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                            STANDARD INDUSTRIAL LEASE

CONFIDENTIAL                        BLICKMAN
                                    TURKUS   COMMERCIAL
                                             INDUSTRIAL
                                             REAL ESTATE

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                     An Affiliate of the Woodmont Companies
              ----------------------------------------------------

1. PARTIES. This Lease, dated, for reference purposes only, DECEMBER 17, 1996 is
made by and between LEONARD AND ROBERTA COHN, DONALD AND DIANE ROSENBERG, ET.
AL. DBA C&R INVESTMENTS (herein called "Lessor") and ACACIA BIOSCIENCES, INC., A
DELAWARE CORPORATION (herein called "Lessee").

2. PREMISES. Lessor hereby leases to Lessee and Lessee leases from Lessor for
the term, at the rental, and upon all of the conditions set forth herein, that
certain real property situated in the County of CONTRA COSTA State of
California, commonly known as 4136 LAKESIDE DRIVE, RICHMOND and described as
APPROXIMATELY 5,560 RENTABLE SQUARE FEET OF OFFICE AND LABS SPACE. Said real
property including the land and all improvements thereon, is herein called "the
Premises".

3.       TERM.

         3.1 TERM. The term of this Lease shall be for THREE (3) YEARS
commencing on MARCH 1, 1997 and ending on FEBRUARY 28, 2000 unless sooner
terminated pursuant to any provision hereof.

         3.2 DELAY IN COMMENCEMENT. Notwithstanding said commencement date, if
for any reason Lessor cannot deliver possession of the Premises to Lessee on
said date, Lessor shall not be subject to any liability therefor, nor shall such
failure affect the validity of this Lease or the obligations of Lessee hereunder
or extend the term hereof, but in such case Lessee shall not be obligated to pay
rent until possession of the Premises is tendered to Lessee; provided, however,
that if Lessor shall not have delivered possession of the Premises within sixty
(60) days from said commencement date, Lessee may, at Lessee's option, by notice
in writing to Lessor within ten (10) days thereafter, cancel this Lease, in
which event the parties shall be discharged from all obligations hereunder, if
Lessee occupies the Premises prior to said commencement date, such occupancy
shall be subject to all provisions hereof, such occupancy shall not advance the
termination date, and Lessee shall pay rent for such period at the initial
monthly rates set forth below.

4. RENT. Lessee shall pay to Lessor as rent for the Premises equal monthly
payments of $4,170.00, in advance, on the 1ST day of each month of the term
hereof. Lessee shall pay Lessor upon the execution hereof $4,726.00 as rent for
the LAST MONTH. Rent for any period during the

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term hereof which is for less than one month shall be a pro rata portion of the
monthly installment. Rent shall be payable in lawful money of the United States
to Lessor at the address stated herein or to such other persons or at such other
places as Lessor may designate in writing.

5. SECURITY DEPOSIT. Lessee shall deposit with Lessor upon execution hereof
$4,170.00 as security for Lessee's faithful performance of Lessee's obligations
hereunder. If Lessee fails to pay rent or other charges due hereunder, or
otherwise defaults with respect to any provision of this Lese, Lessor may use,
apply or retain all or any portion of said deposit for the payment of any rent
or other charge in default or for he payment of any other sum to which Lessor
may become obligated by reason of Lessee's default, or to compensate Lessor for
any loss or damage which Lessor may suffer thereby. If Lessor so uses or applies
all or any portion of said deposit, Lessee shall within ten (10) days after
written demand therefor deposit cash with Lessor in an amount sufficient to
restore said deposit to the full amount hereinabove stated and Lessee's failure
to do so shall be a material breach of this Lease. Lessor shall not be required
to keep said deposit separate from its general accounts. If Lessee performs all
of Lessee's obligations hereunder, said deposit, or so much thereof as has not
theretofore been applied by Lessor, shall be returned, without payment of
interest or other increment for its use, to Lessee (or, at Lessor's option, the
last assignee, if any, of Lessee's interest hereunder) at the expiration of the
term hereof, and after Lessee has vacated the Premises. No trust relationship is
created herein between Lessor and Lessee with respect to said Security Deposit.

6.       USE.

         6.1 USE. The Premises shall be used and occupied only OFFICE,
LABORATORY, RESEARCH AND DEVELOPMENT, AND OTHER INCIDENTAL USES and for no other
purpose.

