad. Sci., 88, 8257-8261 (1991).

7. "Prototypic Sequences for Human Repetitive DNA", J. Jurka, J. Walichiewicz,
and A. Milosavljevic, J. Mol. Evol., 35, 286-291 (1992).

8. "Discovery by Minimal Length Encoding: A Case Study in Molecular
Evolution", A. Milosavljevic and J. Jurka, Machine Learning Journal,
Special Issue on Machine Discovery, 12, nos. 1, 2, 3 (1993).

9. "Discovering Simple DNA Sequences by the Algorithmic Significance Method",
A. Milosavljevic, and J. Jurka, Computer Applications in Biosciences, 9,
no. 4 (1994).

10. "Identification and Characterization of New Human Medium Reiteration
Frequency Repeats", J. Jurka, D.J. Kaplan, C.H. Duncan, J. Walichiewicz, A.
Milosavljevic, G. Murali, and J.F. Solus, Nucleic Acids Research, 21, no.
5, 1273-1279 (1993).

11. "Discovering Sequence Similarity by the Algorithmic Significance Method",
A. Milosavljevic, Proceedings of the First International Conference on
Intelligent Systems for Molecular Biology, (1993).

12. "Clone Clustering by Hybridization", A. Milosavljevic, Z. Strezoska, M.
Zeremski, D. Grujuc, T. Paunesku, and R. Crkvenjakov, Genomics, in press.

13. "Repeat Analysis", A. Milosavljevic, Chapter 13, Section IV, Handbook of
Genome Analysis, in press.

- --------------------------------------------------------------------------------
<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.

- --------------------------------------------------------------------------------
NAME POSITION TITLE
Joseph C. Kaufman Director of Software Development

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
California State University, Long Beach, CA B.S. 1983 Chemical
- -------------------------------------------------------------------------------------------------------------
</TABLE>
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- -----------------------

1980-1984 Research Associate
Specialty Labs Inc., Los Angeles, CA

1984-1986 Research Associate
Beckman Research Institute of the City of Hope, Duarte, CA

1986-1991 Scientist/Systems Chemist
Beckman Instruments, Inc., Brea, CA

1991-1995 Senior Software Engineer
Eastman Kodak, New Haven, CT

1994-1995 Software Consultant
Neurogen Corporation, Branford, CT

1995-Present Director of Software Development
CuraGen Corporation, Branford, CT

Honors and Awards:
- -----------------

Gold Nugget Award, Associated Students Honors for Service, CSLUB, 1983
Chemistry Alumni Award, CSLUB, 1983
Distinguished Service Award, Department of Chemistry, CSLUB, 1983
Distinguished Service Award, School of Natural Science, CSLUB, 1983

Bibliography:
- ------------

1. "Evaluation of the recovery between samples presented in primary tubes and
those presented in cups on the Beckman Synchron CX(R)7", B.Davis, and J.C.
Kaufman, Clin.Chem. 37, 872 (1991).

2. "Differential detection of viral DNA and RNA in situ cells infected with
human cytomegalovirus", J.R. McCarrey, J. C. Kaufman, M. A. Churchill, and
J.A. Zaia, Journal of Virological Methods 25, 301-314 (1989).

3. "Evaluation of Cold-Stable Rate-Jaffe creatinine reagent for the use on the
Beckman Synchron CX4/5", J. C. Kaufman et. al, Clin.Chem, 33 951 (1987).

- --------------------------------------------------------------------------------
<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person.
- --------------------------------------------------------------------------------
NAME POSITION TITLE

Harold G. Craighead Professor of Applied and Engineering Physics

- --------------------------------------------------------------------------------
RESEARCH AND/OR PROFESSIONAL EXPERIENCE. Concluding with present position, list,
in chronological order, previous employment, experience and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership or any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

After completing his thesis in experimental physics at the end of 1979,
Dr. Craighead joined Bell Laboratories as a Member of Technical Staff in the
Device Physics Research Department. Research included studies of high-resolution
semiconductor fabrication processes including electron beam lithography with
high energy finely focused electron beams. This work resulted, at the time, in
the creation of the smallest wires and etched structures on GaAs. He did some
of the deepest UV lithography studies with excimer lasers.
At the breakup of AT&T, Dr. Craighead transferred to the newly created
Bell Communications Research and became a research manager in the Solid State
Science and Technology Laboratory. He formed and headed the group responsible
for advanced lithography and device fabrication and ultra-small experimental
device studies. His personal research centered on advanced semiconductor
processing and the properties of ultra-small structures. He explored ion etching
processes in compound semiconductors, with in several cases the first published
accounts of reactive ion etching processes in several material systems. Studies
of ion induced damage and enhanced compositional disordering were exploited to
create quantum wire and dot structures in GaAs/AlGaAs systems. He has worked
extensively on optical materials, device and system studies.
In 1989 Dr. Craighead joined the faculty of Cornell University as a
Professor in the School of Applied and Engineering Physics. From 1989 until 1995
he was Director of the National Nanofabrication Facility at Cornell University.
He is involved in collaborative projects on new molecular species for
microfabrication and cell growth and a developing project on the use of
microfabrication in biology.

Publications (last three years)

"Anisotropic reactive ion etching of InP in methane/hydrogen based plasmas",
J. W. McNabb, H. G. Temkin, and R. A. Logan, J. Vac, Sci. Technol, B. 9,
-
3535 (1991).

"Anisotropic reactive ion etching of InP in methane/hydrogen based plasmas",
J. McNabb, H. G. Craighead, and H. Temkin, in Integrated Photonics Research,
1991, Technical Digest Series, (Optical Society of America, Washington, DC
1991), pp26-27.

"High resolution reactive ion etching of SiGe Alloys", J. G. Couillard, H. G.
Craighead, J. Vac, Sci. Technol, B. 11, 717 (1993).
--

"Lateral patterning of nanostructures", H. G. Craighead in Physics of
Nanostructure, A. Long, editor (1992) (NATO summer school).

"Ballistic electron emission microscopy investigation of SiGe nanostructures
fabricated using high resolution electron beam lithography and reactive ion
etching", A. Davies, J. G. Couillard, and H. G. Craighead, Appl. Phys. Lett. 61,
--
1040 (1992).

<PAGE>

Principal Investigator/Program Director (Last, first, middle): Went, Gregory T.
- --------------------------------------------------------------------------------

"Ballistic electron emission microscopy investigation of SiGe nanostructures
fabricated using reactive ion etching", J. G. Couillard, A. Davies, and H. G.
Craighead, J. Vac. Sci. Technol B, 10, 3112 (1992).
--

"A method of fabrication submicrometer gold wires on optical fibers", L. M.
Schiavone, H. G. Craighead, and S. DiVita, Thin Silid Films, 208, 156 (1992).
---

"A self assembled monolayer electron beam resist on GaAs", R. C. Tiberio, H. G.
Craighead, M. Lercel, T. Lau, C. W. Sheen and D. L. Allara, Appl. Phys. Lett,
62, 476, (1993).
- --

"Proton implantation intermixing of GaAs/AlGaAs quantum wells", G. F. Redinbo,
H. G. Craighead and J. M. Hong, J. Appl. Physics 74, 3099, (1993).
--

"A simple surface emitting LED array for free-space optical interconnects",
H. F. Bare, F. Haas, D. A. Honey, D. Mikolas, H. G. Craighead, G. Pugh and
R. Soave Photonics Technol. Lett, 5, 172 (1993).
-

"Fabrication of aspheric high numerical aperture reflective diffractive optic
elements using electron beam lithography", D. Mikolas, R. Bojko, H. G.
Craighead, F. Haas, D. A. Honey and H. F. Bare, J. Vac. Sci. Technol. B, 12, 20
--
(1994).

"Photolithography of Porous Silicon", J. G. Couillard and H. G. Craighead, J.
Vac. Sci. Technol. B. 12, 161 (1994).
--

"Focused ion beam interactions with a shallow two-dimensional electron gas",
Y. A. Soh, G. L. Snider, M. J. Skvarla, and H. G. Craighead, J. Vac. Sci.
Technol. B, 11, 2629 (1993).
--

"Self assembled monolayer electron beam resists on GaAs and SiO2", M. Lercel, R.
C. Tiberio, H. G. Craighead, C. W. Sheen, A. N. Parikh, and D. L. Allara, J.
Vac. Sci. Technol. B, 11, 2823 (1993).
--

"Ballistic-electron-emission microscopy characteristics of reverse-biased
Schottky diodes", A. Davies and H. G. Craighead, Appl. Phys. Lett, 64, 2833
--
(1994).

"Fabrication of a multilevel structure for nanophysics in two-dimensional
electron gases", Y-A. Soh. G. L. Snider, M. J. Rooks, H. G. Craighead and
J. Parpia, J. Vac. Sci. Technol. B, 12, 1372 (1994).
--

"Binary optics for optical interconnects", S. M. Shank and H. G. Craighead, (to
appear in Proc. SPIE 2216 (1994))
----

"Scanning tunneling microscopy based lithography of octadecanethiol on Au and
GaAs", M. J. Lercel G. F. Redinbo, H. G. Craighead, C. W. Sheen and D. L.
Allara, Appl. Phys. Lett 65, 974 (1994).
--

"Diffractive phase elements based on two-dimensional artifical dielectrics",
F. T. Chen and H. G. Craighead, Optics Letters 20 No. 2, 121 (1995)
--

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

<PAGE>

Trevor Hawkins Research Scientist

- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE: Concluding with present position, list in
chronological order previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the project. Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership on any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. DO NOT
EXCEED TWO PAGES.

Professional Experience:
- ------------------------
1989-1990 Research and Teaching Assistant, Center for Medical Research,
University of Sussex, United Kingdom.
1990-1992 Research Scientist, Medical Research Council, Cambridge, United
Kingdom.
1992-1993 Staff Scientist, Medical Research Council, Cambridge, United
Kingdom.
1993 Senior Scientist, Promega Corporation, Madison Wisconsin.
1993-present Research Scientist, Whitehead Institute/MIT Center for Genomic
Research.

Publications:
- -------------
Hawkins, T.L., and Sulston, J.E.(1990). Automated fluorescent primer walking.
Technique-A journal of methods in cell and molecular biology. 2.6. 307-310.
Hawkins, T.L., and Sulston, J.E.(1991). The resolution of compressions in
automated fluorescent sequencing. Nucl. Acids. Res. 19.10.2784.
Sulston, J., and Hawkins, T.L., et al (1992). The C.elegans genome sequencing
project: A beginning. Nature 356:37-41.
Waterson, R. and Hawkins, T.L. et al (1992). A survey of expressed genes in
Caenorhabditis elegans. Nature genetics 1:114-123.
Hawkins, T.L., Du, Z., Halloran, N.D., and Wilson, R.K.(1992). Fluorescence
chemistries for automated primer-directed DNA sequencing. Electrophoresis
13:552-559.
Hawkins, T.L. (1992). M13 single-stranded purification using a biotinylated
probe and streptavidin coated magnetic beads. DNA sequence- J.DNA Sequencing
and Mapping. 3:65-69.
Hawkins, T.L. The use of magnetic particles in molecular biology. In Automated
DNA sequencing and analysis techniques, Ed. Craig Venter, J.
Ainscough, R., and Hawkins, T.L. et al. (1993). Sequencing the genome. WBG
93.340-343.

Berks, M., and Hawkins, T.L. et al (1993). WBG 123.22-25.

Watson, A., Smaldon, N., Lucke, R., and Hawkins, T.L. (1993). The Caenorhabdiris
elegans project: first steps in automation. Nature. 362:569-570.
Wilson, R., Hawkins, T., et al. (1994). 2.2Mb of contiguous nucleotide sequence
from chromosome III of C. elegans. Nature 368:32-38.
Hawkins, T.L. (1994). In automated DNA sequence analysis. Ed. Craig Ventor,
Academic Press.

Hawkins, T.L., O'Connor-Morin, T., Roy A., and Santillan, C. (1994). DNA
purification and isolation using a solid-phase, Nucl. Acids, Res. In press
Hawkins, T.L., O'Connor-Morin, T., Ingalls, K., Levinson, D., DeAngelis, M.,
Santillan, C., and Evans, C. (1994). Solid-phase molecular biology. Biomedical
products. December issue. Ed Steve Ernst.

<PAGE>

FF Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
Page 2

Hawkins, T.L., Banerjee S.R., Brodowski, C., Days, F., Levinson, D., and
Ingalls, K. (1995) Thermal Cycle DNA Sequence set up using a modified
lab workstation. In press.
Whitfield, L.S., Goodfellow, P.N., Sulston, J., and Hawkins, T.L., 41 Kilobases
of Analyzed Sequence from the pseudoautosomal and Sex-determining
regions of the short arm of Human Y chromosome. Submitted.
Santillan, C., Roy, A., and Hawkins, T.L., Isolation of DNA from agarose gel
using a solid-phase. Submitted.

DeAngelis, M., and Hawkins, T.L., Solid-Phase Reverse immobilzation for the
isolation of PCR products. Submitted.
Ingalls, K., Levinson, D., and Hawkins, T.L., Solid-Phase Reversible
immobilization for the isolation of cosmid DNA suitable for library
construction. Submitted.

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

<PAGE>

Herbert H. Hooper Vice President, Research

North Carolina State University B.S. 1985 Chem. Eng.

University of California, Berkeley Ph.D. 1990 Chem. Eng.

- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE. Concluding with present position, list, in
chronological order, previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the project. Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership on any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. If
the list of publications in the last three years exceeds two pages, select the
most pertinent publications. DO NOT EXCEED TWO PAGES.

Experience:
- -----------

1985-1990 Graduate Research Assistant, University of California, Berkeley
1990 Postdoctoral Research Fellow, University of California, Berkeley
1990-1993 Senior Research Engineer, Air Products and Chemicals, Inc.,
Allentown, PA
1993-present Vice President, Research, Soane BioSciences, Inc.

Awards:
- -------
Principal Investigator on NIH SBIR awards and Advanced Technology Program award.

Publications:
- -------------
Sassi, A.P., S. Beltran, H.H. Hooper, H.W. Blanch and J.M. Prausnitz, Monte
Carlo Simulations of Hydrophobic Weak Polyelectrolytes; Titration Properties
and pH-Induced Structural Transitions. J. Chem. Phys., 97(11), 8767(1992).
Baker, J.P., H.H. Hooper, H.W. Blanch and J.M. Prausnitz, Swelling Equilibria
for Weakly-Ionizable, Temperature-Sensitive Hydrogels, Macromolecules, 24,
549(1991).
Hooper, H.H., S. Beltran, A.P. Sassi, H.W. Blanch and J.M. Prausnitz, Monte
Carlo Simulations of Hydrophobic Polyelectrolytes: Evidence for a Structural
Transition in Response to Increasing Chain Ionization, J. Chem. Phys., 93(4),
2715(1990).
Hooper, H.H., H.W. Blanch and J.M. Prausnitz, Configurational Properties of
Partially Ionized Polyelectrolytes from Monte Carlo Simulation,
Macromolecules, (1990).
Beltran, S., H.H. Hooper, H.W. Blanch and J.M. Prausnitz, Swelling Equilibria
for Ionized Temperature Sensitive Gels in Water and Aqueous Salt Solutions, J.
Chem. Phys., 92(3), 2061(1990).
Hooper, H.H., H.W. Blanch, J.M. Prausnitz, Molecular Thermodynamics of Aqueous
Polymers and Gels, in Absorbent Polymer Technology, Elsevier Publishers
(1990).
Hooper, H.H., Swelling Equilibria for Positively Ionized Polyacrylamide
Hydrogels, Macromolecules, 23, 1096(1990).
Prange, M.M., H.H. Hooper and J.M. Prausnitz, Thermodynamics of Aqueous Systems
Containing Hydrophilic Polymers or Gels, AICHE J., 35(5), 803(1989).
Michel, S., H.H. Hooper and J.M. Prausnitz, Mutual Solubilities of Water and
Hydrocarbons from an Equation of State, Fluid Phase Equil., 45, 173(1989).

<PAGE>

Hooper, H.H., S. Michel and J.M. Prausnitz. Correlation of Liquid-Liquid
Equilibria for Some Water/Organic-Liquid Systems in the Region 20-250C. Ind.
Eng. Chem. Res., 27(11), 2182(1988).
Hooper, H.H., S. Michel and J.M. Prausnitz. High-Temperature Mutual
Solubilities for some Binary and Ternary Aqueous Mixtures Containing
Aromatic and Chlorinated Hydrocarbons, J. Chem. Eng. Data. 33(4), 502
(1988).

Patents:
--------
H.H. Hooper, S. Pacetti, D.S. Soane and Y.C. Bae. Separation Media for
Electrophoresis, patent pending.

- --------------------------------------------------------------------------------
<PAGE>

David S. Soane Chairman, Scientific Advisory Board

National Taiwan University B.S. 1973 Chemistry
University of California, Berkeley M.S. 1977 Chemical Eng.
University of California, Berkeley Ph.D. 1978 Chemical Eng.

- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE. Concluding with present position, list, in
chronological order, previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the proper Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership or any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. If
the list of publications in the last three years exceeds two pages, select the
most pertinent publications. DO NOT EXCEED TWO PAGES.

Experience
- ----------

1978-1979 Postdoctoral Research Associate, Department of Chemical
Engineering, UC Berkeley
1979-1983 Assistant Professor, Department of Chemical Engineering, UC
Berkeley
1983-1987 Associate Professor, Department of Chemical Engineering, UC
Berkeley
1984-present Associate Faculty Scientist, Center for Advanced Materials,
Lawrence Berkeley Lab
1985-1986 Sabbatical Leave at IBM, Almaden Research Laboratory and Kyoto
University, Japan
1986-1989 Vice Chairman, Department of Chemical Engineering, UC Berkley
1987-1994 Professor, Department of Chemical Engineering, UC Berkeley
1994-present Adjunct Professor, Department of Chemical Engineering, UC
Berkeley
1991-present Founder and Chairman, Soane Technologies, Inc.
1993-present Chairman, Scientific Advisory Board, Soane BioSciences, Inc.

Honors:
- ------
Earl C. Anthony Fellowship, 1976
Camille and Henry Dreyfus Teach-Scholar Award, 1984

Society Activities:
- ------------------
Editorial Advisory Board, Journal of Applied Polymer Science, 1983-1989
Editorial Advisory Board, Journal of Biomaterials, 1985-present
Membership and Examination Committees, Polymer Division, American Chemical
Society, 1982-present
Board of Directors, Golden Gate Chapter, Society of Plastics Engineers,
1982-present
Executive Committee, Northern California Section, American Institute of
Chemical Engineers, 1983-1984

Selected Publications (total greater than 170):
- ----------------------------------------------
Barron, A.E., H.W. Blanch and D.S. Soane. A Transient Entanglement Coupling
Mechanism for DNA Separation by Capillary Electrophoresis in Ultra-Dilute
Polymer Solutions.
Electrophoresis. 15.597 (1994).

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

<PAGE>

Yonkoski, R.K., A Mathematical Model for Planarization of Microelectronic
Topographies. J. Electochem. Soc., 141,585 (1994)
Monk, D.J., D.S. Soane and R.T. Howe, Hydrofluoric Acid Etching of Silicon
Dioxide Sacrificial Layers, 2. Modeling, J. Electochem. Soc., 141, 270
(1994).
Monk, D.J., D.S. Soane and R.T. Howe, Hydrofluoric Acid Etching of Silicon
Dioxide Sacrificial Layers, 1. Experimental Observations, J. Electrochem,
Soc., 141. 264 (1993).
Barron, A.E.D.S. Soane and H.W. Blanch, Capillary Electrophoresis of DNA in
Uncrosslinked Polymer Solutions, J. Chrom., 652.3 (1993).
Bae, Y.C., and D.S. Soane, Polymeric Separation Media for Electrophoresis;
Crosslinked Systems or Entangled Solutions, J. Chrom. A., 652 (1), 17
(1993).
Monk, D.J., D.S. Soane and R.T. Howe, A Review of the Chemical Reaction
Mechanism and Kinetics for Hydrofluoric Acid Etching of Silicon Dioxide for
Surface Micromachining Applications, Thin Solid Films, 231,1 (1993).
Monk, D.J. Soane and R.T. Howe, LPCVD Silicon Dioxide Sacrificial Layer Etching
for Surface Micromachining, Proc. Mac. Res. Soc. 264,303 (1992).
Hino, T., P.D. Grossman and D.S. Soane, Dynamic Light Scattering Studies of HEC
Solutions used as Sieving Media for Electrophoretic Separations, J. Chrom.,
608,79 (1992).
Grossman, P.D., and D.S. Soane, Capillary Electrophoresis of DNA in Entangled
Polymer Solutions, J. Chrom., 559,257 (1991).
Grossman, P.D., and D.S. Soane, Experimental and Theoretical Studies of DNA
Separations by Capillary Electrophoresis in Entangled Polymer Solutions,
Biopolymers, 31,1221 (1991).

