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                         Lease Management Services, Inc.
                         2500 Sand Hill Road, Suite 101
                              Menlo Park, CA 94025
                  Telephone (415) 854-9450   Fax (415) 854-9457


April 25, 1997

Ms. Julie C. Neumann
Director, Finance & Administration
ACACIA Biosciences, Inc.
4136 Lakeside Drive
Richmond, CA 94806

Dear Julie:

We are pleased to present our lease proposal to ACACIA Biosciences, Inc.

LESSEE:          ACACIA Biosciences, Inc.

LESSOR:          Lease Management Services, Inc.

EQUIPMENT:       A master lease line of $1 500,000 to finance equipment as per
                 the attached list. All equipment is subject to Lessor's final
                 approval.

LEASE TERM:      Forty-two (42) months.

RENTAL FACTOR:   2.654% of equipment cost payable monthly in advance for each
                 lease schedule.

                 The yield in this transaction be adjusted relative to any
                 increase in comparable term US Treasury maturities. The payment
                 factor for each schedule will be set at the time it is
                 documented arid will be fixed for the term. The payment factors
                 above is based on the average of the Federal Reserve's 3-year
                 and 5-year treasuries (6.71%) for the week ending 4/10/97.

LEASE TYPE:      Net lease - insurance, personal property taxes and maintenance
                 paid by Lessee.


END OF LEASE:    At the end of the lease term, equipment will be purchased for
                 12% of original, aggregate equipment cost; OR, subject to
                 satisfactory credit review, the term may be extended 12 months
                 at the lease rate factor of 1.05% after which Lessee will own
                 the equipment.
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LESSEE MAY CHOOSE ONE OF THE FOLLOWING COLLATERAL OPTIONS



(1). DEPOSIT      A deposit equal to 15% of equipment cost shall be payable upon
                  execution of each schedule.

                  Interest on deposits shall be credited to Borrower at the rate
                  of 5.0% annually. Interest will be accrued and paid with the
                  return of the security deposit.

                  All deposits and accrued interest will be returned to Borrower
                  at achievement of the earlier of:

                  A)    At such time as Borrower's unrestricted cash balance,
                        less debt, is at least $20,000,000; OR,

                  B)    In the event of an acquisition, if a credit-worthy
                        acquirer executes an assignment or guarantee acceptable
                        to Lender OR,

                  C)    After 6/30/98, with the signing of two or more corporate
                        partnerships that include up-front license or access
                        fees, equity, or other non-refundable cash of at least
                        $6,000,000 plus annual R&D payments or similar
                        equivalent to 40% or more of Lessee's Board-approved
                        cash burn for calendar years 1998, 1999. and 2000; OR,

                  D)    On a schedule-by-schedule basis, after receipt of 32
                        prompt rent payments.

(2) WARRANT       In consideration for this financing, Lessee shall grant to
                  Lessor a warrant to purchase Lessee's Preferred Series "A
                  stock. The warrant shares will be for 4% of equipment cost
                  at the price of $1.00, share (i.e. 60,000 shares). The
                  warrant may be exercised by cash or net issue and will
                  include standard anti-dilution provisions. The exercise
                  period shall end 72 months from the date of issue.

(3) COVENANT      No additional collateral will be required except in the event
                  Lessee's unrestricted cash, excluding debt, falls below the
                  appropriate benchmark, below. In that event, Lessee will
                  provide to Lessor a cash security deposit equivalent to 20%
                  of original equipment cost, but in no event to exceed the
                  remaining gross lease receivable.

                  PRE-IP0 BENCHMARK: Unrestricted cash, excluding debt, must be
                  the greater of $2,500,000 or 8 month's cash needs ["6 months'
                  cash needs" will be defined as Lessee's cash burn for the 3
                  months just completed multiplied by a factor of 2.5].


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                  POST-IPO BENCHMARK: Unrestricted cash, excluding debt, must be
                  the greater of $8,000,000 or 9 month's cash needs ["9 months'
                  cash needs" will be defined as Lessee's cash burn for the
                  quarter just completed multiplied by a factor of 3.3].

                  This cash will be released when Lessee's unrestricted cash
                  position, excluding debt, recovers and is greater than the
                  above benchmark for at least one quarter and continues to
                  remain greater.

                  Verification of achievement of benchmarks is to be acceptable
                  to Lessor. Return of deposits prior to end of term is
                  contingent upon receipt of all payments and financials to date
                  as agreed, no default under any financial obligation, and no
                  material adverse change in Lessee's financial condition or
                  management.

CONTINGENCIES:    1)    Standard documentation satisfactory to Lessee and
                        Lessor.

                  2)    Releases against this lease credit line are contingent
                        upon Lessee providing evidence of no material adverse
                        change or threatened material adverse in Lessee's
                        financial condition, management status, corporate
                        partnership or regulatory issues. This credit line,
                        unless extended in writing, expires 12/31/98.

                  3)    Throughout the lease term, Lessee shall provide monthly
                        financials within 30 days of each month-end, and
                        annually, an audited statement. All such financial
                        statements to be prepared using generally accepted
                        accounting principles.

                  4)    Complete equipment specifications to be provided to
                        Lessor before each takedown.

                        All equipment to be located at Lessee's Richmond,
                        California, headquarters.

                        Custom equipment; software; upgrades to equipment to
                        which Lessor does not have clear title or first
                        security interest; disposables; "SOFT COSTS" SUCH AS
                        SALES TAX, FREIGHT. PLUMBING WIRING, LABOR OR
                        INSTALLATION; AND LEASEHOLD OR TENANT IMPROVEMENTS IN
                        EXCESS OF $150,000 are excluded from this line.

                  5)    Subject to final approval by Lessor's Credit Committee.

                  6)    This is a statement of mutual intent and not an
                        agreement to Lease. The terms set forth above are not
                        therefore binding until a lease


                                      -3-
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                        agreement is executed between Lessor and Lessee for
                        specific items of equipment.

COMMITMENT
FEE:             $15,000.00 commitment fee. This fee shall be fully credited,
                 pro-rata, to rentals due. All or a portion of said fee will be
                 forfeited if this transaction is approved by Lessor and not
                 executed by Lessee as called for in this proposal. The entire
                 fee will be returned to Lessee promptly in the event Lessor
                 fails to approve this transaction.

If the terms of this proposal meet with your approval, please sign and return
with your commitment fee, and we will proceed. Unless previously accepted, this
proposal will expire 5/10/97.

We're very pleased to help finance your equipment needs and promise to give you
the best service in the industry.


Sincerely,                                Collateral Option Chosen
                                          ------------------------
                                                  Deposit
                                                           ---
/s/ Stephanie Wagner                              Warrant   x
                                                           ---
                                                  Covenant
                                                           ---

Stephanie K. Wagner                       ACCEPTED:  ACACIA Biosciences, Inc.
Vice President Marketing                  BY: /s/ Julie C. Neumann
                                              ---------------------------------
                                          TITLE: Director, Finance & Admin
                                                 ------------------------------
                                          DATE: April 30, 1997
                                                -------------------------------


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