         6.2      COMPLIANCE WITH LAW.

                  (a) Lessor warrants to Lessee that the Premises, in its
existing state, but without regard to the use for which Lessee will use the
Premises, does not violate any applicable building code, regulation or ordinance
at the time this Lease is executed. In the event it is determined that this
warranty has been violated, then it shall be the obligation of the Lessor, after
written notice from Lessee, to promptly, at Lessor's sole cost and expense,
rectify any such violation. In the event Lessee does not give to Lessor written
notice of the violation of this warranty within 1 year from the commencement of
the term of this Lease, it shall be conclusively deemed that such violation did
not exist and the correction of the same shall be the obligation of the Lessee.

                  (b) Except as provided in paragraph 6.2 (a), Lessee shall, at
Lessee's expense, comply promptly with all applicable statutes, ordinances,
rules, regulations, orders, restrictions of record, and requirements in effect
during the term or any part of the term hereof regulating the use by Lessee of
the Premises. Lessee shall not use nor permit the use of the Premises in any
manner that will tend to create waste or a nuisance or if there shall be more
than one tenant in the building containing the Premises, shall tend to disturb
such other tenants.

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         6.3 CONDITION OF PREMISES. Except as provided in paragraph 6.2 (a)
Lessee hereby accepts the Premises in their condition existing as of the date of
the execution hereof, subject to all applicable zoning, municipal, county and
state laws, ordinances and regulations governing and regulating the use of the
Premises, and accepts this Lease subject thereto and to all matters disclosed
thereby and by any exhibits attached hereto. Lessee acknowledges that neither
Lessor nor Lessor's agent has made any representation or warranty as to the
suitability of the Premises for the conduct of Lessee's business.

7.       MAINTENANCE REPAIRS AND ALTERATIONS.

         7.1 LESSOR'S OBLIGATIONS. Subject to the provisions of Paragraph 6.2
(a) and 9 and except for damage caused by any negligent or intentional act or
omission of Lessee, Lessee's agents, employees, or invitees in which event
Lessee shall repair the damage, Lessor, at Lessor's expense shall keep in good
order, condition and repair the foundations, exterior walls and the exterior
roof of the Premises. Lessor shall not, however, be obligated to paint such
exterior, nor shall Lessor be required to maintain the interior surface of
exterior walls, windows, doors or plate glass. Lessor shall have no obligation
to make repairs under this Paragraph 7.1 until a reasonable time after receipt
of written notice of the need for such repairs. Lessee expressly waives the
benefits of any statute now or hereafter in effect which would otherwise afford
Lessee the right to make repairs at Lessor's expense or to terminate this Lease
because of Lessor's failure to keep the Premises in good order, condition and
repair.

         7.2      LESSEE'S OBLIGATIONS.

                  (a) Subject to the provisions of Paragraphs 6.2 (a), 7 and 9,
Lessee, at Lessee's expense, shall keep in good order, condition and repair the
Premises and every part thereof (whether or not the damaged portion of the
Premises or the means of repairing the same are reasonably or readily accessible
to Lessee) including, without limiting the generality of the foregoing, all
plumbing, heating, airconditioning, ventilating, electrical and lighting
facilities and equipment within the Premises, fixtures, interior walls and
interior surface of exterior walls, ceilings, windows, doors, plate glass, and
skylights, located within the Premises, and all and signs located in the
Premises and all adjacent to the Premises. Lessee expressly waives the benefit
of any statute now or hereinafter in effect which would otherwise afford Lessee
the right to make repairs at Lessor's expense or to terminate this Lease because
of Lessor's failure to keep the Premises in good order, condition and repair.

*(see Addendum I)

                  (b) If Lessee fails to perform Lessee's obligations under this
Paragraph 7.2, Lessor may at Lessor's option enter upon the Premises after 10
days prior written notice to Lessee, and put the same in good order, condition
and repair, and the cost thereof together with interest thereon at the rate of
10% per annum shall be due and payable as additional rent to Lessor together
with Lessee's next rental installment.

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                  (c) On the last day of the term hereof, or on any sooner
termination, Lessee shall surrender the Premises to Lessor in the same condition
as received, broom clean, ordinary wear and tear excepted, Lessee shall repair
any damage to the Premises occasioned by the removal of its trade fixtures,
furnishings and equipment pursuant to Paragraph 7.3 (d), which repair shall
include the patching and filling of holes and repair of structural damage.