Selected Presentations:
- -----------------------
Soane, D.S., Advances in Gel Matrices for DNA Electrophoresis, presented at The
Human Genome Project: Commercial Implications, San Francisco, CA. March,
1995.
Soane, D.S., Replaceable Crosslinked Gels for DNA Analysis by Capillary
Electrophoresis, presented at Third International Symposium on Capillary
Electrophoresis, York, UK, August, 1994.

Books:
- ------
Soane, D.S. ed. Polymers for Biotechnology; Macromolecular Separation and
Identification. Prentice Hall, New York, 1992.
Soane, D.S. and Z. Martynenko, Polymers in Microelectronics; Fundamentals and
Applications, Elsevier, New York and Amsterdam, 1989.

Selected Patents (total greater than 15);
- -----------------------------------------
Soane, D.S. and Y.C. Bae, Separation Media for Electrophoresis, WO 94/10561.
Soane, D.S., Mosaic Microcolumns, Slabs and Separation Media for Electrophoresis
and Chromatography, US Patent 5,135,627 (1992).
Soane, D.S. and Z.M. Soane, Method and Device for Moving Molecules by the
Applications of a Plurality of Electrical Fields, US Patent 5.126.022
(1992).
Soane, D.S. Controlled Casting of a Shrinkable Material, US Patent 5.110.514
(1992).
Soane, D.S., Gel Casting Method and Apparatus, US Patent 5.061.336 (1991).
Soane, D.S., Casting of Gradient Geis, US Patent 5.135.627 (1991).

<PAGE>

Goretty Alonso Amigo Senior Scientist

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.
- --------------------------------------------------------------------------------
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- --------------------------------------------------------------------------------
University of Valladolid, Spain BS 1978 Chemistry
University of Detroit, Michigan MSEC 1983 Science & Chem.
University of Detroit, Michigan Ph.D. 1988 Macromolecular
Ch.
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE. Concluding with present position, list, in
chronological order, previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the project Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership on any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. If
the list of publications in the last three years exceeds two pages, select the
most pertinent publications. DO NOT EXCEED TWO PAGES.

Experience:
- -----------
1979-1981 Science Teacher, ICEDE Professional School, Burgos, Spain
1981-1984 Research Assistant, Polymer Technologies Inc., University of
Detroit, Detroit, MI
1984-1988 Graduate Research Assistant, University of Detroit, Detroit, MI
1989-1991 Materials Scientist, Polymer R&D, Pilkington Barnes Hind,
Sunnyvale, CA
1991-1993 Manager, Analytical Chemistry R&D, Pilkington Barnes Hind,
Sunnyvale, CA
1994 Adjunct Professor, San Jose State University, San Jose, CA
1993-1995 Manager, Polymer R&D, Pilkington Barnes Hind, Sunnyvale, CA
1995-present Senior Scientist, Soane BioSciences, Inc.

Publications:
- -------------

M.G. Alonso-Amigo and S. Schlick, ESR of Cu/2+/ in Nafion Ionomers,
Polymer Preprints (American Chemical Society, Polymer Division
Preprints, 27,337(1986).

M.G. Alonso-Amigo and S. Schlick, Detection of Isolated and Paired
Cu/2+/ Ions in Nafion Membranes by ESR Spectroscopy, Journal of Physical
Chemistry, 90, 6353 (1986).

D. Becker, J. Yanez, M.D. Sevilla, M.G. Alonso-Amigo and S. Schlick, An
Electron Spin Resonance Investigation of the Motion of Lipid Peroxyl
Radicals, Journal of Physical Chemistry. 91, 492, (1987).

M.G. Alonso-Amigo and S. Schlick, Study of Mobile and Rgid Peroxy
Radicals in Polypropylene, Macromolecules, 20, 795, (1987).

M.G. Alonso-Amigo and S. Schlick, Binding of Paramagnetic Ions in
Ionomers, Cu/2+/ and Ti/3/- in Nafion Membranes, Journal of Chemical
Society, Faraday Transactions I. 83, 3575 (1987).

M.G. Alonso-Amigo and S. Schlick, Detection of Isolated, Paired and
Clustered Ti/3+/ in Nafion by ESR Spectroscopy, Polymer Preprints
(American Chemical Society, Polymer Division Preprints), 28(2), 363,
(1987).

S. Schlick, R.D. Harvey, M.G. Alonso-Amigo and D. Klempner, Study of
Phase Separation in LPNs Using Nitroxide Spin Labels, Macromolecules,
22, 822 (1989).

M.G. Alonso-Amigo and S. Schlick, Determination of the Distance Between
Paramagnetic Centers from ESR Spectra at L. S and X Bands, Cu/2+/ in
Nafion Ionomers. Macromolecules, 22 2638 (1989).

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

<PAGE>

FF Principal Investigator Program Director (Last, first, middle):
Went Gregory T.
---------------
- --------------------------------------------------------------------------------
Biographical Sketch
Goretty A. Amigo
Page 2

M.G. Alonso-Amigo and S. Schlick, Local Environment and Clustering of
Cations in Ionomers. ESR of Cu/2/+ in Nafion Swollen by Water,
Methanol,Dimethylformamide and Tetrahydrofuran. Macromolecules, 22, 2634
(1989).

S. Schlick, M.G. Alonso-Amigo and S.S. Eaton, Structure of Cu/2/+_Cu/2/
Dimers in Nafion Swollen by Water, Methanol, DMF and THF. ESR Results and
Theoretical Simulations. Journel of Physical Chemistry, 93, 7906 (1989)

S. Schlick and M.G. Alonso-Amigo, Co-Cation Enhanced Electron Transfer in
Nafion Neutralized by Ti/3/+. Study of O\\2\\ Formation by ESR. Polymer
Preprints (American Chemical Society), 30 (1), 440 (1989).

M.G. Alonso-Amigo and S. Schlick, O\\2\\ Formation in Nafion by Electron
Transfer from Ti/3/+. The Effect of Al/3/+ as Cocation, Journal of Physical
Chemistry, 93, 7526 (1989).

Shulamith Schlick, M.G. Alonso-Amigo and Janusz Bednareck, Multifrequency
Electron Spin Resonance and Electron Nuclear Double Resonance Studies of
Metal Carions in Perfluorinated Ionomers, Colloids and Surfaces A:
Physicochemical and Engineering Aspects. 72, 1 (1993).

<PAGE>

Alexander P. Sassi Senior Research Engineer

University of Washington, Seattle BSChE 1988 Chemical Eng.

University of California, Berkeley Ph.D. 1994 Chemical Eng.

- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE. Concluding with present position, list, in
chronological order, previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the project Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership on any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. If the
list of publications in the last three years exceeds two pages, select the most
pertinent publications. DO NOT EXCEED TWO PAGES.

Experience:
- -----------
1988 Engineer Intern, Exxon Production Research, Houston, TX
1988-1995 Graduate Research Assistant, University of California, Berkeley
1994 Visiting Researcher, Eisai Co., Ltd., Tsukuba, Japan
1995-present Senior Research Engineer, Soane BioSciences, Inc.

Awards:
- -------
Principal Investigator on NIH SBIR Phase I grant, Constant-Field Electrophoresis
of Large DNA.

Publications:
- -------------

Sassi, A.P., H.W. Blanch, and J.M. Prausnitz, Phase Equilibria for Aqueous
Protein/Polyelectrolyte Gel Systems, submitted to AIChE Journal.
Sassi, A.P., D. Freed, H.W. Blanch, and J.M. Prausnitz, Partitioning of
Hexavalent Chromium in Temperature-Sensitive, Polyelectrolyte Hydrogels,
submitted to Polymer Gels and Networks.
Sassi, A.P., A. Shaw, S. Han, H.W. Blanch, and J.M. Prausnitz, Partitioning of
Proteins and Small Biomolecules in Temperature-and pH-Sensitive Hydrogels,
accepted by Polymer (1995).
Sassi, A.P. S.H. Lee, Y. Park, H.W. Blanch, and J.M. Prausnitz, Sorption of
Lysozyme by HEMA Copolymer Hydrogels, accepted by Journal of Applied Polymer
Science (1995).
Sassi, A.P., H.W. Blanch, and J.M. Prausnitz, Characterization of Size-Exclusion
Effects in Highly Swollen Hydrogels: Correlation and Prediction, accepted by
Journal of Applied Polymer Science (1995).
Sassi, A.P., H.W. Blanch, and J.M. Prausnitz, Feasibility Studies for
Separations Processes Using Environmentally Sensitive Hydrogels, Lawrence
Berkeley Laboratory, LBL Report #36405 (1994).
Sassi, A.P., J.L.F. Abascal, H.W. Blanch, and J.M. Prausnitz, Monte Carlo
Simulations of a Hydrophobic Weak Polyelectrolyte. Charge Distribution as a
Function of Conformation. J. Chem. Phys. 99(5), 4231 (1993).

<PAGE>

Sassi, A.P., S. Beltran, H.H. Hooper, H.W. Blanch, J.M. Prausnitz and R.A.
Siegel Monte Carlo Simulations of Hydrophobic Weak Polyelectrolytes:
Titration Properties and pH-Induced Structural Transitions for Polymers
Containing Weak Electrolytes, J. Chem. Pys., 97 (11), 8767 (1992).

Sassi, A.P., H.W. Blanch, and J.M. Prausnitz, Crosslinked Gels as Water
Absorbents in Separations, chapter 8 in Polymer Applications for
------------------------
Biotechnology, D.S. Soane, ed. Englewood Cliffs: Prentice Hall (1992)
-------------

Hooper, H.H. S. Beltran. A.P. Sassi, H.W. Blanch and J.M. Prausnitz, Monte Carlo
Simulations of Hydrophobic Polyelectrolytes: Evidence for a Structural
Transition In Response to Increasing Chain Ionization, J. Chem. Phys.,
93 (4), 2715 (1990).

<PAGE>

Danny Hion Research Biochemist

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training.
- --------------------------------------------------------------------------------
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- --------------------------------------------------------------------------------
University of California, Berkeley BA 1992 Molecular
Biology
Genetics
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE. Concluding with present position, list, in
chronological order, previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the project Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership on any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. If the
list of publications in the last three years exceeds two pages, select the most
pertinent publications. DO NOT EXCEED TWO PAGES.

Experience:
- -----------
1993-present Research Biochemist, Soane BioSciences, Inc.
Experienced in DNA sequencing sample prep and electrophoresis
(Slab and Capillary).

<PAGE>

Give the following information for the key personnel and consultants and
collaborators. Begin with the principal investigator/program director.
Photocopy this page for each person
- --------------------------------------------------------------------------------
NAME POSITION TITLE

Shi Lin Postdoctoral Scientist

- --------------------------------------------------------------------------------
EDUCATION (Begin with baccalaureate or other initial professional education,
such as nursing, and include postdoctoral training
- --------------------------------------------------------------------------------
YEAR
INSTITUTION AND LOCATION DEGREE CONFERRED FIELD OF STUDY
- --------------------------------------------------------------------------------
South China University of Technology BS 1982 Chem. Eng.
South China University of Technology MS 1985 Chem. Eng.
SUNY College of Env. Sci. & Forestry Ph.D. 1994 Polym. Chem
Syracuse
- --------------------------------------------------------------------------------
RESEARCH AND PROFESSIONAL EXPERIENCE. Concluding with present position, list, in
chronological order, previous employment, experience and honors. Key personnel
include the principal investigator and any other individuals who participate in
the scientific development or execution of the project. Key personnel typically
will include all individuals with doctoral or other professional degrees, but in
some projects will include individuals at the masters or baccalaureate level
provided they contribute in a substantive way to the scientific development or
execution of the project. Include present membership on any Federal Government
public advisory committee. List, in chronological order, the titles, all
authors, and complete references to all publications during the past three years
and to representative earlier publications pertinent to this application. If the
list of publications in the last three years exceeds two pages, select the most
pertinent publications. DO NOT EXCEED TWO PAGES.

Experience:
- -----------
1982 Research Associate, Guangdong Provincial Research Institute of
Man-Made Fiber, China
1982-1985 Graduate Assistant, South China University of Technology
1985-1986 Faculty of Chemical Engineering, South China University of
Technology
1987-1994 Research Project Assistant, SUNY College of Environmental Science
and Forestry, Syracuse
1995-present Postdoctoral Scientist, Soane BioSciences, Inc.

Publications:
- -------------
Shi Lin and Israel Cabasso, Synthesis and Characterization of
Carbamoylphosphonate Monomer and It's Copolymer with Styrene, II, submitted
to J. Polym. Sci. Polym. Chem. Ed.
Shi Lin and Israel Cabasso, Synthesis and Properties of
Poly{5-oxy[2-(2',2'-diethoxyphosphonoethyl)-1.3-dioxane]methyl siloxane}, to
be published
Shi Lin and Israel Cabasso, Synthesis and Characterization of
Poly{[(diethylphosphonobenzyl) a. b-ethyl] methyl siloxane} and Its Salt
Complexes, to be published
Su Maoyao, Gao Guang and Lin Shi, A Study on the Effects of Pretreatment by
Chemical Activation on the Fine Structure and Reactivity of Cellulose Fiber,
J. South China University of Technology, 17(1), 94, (1984)
Yang ZhiLi, Wu GuoMin, Mei ChienFong, Gao Guang, Lin Shi, Liu HaiMin and Zou
JingHong, Study on the Manufacture of Rayon Fiber from a PF/DMSO Solvent
System, Cellulose Chem. Technol., 21.493 (1987)

Patents:
- --------
I. Cabasso and S. Lin, Water Soluble Phosphorylated Polysiloxanes. US patent
pending.
I. Cabasso and S. Lin, Hydrogels and Salt Complexes form Novel Phosphorylated
Siloxane. US patent pending.

- --------------------------------------------------------------------------------
<PAGE>

William Lee Research Specialist

Massachusetts Institute of Technology B.S. 1995 Mechanical Eng.

- --------------------------------------------------------------------------------
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list
in chronological order previous employment, experience, and honors. Key
personnel include the principal investigator and any other individuals who
participate in the scientific development or execution of the project. Key
personnel typically will include all individuals with doctoral or other
professional degrees, but in some projects will include individuals at the
masters or baccalaureate level provided they contribute in a substantive way to
the scientific development or execution of the project. Include present
membership on any Federal Government public advisory committee. List, in
chronological order, the titles, all authors, and complete references to all
publications during the past three years and to representative earlier
publications pertinent to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- ------------------------

1992-1995 Artificial Muscle Group. Artificial Intelligence Laboratory,
MIT
(1995) Second Phase Gel Model
(1994) pH Imaging System
(1994) Linear Gel Based Actuaor Test Bed
(1994) Small Scale Test Bed and Gel Fluid Model
(1993) Tabletop Cylindrical Gel Based Actuator Test Bed
(1992) Investigation of Mechanical Properties of PAN Fiber Gels
1995-present Research Specialist. Whitehead Institute for Biomedical
Research/MIT Center for Genome Research

Publications:
- -------------
None.

<PAGE>

Lincoln Stein Research Scientist

- --------------------------------------------------------------------------------
RESEARCH AND/OR PROFESSIONAL EXPERIENCE: Concluding with present position, list,
in chronological order, previous employment, experience and honors, the
principal investigator and any other individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project. Include present membership on any Federal Government public
advisory committee. List, in chronological order, the titles, all authors,
during the past three years and to representative earlier publications pertinent
to this application. DO NOT EXCEED TWO PAGES.

Professional Experience:
- ------------------------
1980-1982 Graduate Student Laboratory of George Scangos, John Hopkins
University Dept. of Biology; eukaryotic transcription promoters
using DNA-mediated gene transfer
1983 Graduate Student Laboratory of Richard Mulligan, M.I.T. Center
for Cancer Research; extendin of retrovirus vectors
1986 Microbiology laboratory instructor, New England Baptist Hospital
School of Nursing
1986-1988 Lecturer for veterinary parasitology and infectious disease
courses at Tufts University Veterinary
1984-1989 Graduate Student Laboratory of John David Harvard School of
Public Health; cloning of deve?? regulated genes from
Schistosoma mansoni
1990 Instructor for Harvard Medical School courses in infectious
diseases and gastrointestinal pathop???
1992-1994 Assistant Director, Informatics Core, Whitehead Institute/MIT
Center for Genome Research.
1990-present Instructor, Harvard Medical School, Department of Pathology.
Brigham and Women's Hospital
1994-present Director, Informatics Core, Whitehead Institute/MIT Center for
Genome Research.

Honors and Awards:
- ------------------

1978 National Merit Scholarship, Johns Hopkins University
1979 Phi Beta Kappa, Johns Hopkins University
1984 Medical Scientist Training Program Scholarship, Harvard Medical
School
Publications:
- -------------

Copeland, N.G., D.J. Gilbert, N.A. Jenkins, J.H. Nadeau, J.T. Eppig, L.J.
Maltais, J.C. Miller, W.F. Dietrich, S.E. Lincoln, A. Weaver, D.C. Joyce, M.
Merchant, M. Wessel, H. Katz, L.D. Stein, M.P. Reeve, R.D. Dredge, A. Marquis,
N. Goodman, and E.S. Lander(1993) Genome Maps IV Science 262:67-82
--------------
Copeland, N.G., N.A. Jenkins, D.J. Gilbert, J.T. Eppig, L.J. Maltais, J.C.
Miller, W.F. Dietrich, A. Weaver, R.G. Steen, L.D. Stein, J.H. Nadeau, and
E.S. Lander(1993) A genetic linkage map of the mouse: C applications and
future prospects. Science 262:57-66.
-------
Dietrich, W.F., J.C. Miller, R.G. Steen, M. Merchant, D. Damron, R. Nahf, D.C.
Joyce, R.D. Dredge, A. Weaver, L.D. Stein, N. Goodman, D.C. Page, and E.S.
Lander(1994). A genetic map of the mouse with 4,006 simple length
polymorphisms. Nature Genetics, 7:220-245.
------ --------
Genest, D., Stein, L., Cibas, E., Sheets, E., Zitz. J., Crum, C.(1993) A Binary
(Bethesday) System for Class Cancer Precursors: Criteria, Reproducibility and
Viral Correlates. Human Path, 24:730-736.
----------
Goodman, N., Rozen S., Stein, L.(1993). Requirements for a Deductive Query
Language in the MapBase Ge???? Database. Workshop on Programming with Logic
----------------------------------
Databases, Vancouver, BC. Oct. 30, 1993.
---------
Goodman, N., Rozen S., Stein, L.(1994). Constructing a domain-specific DBMS
using a persistent object systems International Workshop on Persistent Object
-------------------------------------------
Systems, In press.
-------

<PAGE>

FF Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
Page 2
Miller, J., W. Dietrich, R. Steen, D. Joyce, M. Merchant, M. Wessel, D. Damron,
R. Nahi, L. Stein, R. Dredg M. Daly, M.P. Reeve, N. Goodman, C.J. Lord,
C.T. Montague, J.B. Prins. J. Todd, and E.s. Lande SSLP/Microsatellite
genetic linkage map of the mouse. In: Genetic Variants and Strains of the
------- -------- --- ------- -- ---
Laboratory Edition. M.F. Lyon, and A.G. searle, eds., Oxford University
---------- -------
Press.
Shoemaker, C. Ramachandran, H. Landa, H. dos Reis, M. Stin, L. (1992),
Alternative splicing of the Six gene encoding a homologue of epidermal
growth factor receptor. Mol Biochem Parasitol 53:17-32.
---------------------
Skelly, P.J., Stein, L.D. Shoemaker, C. (1993). Expression of Schistosoma
mansoni genes involved in ____ oxidative glucose metabolism during the
cercaria to adult transformation. Mol Biochem Parasitol. 60:93
STEIN, L. SNYDR-MICHAL, J., AND GREENES, R. (1991) Realistic Viewing and
Manipulation of Radiographic ____ Computer--a User Interface for
Educational Applications. Journal of Digital Imaging 4:3 169-176.
Stein, L., Ham. D., and David J. (1990), A cloned ATP:Guanidino Kinase in the
Trematode Schistosoma ___ Duplicated Structure, J. Biol. Chem. 265:6582-
--------------
6588.
Stein, L., David, J. (1987), Isolation of a tandemly repeated cDNA from S.
mansoni which contains four long reading frames. Federation Proc., April
----------------
1987.
Stein L., David, J. (1986). Cloning of a developmentally regulated tegument
antigen of Schistosoma mansoni: 20:253-264
Stein, L., Dessein. A., David. J. (1985). Cloning of two Schistosome Antigens
Recognized by Human _______. Proc. April. 1985.
----
Stein. L., Dessein. A., Harn. D., Miller. J., Bina. J., David. J. (1984).
Immunoprecipitation of Schistosome _____ Translation Products using Human
Antisera. Federation Proc., April. 1984.
---------------
Stein. L., Marquis> A., Dredge. E., Reeve. M.P., Daly. M., Rozen. S., Goodman.
N. (1994). Splicing UNIX Mapping Laboratory. USENIX Summer Technical
Conference. pp. 221-229. 1994.
Samuelson. J., and Stein. L. (1989). Schistosoma mansoni: increasing saline
concentration signals cercariae to schistosomula. Exp. Parasitol. 69:23-29.
--------------
Stein. L., Rozen. S., and Goodman. N. (1995). Managing laboratory Workflow With
LabBase. In Proceedings of the 1994 Conference on Computers in Medicine
(CompMed94). World Scientific Publishing Company.
Stein. L. (1995). How to Set Up and Maintain a World Wide Web Site: the Guide
for Information Providers. Addison-Wesley Publishing. Reading. MA.