         7.3      ALTERATIONS AND ADDITIONS.

                  (a) Lessee shall not, without Lessor's prior written consent
make any alterations, improvements, addition, or Utility Installations in, on or
about the Premises, except for nonstructural alterations not exceeding
$10,000.00 in cost. As used in this Paragraph 7.3 the term "Utility
Installation" shall mean bus ducting, power panels, wiring, fluorescent
fixtures, space heaters, conduits, airconditioning and plumbing. Lessor may
require that Lessee remove any or all of said alterations, improvements,
additions or Utility Installations at the expiration of the term, and restore
the Premises to their prior condition. Lessor may require Lessee to provide
Lessor, at Lessee's sole cost and expense, a lien and completion bond in an
amount equal to one and one-half times the estimated cost of such improvements,
to insure Lessor against any liability for mechanic's and materialmen's liens
and to insure completion of the work. Should Lessee make any alterations,
improvements, additions or Utility Installations without the prior approval of
Lessor, Lessor may require that Lessee remove any or all of such.

                  (b) Any alterations, improvements, additions or Utility
Installations in, or about the Premises that Lessee shall desire to make and
which requires the consent of the Lessor shall be presented to Lessor in written
form, with proposed detailed plans. If Lessor shall give its consent the consent
shall be deemed conditioned upon Lessee acquiring a permit to do so from
appropriate governmental agencies, the furnishing of a copy thereof to Lessor
prior to the commencement of the work and compliance by Lessee of all conditions
of said permit in a prompt and expeditious manner.

                  (c) Lessee shall pay, when due, all claims for labor or
materials furnished or alleged to have been furnished to or for Lessee at or for
use in the Premises, which claims are or may be secured by any mechanics' or
materialmen's lien against the Premises or any interest therein. Lessee shall
give Lessor not less than ten (10) days notice prior to the commencement of any
work in the Premises, and Lessor shall have the right to post notices of
non-responsibility in or on the Premises as provided by law. If Lessee shall, in
good faith, contest the validity of any such lien, claim or demand, then Lessee
shall, at its sole expense defend itself and Lessor against the same and shall
pay and satisfy any such adverse judgement that may be rendered thereon before
the enforcement thereof against the Lessor or the Premises, upon the completion
that if Lessor shall require, Lessee shall furnish to Lessor a surety bond
satisfactory to Lessor in an amount equal to such contested lien claim or demand
indemnifying Lessor against liability for the same and holding the Premises free
from the effect of such lien or claim. In addition, Lessor may require Lessee to
pay Lessor's attorneys fees and costs in participating in such action if Lessor
shall decide it is to its best interest to do so.

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                  (d) Unless Lessor requires their removal, as set forth in
Paragraph 7.3 (a), all alterations, improvements, additions and Utility
Installations (whether or not such Utility Installations constitute trade
fixtures of Lessee), which may be made on the Premises, shall become the
property of Lessor and remain upon and be surrendered with the Premises at the
expiration of the term. Notwithstanding the provisions of the this Paragraph 7.3
(d), Lessee's machinery and equipment, other than that which is affixed to the
Premises so that it cannot be removed without material damage to the Premises,
shall remain the property of Lessee and may be removed by Lessee subject to the
provisions of Paragraph 7.2 (c).

8.       INSURANCE; INDEMNITY.

         8.1 LIABILITY INSURANCE. Lessee shall, at Lessee's expense obtain and
keep in force during the term of this Lease a policy of Combined Single Limit,
Bodily Injury and Property Damage insurance insuring Lessor and Lessee against
any liability arising out of the ownership, use, occupancy or maintenance of the
Premises and all areas appurtenant thereto. Such insurance shall be a combined
single limit policy in an amount not less than $500,000. The policy shall
contain cross liability endorsements and shall insure performance by Lessee of
the indemnity provisions of this Paragraph 8. The limits of said insurance shall
not, however, limit the liability of Lessee hereunder. In the event that the
Premises constitute a part of a larger property said insurance shall have a
Lessor's Protective Liability endorsement attached thereto. If Lessee shall fail
to procure and maintain said insurance Lessor may, but shall not be required to,
procure and maintain the same, but at the expense of Lessee. Not more frequently
than each 5 years, if, in the reasonable opinion of Lessor, the amount of
liability insurance required hereunder is not adequate, Lessee shall increase
said insurance coverage as required by Lessor. Provided, however, that in no
event shall the amount of the liability insurance increase by more than fifty
percent greater than the amount thereof during the preceding five years of the
term of this lease. However, the failure of Lessor to require any additional
insurance coverage shall not be deemed to relieve Lessee from any obligations
under this Lease.

         8.2      PROPERTY INSURANCE.

                  (a) Lessor shall obtain and keep in force during the term of
this Lease a policy of policies of insurance covering loss or damage to the
Premises, but not Lessee's fixtures, equipment or tenant improvements in the
amount of the full replacement value thereof, providing protection against all
perils included within the classification of fire, extended coverage, vandalism,
malicious mischief, special extended perils (all risk) but not plate glass
insurance. In addition, the Lessor shall obtain and keep in force, during the
term of this Lease, a policy of rental income insurance covering a period of six
months, with loss payable to Lessor which insurance shall also cover all real
estate taxes and insurance costs for said period. In the event that the Premises
contains sprinklers then the insurance coverage shall include sprinkler leakage
insurance.

                  (b) Lessee shall pay to Lessor, during the term hereof, in
addition to the rent, the amount of any increase in premiums for the insurance
required under this Paragraph 8.2 over and above such premiums paid during the
Base Period, as hereinafter defined, whether such premium

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increase shall be the result of the nature of Lessee's occupancy, any act of
omission of Lessee, requirements of the holder of a mortgage or deed of trust
covering the Premises, or increased valuation of the Premises or general rate
increases. In the event that the Premises have been occupied previously the
words "Base Period" shall mean the last twelve months of the prior occupancy and
in the event that the Premises have never been previously occupied the words
"Base Period" shall mean the lowest premium reasonably obtainable for the said
insurance for the Premises assuming the most nominal use of the Premises.

                  (c) If the Premises being leased herein are part of a larger
property, then Lessee shall not be responsible for paying any increase in the
property insurance caused by the acts or omissions of any other tenant of the
building of which the Premises are a part.

                  (d) Lessee shall pay any such premium increases to Lessor
within 30 days after receipt by Lessee of a copy of the premium statement or
other satisfactory evidence of the amount due. If the insurance policies
maintained hereunder cover other improvements in addition to the Premises,
Lessor shall also deliver to Lessee a statement of the amount of such increase
attributable to the Premises and showing in reasonable detail the manner in
which such amount was computed. If the term of this Lease shall not expire
concurrently with the expiration of the period covered by such Insurance,
Lessee's liability for premium increases shall be prorated on an annual basis.

         8.3 INSURANCE POLICIES. Insurance required hereunder shall be in
companies holding a "General Policyholders Rating" of B plus or better as set
forth in the most current issue of "Best Insurance Guide". Lessee shall deliver
to Lessor copies of policies of liability insurance required under Paragraph 8.1
or certificates evidencing the existence and amounts of such insurance with loss
payable clauses satisfactory to Lessor. No such policy shall be cancelable or
subject to reduction of coverage or other modification except after ten (10)
days prior written notice to Lessor. Lessee shall, within ten (10) days prior to
the expiration date of such policies, furnish Lessor with renewals or "binders"
thereof, or Lessor may order such insurance and charge the cost thereof to
Lessee, which amount shall be payable by Lessee upon demand. Lessee shall not do
or permit to be done anything which shall invalidate the insurance policies
referred to in Paragraph 8.2.

         8.4 WAIVER OF SUBROGATION. Lessee and Lessor each hereby waives any and
all rights of recovery against the other, or against the officers, employees,
agents and representatives of the other, for loss of or damage to such waiving
party or its property or the property of others under its control, where such
loss or damage is insured against under any insurance policy in force at the
time of such loss or damage. Lessee and Lessor shall, upon obtaining the
policies of insurance required hereunder, give notice to the insurance carrier
or carriers that the foregoing mutual waiver of subrogation is contained in this
Lease.