Software Development

Explorer (1987) a medical hypertext teaching system developed in the laboratory
of Robert Greenes at Harvard ______
RWS (1987) an ultrasound image analysis package used by the Framingham Heart
Study to asses carotid _______ disease.
CWS (1990) an ultrasound image acquisition and analysis package based loosely on
RWS and used by the ______ Cardiovascular Health and the IRAS studies.
Quote Init (1988) a desktop publishing utility for producing typographically
correct quotes.
QT Batch Compressor (1991) an image compression utility for the Macintosh.
MapBase. and LabBase (1992.1994) two object-oriented genome databases for UNIX
platforms.
RHMAPPER (1994) a package for creating radiation hybrid maps for genome mapping.
CGI.pm (1995) An interface between the World Wide Web and the Perl programming
language.

- --------------------------------------------------------------------------------
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

FOLLOW INSTRUCTIONS CAREFULLY. Incomplete, inaccurate, or ambiguous information
about OTHER SUPPORT could lead to significant delays in the review and/or
possible funding of the application. If there are changes in the information
after submission, notify the scientific review administrator or the initial
review group before the review; if changes occur after the review, notify the
appropriate institute.

Other support is defined as all funds or resources, whenever Federal,
non-Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. Key personnel
are defined as all individuals who participate in the scientific development or
execution of the project. Key personnel typically will include all individuals
with doctoral or other professional degrees, but in some projects will include
individuals at the masters or baccalaureate level provided they contribute in a
substantive way to the scientific development or execution of the project.

Name Gregory T. Went. Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST 70NANB5H1036 P.I. Gregory T. Went
---------------------- -----------------------

Title Integrated Microfabricated DNA Analysis Device for Diagnosis of Complex
-------------------------------------------------------------------------
Genetic Disorder
----------------

b. Your role on project Principal Investigator [XXXXXXXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project This project proposes to develop a device to
----------------------------------------------------
extend the use of DNA analysis from the characterization of simple inborn
- --------------------------------------------------------------------------------
genetic disorders to the efficient diagnosis and treatment of complex illnesses
- --------------------------------------------------------------------------------
like cardiovascular disease and cancer.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap This present application contains
-----------------------------------
optical components similar to those described herein.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

Adjustments will be made to the aims of the NIST project during 1997 if an award
- --------------------------------------------------------------------------------
is received.
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. Key
personnel are defined as all individuals who participate in the scientific
development or execution of the project. Key personnel typically will include
all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Gregory T. Went, Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST 70NANB5H1066 P.I. Jonathon M. Rothberg
---------------------- -----------------------

Title Molecular Recognition Technology for Precise Design of Protein-Specific
-------------------------------------------------------------------------
Drugs
-----

b. Your role on project Business Administrator [XXXXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project This project, through state-of-the-art molecular
----------------------------------------------------
biology, structural physics, and computation methods, proposes to understand how
- --------------------------------------------------------------------------------
small highly constrained mimics of protein modules bind to a target protein.
- --------------------------------------------------------------------------------
This technological discovery uncovers rules governing protein recognition which
- --------------------------------------------------------------------------------
can be applied to guide the development of drugs to combat major uncured
- --------------------------------------------------------------------------------
diseases.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap No Scientific or budgetary
-----------------------------------
overlap
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

Dr. Went's effort will be reduced to [XXX] if the current project is funded.
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. Key personnel
are defined as all individuals who participate in the scientific development or
execution of the project. Key personnel typically will include all individuals
with doctoral or other professional degrees, but in some projects will include
individuals at the masters or baccalaureate level provided they contribute in a
substantive way to the scientific development or execution of the project.

Name Gregory T. Went, Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH SBIR 2 R44 HGOO960-02 P.I. Gregory T. Went
---------------------------- -----------------

Title Modular UltraHigh ThroughPut DNA Sequencing
-------------------------------------------------------------------------

b. Your role on project Principal Investigator [XXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project This project proposes to develop a working
----------------------------------------------------
prototype incorporating a microfabricated separation module and loading
- --------------------------------------------------------------------------------
interface.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap This project serves as the basis
-----------------------------------
to the microchannel structures needed for the current proposal.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

No Adjustments will be necessary
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Jonathon M. Rothberg, Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST 70NANB5H1036 P.I. Gregory T. Went
---------------------- -----------------------

Title Integrated Microfabricated DNA Analysis Device for Diagnosis of Complex
-------------------------------------------------------------------------
Genetic Disorder
----------------

b. Your role on project Business Administrator [XXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Jonathon M. Rothberg, Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST 70NANB5H1066 P.I. Jonathon M. Rothberg
---------------------- -----------------------

Title Molecular Recognition Technology for Precise Design of Protein-Specific
-------------------------------------------------------------------------
Drugs
-------------------------------------------------------------------------

b. Your role on project Principal Investigator [XXXXXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

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

f. Describe scientific and budgetary overlap No Scientific or budgetary
-----------------------------------
overlap
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

Dr. Rothberg's effort will be reduced to [XXX] if the current project is funded.
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal,
non-Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. Key personnel
are defined as all individuals who participate in the scientific development or
execution of the project. Key personnel typically will include all individuals
with doctoral or other professional degrees, but in some projects will include
individuals at the masters or baccalaureate level provided they contribute in a
substantive way to the scientific development or execution of the project.

Name Jonathon M. Rothberg, Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH SBIR 2 R44 HG00960-02 P.I. Gregory T. Went
---------------------------- -----------------

Title Modular UltraHigh Throughput DNA Sequencing
-------------------------------------------------------------------------

b. Your role on project Investigator [XXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

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

f. Describe scientific and budgetary overlap This project serves as the basis
-----------------------------------
to the michrochannel structures needed for the current proposal.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

No Adjustments will be necessary
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
55

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal,
non-Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. Key personnel
are defined as all individuals who participate in the scientific development or
execution of the project. Key personnel typically will include all individuals
with doctoral or other professional degrees, but in some projects will include
individuals at the masters or baccalaureate level provided they contribute in a
substantive way to the scientific development or execution of the project.

Name Michael P. McKenna, Ph.D Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST 70NANB5H1036 P.I. Gregory T. Went
---------------------- -----------------------

Title Integrated Microfabricated DNA Analysis Device for Diagnosis of Complex
-------------------------------------------------------------------------
Genetic Disorder
-------------------------------------------------------------------------

b. Your role on project Senior Research Scientist [XXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

Adjustments will be made to the aims of the NIST during 1997 if an award is
- --------------------------------------------------------------------------------
received.
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
56

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name John W. Simpson Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST 70NANB5H1036 P.I. Gregory T. Went
---------------------- -----------------------

b. Your role on project Senior Research Engineer [XXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name John W. Simpson Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIST SBIR 2 R44 HG00960-02 P.I. Gregory T. Went
---------------------------- -----------------

Title Modular UltraHigh Throughput DNA Sequencing
-------------------------------------------------------------------------

b. Your role on project Senior Engineer [XXXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

No Adjustments will be necessary
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
58

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Harold G. Craighead Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. ARPA/AF - F49620-93-C-0061 P.I. Craighead
---------------------------- ----------------

Title Micro-Column Arrays for Nanolithography
-------------------------------------------------------------------------

b. Your role on project % Effort
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project Develop a miniaturized electron beam source and
----------------------------------------------------
optical column
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

- --------------------------------------------------------------------------------
59

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
================================================================================
OTHER SUPPORT
(Use continuation pages if necessary)

FOLLOW INSTRUCTIONS CAREFULLY. Incomplete, inaccurate, or ambiguous information
about OTHER SUPPORT could lead to significant delays in the review and/or
possible funding of the application. If there are changes in the information
after submission, notify the scientific review administrator of the initial
review group before the review; if changes occur after the review, notify the
appropriate insurance.

Other support is defined as all funds or resources, whether Federal,
non-Federal, or institutional, available to the principal investigator/program
(director and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. Key
personnel are defined as all individuals who participate in the scientific
development or execution of the project. Key personnel typically will include
all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Reporting requirements are: for each of the key personnel, describe (1) all
currently active support and (2) all applications and proposals pending review
or award, whether related to the application or not. If the support is part of
a larger project, identify the principal investigator/program director and
provide the data for the relevant subproject(s). If an individual has no active
or pending support, check "None." Use continuation pages as needed to provide
the required information in the format as shown below.

Name Harold G. Craighead Active X Pending None
-------------------------------- ------ ------ ------

a. Source and identifying no. ARPA/ONR - NOOO14-93-1-1080 P.I. Craighead
-------------------------------- -------------

Title Molecular Approaches to Device Nanofabrication
---------------------------------------------------------------------------

b. Your role on project PI % Effort
---------- -------------------- ---------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project Investigate the properties and use of
----------------------------------------------------
self-assembled organic monolayers as resists for nanofabrication
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

================================================================================

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Harold G. Craighead Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. DoD/Rome Labs - F30602-93-C-0061
--------------------------------------------------

P.I. Craighead
----------------------------------------------------------------------------

Title Advancement of Free-Space Optical Interconnects
-------------------------------------------------------------------------

b. Your role on project PI [XXXXXXXXXXXXXXXXX] Summer
-------- -------- --------- ---------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project Fabricate and test an optical interconnect for
----------------------------------------------------
electronic circuits based on microfabricated diffractive optics.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap Uses advanced microfabrication
-----------------------------------
technologies
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Harold G. Craighead Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. MSC/NSF - DMR-9121654 P.I. Craighead
--------------------------- -------------------

Title Electron Scattering in Mesoscopic Systems
-------------------------------------------------------------------------

b. Your role on project PI % Effort
---------- -------------- -------------------

c. Dates and costs of entire project
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project Explore electron scattering in small electronic
----------------------------------------------------
devices
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Harold G. Craighead Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. Cornell Center for Advanced Tech
--------------------------------------------------

P.I. Craighead
----------------------------------------------------------------------------

Title Nanofabrication of Artificial Insect Eggs for use in Biological Control
-------------------------------------------------------------------------
of Parasites
-------------------------------------------------------------------------

b. Your role on project PI % Effort
----------- ------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year
---------------------------------------------

e. Specific aims of project This study involves creating micro-structures
----------------------------------------------------
on the surface of artificial insect eggs to encourage egg laying by beneficial
- --------------------------------------------------------------------------------
insect parasites. The goal is to mass rear beneficial parasites in artificial
- --------------------------------------------------------------------------------
eggs.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
-----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Reporting requirements are: for each of the key personnel, describe (1) all
currently active support and (2) all applications and proposals pending review
or award whether related to this application or not. If the support is part of a
larger project, identify the principal investigator/program director and provide
the data for the relevant subproject(s). If an individual has no active or
pending support, check "None." Use continuation pages as needed to provide the
required information in the format as shown below. Information may be combined
as long as the format remains the same. For example, all key personnel who have
no other support may be listed on a single page. DO NOT SEND in a separate page
for each person listed for whom "None" is checked.

Name Harold G. Craighead Active Pending X None
----------------------------------- ------ ------- --------

a. Source and identifying no. NY State Health Dept/NIH P.I. William Shain
---- --- ----------------

Title Brain Prostheses: Tissue Compatibility and Integration
------ ---------------

b. Your role on project PI of Subcontract from Cornell % Effort
--- ------ --------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year
---------------------------------------------

e. Specific aims of project Develop surface coatings and treatments for the
----------------------------------------------------
selective attachment of neurons to electrodes
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Harold G. Craighead Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. CuraGen Corp. P.I. Craighead
---------------------- -----------------------

Title Nanofabrication of Devices for Genetic Analysis
-------------------------------------------------------------------------

b. Your role on project PI % Effort
---------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year
---------------------------------------------

e. Specific aims of project This project is to find efficient ways of
----------------------------------------------------
microfabricating multiple parallel lanes for conventional gel electrophoresis.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap Gel channels made under this
-----------------------------------
project can be used with the proposed optics.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- -------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported.Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Harold G. Craighead Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. DOD/MPO P.I. Craighead
---------------------- -----------------------

Title Electron Beam Programming
-------------------------------------------------------------------------

b. Your role on project PI % Effort
---------- ----------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year
---------------------------------------------

e. Specific aims of project Electron beam programming of MOS transistor
----------------------------------------------------
memories
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- -------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported.Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Herbert H. Hooper Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH HG01289-01 P.I. H. Hooper
---------------------- -----------------------

Title Replaceable Gels for Microchannel DNA Electrophoresis
-------------------------------------------------------------------------

b. Your role on project PI [XXXXXXXXXXX]
-------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year same
---------------------------------------------

e. Specific aims of project Develop replaceable matrices for DNA sequencing
----------------------------------------------------
and typing by capillary electrophoresis with low viscosity during loading and
- --------------------------------------------------------------------------------
unloading.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None. Related area but different
-----------------------------------
approach and technology.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Herbert H. Hooper Active X Pending None
----------------------------------- ------ ------- --------

H. Hooper (Soane)
a. Source and identifying no. NIST 70NANB5H1036 P.I. G. Went (CuraGen)
---------------------- -----------------------

Title Integrated Microfabricated DNA Analysis Device
-------------------------------------------------------------------------

b. Your role on project PI at Soane [XXXXXXXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
---------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

e. Specific aims of project Develop replaceable gels for microfabricated
----------------------------------------------------
device that flow at room temperature and gel upon heating.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whenever Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Herbert H. Hooper Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH HGO1338-01 P.I. A.P. Sassi
---------------------- -----------------------

Title Constant - Field Electrophoresis of Large DNA
-------------------------------------------------------------------------

b. Your role on project Scientist [XXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
---------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

e. Specific aims of project Develop gels for separates large (greater than
----------------------------------------------------
50kbp) DNA fragments without pulsed fields.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whether Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts, fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name David Soane Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH HGO1338-01 P.I. A.P. Sassi
---------------------- -----------------------

Title Constant - Field Electrophoresis of Large DNA
-------------------------------------------------------------------------

b. Your role on project Scientist [XXXXXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
---------------------------------------------
XXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

e. Specific aims of project Develop gels for separating large (greater than
----------------------------------------------------
50kbp) DNA fragments without pulsed fields
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None
-----------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None
- --------------------------------------------------------------------------------

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whenever Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name David Soane Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH HG01289-01 P.I. H. Hooper
---------------------- -----------------------

Title Replaceable Gels for Microchannel DNA Electrophoresis
-------------------------------------------------------------------------

b. Your role on project Scientist [XXXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

d. Dates and costs of current year [XXXX]
---------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None.
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Other support is defined as all funds or resources, whenever Federal, non-
Federal, or institutional, available to the principal investigator/program
director (and other key personnel named in the application) in direct support of
their research endeavors through research or training grants, cooperative
agreements, contracts fellowships, gifts, prizes, and other means. However, in
the case of prizes and gifts, only those that support the specific project must
be reported. Key personnel are defined as all individuals who participate in the
scientific development or execution of the project. Key personnel typically will
include all individuals with doctoral or other professional degrees, but in some
projects will include individuals at the masters or baccalaureate level provided
they contribute in a substantive way to the scientific development or execution
of the project.

Name Alexander P. Sassi Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. NIH HG01338-01 P.I. A.P. Sassi
---------------------- -----------------------

Title Constant - Field Electrophoresis of Large DNA
-------------------------------------------------------------------------

b. Your role on project Scientist [XXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project (For renewals, include only the most
recent competitive award. List direct and indirect costs separately.)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX] [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
---------------------------------------------
XXXXXXXXXXXXXXXXXXXXX]
- --------------------------------------------------------------------------------

e. Specific aims of project Develop gels for separating large (greater than
----------------------------------------------------
50kbp) DNA fragments without pulsed fields.
- --------------------------------------------------------------------------------

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

f. Describe scientific and budgetary overlap None. Project ends before subject
-----------------------------------
grant will begin.
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

None.
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

OTHER SUPPORT
(Use continuation pages if necessary)

Name Trevor Hawkins Active X Pending None
----------------------------------- ------ ------- --------

a. Source and identifying no. Department of Energy DE-FGO2-95ER62099
--------------------------------------------------

P.I. Trevor L. Hawkins
-----------------------

Title DNA Sample Munipulation and Automation
-------------------------------------------------------------------------

b. Your role on project Principal Investigator [XXXXXXXXX]
---------------------------- -------------------

c. Dates and costs of entire project [XXXXXXXXXXXXXXXXXXXXXXXXXXX]
-------------------------------------------

d. Dates and costs of current year [XXXXXXXXXXXXXXXXXXXXXXXXXXX]
---------------------------------------------

e. Specific aims of project The Aims of this Project are:
----------------------------------------------------
1) Produce sub-clone libraries from a variety of templates and automate
- --------------------------------------------------------------------------------
library construction process.
- --------------------------------------------------------------------------------
2) Sequence large numbers of DNA templates for analysis on sequencers and
- --------------------------------------------------------------------------------
capillary systems.
- --------------------------------------------------------------------------------
3) Evaluate capillary array for DNA sequence while integrating and automating
- --------------------------------------------------------------------------------
the procedures from MAP clone to get ready samples.
- --------------------------------------------------------------------------------

f. Describe scientific and budgetary overlap No Scientific or budgetary
-----------------------------------
overlap
- --------------------------------------------------------------------------------

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

g. Describe adjustments you will make if the present application is funded
(budget, % effort, aims, etc.)

No adjustment is necessary.
- --------------------------------------------------------------------------------

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

[Confidential Treatment Requested]
<PAGE>

GG Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

Name Trevor L. Hawkins Active Pending X None
--------------------------------- --------- ----- -------

a. Source and identifying no. NIH RFA HG95-001 with Intelligent Automation
---------------------------------------------------
P.I. Steve Gordon
---------------------------------

Title Improved Electrophoretic DNA Sequencing Technology
---------------------------------------------------------------------------

b. Your role on project: Co-Investigator [XXXXXXXXXXX]
--------------------------------- ---------------

c. Dates and costs of entire project: Dates and Costs Currently Under Review
-------------------------------------------

d. Date and costs of current year: Dates and Costs Currently Under Review
----------------------------------------------

e. Specific aims of project: The Aims of this Project are: Studies using gel
----------------------------------------------------
electrophoresis systems that could yield reductions in scale and increased
- --------------------------------------------------------------------------------
throughput of DNA sequencing.
- --------------------------------------------------------------------------------

f. Describe scientific and buggetary overlap: Effort will be reduced if there is
-----------------------------------
overlap.
- --------------------------------------------------------------------------------

f. Describe adjustments you will make if the present application is funded
(budget % effort, aims, etc.)

Effort will be reduced if RFA HG 95-004 is funded.
- --------------------------------------------------------------------------------

OTHER SUPPORT CONTINUED:

NAME ACTIVE PENDING
- -----------------------------------------------------
<S> <C> <C>
Lincoln Stein None None
William Lee None None

</TABLE>

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

[Confidential Treatment Requested]
<PAGE>

HH Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

RESOURCES AND ENVIRONMENT
(CuraGen Corporation)
- --------------------------------------------------------------------------------

FACILITIES. Mark the facilities to be used at each performance site listed in
item 9. Face Page, and briefly indicate their capabilities, relative
capabilities, relative proximity, and extent of availability to the project. Use
"Other" to describe the facilities at any other performance sites listed in item
9 on the Face Page and at sites for field studies. Use continuation pages if
necessary. Include an explanation of any consortium/contractual arrangements
with other organizations.