         8.5 INDEMNITY. Lessee shall indemnify and hold harmless Lessor from and
against any and all claims arising from Lessee's use of the Premises, or from
the conduct of Lessee's

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business or from any activity, work or things done, permitted or suffered by
Lessee in or about the Premises or elsewhere and shall further indemnify and
hold harmless Lessor from and against any and all claims arising from any breach
or default in the performance of any obligation on Lessee's part to be performed
under the terms of this Lease, or arising from any negligence of the Lessee, or
any of Lessee's agents, contractors, or employees, and from and against all
costs, attorney's fees, expenses and liabilities incurred in the defense of any
such claim or any action or proceeding brought thereon; and in case any action
or proceeding be brought against Lessor by reason of any such claim, Lessee upon
notice from Lessor shall defend the same at Lessee's expense by counsel
satisfactory to Lessor. Lessee, as a material part of the consideration to
Lessor, hereby assumes all risk of damage to property or injury to persons, in,
upon or about the Premises arising from any cause and Lessee hereby waives all
claims in respect thereof against Lessor.

         8.6 EXEMPTION OF LESSOR FROM LIABILITY. Lessee hereby agrees that
Lessor shall not be liable for injury to Lessee's business or any loss of income
therefrom or for damage to the goods, wares, merchandise or other property of
Lessee, Lessee's employees, invitees, customers, or any other person in or about
the Premises, nor shall Lessor be liable for injury to the person of Lessee,
Lessee's employees, agents or contractors, whether such damage or injury is
caused by or results from fire, steam, electricity, gas, water or rain, or from
the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires,
appliances, plumbing, air conditioning or lighting fixtures, or from any other
cause, whether the said damage or injury results from conditions arising upon
the Premises or upon other portions of the building of which the Premises are a
part, or from other sources or places, and regardless of whether the cause of
such damage or injury or the means of repairing the same is inaccessible to
Lessee. Lessor shall not be liable for any damages arising from any act or
neglect of any other tenant, if any, of the building in which the Premises are
located.

9.       DAMAGE OR DESTRUCTION.

         9.1 PARTIAL DAMAGE-INSURED. Subject to the provisions of Paragraphs 9.3
and 9.4, if the Premises are damaged and such damage was caused by a casualty
covered under an insurance policy required to be maintained pursuant to
Paragraph 8.2, Lessor shall at Lessor's expense repair such damage as soon as
reasonably possible and this Lease shall continue in full force and effect but
Lessor shall not repair or replace Lessee's fixtures, equipment or tenant
improvements.

         9.2 PARTIAL DAMAGE-UNINSURED. Subject to the provisions of Paragraphs
9.3 and 9.4, if at any time during the term hereof the Premises are damaged,
except by a negligent or willful act of Lessee (in which event Lessee shall make
the repairs, at its expense) and such damage was caused by a casualty not
covered under an insurance policy required to be maintained by Lessor pursuant
to Paragraph 8.2, Lessor may at Lessor's option either (i) repair such damage as
soon as reasonably possible at Lessor's expense, in which event this Lease shall
continue in full force and effect, or (ii) give written notice to Lessee within
thirty (30) days after the date of the occurrence of such damage of Lessor's
intention to cancel and terminate this Lease as of the date of the occurrence of
such damage. In the event Lessor elects to give such notice of Lessor's
intention to cancel and terminate this Lease, Lessee shall have the right within
ten (10) days after

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the receipt of such notice to give written notice to Lessor of Lessee's
intention to repair such damage at Lessee's expense, without reimbursement from
Lessor, in which event this Lease shall continue in full force and effect, and
Lessee shall proceed to make such repairs as soon as reasonably possible. If
Lessee does not give such notice within such 10-day period this Lease shall be
cancelled and terminated as of the date of the occurrence of such damage.

         9.3 TOTAL DESTRUCTION. If at any time during the term hereof the
Premises are totally destroyed from any cause whether or not covered by the
insurance required to be maintained by Lessor pursuant to Paragraph 8.2
(including any total destruction required by any authorized public authority)
this Lease shall automatically terminate as of the date of such total
destruction.

         9.4 DAMAGE NEAR END OF TERM. If the Premises are partially destroyed or
damaged during the last six months of the term of this Lease, Lessor may at
Lessor's option cancel and terminate this Lease as of the date of occurrence of
such damage by giving written notice to Lessee of Lessor's election to do so
within 30 days after the date of occurrence of such damage. Said termination
right shall be mutual.