[X] Laboratory: CuraGen has 8000 sq. ft. of state-of-the-art molecular and
structural biology laboratory and office space at its research headquarters in
Branford. A recent buildout of 3000 square feet of space was completed for
structural biology and computation laboratories. This space also houses the
Company's 1000 sequence/day DNA analysis facility and 3500 square feet of
molecular biology facilities, which includes standard equipment. By 1996, the
Company plans to occupy over 15,000 sq. ft. of lab and office space.

[_] Clinical:

[_] Animal:

[X] Computer: Four workstation class SGI computers are available for CuraGen's
software development. Twenty Macintoshes and PowerPC's are also onsite. Large
scale sequence databases, such as GenBank, are available on-site, as are
literature search databases such as CAS on-line. Entrez and MedLine.

[X] Office: Ample (2500 sq. Ft.) office space (with a library in our new
expansion) is available for CuraGen's 25 employees.

[X] Other ( ): CuraGen collaborates closely with all three coinvestigators as a
part of ongoing projects. In addition, CuraGen has a visiting scientist position
at MIT/The Whitehead Institute with office and computer access.

- --------------------------------------------------------------------------------
MAJOR EQUIPMENT List the most important equipment items already available for
this project, noting the location and pertinent capabilities or each

CuraGen has developed under NIH and NIST funding a high throughput DNA analysis
instrument, placing in its core facility. These systems are driven by TECAN and
Beckman robot stations with integrated thermal cycling (384 well). Our molecular
biology facilities are modern and well equipped with freezers, incubators, PCR,
HPLC, electroporation, electrophoresis, centrifuges, plate readers, microscopes
and hoods.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION: Provide any other information describing the environment
for the project. Identify support services such as consultant, secretarial,
machine shop, and electronics shop, and the extent to which they will be
available to the project.

Secretarial, administrative support, and accounting are all provided onsite, as
are reporting and regulatory support.

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

<PAGE>

HH Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

RESOURCES AND ENVIRONMENT

(Cornell University)
- --------------------------------------------------------------------------------

FACILITIES Mark the facilities to be used at each performance site listed in
item 9. Face Page, and briefly indicate their capabilities, pertinent
capabilities, relative proximity, and extent of availability to the project. Use
"Other" to describe the facilities at any other performance sites listed in item
9 on the Face Page and at sites for field studies. Use continuation pages if
necessary. Include an explanation of any consortium/contractual arrangements
with other organizations.

[X] Laboratory: Harold Craighead's laboratory has the capabilities to evaluate
and test optical components and systems. Cornell University has extensive
facilities and equipment for optical device fabrication research, prototyping
and testing. The National Nanofabrication Facility (NNF) provides resources and
technical expertise to researchers in microstructure science. Extensive
experience also exists in fine feature patterning of semiconductors and optical
materials. Unique capabilities exist for integration of electron beam
lithography and ion etching for novel thin film fabrication. The NNF is located
in the Knight Laboratory, specifically designed and construed for nanostructures
research, on the Cornell University campus. The cleanroom facilities comprise
7,500 sq. ft. of approximately Class 500 area, including Class 10 local
processing benches within that area. Particular care was given during
construction to vibration and electromagnetic isolation of the advanced
lithography facilities. The Materials Science Center at Cornell provides
computational facilities and extensive electron microscopy and thin film
capabilities.

[_] Clinical:

[_] Animal:

[_] Computer:

[_] Office:

[_] Other( ):

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION Provide any other information describing the environment
for the project. Identify support services such as consultant, secretarial,
machine shop, and electronics shop, and the extent to when they will be
available to the project.

<PAGE>

HH Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

RESOURCES AND ENVIRONMENT

(Soane Biosciences Inc.)
- --------------------------------------------------------------------------------

FACILITIES. Mark the facilities to be used at each performance site listed in
Item 9, Face Page, and briefly indicate their capabilities, pertinent
capabilities relative proximity, and extent of availability to the project. Use
"Other" to describe the facilities at any other performance sites listed in Item
9 on the Face Page and at sites for field studies. Use continuation pages if
necessary. Include an explanation of any consortium/contractual arrangements
with other organizations.

[X] Laboratory: Soane BioSciences (SBio) was formed as a division of Soane
Technologies (STI) in 1993, and was spun-off as an independent, venture-capital
backed company in 1995 to develop and commercialize advanced electrophoresis
media and devices. SBio currently has 12 employees and is located in a 6,000 sq.
ft. facility in Hayward, California, about 70% of which is lab space. Adjoining
SBio is STI's 6,000 sq. ft. facility, providing additional equipment and
resources freely available to SBio.

SBio's labs are well-suited for organic and polymer synthesis, with a total of 6
chemical fume hoods and extensive synthesis equipment. SBio also has extensive
equipment for performing material characterization, electrophoresis and
molecular biology experiments. SBio's labs and offices are equipped with a
total of 12 PC's (pentium and 486 model), networked with Novell software.

[_] Clinical:

[_] Animal:

[_] Computer:

[_] Office:

[_] Other( ):

Bioanalytical and Molecular Biology Equipment
SBio has a Pharmacia A.L.F. DNA sequencer, a Beckman P/ACE 2100 capillary
electrophoresis system with UV detection (a laser-induced fluorescence detector
is on order); vertical and horizontal electrophoresis units, including a manual
DNA sequencer, with power supplies and visualization equipment; equipment for
preparation of DNA sequencing samples including thermocycler, microcentrifuge,
and centrifugal evaporator; along with other miscellaneous items including a
Millipore Milli-Q Plus ultra-pure water system, freezers, refrigerators,
glassware, etc.

Monomer and Polymer Synthesis and Characterization Equipment
SBio has extensive polymer and organic synthesis equipment including reaction
kettles, homogenizer, temperature controllers, rotary evaporators, vacuum ovens,
centrifuge, filtration equipment, freeze dryer, UV curing lamps and other
miscellaneous items (balances, pH/conductivity meter, etc.) For analysis and
characterization, SBio has a Hewlett-Packard 1090 HPLC with both diode array and
refractive index detection. Brookfield viscometer with temperature control,
Nikon visible microscope with CCD camera, differential scanning calorimeter, and
a refractometer.

Machine Shop
SBio has access to STI's machine shop with state-of-the-art equipment including
CNC mill, which will be used for this project.

<PAGE>

HH Principal Investment/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
RESOURCES AND ENVIRONMENT
(The Whitehead Institute)
- --------------------------------------------------------------------------------

FACILITIES: Mark the facilities to be used at each performance site listed in
Item 9. Face Page, and briefly indicate their capacities, pertinent
capabilities, relative proximity, and extent of availability to the project. Use
"Other" to describe the facilities at any other performance site listed in Item
9 on the Face Page and a: sites for field studies. Use continuation pages if
necessary. Include an explpanation of any consortium/contractual arrangements
with other organizations.

[X] Laboratory: There is 16,500 square feet of laboratory space divided between
the 4th and 5th floors of The Whitehead Institute/MIT Genome Center. These
include bench space, shared rooms for radioisotope handling, consistent
temperature (4 degrees C and 37 degrees C), darkrooms, and heavy equipmemt
rooms.

[_] Clinical:

[_] Animal:

[X] Computer: The Center currently has a network of UNIX workstations (7 DEC
workstations, 7 SUN workstations, and 4 new DEC Alphas) and Macintosh personal
computers connected through Ethernet. Outside connections provide full access to
computer services at The Whitehead Institute (e.g. MedLine) as well as to other
sources of information available at MIT and over the world-wide Internet. Also
available is a PC set-up for automatic visual entry of dot blot data with CCD
Camera and a Montage film recorder.

[X] Office: There is approximately 5500 square feet of office space on the 5th
floor of the Genone Center. Available to me are Ricoh photocopy machines, Cannon
FAX machines, IBM typewriters, secretarial support, file cabinets and storage
space.

[_] Other ():

- --------------------------------------------------------------------------------
MAJOR EQUIPMENT. List the most important equipment items already available for
this project, noting the location and pertinent capabilities of each.

There are low and medium speed centrifuges, preparative ultracentrifuges,
scintillation counters, incubators for bacteria, liquid nitrogen freezers,
laminar flow hoods, microscopes, electrophoresis and sequencing facilities and
PCR machines available.

- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION. Provide any other information describing the environment
for the project. Identify support services such as consultant, secretarial,
machine shop, and electronics shop, and the extent to which they will be
available to the project.

We have available to us the resources of The Whitehead Institute, including an
electron microscopy laboratory, a florescence photomicroscope, an histology
laboratory, polynucleotide and polypeptide synthesis facilities, a P3
laboratory, a library and computer facility. Chemical storage, media preparation
and a glassware washing facility are located on the 4th floor of the Genome
Center. Also available to us is access to the resources of the MIT Biology
Department.

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
1. Specific Aims

In this proposal, we describe a three-year project to develop, integrate and
distribute into the Human Genome Program (HGP) pilot sequencing projects a
fluorescent sequencing instrument and software system capable of meeting the
logistic and cost demands of sequencing the entire human genome. This project
consists of taking a system level approach to developing methods,
instrumentation and software designed from the start to work within, and be
proven in, the framework of genome laboratories. These aims will be met by
building upon the high-throughput system (version 1.0) developed under NIH
funding at CuraGen. This program will produce two sequential improvements:

. version 1.1, for pilot scale sequencing [XXXXXXXXXXXXXXXXXXXXXX]

. version 2.0, for full scale genome sequencing [XXXXXXXXXXXXXXXXX
XXXXXX]

Project Overview

MIT Whitehead Genome Center
-----------------------------------
Automation Workflow Informatics
-----------------------------------------------------
Sample Prep Finishing
Autoloading Assembly
---------------------------------------------------
SBio NNF
Media Optics
---------------------------
Electrophoresis BaseCalling
system
Replicated Substrates
-----------------------------------
---------------------------------------------------

The project duration is designed to parallel that of planned HGP pilot studies,
allow for the use of the systems in these studies, and produce a finished system
ready for distribution to sites selected to carry out full scale human genome
sequencing efforts. The project is designed to effect the research tasks
necessary both to achieve the requisite technical objectives as well as to
create the track record necessary to make this the system of choice for wide
scale genome sequencing.

As indicated by the diagram above, CuraGen, Soane BioSciences (SBio), and their
academic collaborators at MIT/Whitehead and the Cornell National Nanofabrication
Facility (NNF) are taking a modular phased approach built upon existing and
proven technology. The evolving CuraGen/SBio DNA analysis system has been
developed and "road tested" in a production sequencing environment at CuraGen.
Since July 1995, it has been in place at the Whitehead Institute. This project
builds on the NIH and DOE funded efforts at each of the four groups. The P.I.
Dr. Went will coordinate, integrate and focus the actives of the individual
groups and rely on his interdisciplinary team at CuraGen for instrument,
software and system development. The experiences of Drs. Trevor Hawkins and
Lincoln Stein at Whitehead in automation, workflow and informatics is brought to
bear to insure dove-tailing of the instrument development into existing
infrastructure. The expertise of Drs. Herb Hooper, David Soane and the Soane
BioScience team in advanced media and replication enables the development of
advanced reusable and disposable separation systems. Leadership in the field of
microfabrication, with an emphasis on microfabricated optics, is provided by Dr.
Harold Craighead at the Cornell NNF.

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------

We begin with the system in routine operation at CuraGen and make the following
specific improvements to produce advanced generations: version 1.1 (by October
1997) and version 2.0 (by April 1999).

Component (Performance Site) Specific Aim
<S> <C>
Sample preparation(MIT, CuraGen) Develop and automate solid phase loading and
purification methods to remove the bottleneck at
the interface between existing robotic sample
preparation and loading of fluorescent
electrophoretic systems and to reduce the overall
reagent costs (v. 1.1).

Develop novel bi-directional sequencing protocols
(v. 1.1, 2.0).

Electrophoresis system (CuraGen, SBio) Produce a low cost, robust electrophoresis system
with a disposable, ready-to-run microchannel
(microreplicated) separation sub-assembly (v. 2.0).

Media (SBio) Develop advanced separation media for multiple runs per
gel (v. 1.1).

Develop dynamic porosity media to extend read lengths
(v. 1.1, 2.0).

Develop media for disposable, microreplicated gel
assemblies (v. 2.0).

Detection (Cornell): Implement a binary detection system for use with the
microreplicated separation system (v. 2.0).

Informatics (CuraGen, MIT) Tie electrophoresis instruments into laboratory work-flow
(v. 1.1).
Produce sequencing data with explicit confidence levels
for each base call (v. 1.1).
Enable 8-dye protocols (v. 1.1, 2.0).
Enable automated assembly and statistically qualified
finishing of sequences (v. 2.0).

</TABLE>

2. Background and Significance

The human genome comprises three billion base pairs of DNA. In order to sequence
the entire genome, a phased approach has been implemented by the NIH and DOE.
The first requirement is the production of a conceptual array of large
contiguous DNA sequences (large insert clones) spanning the 23 chromosomes.
These "physical maps" must accurately represent the human genome and be in a
form amenable to DNA sequencing. To make these physical maps amenable to
sequencing, the individual large-insert clones will be further sub-divided into
templates (either physically by subcloning or by primer walking) for direct DNA
sequencing. Once the precise sequence of these templates is determined (by
Sanger sequencing and fluorescent detection) they will be "assembled" into
accurate ("finished" sequence) virtual representations of the original
large-insert clones. The sequences of these large-insert clones are then
assembled to form the full finished sequence of the human genome.

2.1 HGP: Technical Challenges

The challenge, constrained by economics and time, is to produce a finished
genome sequence at a cost of under $0.10 per base at a rate of 600 Mb per year,
in order to complete the genome for under $300 million dollars in a five-year
period. Physical maps of the genome are now estimated to contribute less than 1
penny per base to the finished sequence cost (Lander et al., 1995) and to be
nearly complete in time for the start of large scale sequencing of the human
genome. This leaves $0.09 per base to go from the physical map to assembled and
finished sequence. The most successful high-throughput DNA sequencing centers in
the world are currently
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
producing C. elegans sequence from physical maps at $0.50 per finished base at a
rate of 10 Mb/year (Sulston et al., 1992; Wilson et al., 1994 ). The rate and
cost of sequencing complete bacterial genomes and yeast chromosomes is
comparable. To meet the HGP goals, it is necessary to increase the rate of
production of finished sequence 60-fold while decreasing the cost 5-fold over
these current projects.

The logistical concerns of genome-scale DNA sequencing are essentially those
derived from the need to increase throughput and reduce cost. This can only be
done by improved technology integration and automation. Historically, the
introduction of fluorescent four color sequencing into the life science research
market enabled the sequencing of individual clones, small contiguous regions,
and, when pushed to the limits of the original technology, the sequencing of the
first complete bacterial genome (Fleischmann et al., 1995). An early 4-dye
commercial instrument produced by Applied Biosystems, Inc., the ABI 373, and its
subsequent replacement, the 377, were not designed with the logistics of large
scale genomic sequencing in mind. Specifically, these instruments were not
designed to efficiently integrate into a "factory environment" consisting
primarily of robotic sample handling automated within an informatics framework.

Producing finished sequence at 600 Mb per year or 2 Mb per day requires the
production of upwards of 40,000 template and sequencing ladders a day (based on
500 bp reads/sample and 10 fold redundancy). Pilot programs are currently aimed
at achieving 1/10th of this rate. The workflow, upstream robotics and
informatics that are being planned and currently developed for pilot studies
(Lander et al., 1995), if properly assisted by a new generation of sequencing
technology such as the v. 1.1 system proposed here, would be capable of
processing 4,000 samples per day. With the advent of the v. 2.0 system, these
pilot programs could be scaled to meet the expected 40,000 sample per day
throughput required for a large scale sequencing effort. In order not in any way
--------------
to duplicate the upstream workflow and robotics efforts, we concentrate in this
- -------------------------------------------------------
proposal on developing advanced sequencing instrumentation and systems to
dove-tail into the upstream capabilities. This represents an approach in which
increases in lane density, electrophoresis speed, and sensitivity of a
fluorescent sequencing instrument are integrated into existing front-end
robotics to yield the requisite targeted "system level" throughput increases and
concomitant cost reductions.

2.2 HGP: Cost Analysis

Cost analysis studies are regularly used to determine which problems to work on
from a return on investment standpoint, and which components of a problem are
sensitive to cost reductions. Recent examinations of the Human Genome Project
(HGP) have led to a separation of the project into two phases. During the first
phase, scheduled to last three years, additional technology will be developed
and pilot studies will be conducted to provide a solid basis for determining how
best to carry out the full scale project during the subsequent five year second
phase.

Technology improvements are often driven by the need for better cost
performance. In the computer industry this has lead to a doubling of potential
with a concomitant halving of cost every 18 months. This has become known as
Moore's law, in recognition of its major proponent, Gordon Moore of Intel
Corporation. With this in mind we have investigated the impact that advances in
the major technology components would have (primarily) on the sequencing portion
of the HGP. Ultimately, the impact of the HGP will be judged by the number of
genetic disorders that can be more effectively diagnosed and treated, which will
require many-fold genomic sequencing.

Physical mapping and sub-cloning efforts, which are planned prerequisites of
large scale sequencing are expected to contribute from $.01 to $.03 to the cost
per base of finished sequence. (Throughout this discussion we have adapted the
NCHGR convention of using the finished base as the unit of measure to allow a
comparison of the impact of technological advances on cost.) Pilot projects are
better suited to address these costs and we therefore concentrate our efforts
here on improved sub-clone sequencing and assembly to produce a finished
sequence.

A sequencing cost analysis (Table 2.1; see Appendix 2 for a breakdown of the
analysis and supporting assumptions) highlights the major contributions to the
final cost, which can be reduced by improvements in the following technology
areas: sample preparation and loading, electrophoresis systems, separation
media, detection and informatics. Specifically, the two largest contributions to
the finished cost per base are (1) materials for template preparation and
sequencing reactions and (2) labor costs associated with sequence assembly. The
aggregate sensitivity and bi-directional sequencing improvements described
herein have the potential to reduce this cost 3-fold, while the addition of
confidence information in base calling, and accurate lane tracking provided by
micro-channels would enable the automation of the assembly and lane-finding
processes, and another 3-fold decrease in cost. This analysis further indicates
that the expected improvements in automation being developed in pilot studies
are sufficient to meet the overall goals, and do not need to be undertaken here.
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
In addition to financial issues, these calculations provide additional
information on other resource and labor issues that may contribute to logistical
problems. These specifically include the demand existing technology presents for
pouring and handling over 1000 gels a day and the space and power requirements
to house over 250 sequencing instruments. From this information, it is clear
that disposable, ready-to-run gels will tremendously decrease the logistical and
financial burdens of gel-pouring.

These improvements taken together can yield a cost saving based on using
commercially available systems of over $800 million. Using the expected
investment of approximately $80 million for the first phase of the human genome
project (over the next 3 years), this 10-fold return on investment would yield
in the ensuing 5 years a 50% compounded return on investment. This analysis
clearly indicates the importance of the pilot programs and an emphasis on
technology development for the success of the humane genome project. This
project aims to address those critical components highlighted above, and to
deliver a system to cost-effectively sequence the genome.

Table 2.1 Cost analysis for sequencing the human genome.
<TABLE>
<CAPTION>
Advanced Commercial [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
------------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Project cost summary:
- --------------------
Total Fixed costs $54,594,000 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Total Material Costs $273,600,000 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Total Labor Costs $329,550,000 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
- ----------------- ------------ ------------ ----------- -----------
Total project cost $657,744,000 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]

Cost per finished base:
Fixed cost/finished base $0.018 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Material cost/finished base $0.0912 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Gel related labor cost/finished base $0.0139 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Sample labor cost/finished base $0.0160 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Sequence assemble labor cost/finished base $0.0800 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
- ------------------------------------------ ------- ------- ------- -------
Total sequencing cost/finished base $0.2192 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]

Totals with 70% Indirect cost on labor and materials:
- ----------------------------------------------------
Total project cost $1,025,355,000 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Total sequencing cost/finished base $0.3418 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Physical mapping and sub-cloning $0.0333 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
- -------------------------------- ------- ------- ------- -------
Total cost/finished base $0.3751 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]

Summary of Resource needs:
- -------------------------
Gels to set up per day 1,108 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Total Seq Units needed to meet quota 277 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Number of people necessary 1,373 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
Estimated Sq. ft 186,265 [XXXXXXXXX] [XXXXXXXXX] [XXXXXXXXX]
</TABLE>

2.3 Component Technologies

The process of sequencing the genome leads to the production of small (less
than 2 Kb) fragments of DNA from large-insert clones (BACs, YACs, P1s). Sanger
sequencing ladder products can be generated from these fragments by a number of
robotic means, with final product residing in the wells of a microtiter dish (96
or 384 well). This process is executed now at major genome facilities. At this
point, a second stage of systems for performing electrophoresis, fluorescent
sequencing, and sequence assembly take over. This project replaces the second
stage, enables new Sanger protocols, and carries through to use the host site
informatic system to deposit automatically the finished sequence into a
database.

2.3.1 Sample Preparation/Loading

The output of most Sanger protocols is a mixture of input DNA, fluorescent DNA
ladders, and unreacted fluorescent primers or nucleotides. In order to prepare
the sample for electrophoresis, it must be purified. The

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------

use of solid phase techniques for this purification step has increased
dramatically over the last few years as more biochemical methods are adapted for
use with magnetic particles (Uhlen, 1989; Hultman et al., 1989; Hultman et al.,
1991; Hawkins, 1994). The advantages of using magnetic particles are based upon
the ease with which DNA can be manipulated once immobilized on the magnetic
particles. In theory, the need for centrifugation stages could be removed from
molecular biology if DNA fragments were fixed either temporarily or permanently
to the magnetic solid phase. However, the use of a solid-phase has not yet been
successfully applied to the automated loading, a process that could benefit from
the simplicity and throughput increases associated with the coupling of the
transport and purification advantages of solid-phase systems.

2.3.2 Gel Electrophoresis

There are several important features of a gel electrophoresis system: (1) the
interfaces for gel and sample loading, (2) throughput, i.e., the number of
samples (and bases) that can be processed per unit time, (3) read length, (4)
sample volume required, and (5) the back-end interface for fragment detection.
Traditionally, electrophoresis has been carried out between two plates of glass
(or plastic) separated by a spacer, with a polymeric medium to sieve the DNA.
Commercial state-of-the art is now the ABI 377 at 36 sample/450 bases/2.5 hrs.,
providing 6.5 Kb/hour of raw sequence. Performance has been improved using thin
slab gels, capillary arrays, and microchannel devices.

Thin slab gels. One of the primary factors in determining electrophoresis time
- --------------
is the ability to apply high voltages, generating significant heat, without
significant temperature gradients. Smith and coworkers (Brumley and Smith, 1991)
pioneered (less than) 100 (um)m gel widths and established that 10 bp/min can
be attained at 200 V/cm. Vertical and horizontal thin gels have been used, but
the horizontal approach has significant advantages from the standpoint of
automating sample loading. CuraGen has adapted the horizontal thin gel approach
with traditional gel and sample loading to produce a routine and automatable
device (see Section 3).

Capillary array electrophoresis. Introduced to DNA sequencing by Mathies and
- -------------------------------
coworkers (Huang et al., 1992a,b), CAE combines the high-speed separation
attainable in individual capillaries with the throughput provided by
multiplexing. Several groups are actively developing capillary array systems
(Takahashi et al., 1994; Ueno and Yeung, 1994; Barker, 1995), including at least
three commercial entities. In addition to throughput, CAE offers the potential
for automated gel and sample loading, which is now being realized with the
recent advances in replaceable matrices. Lower viscosity matrices are still
needed, as are more stable wall coatings. Electrokinetic injection is
inefficient with respect to sample utilization, requiring a concentrated DNA
sample of which only a fraction is injected. The detection region of capillary
arrays is ultimately determined by the capillary outer diameters, an inherent
limitation for high lane densities.

Microchannel gel devices. Miniaturized separation lanes and devices can be
- ------------------------
fabricated in planar substrates using micromachining techniques. Terry et al.
(1979) microfabricated a gas chromatograph in silicon sixteen years ago,
providing the basis for a commercial, portable GC manufactured by Microsensor
Technologies Inc. Microfabricated electrophoresis devices were proposed by
several groups around 1990 (Kovacs et al., 1989; Pace, 1990; Manz et al., 1991;
Harrison et al., 1992a). Several reports have demonstrated sample injection
schemes, high speed electrophoretic separations of dyes and labeled amino acids,
and pre- and post-column reactions (Harrison et al., 1992b; Jacobson et al.,
1994a-c). Recently, rapid, high-resolution separations of dsDNA (Wooley and
Mathies, 1994), oligonucleotides (Effenhauser et al., 1994) and DNA sequencing
ladders (Balch et al., 1994; Went, 1995) have been reported. The revolutionary
vision is to create fully-integrated chip-sized devices with on-board sample
preparation, followed by automated injection, separation and detection. While
this goal appears fundamentally achievable, it presents significant technical
risk in the 3-5 year time frame. The more evolutionary approach is to
microfabricate the separation device, and utilize continually improving robotic
methods for sample preparation and loading. We have taken the second approach,
utilizing the modular design of CuraGen's horizontal thin gel system (Section
3). This device can be integrated with microfabricated front-ends as they become
available.

2.3.3 Electrophoretic Separation Media

The separation matrix is a critical element of the separation platform in DNA
sequencing. The use of crosslinked polyacrylamide in slab gel sequencing has
changed little since its introduction in the late 1950's . The disadvantages of
in-situ acrylamide polymerization are well-known, including monomer toxicity,
labor intensity, and reproducibility issues. These effects become logistically
untenable at the 40,000 lane (1000+ gel) per day level. Pre-cast gels, popular
in a number of electrophoresis applications, have not been introduced for DNA
sequencing. In contrast to slab gels, there has been significant innovation in
media for capillary electrophoresis, centered around the use of uncrosslinked
polymer solutions as replaceable matrices. Since the early reports by Zhu et al.
(1989) and Chin and Colburn (1989), a number of groups have demonstrated that a
wide variety of uncrosslinked polymer solutions can be used for separating dsDNA
fragments (e.g., Heiger et al., 1990;
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
Grossman and Soane, 1991; Pulyaeva et al., 1992). These dsDNA matrices typically
have low viscosities and can be routinely filled and replaced at low pressures.

The development of replaceable matrices for DNA sequencing has been more
difficult, as higher concentration, higher viscosity solutions are required. In
1993, Karger and coworkers (Ruiz -Martinez et al., 1993) reported the use of a
6% uncrosslinked polyacrylamide (PAA), which provided single base resolution to
350-400 bases. Since then, additional reports on the use of uncrosslinked PAA
(Grossman, 1994) and other polymers (Johnson et al., 1995; Yeung et al., 1995)
as replaceable matrices for DNA sequencing have appeared. These matrices are
still relatively viscous, typically requiring several hundred psi and several
minutes for loading into standard (e.g., 75-100 (mu)m ID) capillaries. Matrix
loading in microfabricated lanes is likely to be more difficult, and existing
reports on sequencing in microfabricated devices have employed in-situ
polymerized gels (Balch et al., 1994; Went, 1995), similar to the early work in
capillaries.

2.3.4 Fluorescent Detection

Fluorescent detection of 4-dye Sanger fragments from a single lane was pioneered
by Smith and coworkers (Smith, 1986) and is currently available only from
Applied Biosystems. In its early and current embodiment, a scanning
laser/detection unit rasters across a slab gel simultaneously exciting a
detecting fluorescence from four select dye labels. Filters, initially employed
on a rotating wheel, have been replaced with a more efficient reflective
grating, allowing for the detection of 1.5 (upsilon)l of a standard Sanger
ladder.

Scanning. As capillary arrays are employed, scanning systems have been improved
- --------
to contain confocal illumination and detection (Mathies and Huang, 1992) to
reduce scattering off the glass. These systems are very efficient and have been
commercialized for non-sequencing use. Their use for imaging slab systems is
also growing (Brumely, 1994). Sample volumes that are actually required for
robust detection are less than 100 nl (Smith, 1993), 15-fold more sensitive than
the ABI system.

2.3.5 Informatics: Image Processing, Base Calling and Sequence Assembly

Determination of DNA sequence from fluorescent images involves the following
steps: lane finding and identification, background elimination, spectral matrix
conversion, base calling, and analysis/editing . At the 36 sample per day level,
this process involves a significant amount of human intervention for lane
calling and sequence editing. At 40,000/day, the system must permit automated
transfer throughout with under 1% manual intervention. Existing automated lane
finding software is capable of calling only 90% of sequencing gels without human
intervention (Stein, pers. comm.). Tibbetts and coworkers (Golden, et al., 1993;
Tibbetts, 1993) have applied neural networks to the base calling problem, with
significant improvements over traditional methods. Giddings (1993) has also
worked on this problem using expert modules which judge peaks to evaluate the
confidence of base calls.

Unlike all other stages of the process, assembly and finishing have
traditionally required considerable human attention including hours of attention
at a computer screen and custom-designed experiments to resolve uncertainties.
More than 60% of the costs of large scale sequencing projects may go to assembly
and finishing, due to their low efficiencies. There have been considerable
advances in sequence assembly. Specifically, PHRAP (Phil Green, pers. comm.) and
FAK (Gene Myers, pers. comm.) represent substantial improvements over previous
tools and essentially solve the issues of assembly with few repeats, yet still
have serious difficulties with many mammalian sequences.

[Confidential Treatment Requested]
<PAGE>

Figure 3.1 DNA analysis system overview [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

In this section, we review development at each of our four groups which provides
the foundation for this project. These preliminary results are organized by
component technology rather than group, consistent with our systems approach.
The starting point of this project is CuraGen's current version 1.0 DNA analysis
system, shown in Figure 3.1. As an end user requiring high throughput,
integrated DNA analysis systems, CuraGen has developed

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

a horizontal thin gel electrophoresis system with a proprietary imaging
spectrograph adapted to DNA sequencing, ready for integration into automated
systems. The optical schematic shown in Figure 3.1 highlights the principle
hardware components of CuraGen's DNA analysis system. This device has been in
operation at CuraGen since early 1993 for a variety of applications, including
sequencing (see Figure 3.1 and A.0 in the Appendix for representative M13
results). The system has several advantages:

. It is a high speed modular device that is adaptable and
upgradeable. Current speeds are 700 bph (bases per hour) with read
lengths of 450bp typical, as shown in Figure A.0. In general, we
load 1/15th of a standard ABI sample. The system is running at 36
lanes per gel at 14 Kb of raw sequence/hr.

. Full spectrum detection under software control allows any dyes to
be used (see Figure 3.3). We have demonstrated the feasibility of
five colors being used simultaneously (four for sequencing, the
fifth for reverse sequence or fingerprint information).

. It includes trainable image analysis and base calling software. In
collaboration with Dan Seligson of Intel, CuraGen has developed a
modular set of algorithms for preprocessing and base calling. The
advantages of the software are full UNIX compatibility, a database
access tool set (with easy i/o) and high processing speed (less
than 5 secs/lane on an Intel P90).

The ability to integrate this device into automated systems, both in terms of
front end sample handling and back end image processing and base calling, makes
this system a cost effective alternative to the ABI.

3.1 Sample Preparation (MIT, CuraGen)

3.1.1 Automated Protocols for Large Scale Genome Sequencing (MIT)

Work at MIT/Whitehead has culminated in a second-generation automation system
for purification of templates and production of sequencing ladders. The current
"Sequatron" system has a throughput of 80 microtiter plates per 24 hours,
starting with grown M13 supernatants for DNA isolation or plates of PCR products
and ending with completed pooled sequencing reactions ready for denaturing and
loading on a gel.

3.1.2 Solid phase technology /Automated Loading/Concentrating (MIT, CuraGen)

We have developed a simplified system for the manipulation and isolation of DNA
using solid phase purification that does not rely on streptavidin-biotin,
digoxigenin-antidigoxigenin or sequence-specific interactions. We refer to this
as Solid-Phase Reversible Immobilization (SPRI, Hawkins et al., 1994). The
method provides a solid-phase purification procedure that can be used for DNA
extraction, purification and concentration. These methods have been introduced
into routine use in the Whitehead DNA Sequencing Core.

[GRAPHIC APPEARS HERE]

Figure 3.2 Trace file obtained from direct SPRI loading experiment performed
at MIT on a CuraGen device. Sequence of M13 obtained using standard
ABI kit. Trace shows bases 100 - 200 taken over a 7 minute stretch.
Applied voltage was 5 KV over 25 cm, 200 V/cm.

The isolation of extension products using solid phase support has had
limited use, mostly due its lack of applicability to cycle sequencing, the
elevated cost of magnetic particles and the lack of demand for replacements to
ethanol precipitations. A key advantage of the SPRI procedure is that the
isolation step functions as a concentrating step and can be directly
incorporated into an automated loading step. We found that SPRI can both
concentrate dye-primer reactions as well as clean-up dye terminator reactions
prior to electrophoresis. This removes the need for ethanol precipitation or
spin columns. Of great importance, the primers do not have to be derivatized
---
with haptens such as biotin or digoxigenin to be subsequently isolated using
SPRI, and hence it is applicable to amplification based sequencing techniques,
now the methods of choice in the genome community. Direct loading with SPRI
beads into formamide wells (see Figure 3.2) allows the precise control of the
loading and motivates the design of an automated system.
<PAGE>

One principal advantage of the CuraGen DNA Sequencer is the ability to image
many distinct dyes simultaneously. Methods for producing sequencing ladders from
both directions have been tested, and to date we have shown that 5- dye
sequencing can be achieved with the fifth color being used to obtain a T track
from the opposite end of the sequencing template (Figure 3.3). Strategies
employing more then 4 dyes have utility in fingerprinting, assembly and
finishing. Combined with Figure 3.4, this clearly establishes (1) the
feasibility of 5-dye protocols for alignment (using far distant red-dyes) and
(2) the potential to sequence in both directions using 8 dyes. With this proof
of principle and our current advances in fluorescent detection, we are in a
position to develop full bi-directional sequencing strategies.

[GRAPHIC APPEARS HERE]

Figure 3.3 Bi-directional sequencing. The trace shown in 3.3a is a
sequence off the forward primer of a sequamark template, while
trace 3.3c is the same template sequenced from the reverse primer.
The center trace 3.3b is the result of a sequencing run from a
single tube in which two different primers, FAM-forward and
JOE-reverse, were placed with the ddT mix. The resulting product
terminates in both directions with two different dye labels. A
color copy of this figure is included in the Appendix.

[LINE GRAPH APPEARS HERE]

Figure 3.4 Spectral emission measured from spatial cross section taken
from electrophoresing dye-labeled primers. All 8 have been tested
and the individual dyes are easily resolved. A 5-dye set can be
chosen and we are currently evaluating 8 dye possibilities. A color
copy of this figure is included in the Appendix.

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

3.2 Gel Electrophoresis (CuraGen)

We have developed a flexible thermal regulation box (air, water, and passive)
for the use and testing of a variety of thin slab and microfabricated channel
devices (see Figure 3.1). It requires under 10 minutes of assembly time and
yields bubble-free, high quality 50 (mu)m gels over 95% of the time.
Representative capabilities are shown in Figure A.0, 3.2 and 3.3, in which raw
data (i.e., matrix converted without any filtering) clearly indicates the
ability to load, electrophorese and detect from these gels.

3.1.1 Routine Thin Gel Capabilities.

CuraGen has logged over 7000 lanes on its thin slab system and currently has 4
systems in place. During the month of August 1995, MIT carried out over 500
lanes with comparable results.

Multiplicity (36). Figure A.0, 3.2 and 3.4 taken from 36 lane runs using
sharkstooth combs. Manual lane identification easily picks separate lanes.

Length of Read (500). Figure A.0 shows a sequence of M13 at 450+ bp.

Speed (1 hr). The results shown in Figure 3.2 from a SPRI experiment
run at MIT clearly show that at 5kV, we can obtain base pair resolution to
400 bases at 17 cm from the loading region at a rate of 15 bp/min.

3.2.2 Microchannel Substrates

Figure 3.5 shows a trace taken from a 96-channel glass substrate used to test
microchannel electrophoresis in which 10 nl of input Sanger ladder was loaded.
Although the quality is less than a comparable run on a thin slab, the sequence
was correctly called. Improvements to the loading (larger volumes) and imaging
capabilities are being developed under a NIH Phase II SBIR.

[GRAPHIC APPEARS HERE]

Figure 3.5 Processed sequencing data obtained from sequencing an M13 template
in two different configuration: (a) top, short thin slab with laser
10 cm from loading region; (b) bottom, glass microchannels with
laser 10 cm from loading region. Color copies of this figure are
included in the Appendix.

3.2.3 Polymeric Substrates

Mass production of polymeric substrates via molding or casting will be
significantly less expensive than etching glass, will not produce acid waste,
and will therefore enable our strategy of providing ready-to-use, disposable
microchannel substrates. Moreover, there are a great number of methods for
fabricating plastics and a variety of transparent materials to employ. The
personnel at SBio have investigated the polymerization and optical
characteristics of a variety of plastic materials. We have a long track record
of replicating the surface and bulk features of molds in plastic with high
precision, as will be required for microreplication of lanes in plastic. In
addition, our experience with mass producing such substrates in a commercial
setting will enable the eventual production of the proposed microreplicated
separation subsystems.

3.3 Advanced Separation Media (SBio)

SBio is developing improvements in replaceable gels for DNA sequencing by
capillary electrophoresis (CE), as reviewed below. These preliminary results
demonstrate SBio's expertise in gel media, and a technology base that serve as a
foundation for this project.

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
1st generation replaceable matrices. SBio is developing non-crosslinked,
replaceable matrices for CE based on N-substituted acrylamide polymers, which
are known to provide an order-of-magnitude increase in hydrolytic stability
relative to polyacrylamide (Righetti et al., 1993). Hydrolysis of the amide
bonds in polyacrylamide (PAA), which is accelerated at high pH and urea levels,
will limit the shelf life of replaceable matrices based on uncrosslinked PAA. We
have developed copolymer formulations of N-substituted acrylamides that provide
resolution comparable to PAA matrices (Figure 3.6), while simultaneously
providing enhanced stability and shelf life. We have also developed
reproducible, scaleable synthesis and purification processes for these matrices.
We are currently optimizing matrix formulations to reduce viscosity and
electrophoretic run time. The matrix used in Figure 3.6 was loaded into the 65
cm long, 75 (mu)m ID capillary in less than 3 minutes under an applied pressure
of 400psi. We believe that incremental reductions in loading pressure and time
can be realized through optimization of MW and MW distributions.

[GRAPHIC OMITTED]

Figure 3.6 Capillary electrophoresis separation of T-terminated extension
products from M13mp18 template on SBio replaceable matrix.
Experimental conditions: capillary length: 65.0 cm (40.0
effective), DNA injection: 12.0 kV - 15 seconds, run voltage: 12.0
kV. M13 sequence prepared via cycle sequencing using labeled primer
and imaged by laser-induced fluorescent detection.

2nd generation replaceable matrices. SBio is developing a novel proprietary
class of replaceable matrices which undergo phase transitions in response to
temperature (Soane and Bae, 1994; Soane, 1994 and 1995), offering the potential
for dramatic reductions in loading viscosity. In these "reversible gels", the
matrix polymer is highly soluble on one side of the transition, and much less
soluble (or insoluble) on the other side. We have demonstrated that this phase
transition property can be utilized to drive a viscosity transition (Figure
3.7), and have used this transition to demonstrate matrix loading in capillaries
under very low pressures, including simple vacuum injection. We have also
developed polymer compositions which provide excellent electrophoretic
properties in addition to this viscosity transition behavior. One family of
compositions is based on a subset of the N-substituted acrylamides which are
temperature-sensitive. Other, non-acrylamide compositions are also being
developed, along with matrices which have a low viscosity at room temperature
and gel upon heating. These 2nd generation matrices hold the promise for
dramatically improving the process of matrix loading and unloading, which will
be especially important if replaceable matrices are to be used in very small
channel microfabricated devices.
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

[GRAPHIC OMITTED]

Figure 3.7 Temperature induced phase transition in crosslinked microgel system
(A) and uncrosslinked polymer solution (B), resulting in a
reversible viscosity transition in both cases. The exemplary
viscosity curve (C) is for a microgel system with a transition
around 30C. By modifying the polymer composition, matrices can be
designed with viscosity transitions at temperatures ranging from
room temperature to 95 C.