         9.5      ABATEMENT OF RENT; LESSEE'S REMEDIES.

                  (a) If the Premises are partially destroyed or damaged and
Lessor or Lessee repairs or restores them pursuant to the provisions of this
Paragraph 9, the rent payable hereunder for the period during which such damage,
repair or restoration continues shall be abated in proportion to the degree to
which Lessee's use of the Premises is impaired. Except for abatement of rent, if
any, Lessee shall have no claim against Lessor for any damage suffered by reason
of any such damage, destruction repair or restoration.

                  (b) If Lessor shall be obligated to repair or restore the
Premises under the provisions of this Paragraph 9 and shall not commence such
repair or restoration within 90 days after such obligations shall accrue, Lessee
may at Lessee's option cancel and terminate this Lease by giving Lessor written
notice of Lessee's election to do so at any time prior to the commencement of
such repair or restoration. In such event this Lease shall terminate as of the
date of such notice.

         9.6 TERMINATION- ADVANCE PAYMENTS. Upon termination of this Lease
pursuant to this Paragraph 9, an equitable adjustment shall be made concerning
advance rent and any advance payments made by Lessee to Lessor. Lessor shall, in
addition, return to Lessee so much of Lessee's security deposit as has not
theretofore been applied by Lessor.

         9.7 WAIVER. Lessee waives the provisions of California Civil Code
Sections 1932 (2) and 1933 (4) which relate to termination of leases when the
thing leased is destroyed and agrees that such event shall be governed by the
terms of this Lease.

10.      REAL PROPERTY TAXES.

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         10.1 PAYMENT OF TAX INCREASE. Lessor shall pay all real property taxes
applicable to the Premises; provided, however, that Lessee shall pay in addition
to rent, the amount, if any, by which real property taxes applicable to the
Premises increase over the fiscal tax year 1996 1997. Such payment shall be made
by Lessee within thirty (30) days after receipt of Lessor's written statement
setting forth the amount of such increase and the computation thereof. If the
term of this Lease shall not expire concurrently with the expiration of the tax
fiscal year, Lessee's liability for increase taxes for the last partial lease
year shall be prorated on an annual basis.

         10.2 DEFINITION OF "REAL PROPERTY" TAX. As used herein, the term "real
property tax" shall include any form of assessment, license fee, commercial
rental tax, levy, penalty, or tax (other than inheritance or estate taxes),
imposed by any authority having the direct or indirect power to tax, including
any city, county, state or federal government, or any school, agricultural,
lighting, drainage or other improvement district thereof, as against any legal
or equitable interest of Lessor in the Premises or in the real property of which
the Premises are a part, as against Lessor's right to rent or other income
therefrom, or as against Lessor's business of leasing the Premises or any tax
imposed in substitution, partially or totally, of any tax previously included
within the definition of real property tax, or any additional tax the nature of
which was previously included within the definition of real property tax.

         10.3 JOINT ASSESSMENT. If the Premises are not separately assessed,
Lessee's liability shall be an equitable proportion of the real property taxes
for all of the land and improvements included within the tax parcel assessed,
such proportion to be determined by Lessor from the respective valuations
assigned in the assessor's work sheets or such other information as may be
reasonable available. Lessor's reasonable determination thereof, in good faith,
shall be conclusive.

         10.4     PERSONAL PROPERTY TAXES.

                  (a) Lessee shall pay prior to delinquency all taxes assessed
against and levied upon trade fixtures, furnishings, equipment and all other
personal property to be assessed and billed separately from the real property of
Lessor.

                  (b) If any of Lessee's said personal property shall be
assessed with Lessor's real property, Lessee shall pay Lessor the taxes
attributable to Lessee within 10 days after receipt of a written statement
setting forth the taxes applicable to Lessee's property.

11. UTILITIES. Lessee shall pay for all water, gas, heat, light, power,
telephone and other utilities and services supplied to the Premises, together
with any taxes thereon. If any such services are not separately metered to
Lessee, Lessee shall pay a reasonable proportion to be determined by Lessor of
all charges jointly metered with other premises.