3.4 Fluorescent Detection (CuraGen, Cornell)

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

3.4.2 Microfabricated Optics (Cornell NNF, CuraGen)

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

Figure 3.8 AFM area scan of a continuously blazed grating using focused
ion-beam milling (Shank et al., 1994)

[XXXXXXXXXXXX]

Figure 3.9 Diagram of a vertical optical interconnect showing the location of
the individual components (Bare et al., 1994)

[XXXXXXXXXXXX]

3.5 Informatics (CuraGen,MIT)

Critical issues in high-throughput genomic sequencing include sample
tracking, work-flow management, image analysis, base calling (speed and
confidence), assembly and finishing.

3.5.1 Image Analysis and Base Calling (CuraGen)

[XXXXXXXXXXXXXXXXXXXXXXX]

Figure 3.10 Base calling algorithm and output. [XXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
CuraGen has developed a modular set of algorithms for preprocessing and base
calling. The software has several advantages:

. it is trainable to new chemistries, dyes or dye coding strategies,

. it reports quantifiable confidence values on each base called, and

. it is based upon a UNIX development platform and easily integrated in
LabBase and other informatics systems.

There are three main modules: a signal preprocessing module, a pattern
recognition module (i.e., base calling for DNA sequencing), and a proofreading
or postprocessing module. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

3.5.2 Assembly and Finishing (MIT)

Major assembly and finishing packages, including PHRAP and FAK, are in use in
our laboratories. We have written our own software, including MAPPER, which
assembles map contigs based on existing assembly tools with forward and reverse
constraints, and FINISHER, which uses the information from the map contigs to
select further experiments. Using these programs we have evaluated sequencing
strategies on simulated and real data. The ability to quantify the confidence of
individual base calls will set the precedent for allowing this entire process to
be conducted in an automated way, and to maintain the integrity of the data.

3.5.3 Work flow

Over the past two years, the MIT Genome Center's Informatics Core has gained
extensive experience in database and sample-tracking issues, and developed three
major systems: LabBase, Workflow Manager, and BuilderIO. Our laboratory
informatics system has been developed to allow FINISHER to download instructions
to robotic workstations. With the direct incorporation of the sequencing
instrumentation into workflow we will be able to place the instrument into an
automated environment and take advantage of the advanced base calling software.

4. Research Design and Methods

The research program outlined herein builds upon the combined experience of the
collaborators to develop technologies to accelerate the completion of the human
genome sequence as well as to enable more routine genome sequencing. As outlined
before, the HGP has evolved to the point where its completion is tractable. This
project plans to hasten that timeline in stages:

1) Version 1.1, a thin slab gel platform addressing the cost and throughput
needs of a 4000 sample/day pilot facility;

2) Version 2.0, a microchannel platform solving the gel and informatics
logistics of a 40,000 sample/day operation, capable of sequencing multiple
genomes and extending high throughput sequencing to other markets in the future.

The project is divided into the five components discussed shown below. Although
primary responsibility for the execution of each sub-task rests with the
collaborating investigators, all advances will be tested in CuraGen's evolving
DNA analysis system. Moreover, each of the project teams will have
instrumentation in place to accelerate the design and testing of individual
components.

A component breakdown with primary responsibilities and delivery dates is shown
below in Table 4.2.

4.0 A Modular Phased Approach

<TABLE>
<CAPTION>
Component Site Deliverable Date
<S> <C> <C> <C>

4.1 Sample Preparation MIT/Whitehead v. 1.1 Manual device 4/1/97
</TABLE>

[Confidential Treatment Requested]
<PAGE>

CuraGen v. 1.1 5-dye protocol 10/1/96
(Gregory Went) v. 1.1, 2.0 8-dye protocol 4/1/97
4.2 Electrophoresis System CuraGen/Cornell v. 1.1 Electrophoresis station 4/1/97
(Harold Craighead) v. 2.0 Microreplication 10/1/97
prototype

Soane BioSciences v. 2.0 Materials 10/1/97
(Herbert Hooper and v. 2.0 Surface design 10/1/97
David Soane) v. 2.0 Processing 4/1/98

4.3 Separation Media Soane BioSciences v 1.1 Reusable gels 4/1/97
v 1.1, 2.0 Dynamic porosity 10/1/97
v. 2.0 Disposable media 10/1/98

4.4 Binary optics Cornell v. 2.0 Collection optics 4/1/99
4.5 Informatics CuraGen v. 1.1 5-dye base calling 10/1/96
v. 1.1, 2.0 8-dye base calling 10/1/97
MIT/Whitehead v. 1.1, 2.0 Assembly/ 4/1/97
(Lincoln Stein) finishing with confidence
v. 1.1 5-dye assembly 4/1/97
4.6 Systems Integration CuraGen/MIT [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]
</TABLE>

4.1 Sample Preparation and Loading (MIT, CuraGen)

4.1.1 Manual and Robotic Solid-Phase Sample Concentration and Gel Loading

In preparation for pilot projects, fully automated systems that process DNA
subclones into dye-labeled sequencing ladders have been developed with
throughput capacities of greater than 4,000 samples per day. Our system starts
with the sequencing products (Sanger ladders) presented in 96 or 384 well
bar-coded plates. This approach has three major benefits: (1) it reduces
redundancy with other efforts; (2) it allows new systems to dovetail into
planned pilot studies; and, (3) it reduces the upstream burden by decreasing the
number and the concentration requirements of the sequencing reactions. In
preparation for pilot sequencing, MIT has developed the Sequatron. This device
is currently being tested and used at the MIT Genome Center. We will enhance the
system with the ability to concentrate samples and load CuraGen's DNA sequencing
gels, allowing the integrated system to generate base called sequences directly
from DNA subclones. This enables increased throughput through the continuous
operation of DNA sequencers at lower variable costs.

We will utilize our combined expertise in solid-phase methods, including SPRI
(Hawkins et al., 1994a), biotin-streptavidin (Hawkins, 1994) with photocleavable
biotin derivatives (Olejnik et al., 1995), and digoxigenin-antidigoxigenin
(Hawkins et al., 1994b), to concentrate and purify the final sequencing ladders
produced by sequencing reaction as part of automated gel loading. During the
first year, we will focus on SPRI technology, a highly effective
biochemical/biophysical technique. SPRI uses inexpensive carboxyl-coated
magnetic particles that compose the base material for most magnetic particle
manufacture. The sequencing products are absorbed onto the surface of the
magnetic beads, which are then transferred to the gel using magnetic pins. As an
alternative to magnetic particles, we will also develop a manifold of 12
9mm-spaced pins coated to absorb reaction products directly, allowing washing
and finally elution of products into wells for electrophoresis. This will enable
us to transfer samples from standard 96, 192, or 384-well microtiter plates (9mm
well spacing) into a sequencing gel. Integration of this manifold onto the arm
of a robotic system will allow the full automation of this process.

In conjunction with using coated pins, we will also attempt to use graphite tips
(as used by Tecan and Packard to allow capacitance sensing) to absorb reaction
products and load the gels for electroelution. In addition to automation and
reproducibility improvements, autoloading from a solid substrate enables us to
take advantage of the 15-fold sensitive advantage of the CuraGen device. This
advantage reduces the enzyme utilization requirements at least 10-fold and
translates to a large savings in sample preparation costs.

[Confidential Treatment Requested]
<PAGE>

1. Year 1. Modify and improve our solid-phase approaches to enable us to coat 12
channel pins to perform SPRI, biotin-streptavidin capture or
digoxigenin-antidigoxigenin capture and fragment selection.

2. Year 1. Develop a 12 pin loading device to carry out parallel loading from 96
and 384 well plates directly into the wells of the electrophoresis system.

3. Year 1,2. Develop 12 channel pin tools to be fixed to the head of a CRS
articulated robot, as used in our Sequatron system. Set up the robotic system to
enable reproducible loading into wells less than 0.1mm apart. The use of a CRS
articulated arm will give us the necessary flexibility.

4. Year 1,2. Integrate the automated sample concentration and gel loading into
the Sequatron system to provide a fully integrated and automated system.

5. Year 3. Resolve problems of final integration into Sequatron system. Modify
Sequatron software to include collection software of CuraGen electrophoresis
instrumentation.

4.1.2 8-Dye Bi-directional Sequencing

Advances in detection and software allow two reactions, one in each direction,
to be produced from a single template (see Figure 3.2). Initially the reverse
read will be for only one base (5-dye sequencing) for fingerprinting, sizing, or
to enhance assembly strategies. Later evolution to a full 8-dye system will
allow full bi-directional sequencing. [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXX]

1. Year 1. Establish alternative dye sets for 5-dye and 8-dye sequencing. We
will evaluate the properties (shifting, signal/noise) of a number of publicly
available dyes to expand our current set of 8. Dye-transfer (tested and soon to
be available) dyes (Yu et al., 1995) will also be investigated.

2. Year 1. Build on CuraGen's 2-dye, bi-directional success to develop a kit for
full 5-dye sequencing. The 5th dye will be chosen such that a full 5 basis
matrix transform is robust. This is rather straightforward in a two-laser system
(i.e., no spectral overlap between the standard 4 and the 5th dye).

3. Year 1,2. Reduce enzyme costs by using highly efficient loading protocols.
Sensitivity improvements will minimize the concentration of enzyme needed.
Reaction and cycling conditions will be modified to optimize the results.
Properties of other dyes, including incorporation and detectability, will be
investigated.

4. Year 2. Develop and implement full bi-directional sequencing. This primarily
involves protocol application and software confirmation that the 8-dye transform
matrix works. Again, given the 2-laser, 2-region capabilities we have in version
1.0, this is completely feasible with current state of technology.

4.2 Electrophoresis System (CuraGen, SBio, Cornell)

4.2.0 System Design - Reusable (v. 1.1) to Disposable (v. 2.0) Separation
System

The 2+ years of production experience with the thin gel system at CuraGen,
combined with MIT's experience in the logistics of executing thousands of
electrophoresis runs/day, suggested to us separating the electrophoresis plates
and media from an electrophoresis station residing in an optical detection
compartment. Such a decoupling can reduce the optical "downtime" between runs to
minutes, thereby maximizing the throughput of the system. We propose to achieve
this efficient operation through a modular design:

1. an electrophoresis station integrating loading and electrophoresis
electronics with high speed thermal regulation;

2. female end connectors that contain the buffer, loading and optical
illumination accessories; and

3. gel plate devices (both thin slab and microchannel) that are either
disposable or remotely filled/cleaned.

These developments are readily tested on CuraGen's version 1.0 platform.

4.2.1 Electrophoresis Station/Accessories

CuraGen's version 1.0 thin slab device is a component that enables high voltage
electrophoresis with a variety of cooling (air, water, passive) and laser
illumination strategies. To reduce turnaround times (currently 20 minutes) and
to enable temperature sensitive gels and disposable gel devices, we will produce
a platform that accommodates a plate between two end-caps. A principle feature
is the decoupling of the electrophoresis system from the thermal regulation in a
safe, well-interlocked system, allowing direct and flexible testing of

[Confidential Treatment Requested]

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
microreplicated systems. Buffer caps have been designed that seal to the
radiused surface of the glass or plastic electrophoresis plates. For
non-disposable glass substrates, a separate pouring station is constructed to
enable rapid end-capping, pouring, and polymerization. Once prepared, the gel
plates are placed onto the electrophoresis station. Electrical contact is made
through the end-caps to the station, and final voltage contact is established
when the station lid is shut. Should longer lengths or better thermal control be
required, this system will be adaptable to different shapes and cooling
strategies. Our yearly plans are as follows:

Year 1. Evaluate materials and designs for the end-caps. Key considerations
include sealing to radiused glass/plastic gel plates, tensioning to the loading
combs, and proper tensioning of the plates. Prototypes will be machined from
delrin with non-conducting O-rings providing the sealing. We expect to address
first the sealing/loading characteristics, maintaining as much similarity to
working systems at CuraGen and MIT.

Year 2. Issues associated with producing large numbers of these systems,
including casting/molding, will be addressed in Years 2 and 3. Materials for
microreplicated gels substrates will be evaluated to insure their utility.

[GRAPHIC APPEARS HERE]

Figure 4.1 Electrophoresis system in version 2.0.

4.2.2 Microreplication Development

Our objective is to develop disposable microchannel substrates that can be
pre-filled with gel and supplied ready-to-use at low cost (less than $20/gel).
To accomplish this, we will investigate the production of lanes in plastic,
which has several advantages over a glass substrate: (1) lower production costs;
(2) reduced disposal and handling problems related to wet etch chemicals; (3)
facile bonding of base and cover substrates to form closed channels; and (4)
positionally-defined channel surface properties. These advantages are magnified
by the large consumption of plates, 500 to 1000 per day, in a high throughput
lab.

It is important to note that this effort is backed by experience with slab gels
(CuraGen), plastics and replication (Soane Technologies, Soane BioSciences), and
microfabricated electrophoresis channels (CuraGen with Cornell NNF). Rather than
a device on a glass microscope slide scale, our intent is to carry out
electrophoresis over suitable distances (10 cm - 30 cm) in a microchannel array
that takes advantage of proven loading and detection methodologies. In short, we
aim to replace the thin-gel plates we use now (10 cm and 14 cm width by 10 cm
and 30 cm length) with micro channel plates of the same size, increasing the
channel density to allow 64 (v. 1.1), 96 (v. 2.0), and ultimately 384 lanes.

Microreplication development will involve 6 component efforts: (a) establish
design features; (b) develop prototyping methods to test system designs and
plastic formulations; (c) investigate electrode deposition; (d) develop polymer
formulations exhibiting the required bulk properties; (e) develop channel
surface modifications to enable high-resolution separations; and (f) demonstrate
a microreplication production process. These six efforts, involving
contributions from CuraGen, Cornell and Soane, are reviewed below.
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
---------------
- -------------------------------------------------------------------------------

4.2.2.a Design Considerations
- -----------------------------

The design considerations focus on developing a standard geometry for
interfacing the sample handling system, either combs or reactors, with the
sample imaging system (existing and proposed microfabricated optics discussed
below). Open lanes at the entrance converge in the imaging region in order to
present the correct size scale to each module. This strategy does not introduce
serpentine patterns that may broaden electrophoresis bands. We have already
fabricated masks to make converging lanes and will continue to investigate other
lane geometries, such as a fan of straight lanes at different angles. The
underlying principle is to have a size scale near the loading end that is
consistent with available solid phase and micromachined sample loading methods
and which will be amenable to microfabricated reactor arrays. [XXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

4.2.2.b Substrate Prototyping
- ------------------------------

Prototyping methods are being established now and during the first year to lay a
foundation for testing different system designs (lane geometries, electrode
locations), polymer formulations, and surface modifications. We have identified
three methods for the prototyping of lanes. Most can be configured to
accommodate the long substrates required for electrophoresis.

[XXXXXXXXXXXXXXXXXXXXX]

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXX]

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

4.2.2.d Formulation Development
- -------------------------------

We will develop polymer formulations that are amenable to the processing
techniques outlined above, and which provide optical, mechanical, thermal and
surface characteristics to enable high-resolution separations and high-
sensitivity detection. We note that plastics are commonly used as an alternative
to glass in slab and tube gel electrophoresis, particularly for pre-cast gels
where cost is a concern. Plastic has also demonstrated utility in capillary
electrophoresis (e.g., Lukas and Jorgenson, 1985; Nielen, 1993; Liu et al.,
1993). The dominant use of fused silica in CE is due to the commercial
availability of high-quality fused silica capillaries, the higher thermal
conductivity and higher UV transparency of fused silica compared to plastic, and
the established means for modifying silica surfaces in CE separations. However,
none of these are inherent limitations in our system, and manufacturability is
actually a significant advantage of plastic in our approach.

Our focus will be on curable (UV, heat) and injection moldable materials, which
will be amenable to prototyping methods 2 and 3, and ultimately to production
methods (Section 4.2.2.f). Acrylics and aliphatic urethane acrylates will be
investigated first for their excellent optical properties and formulation
latitude. In general, they are highly transparent above 250nm and exhibit low
background fluorescence. Further, we have considerable experience in formulating
and processing these classes of polymers for optical applications. Any specific
formulations under consideration will be examined for transparency and
fluorescence before being used. Raw material purity is critical to eliminating
fluorescence, and we will implement established purification methods developed
by Soane Technologies. Mechanical rigidity can be imparted through crosslinking
or providing a rigid support (e.g., glass) under the microreplicated substrate.
The glass-plastic composite approach can also be used to improve thermal
dissipation if required, wherein the plastic layer need only be thicker than the
channel depths. Surface properties are considered separately in the next
section. Regarding potential scattering of the excitation beam, we view this as
a system issue and have designed channel geometries where the laser does not
pass through the channel walls.

4.2.2.e Surface Modification
- ----------------------------

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

Surface chemistry and topology are critical in narrow bore separations, and
unmodified fused silica capillaries have traditionally required modification to
suppress electroosmotic flow in DNA sequencing applications. The two common
approaches are: (1) covalently linking the separation matrix to the capillary
wall, and (2) covalently or physically coating the capillary wall with a
hydrophilic polymer to suppress the surface charges and adsorption. Both in-situ
polymerized gels and replaceable matrices can be used with coated capillaries.
Like fused silica, most native polymer surfaces also exhibit a surface charge in
electrolyte solutions (Schutzner and Kenndler, 1992), and we will need to employ
one of the two basic strategies noted above. The silane coupling chemistry used
with fused silica is not applicable to organic polymer surfaces. However, there
are numerous methods for derivatizing polymer surfaces, and we have identified
three approaches to be investigated here as discussed below.

1. Surface Activation: Free radicals created at the polymer surface and present
- ---------------------
during acrylamide polymerization will result in covalent attachment between the
polyacrylamide and the surface. Liu et al. (1994) demonstrated a
hydroperoxidation preactivation method for covalently coating polypropylene
capillaries with polyacrylamide. This hydroperoxidation method should be
applicable to a wide variety of polymer surfaces, and will be used here. We can
also use electron discharges (RF, microwave, corona) in inert gas plasma to
activate the channel surfaces (Yasuda et al., 1987).

2. Coupling agents: This approach, analogous to silane coupling with silica,
- ------------------
involves a hetero bifunctional reagent, wherein one functional group reacts with
the polymer surface, and the other functional group (a vinyl or an acryl group)
later reacts with a growing polyacrylamide chain (e.g., urethane acrylates could
be used with surface hydroxyl groups). The first step is to ensure functional
groups are present at the polymer surface. We will design UV-curable
formulations containing latent functional groups that orient preferentially at
the surface (e.g., amine, carboxylic acid, hydroxyl groups). Other approaches to
incorporate surface functionality include using oxygen plasmas, and
photopolymerization of vinyl polymers (e.g. hydroxyethyl methacrylate) onto the
substrate surfaces (Wright, 1978). A wide range of hetero-bifunctional reagents
can then be used to react with these surface groups, and provide a reactive
group for incorporation into a polyacrylamide chain.

3. Surface Interpenetrating networks (SIPN's): This third approach is practiced
- ---------------------------------------------
by the contact lens industry (Thakrar and Gandhi, 1995). The polymer substrate
is first contacted with a liquid monomer (e.g., dimethyl acrylamide) which
penetrates the substrate surface without causing dimensional deformation. Next,
the gel-forming monomer solution (e.g., acrylamide) is injected into the channel
and polymerized. The first, surface-penetrating monomer will polymerize in the
presence of the free radicals, interpenetrating with the polymer substrate and
the gel matrix, forming a SIPN.

The above three methods provide us with a means for addressing a wide variety of
polymer substrates as we move through prototyping to production. The surface
activation method will be developed and applied for substrates fabricated by
direct patterning. The coupling agent approach will be developed in concert with
UV curable polymer formulations used for in-situ curing and replication.
Finally, we will explore surface activation, coupling agents and the SIPN
approach for applicability to molded thermoplastics. As described above, both
surface linkage of the gel matrix and coating of the channel surface are
feasible strategies, and either can be pursued using the three surface
modification methods. We will initially form polyacrylamide coatings on the
channels to enable quantitative evaluation of the surface treatment. This will
be done by measuring the EOF before and after surface coating. This enables
comparison of different polymer formulations and surface treatment methods. Upon
determining that a polymer composition and surface modification method are
acceptable, either surface coating followed by gel formation, or direct gel
formation with surface attachment can be used for evaluating separation
performance. While reference is made to polyacrylamide in this section, methods
applicable to polyacrylamide will be equally applicable to our advanced media
(Section 4.3).

4.2.2.f Development of Production Technology
- ---------------------------------------------
Casting or molding from a master substrate (microreplication) is expected to be
the most economical and robust production approach. The prototyping studies will
provide initial process parameters for replication using the optimized
formulation. A major technical difference between production and prototyping
will be the molds employed. For production, electroformed metal molds will be
preferred for ruggedness and economics. One method of producing electroformed
molds for micro scale parts is the well-known LIGA process depicted in Figure
4.3 (Becker et al., 1986). In this process, a thick (~100 (mu)m)
polymethylmethacrylate (PMMA) film is exposed to X-rays through an X-ray mask
which defines the lane geometries. The exposed areas are chemically altered and
can be selectively dissolved to form trenches. Nickel is electroplated into
these trenches to form a metal mold and the mold is released by dissolving the
remaining PMMA. This technology is well-established, but can prove costly due to
the need for access to a synchrotron for X-ray exposure and the expense of
fabricating
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- -------------------------------------------------------------------------------
X-ray masks. Typically, LIGA is used to produce thick structures with fine
resolution (less than 1 (mu)m). In our application, this fine resolution is not
required and therefore we can use an alternate technology to manufacture metal
molds more cheaply. A photopatternable polyimide can be used in place of the
PMMA employed in the LIGA process. This allows us to use standard UV light
photolithographic tools and masks to form trenches for nickel electroplating.
This greatly reduces costs and a resolution of 10 microns can be easily achieved
in 100 micron thick structures.

[GRAPHIC APPEARS HERE]

Figure 4.3 Schematic representation of the LIGA processing for replicating
channel features.

As indicated earlier, microreplication can be accomplished by injection molding
or casting. The decision on replication method will be made in the third year
based on knowledge gained during the project, specifically on the processing
requirements of the optimized formulation and the replication accuracy
attainable with molding vs. casting. The objective in year three will be to
demonstrate on a small scale the production of high-quality microreplicated
systems from electroformed metal molds using the optimized polymer formulation.

4.3 Separation Media (SBio)

4.3.1 Reusable Media - v. 1.1

A reusable matrix will be developed to improve the efficiency of the Phase I
system in a production environment. Reuse of polyacrylamide has been
investigated in capillary and slab gel formats (Swerdlow et al., 1992 and 1994;
Ansorge et al., 1992). Three primary factors are reported to limit gel reuse:
(1) hydrolysis of amide bonds in polyacrylamide, (2) ion depletion at the
gel-liquid interface, and (3) difficult removal of DNA templates and large
fragments from the gel. As discussed in Section 3.3, SBio has developed
non-crosslinked matrices based on N-substituted acrylamides which provide high
resolution and greatly enhanced hydrolytic stability. We will develop
crosslinked gel formulations based on these hydrolytically-stable compositions
for use in the v. 1.1 system. We will also investigate the use of buffer
additives (Swerdlow et al., 1994) to match the environment of the gel and
running buffer, limiting the formation of a liquid junction potential. Rather
than monomers, uncrosslinked polymer solutions will be used as additives,
thereby limiting user exposure to toxic chemicals. Formamide and mixed
formamide/urea buffers will be investigated if standard 7M urea gels demonstrate
unacceptable deformation in the loading region (Swerdlow et al., 1994).
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

[GRAPHIC APPEARS HERE]

Figure 4.4 A schematic diagram of the "collapsible" gel pore concept. The
framework of the polymer network will be formed by crosslinked,
hydrophilic, non-temperature-sensitive polymers (shown as thick
lines). Grafted onto the backbones of the crosslinked polymers will
be long, temperature-sensitive side-chains (thin lines). At one
temperature (A), the side-chains are more soluble and assume
extended conformations, "fingering" across the gel pore to form a
physically entangled network for the separation of DNA sequencing
fragments. When the temperature is changed (B), the side-chain
solubility is dramatically reduced, resulting in side-chain
collapse and dilation of the gel pores. The phase transition
temperature and the direction of the transition (low-to-high or
high-to-low temperature) can be controlled through the chemical
composition of the side-chains.

The above efforts should enable several runs per gel for samples not containing
template or large fragments. When these larger fragments are present, they may
remain in the gel or migrate out very slowly. We will investigate a "collapsible
pore" concept for dynamically opening the gel pores after a run to flush out
rapidly templates and large fragments. This scheme, depicted in Figure 4.4,
involves temperature-responsive side chains grafted onto a large-pore framework
of a non-temperature sensitive polymer. SBio has initial candidate compositions
for both the polymer framework and side chains from previous work, both of which
are hydrolytically stable. This research will involve synthesizing the graft
structures and testing different framework pore sizes and side chain molecular
weights. A variety of methods for polymerizing graft structures are known
(Dreyfuss and Quirk, 1987) and should be directly applicable here. A variation
of this strategy which does not require grafting is to synthesize the framework
polymer in an uncrosslinked solution of the temperature-responsive polymer. In
this approach, the temperature-sensitive polymer will be physically entrapped
within the framework structure, and will exhibit a transition from expanded to
collapsed structures (Section 3.3). Temperature-responsive polymers can be
designed to collapse due to either heating or cooling, providing additional
design flexibility.

4.3.2 Dynamic Porosity Media

The importance of long reads in genome sequencing is well established. In manual
sequencing, where the entire gel is imaged after a run, gradient gels have been
used to extend read length (States et al., 1991). However, the factors limiting
resolution and read length in manual and automated sequencing are different. As
reported by Slater and Drouin (1992), read length in a manual sequencer is
limited by the interband spacing of the large fragments, a problem which
directly lends itself to the gradient gel approach. In contrast, the read length
in automated slab sequencers is reported to be diffusion (band width) limited,
indicating that a static spatial gradient would not improve read length in
automated sequencers. Instead, longer gels and lower voltage drops have been
used to extend read lengths in automated sequencers (Luckey and Smith, 1993).

Theoretical and experimental evidence (Harke et al., 1992) indicates that the
resolution for a given DNA fragment length is optimized at a single gel
composition (other factors constant), and that this optimal gel concentration
decreases with increasing fragment length. Based on this evidence, we propose a
new strategy for increasing read length in automated sequencers. This strategy,
if successful, will be implemented in our v. 1.1 and v. 2.0 systems. We will
employ a temporal concentration gradient, reducing the effective gel
concentration during the run. The collapsible pore concept provides a basis for
developing dynamic porosity gels. We will design
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

polymer side chains which convert from extended to collapsed conformation
gradually over a 10-20 degree range, creating a dynamic concentration gradient
in the pores via thermal control. Variations of this strategy include combining
different side chain compositions that have sharp transitions spanning a 10-20
degree range, and combining temperature-sensitive and non temperature-sensitive
side chains. We will investigate these different approaches and determine which
provides the optimal increase in read length. As in section 4.3.1, an alternate
approach to the grafted side chains will be temperature-sensitive uncrosslinked
polymer physically entrapped in a crosslinked framework. Dynamic porosity can,
of course, be coupled with other methods for increasing read length (e.g.,
longer gels) if necessary.

4.3.3 Media for Disposable Separation System - v. 2.0

We will develop media compositions and polymerization methods enabling the
microreplicated subsystem to be manufactured with self-contained media and
supplied ready-to-use. In production, the media will be polymerized in the
channels, followed by sealing the microreplicated system in a foil with excess
buffer (similar to how pre-cast protein gels are currently packaged).
Alternatively, the media can be supplied dehydrated in the channels, and then
rehydrated with buffer at the point of use. The gel-filled microreplicated
subsystem will need a shelf life of 6 months or greater. The matrix polymer
stability should not be a problem, as we can use the hydrolytically stable
polymers discussed in Section 4.3.1 if required. Urea is known to be unstable in
solution, however urea sequencing buffer is sold commercially with a reported
shelf life of over 6 months when refrigerated. We will determine whether urea
can if fact meet the shelf life requirements, or whether alternate denaturants
(Smith et al., 1990) need to be investigated. If these approaches are
unsuccessful, we can dehydrate the matrix in the channels for shipment. A
re-sealable cover/base design will be preferred in this approach for rehydration
kinetics, and should be feasible through the formulation of the cover material
(e.g., use of an elastomeric polymer layer enabling sealing through
compression). Polymerization of crosslinked gels in capillary size channels can
result in shrinkage-induced defects, particularly when the gel is linked to the
channel walls. SBio's patented process (Soane, 1991) with proven ability to
prepare defect-free, gel-filled capillaries can be employed here. This method
compensates for polymerization-induced shrinkage by a sequential curing
technique similar to that described for substrate replication. This process can
be readily applied to all of the channels simultaneously using a single UV scan
from one end to the other of the sealed microreplicated system. The above
methods should also allow for incorporation of dynamic porosity compositions for
situations where longer read lengths are desired.

4.4 Advanced Detection: Replicated Optics (Cornell NNF, CuraGen)

We are proposing to fabricate and test a microfabricated optical system for
excitation and detection of fluorescence from channels. This optical system is
designed to dovetail into the microreplicated gel systems. The system employs
arrays of micro[XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

4.4.1. Side Illumination Spectral Detection.

Building on CuraGen's grating spectrograph, we will extend the techniques of
micro-optics to make a 10-fold reduction in the size and cost of the v. 1.0
imaging system. The 0.5 numerical aperture described above implies a large
collection angle. This is desirable for collecting the maximum amount of light
and results in a very short depth of focus. This will result in the compact
system we desire and will allow a dense array of optical elements and efficient
light collection. High quality lens arrays are commercially available in this
range of parameters, e.g. Gelsil Inc., which uses the Corning technology for
high quality molded silica optics. In the final phase of the work after
optimizing the design and testing prototype systems, our efforts will be
directed toward reducing the number of optical elements by combining
functionalities. For example, the wavelength dispersion and spatial focusing of
the fluorescent radiation can be combined in one unit by forming a grating on
the surface of the lens array. While our schematic shows discrete optical
elements, we will work to combine these into a maximally integrated unit for
increased simplicity in and operation.

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

[XXXXXXXXXXXXXXXXXXX]

Figure 4.4 Schematic of microfabricated optical elements that accomplish the
same function as CuraGen's existing device at a 10-fold higher
throughput. For side laser illumination, the confocal laser and
dichroic can be omitted.

4.4.2. Confocal Illumination and Detection.

The fluorescence collection system we have outlined will work with a variety of
laser illumination methods. Depending on the outcome of the channel prototyping,
we may chose to explore the possibilities of confocal illumination. The
outstanding feature, compared to the conventional scanning confocal fluorescence
method, is that we do not need to slew mechanically the optics across the
capillary array. The result is a more robust design. We can also employ rigid
alignment methods, impossible in a scanned system, required for the short depth
of focus of the high numerical aperture lens system.

4.4.3. Laser illumination

It is intended to investigate the use of both pulsed and continuous wave laser
source excitation with the objective of ascertaining the minimum limits of
fluorophore concentration for the reliable identification of fluorophore tags.
Of particular importance is the level of unwanted background light generated by
Rayleigh and Raman scattering in the gel and surrounding media, specular
reflection of the laser beam into the collection optics and any fluorescent
emission produced in the glass components of the system by the laser. We will
investigate the tradeoffs involved with continuous wave excitation (with and
without scanning) and pulsed laser excitation with

[Confidential Treatment Requested]
<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

respect to signal-to-noise ratio and observation time and ascertain minimum
fluorophore detection limits under these conditions.

4.4.4. Production.

Once the lane and optical features have been resolved, we will complete
development by characterizing methods for producing these in large quantities.
In particular, we will explore replication means similar to those being
evaluated for the formation of channel features. Principle difficulties will be
to develop robust means for replicating sub-micron features. However, previous
research in fabricating micro-optics has show that such resolution is
achievable.

4.5 Informatics (CuraGen,MIT)

4.5.1 Image Analysis and Base Calling

The preprocessing module will be modified to allow the use of more than 4 dyes
with the base calling software. For the 5-dye system, this can be accomplished
simply by adding a spectrally distinct 5th dye and using a 5x5 matrix for the
transformation from "wavelength space" to "dye space." The conversion produces 5
independent signal channels, which can be used in any base-coding scheme. For
example, 4 channels can be used to identify bases in one DNA strand, while the
5th channel identifies a single base in the reverse strand as an aid in sequence
alignment. For the 8-dye system, one option is as follows. Two lasers are used
to excite two spectrally distinct sets of four dyes each, each in two
independent wavelength regions. Thus the same 4x4 matrix operations used in
conventional preprocessing can be applied independently to the sets of four
dyes. The combined wavelength transform is then a block-diagonal 8x8 matrix with
two 4x4 blocks. We will investigate the possibility of using an analogous matrix
transform to deconvolute the signal from many dyes directly, even if there is
some spectral overlap between dyes.

The base calling module will be redesigned to produce a statistical measure of
the likelihood that a particular signal was generated by each of the four
nucleotides. This probability function can be obtained, for instance, by
comparing the measured signal to the expected signal, or "cluster center," for
each of the four bases (see Figure 3.11). For instance, one can define a metric
which measures the distance between the experimental signal and each of the four
cluster centers. If one of these distances is much smaller than the other three,
then the identity of the base is clear. We will be conducting ongoing research
to investigate the optimal form for the distance metric, including such factors
as the length of the DNA sequence and the identities of nearby bases. We will
also investigate different algorithms for converting distances from cluster
centers into base call probabilities. The best form will be investigated in
conjunction with our ongoing research into the best method of "training," i.e.
the optimum approach to allocating and locating base call prototypes within each
cluster.

4.5.2 Assembly and Finishing

While various definitions of finished sequence have been proposed, they are
usually based on a specific level of accuracy (e.g. 1 error in 1000 bases). The
direct incorporation of the complete information on a base call will allow for
full information to be taken into account during assembly, as opposed to an
arbitrary single call. For an assembled sequence, this translates to a
quantifiable confidence level that can be experimentally correlated with an
error rate. Integration of the base call information with the assembled sequence
will allow the contiguous sequence to be scanned and the quantitative confidence
in the finished sequence to be displayed.

A suitable function of the distances to base call clusters described above and
shown in Figure 3.10 can be used in multiple alignments to greatly increase the
confidence in finished sequence. The goal is demonstrated with a simple example,
showing only two bases. If a base is sequenced three times as A, A, and T, it is
difficult to determine a consensus with confidence. However if the same base is
sequenced as (A=0.95,T=0.05), (A=0.98,T=0.02), and (T=0.59,A=0.41), then it is
reasonable to declare with confidence that A is the correct call. In practice,
we will use the information available to create statistical measures of the
likelihood that each base call is correct, and then will use these to generate
mismatch penalty tables to be used in existing multiple alignment tools.
Furthermore, we will investigate other options for more direct conflict
resolution in multiple alignments. These will use the full information available
from the base calling software.

Our approach will lead to an integration of the base calling software directly
into the assembly and finishing process. This tie-in will allow for sequence
assembly and finishing to take place in a statistically valid and fully
automated fashion.
<PAGE>

Automated Sequencing System for the Human Genome Project
RFA: HG-95-004

<TABLE>
<CAPTION>
Collaborators Principal Investigators
------------- -----------------------
<S> <C>

Cornell University Dr. Harold G. Craighead

Soane BioSciences, Inc. Dr. Herbert H. Hooper

The Whitehead Institute for Biomedical Research Dr. Trevor L. Hawkins, Ph.D.
</TABLE>

(See attached confirming letters)

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

8. Consortium/Contractual Arrangements

Automated Sequencing System for the Human Genome Project

RFA: HG-95-004

CuraGen Corporation, Cornell University, Soane BioSciences, Inc. & The Whitehead
Institute for Biomedical Research hereby state that there are currently in place
the necessary programmatic, fiscal and administrative arrangements to ensure
that all necessary legal, financial and administrative matters are dealt with in
the appropriate manner.

In addition, CuraGen Corporation hereby confirms (see attached letters received
from each of the respective consortia) that all of the required programmatic and
administrative personnel of all consorita involved are aware of the NIH
consortium grant policy and are prepared to establish the necessary
interorganization agreements that will ensure compliance with all Federal
regulations and policies.

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

Appendix

PI: Gregory T. Went

Project Title: Automated Sequencing System for the Human Genome Project

Appendix 1 - Color Figures

Appendix 2- Detailed Cost Analysis

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------

9. References

Ansorge, W., et. al., High-throughput automated DNA sequencing facility with
fluorescent labels at the European Molecular Biology Laboratory,
Electrophoresis 13: 616 (1992).
Babu, Y. et. al., Preparation of Polyacrylamide Gel Filled Capillaries for
Ultra-high Resolution of Polynucleotides by Capillary Gel Electrophoresis.
Anal. Chem. 64:1221 (1992).
Balch et. al., Sequencing of DNA in Micromachined Channels, presented at Genome
Sequencing and Analysis Conference, Hilton Head, Sept. 17-21, 1994.
Bare, H. Haas, F. Honey,D. Mikolas, D. Craighead, H. A simple surface emitting
LED array for free-space optical interconnects. Photonics Technol. Lett.,
5:172 (1993).
Barker, D.L., High throughput mapping using capillary arrays, presented at The
Human Genome Project: Commercial Implications, San Francisco, March 6-8,
1995.
Bashkin, J., M. Bartosiewicz, D. Barker, and R. Johnston, High throughput DNA
analysis by capillary array electrophoresis, presented at the 17th
International Symposium on Capillary Chromatography and Electrophoresis,
Virginia, May 7-11, 1995.
Beck,S., and Alderton,R. A strategy for the amplification, purification, and
selection of M13 templates for large-scale DNA sequencing. Anal Biochem 212:
498 (1993).
Becker, et. al., Fabrication of microstructures with high aspect ratios and
great structural heights by synchrotron radiation lithography,
galvanoforming, and plastic molding (LIGA process), Microelectronic
Engineering 4:35 (1986).
Brumley, R.L. and L.M. Smith, Rapid DNA Sequencing by Horizontal Ultrathin Gel
Electrophoresis, Nucl. Acids Res. 19: 4121 (1991).
Busch, M.H.A., J.C. Kraak, and H. Poppe, Cellulose acetate-coated fused silica
capillaries for the separation of proteins by capillary zone
electrophoresis, J. Chrom. A. 695: 287 (1995).
Chang, E.I. and Lippmann, R.P. A boundary hunting radial basis function
classifier which allocates centers constructively, in Advances in neural
information processing systems 5, Hanson, et. al., eds. pp 139 (1993).
Chen, F. and Craighead H. Diffrative Phase Elements Based on Two-Dimensional
Artificial Dielectrics. Optics Lett. 20:121 (1995).
Chin, A.M., and J.C. Colburn, Counter-migration capillary Electrophoresis in DNA
Restriction Fragment Analysis, Am. Biotech. Lab. 7: 16 (1989).
Dreyfuss, P., and R.P. Quirk, Graft Copolymers, in Encyclopedia of Polymer
Science and Engineering, 2nd Edition, John Wiley and Sons, (1987).
Effenhauser, C.S. et. al., Glass Chips for High-Speed Capillary Electrophoresis
Separations with Submicrometer Plate Heights, Anal. Chem. 65:2637 (1993).
Effenhauser, C.S., et. al., High-Speed Separation of Antisense Oligonucleotides
on a Micromachined Capillary Electrophoresis Device, Anal. Chem. 66: 2949
(1994).
Epperson and Denton, Binning Spectral Images in a Charged COupled Device.
Anal.Chem. 61: 1513 (1989).
Fleischmann et. al., (1995) Science 269: 496
Fry,G., et. al., A new approach to template purification for sequening
applications using paramagnetic particles. BioTechniques 13: 124 (1992).
Giddings, M.C., et. al., An adaptive object oriented strategy for base calling
in DNA sequence analysis. Nucleic Acids Research 21: 4540 (1993).
Gilges, M., et. al., Capillary Zone Electrophoresis Separations of Basic and
Acidic Proteins using Poly(vinyl alcohol) Coatings in Fused Silica
Capillaries, Anal. Chem. 66: 2038 (1994).
Golden III, J.B. et. al., Pattern recognition for automated DNA sequencing: I.
On-line signal conditioning and feature extraction for base calling, in
Proceedings of the first international conference on intelligent systems for
molecular biology, Hunter et. al., eds. AAAI Press, Menlo Park, CA (1993).
Grossman, P.D., Electrophoretic separation of DNA sequencing extension products
using low-viscosity entangled polymer networks, J. Chrom. A. 663: 219
(1994).
Grossman, P.D., and D.S. Soane, Capillary Electrophoresis of DNA in Entangled
Polymer Solutions, J. Chrom. 559: 257 (1991).
Harke, H.R., S. Bay, J.Z. Zhang, M.J. Rocheleau and N. Dovichi, Effect of Total
Percent Polyacrylamide in Capillary Gel Electrophoresis for DNA Sequencing
of Short Fragments, J. Chrom. 608: 143 (1992).
Harrison, D. et. al., Micromachining a Miniaturized capillary Electrophoreisi-
based chemical Analysis System on a Chip. Science 261: 895 (1993).
Harrison, D.J., A. Manz, Z. Fan, H. Ludi, and H.M. Widmer, Capillary
Electrophoresis and Sample Injection Systems Integrated on a Planar Glass
Chip, Anal. Chem. 64: 1926 (1992b).
Harrison, D.J., et. al., Micromachining a miniature capillary electrophoresis-
based chemical analysis system on a chip, Science 261: 895 (1992).