12.      ASSIGNMENT AND SUBLETTING.

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         12.1 LESSOR'S CONSENT REQUIRED. Lessee shall not voluntarily or by
operation of law assign, transfer, mortgage, sublet, or otherwise transfer or
encumber all or any part of Lessee's interest in this Lease or in the Premises,
without Lessor's prior written consent, which Lessor shall not unreasonably
withhold. Any attempted assignment, transfer, mortgage, encumbrance or
subletting without such consent shall be void, and shall constitute a breach of
this Lease.

         12.2 LESSEE AFFILIATE. Notwithstanding the provisions of paragraph 12.1
hereof, Lessee may assign or sublet the Premises, or any portion thereof,
without Lessor's consent, to any corporation which controls, is controlled by or
is under common control with Lessee, or to any corporation resulting from the
merger or consolidation with Lessee, or to any person or entity which acquires
all the assets of Lessee as a going concern of the business that is being
conducted on the Premises, provided that said assignee assumes, in full, the
obligations of Lessee under this Lease. Any such assignment shall not, in any
way, affect or limit the liability of Lessee under the terms of this Lease even
if after such assignment or subletting the terms of this Lease are materially
changed or altered without the consent of Lessee, the consent of whom shall not
be necessary.

         12.3 NO RELEASE OF LESSEE. Regardless of Lessor's consent, no
subletting or assignment shall release Lessee of Lessee's obligation or alter
the primary liability of Lessee to pay the rent and to perform all other
obligations to be performed by Lessee hereunder. The acceptance of rent by
Lessor from any other person shall not be deemed to be a waiver by Lessor of any
provision hereof. Consent to one assignment or subletting shall not be deemed
consent to any subsequent assignment or subletting. In the event of default by
any assignee of Lessee or any successor of Lessee, in the performance of any of
the terms hereof. Lessor may proceed directly against Lessee without the
necessity of exhausting remedies against said assignee. Lessor may consent to
subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of Lessee, without notifying Lessee,
or any successor of Lessee, and without obtaining its or their consent thereto
and such action shall not relieve Lessee of liability under this Lease.

         12.4 ATTORNEY'S FEES. In the event Lessee shall assign or sublet the
Premises or request the consent of Lessor to any assignment or subletting or if
Lessee shall request the consent of Lessor for any act Lessee proposes to do
then Lessee shall pay Lessor's reasonable attorneys fees incurred in connection
therewith, such attorneys fees not to exceed $250.00 for each such request.

13.      DEFAULTS; REMEDIES.

         13.1 DEFAULTS. The occurrence of any one or more of the following
events shall constitute a material default and breach of this Lease by Lessee:

                  (a)  The vacating or abandonment of the Premises by Lessee.

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                  (b) The failure by Lessee to make any payment of rent or any
other payment required to be made by Lessee hereunder, as and when due, where
such failure shall continue for a period of five (5) business days after written
notice thereof from Lessor to Lessee.

                  (c) The failure bye Lessee to observe or perform any of the
covenants, conditions or provisions of this Lease to be observed or performed by
Lessee, other than described in paragraph (b) above, where such failure shall
continue for a period of 30 days after written notice hereof from Lessor to
Lessee; provided, however, that if the nature of Lessee's default is such that
more than 30 days are reasonably required for its cure, then Lessee shall not be
deemed to be in default if Lessee commenced such cure within said 30-day period
and thereafter diligently prosecutes such cure to completion.

                  (d) (i) The making by Lessee of any general arrangement for
the benefit of creditors; (ii) the filing by or against Lessee of a petition to
have Lessee adjudged a bankrupt or a petition for reorganization or arrangement
under any law relating to bankruptcy (unless, in the case of a petition filed
against Lessee, the same is dismissed within 60 days); (iii) the appointment of
a trustee or receiver to take possession of substantially all of Lessee's assets
located at the Premises or of Lessee's interest in this Lease, where possession
is not restored to Lessee within 30 days, or (iv) the attachment, execution or
other judicial seizure of substantially all of Lessee's assets located at the
Premises or of Lessee's interest in this Lease where such seizure is not
discharged within 30 days.

                  (e) The discovery by Lessor that any financial statement
given to Lessor by Lessee, any assignee of Lessee, any subtenant of Lessee,
any successor in interest of Lessee or any guarantor of Lessee's obligation
hereunder, and any of them, was materially false.