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
Harrison, et. al., Capillary Electrophoresis and sample Injection Systems
Integrated on a Planar Glass Chip. Anal. Chem. 64: 1926 (1992).
Hawkins,T.L. M13 single-stranded purification using a biotinylated probe and
streptavidin coated magnetic beads. DNA sequence-J.DNA Sequencing and
Mapping. 3. 65 (1994).
Hawkins,T.L. The use of magnetic particles in molecular biology. In Automated
DNA sequencing and analysis techniques. Ed. Craig Venter,J. Academic Press
(1994).
Hawkins,T.L., et. al., DNA purification and isolation using a solid-phase.
Nucl.Acids.Res. 22: 4543 (1992).
Hawkins,T.L., et. al., Solid-phase molecular biology. Biomedical
products.December issue . Ed Steve Ernst (1994).
Heiger, D.N., et. al., Separation of DNA Restriction Fragments by High
Performance Capillary Electrophoresis with Low and Zero Crosslinked
Polyacrylamide using Continuous and Pulsed Electric Fields, J. Chrom. 516:
33 (1990).
Huang, X.C., et. Al., DNA Sequencing using Capillary Array Electrophoresis,
Anal. Chem. 64: 2149 (1992).
Huang, X.C., et. al., Capillary Array Electrophoresis Using Laser-Excited
Confocal Fluorescence Detection, Anal. Chem. 64: 967 (1992a).
Hultman, T et. al., Bi-directional solid-phase sequencing of In Vitro-amplified
plasmid DNA. BioTechniques 10: 84 (1991).
Hultman,T., et. al., Direct solid-phase sequencing of genomic and plasmid DNA
using magnetic beads as solid support. Nucl.Acids.Res. 17: 4937 (1989).
Jacobson, S.C., et. al., Microchip Capillary Electrophoresis with an Integrated
Postcolumn Reactor, Anal. Chem. 66: 3472 (1994).
Jacobson, S.C., et. al., Effects of Injection Schemes and Column Geometry on the
Performance of Microchip Electrophoresis Devices, Anal. Chem. 66: 1107
(1994).
Jacobson, S.C., et. al., Precolumn Reactions with Electrophoretic Analysis
Integrated on a Microchip, Anal. Chem. 66: 4127 (1994).
Johnson, B, et. al., The design of separation media for DNA sequencing in
capillaries, poster at the Human Genome Project: Commercial Implications,
San Francisco, March 6-8, 1995.
Kostichka, et al., High Speed automated DNA sequencing in ultrathin gels.
BioTechnology, 10, 78-81. (1992).
Kovacs, G.T.A., and K.O. Holland, Electrophoretic System, European patent
application 89313379.3 (1989).
Lander, et al.. Personal communication, Pilot study to sequence the human genome
(1995)
Liu, P.Z., et. al., Polyacrylamide-Modified Polypropylene Hollow Fibers for
Capillary Electrophoresis, J. Microcolumn Sep. 6: 581 (1994).
Liu, P.Z., et. al., Polymeric hollow fibers for capillary electrophoresis, J.
Microcolumn Sep. 5: 245 (1993).
Luckey, J.A., and L.M. Smith, Optimization of the Electric Field Strength for
DNA Sequencing in Capillary Gel Electrophoresis, Anal. Chem. 66: 2841
(1993).
Lukacs, K.D., and J.W. Jorgenson, Capillary Zone Electrophoresis: Effect of
Physical Parameters on Separation Efficiency and Quantitation, J. High
Resol. Chrom. 8: 407 (1985).
Manz, A., et. al., Miniaturization of Chemical Analysis Systems - A Look into
Next Century's Technology or Just a Fashionable Craze?, Chimia 45: 103
(1991).
Mathies and Huang, Nature 359: 176 (1992).
Mikolas, D. et. al., Fabrication of Aspheric High Numerical Aperture Reflective
Diffractive Optic Elements Using Electron Beam Lithography. J. Vac. Sci.
Technol. B 12: 20 (1994).
Nielen, M.W., Capillary zone electrophoresis using a hollow polypropylene fiber,
J. High Resolut. Chrom. 16: 62 (1993).
Olejnik, J., et. al., Photocleavable biotin derivatives: A versatile approach
for the isolation of biomolecules. Proc. Natl. Acad. Sci. USA 92: 7590
(1995).
Pace, S.J., Silicon Semiconductor Wafer for Analyzing Micronic Biological
Samples, US Patent 4,908,112, Issued (1990).
Pulyaeva, H., et. al., Molecular Sieving of Lambda Phage DNA in Polyacrylamide
Solutions as a function of the Molecular Weight of the Polymer,
Electrophoresis 13: 608 (1992).
Righetti, P.G., et. al., Towards New Formulations for Polyacrylamide Matrices,
as Investigated by Capillary Zone Electrophoresis, J. Chrom. 638: 165
(1993).
Ruiz-Martinez, et. al., DNA Sequencing by Capillary Electrophoresis with
Replaceable Linear Polyacrylamide and Laser-Induced Fluorescence Detection,
Anal. Chem. 65: 2851 (1993).
Schutzner, W. and E. Kenndler, Electrophoresis in Synthetic Organic Polymer
Capillaries: Variation of Electroosmotic Velocity and (zeta) Potential with
pH and Solvent Composition, Anal. Chem, 64, (1991).
Shank, S. and Craighead, H. Binary Optics for Optical Interconnects, S. M. Shank
and H. G. Craighead. Proc. SPIE, 2216 (1994).
Shank, S. et. al., Multiple-level phase gratings fabricated using focused ion
beam milling and electron beam lithography. J. Vac. Sci. Technol B 12: 3643
(1994).

<PAGE>

Principal Investigator/Program Director (Last, first, middle):
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
Slater, G.W., and G. Drouin, Why can we not Sequence Thousands of DNA Bases on a
Polyacrylamide Gel, Electrophoresis 13: 574 (1992).
Smith et al., Fluorescent detection in automated DNA sequence analysis. Nature,
321, 674 (1986).
Smith, C.L., et. al., Rapid Sequencing of DNA, Am. Biotech Lab 8: 48 May (1990).
Soane, D.S., Replaceable Crosslinked Gels for DNA Analysis by Capillary
Electrophoresis, Third International Symposium on Capillary Electrophoresis,
York, UK, August 24-26, 1994.
Soane, D.S., Advances in Gel Matrices for DNA Electrophoresis, presented at The
Human Genome Project: Commercial Implications, San Francisco, March 6-8,
1995.
Soane, D.S., and Y.C. Bae, Separation Media for Electrophoresis, International
patent application WO 94/10561.
Soane, D.S., Controlled Casting of Shrinkable Material, US Patent 5,110,514
(1992).
Soane, D.S., Gel Casting Method and Apparatus, US Patent 5,061,336 (1991).
States, J.C., et. al., Electrophoresis System for Resolving Over 500 Nucleotides
with a Single Sample Loading, BioTechniques 46: (11), 1 (1991).
Sulston,J.,et. al., The C.elegans genome sequencing project: a beginning. Nature
356: 37 (1992).
Swerdlow, H., et. al., Reloading and Stability of Polyacrylamide Slab Gels for
Automated DNA Sequencing, BioTechniques 16: (4), 684 (1994).
Swerdlow, H., et. al., Stability of Capillary Gels for Automated Sequencing of
DNA, Electrophoresis, 13, 475 (1992).
Takahashi, et. al., Multiple Sheath-Flow Gel capillary-Array electrophoresis for
Multicolor Fluorescent DNA Detection. Anal. Chem. 66: 1021 (1994).
Taylor, J. and Yeung, E. Axial-Beam Laser-Excited Fluorescence Detection in
Capillary Electrophoresis. Anal. Chem. 64: 1741 (1992).
Terry, S.C., et. al., A Gas Chromatographic Air Analyzer Fabricated on a Silicon
Wafer, IEEE Transactions, 26: 1880 (1979).
Thakrar, A.R. and K. Gandhi, Method of Manufacturing a Contact Lens, US Patent
5,433,898 (1995).
Tibbetts, C.J., et. al., Neural networks for automated base calling of gel-based
DNA sequencing ladders, in Automated DNA sequencing and analysis techniques,
Adams et.al., eds. Academic Press, London (1994).
Ueno, K. and E.S. Yeung, Simultaneous Monitoring of DNA Fragments Separated by
Electrophoresis in a Multiplexed Array of 100 Capillaries, Anal. Chem. 66:
1424 (1994).
Uhlen, M, Magnetic separation of DNA. Nature 340: 733 (1989).
Watson,A., Smalldon,N., Lucke,R., and Hawkins,T.L., The Caenorhabditis elegans
project: first steps in automation. Nature 362: 569 (1993).
Went, G.T., Development of an Integrated Microfabricated Device for DNA Fragment
Analysis, Biochip Array Technologies Conference, Washington, DC, May 10,
1995.
Westphall et. al., Proc SPIE 2386: 45 (1995).
Wilson, R., et. al., 2.2Mb of contiguous nucleotide sequence from chromosome III
of C.elegans. Nature 368: 32 (1994).
Woolley, A.T., and R.A. Mathies, Ultra-High-Speed DNA Fragment Separations Using
Microfabricated Capillary Electrophoresis Chips, Proc. Natl. Acad. Sci. USA,
91: 11348 (1994).
Wright, A.N., Photopolymerization at Surfaces, in Polymer Surfaces, D.T. Clark
and W.J. Feast Eds., John Wiley and Sons, (1978).
Yasuda, H.K., et. al., Plasma-Surface Interactions in the Plasma Modification of
Polymer Surfaces, in Polymer Surfaces and Interfaces, W.J. Feast and H.S.
Munro Eds, John Wiley and Sons, (1987).
Zhu, M., et. al., Factors Affecting Free Zone Electrophoresis and Isoelectric
Focusing in Capillary Electrophoresis, J. Chrom. 480: 311 (1989).

<PAGE>

II Principal Investigator Program Director (Last, first, middle):

--------------------------
- --------------------------------------------------------------------------------
CHECKLIST
- --------------------------------------------------------------------------------

TYPE OF APPLICATION

[X] NEW application. (This application is being submitted to the PHS for the
first time.)

[_] REVISION of application number.
------------------------------------------
This application replaces a prior unfunded version of a new, competing
continuation, or supplemental application.

[_] COMPETING CONTINUATION of grant number.
----------------------------------
(This application is to extend a funded grant beyond its current
project period.)

[_] SUPPLEMENT to grant number.
----------------------------------------------
(This application is for additional funds to supplement a currently funded
grant.)

[_] CHANGE of principal investigator program/program director.
Name of former principal investigator program ???????????.
-----------------

[_] FOREIGN application, city and country of birth and present citizenship of
principal investigator/program director. (This information is required by
the U.S. Department of State.)
---------------------------------------------
- --------------------------------------------------------------------------------
1. ASSURANCES/CERTIFICATIONS

The following assurances/certifications are made by checking the appropriate
boxes and are verified by the signature of the OFFICIAL SIGNING FOR APPLICANT
ORGANIZATION on the FACE PAGE at the application. Descriptions of individual
assurances/certifications begin on page 24 at Specific Instructions.
- --------------------------------------------------------------------------------

a. Human Subjects (Complete Item 4 on the Face Page)

[_] Full IRB Review [_] Expedited Review

b. Vertevrate Animals (Complete Item 5 on the Face Page)

c. and Patents (Competing Continuation Application Only-- Complete Item
10 on the Face Page)

d. Department and Suspension [X] No [_] Yes (Attach explanation)

e. Drug-Free Workplace (Applicable only to new or revised applications being
submitted to the PHS for the first proposed project. Type 1)

[X] Yes [_] No (Attach explanation)

f. Lobbying

With Federal appropriated funds [X] No

With other than Federal appropriated funds [X] No [_] Yes
(If "Yes." see page 29 and
attach Standard Form LLL
"Disclosure of Lobbying
Activities" to the application
behind the second page of the
Checklist)

g. Delinquent Federal Debt [X] No [_] Yes (Attach explanation)

h. Misconduct in Science (Form PHS 6315) [X] Fired [_] Not Fired
If filed, date of initial Assurance or Latest Annual Report 2/21/95
-----------------
<TABLE>

<S> <C> <C> <C>
i. Civil Rights j. Handicapped Individuals K. Sex Discrimination l. Age Discrimination
Form HHS 441 Form HHS 641 Form HHS 639-A Form HHS 680

[X] Filed [X] Filed [X] Filed [X] Filed

[_] Not Filed [_] Not Filed [_] Not Filed [_] Not Filed

</TABLE>

- --------------------------------------------------------------------------------
<PAGE>

- --------------------------------------------------------------------------------
CHECKLIST (Continued)
- --------------------------------------------------------------------------------
2. PROGRAM INCOME (See instructions, page ??)

All applicants must indicate (Yes or No) whether program income is anticipated
during the ???????) for which grant support is requested.
[X] No [ ] Yes If "Yes." use the format below to reflect the amount and
source(s) of anticipatedprogram income.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
?????? ????? Anticipated Amount Source(s)
- --------------------------------------------------------------------------------
<S> <C> <C>

- --------------------------------------------------------------------------------
</TABLE>
3. INDIRECT COSTS

Indicate the applicant organization's most recent indirect cost rate established
with the appropriate DHHS Regional Office, or, in the case of for profit
organizations, the rate established with the appropriate PHS Agency Cost
Advisory Office. If the applicant organization is in the process of initially
developing or renegotiating a rate, or has established a rate with another
Federal agency, it should immediately upon notification that an award will be
made develop a tentative indirect cost rate proposal. This is to be based on its
most recently completed fiscal year in accordance with the principles set forth
in the pertinent DHHS Guide for Establishing Indirect Cost Rates and submitted
to the appropriate DHHS Regional Office or PHS Agency Cost Advisory Office.
Indirect costs will not be paid on foreign grants, construction grants, grants
to Federal organizations, and grants to individuals and usually not on
conference grants. Follow any additional instructions provided for Research
Career Development Awards. Institutional National Research Service Awards, and
the specialized grant applications listed on page 6.

[_] DHHS Agreement dated:______________ [_] No Indirect Cases Requested.

[_] DHHS Agreement being negotiated with _______________ Regional Office.

[X] No DHHS Agreement cut rate being negotiated with * Date April 24, 1995
CALCULATION*
(The entire grant application, including the Checklist will be ???????? and
provided to peer reviewers as CONFIDENTIAL ???????????. ???????? ??? following
information on interest costs if OPTIONAL for ??????? organizations.)

a. Initial budget period:
Amount of base [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

b. Entire proposed project:
Amount of base [XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX]

(1) Add to total direct costs from form page 4 and enter new total on FACE
Page. Item 7?.
(2) Add to total direct costs from form page 5 and enter new total on FACE
Page. Item 8?.

*Check appropriate box(es):

[_] Salary and wages case [X] Modified total direct costs base

[_] Other base (Explain below)

[_] Off-site, other special rate, or more than one rate involved (Explain below)

Explanation (Attach separate sheet, if necessary.):

* National Institute of Standards and Technologies
Atlanta, GA

[Confidential Treatment Requested]
<PAGE>

KK Principal Investigator/Program Director (Last, first, middle)
Went, Gregory T.
----------------
- --------------------------------------------------------------------------------
Attach this form to the signed original of the
application after the CHECKLIST. Do not duplicate.

PERSONAL DATA ON
PRINCIPAL INVESTIGATOR/PROGRAM DIRECTOR
- --------------------------------------------------------------------------------

The Public Health Service has a continuing commitment to monitoring the
operation of its review and aware processes to detect--and deal
appropriately with--any instances of real or apparent inequities with
respect to age, sex, race or ethnicity of the proposed principal
investigator/program director.

To provide the PHS with the information it needs for this important task,
complete the form below and attach it to the signed original of the
application after the Checklist. Do not attach copies of this form to the
duplicated copies of the application.

Upon receipt and assignment of the application by the PHS, this form will
be separated from the application. This form will not be duplicated, and it
will not be a part of the review process. Data will be confidential and
will be maintained in Privacy Act record system 09-25-0036. "Grants:IMPAC
(Grant/Contract information)." All analysis conducted on the data will
report aggregate statistical findings only and will not identify
individuals.

If you decline to provide this information, it will no way affect
consideration of your application.

Your cooperation will be appreciated.

================================================================================
DATE OF BIRTH (month/day/year) SEX

July 1, 1963 [_] Female [X] Male

- --------------------------------------------------------------------------------
PLACE AND/OR ETHNIC ORIGIN (check one)

Note: The category that most closely reflects the individual's recognition in
the community should be used for purposes of recording mixed racial and/or
ethnic origins.

[_] American Indian or Alaskan Native. A person having origins in any of the
original peoples of North America and who maintains a cultural
identification through tribal affiliation or community recognition.

[_] Asian or Pacific Islander. A person having origins in any of the original
peoples of the Far East. Southeast Asia, the indian subcontinent, or the
Pacific islands. This area includes, for example, China, India, Japan,
Korea, the Philippine Islands, and Samoa.

[_] Black, not of Hispanic origin. A person having origins in any of the black
racial groups of Africa.

[_] Hispanic. A person of Mexican, Puerto Rican, Cuban. Central or South
American, or other Spanish culture or origin, regardless of race.

[X] White, not of Hispanic origin. A person having origins in any of the
original peoples of Europe, North Africa, or the Middle East.

[_] Check here if you do not wish to provide some or all of the above
information.

<PAGE>

EXHIBIT 11.1

SCHEDULE OF COMPUTATION OF NET INCOME (LOSS) PER SHARE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1995 1996 1997
----------- ---------- -----------
<S> <C> <C> <C>
Net loss Attributable to
Common Stockholders.................... $(1,088,605) $ (606,241) $(7,290,434)
=========== ========== ===========
Weighted Average Number of Shares
Outstanding During the Period.......... 4,915,087 5,097,073 5,364,505
Assumed Conversion of Series A, C, D & E
Preferred Shares to Common Shares(1)... -- -- 2,523,878
----------- ---------- -----------
4,915,087 5,097,073 7,888,383
=========== ========== ===========
Net Loss Per Share Attributable to
Common Stockholders.................... $ (0.22) $ (0.12) $ (0.92)
=========== ========== ===========
</TABLE>
- --------
(1) In connection with the initial public offering Series A, C, D and E
Preferred Shares will automatically convert to common stock on a one for
one basis. The additive shares reflect such conversion had the conversion
occurred during the year ended December 31, 1997.

<PAGE>

EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Amendment No. 7 to the Registration Statement
of CuraGen Corporation on Form S-1 of our report dated February 13, 1998
(February 20, 1998 as to Note 10), appearing in the Prospectus, which is part
of this Registration Statement. We also consent to the reference to us under
the headings "Experts" and "Selected Financial Data" in such Prospectus.

DELOITTE & TOUCHE LLP

/S/ DELOITTE & TOUCHE LLP

Hartford, Connecticut

March 13, 1998

<PAGE>

EXHIBIT 23.3

CONSENT OF PENNIE & EDMONDS LLP

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-1 and related Prospectus of CuraGen
Corporation.

/s/ Pennie & Edmonds LLP
PENNIE & EDMONDS LLP

New York, New York

March 13, 1998

<PAGE>

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CURAGEN
CORPORATION DECEMBER 31, 1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 17,417,161
<SECURITIES> 0
<RECEIVABLES> 588,314
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 19,260,089
<PP&E> 8,656,032
<DEPRECIATION> (1,735,836)
<TOTAL-ASSETS> 26,519,029
<CURRENT-LIABILITIES> 4,521,417
<BONDS> 0
0
1,459,196
<COMMON> 85,801
<OTHER-SE> 12,137,178
<TOTAL-LIABILITY-AND-EQUITY> 26,519,029
<SALES> 0
<TOTAL-REVENUES> 5,896,543
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 9,742,546
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 684,537
<INCOME-PRETAX> (7,222,010)
<INCOME-TAX> 0
<INCOME-CONTINUING> (7,222,010)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (7,222,010)
<EPS-PRIMARY> (.92)
<EPS-DILUTED> (.92)

</TABLE>