         13.2 REMEDIES. In the event of any such material default or breach by
Lessee, Lessor may at any time thereafter, with or without notice or demand and
without limiting Lessor in the exercise of any right or remedy which Lessor may
have by reason of such default or breach:

(a) Terminate Lessee's right to possession of the Premises by any lawful means,
in which case this Lease shall terminate and Lessee shall immediately surrender
possession of the Premises to Lessor, in such event Lessor shall be entitled to
recover from Lessee all damages incurred by Lessor by reason of Lessee's default
including, but not limited to, the cost of recovering possession of the
Premises; expenses of reletting, including necessary renovation and alteration
of the Premises, reasonable attorney's fees, and any real estate commission
actually paid; the work at the time of award by the court having jurisdiction
thereof of the amount by which the unpaid rent for the balance of the term after
the time of such award exceeds the amount of such rental loss for the same
period that Lessee proves could be reasonably avoided; that portion of the
leasing commission paid by Lessor pursuant to Paragraph 15 applicable to the
unexpired term of this Lease.

                  (b) Maintain Lessee's right to possession in which case this
Lease shall continue in effect whether or not Lessee shall have abandoned the
Premises. In such event Lessor shall be

                                      -11-

<PAGE>

entitled to enforce all of Lessor's rights and remedies under this Lease,
including the right to recover the rent as it becomes due hereunder.

                  (c) Pursue any other remedy now or hereafter available to
Lessor under the laws or judicial decisions of the State of California.

         13.3 DEFAULT BY LESSOR. Lessor shall not be in default unless Lessor
fails to perform obligations required of Lessor within a reasonable time, but in
no event later than thirty (30) days after written notice by Lessee to Lessor
and to the holder of any first mortgage or deed of trust covering the Premises
whose name and address shall have theretofore been furnished to Lessee in
writing, specifying wherein Lessor has failed to perform such obligation;
provided, however, that if the nature of Lessor's obligation is such that more
than thirty (30) days are required for performance then Lessor shall not be in
default if Lessor commences performance within such 30-day period and thereafter
diligently prosecutes the same to completion.

         13.4 LATE CHARGES. Lessee hereby acknowledges that late payment by
Lessee to Lessor of rent and other sums due hereunder will cause Lessor to incur
costs not contemplated by this Lease, the exact amount of which will be
extremely difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Lessor by the terms of any mortgage or trust deed covering the Premises.
Accordingly, if any installment of rent or any other sum due from Lessee shall
not be received by Lessor or Lessor's designee within ten (10) days after such
amount shall be due, Lessee shall pay to Lessor a late charge equal to 6% of
such overdue amount. The parties hereby agree that such late charge represents a
fair and reasonable estimate of the costs Lessor will incur by reason of late
payment by Lessee. Acceptance of such late charge by Lessor shall in no event
constitute a waiver of Lessee's default with respect to such overdue amount, nor
prevent Lessor from exercising any of the other rights and remedies granted
hereunder.

14. CONDEMNATION. If the Premises or any portion thereof are taken under the
power of eminent domain, or sold under the threat of the exercise of said power
(all of which are herein called "condemnation"), this Lease shall terminate as
to the part so taken as of the date the condemning authority takes title or
possession, whichever first occurs. If more than 10% of the floor area of the
improvements on the premises, or more than 25% of the land area of the Premises
which is not occupied by any improvements is taken by condemnation. Lessee may,
at Lessee's option, to be exercised in writing only within ten (10) days after
Lessor shall have given Lessee written notice of such taking (or in the absence
of such notice within ten (10) days after the condemning authority shall have
taken possession) terminate this Lease as of the date the condemning authority
takes such possession. If Lessee does not terminate this Lease is accordance
with the foregoing, this Lease shall remain in full force and effect as to the
portion of the Premises remaining, except that the rent shall be reduced in the
proportion that the floor area taken bears to the total floor area of the
building situated on the Premises. Any award for the taking of all or any part
of the Premises under the power of eminent domain or any payment made under
threat of the exercise of such power shall be the property of the Lessor,
whether such award shall be made as compensation for diminution in value of the
leasehold or for the taking of the fee, or as severance damages; provided,
however, that Lessee shall be entitled to any award

                                      -12-

<PAGE>

for loss of or damage to Lessee's trade fixtures and removable personal
property. In the event that this Lease is not terminated by reason of such
condemnation, Lessor shall, to the extent of severance damages received by
Lessor in connection with such condemnation, repair any authority, Lessee shall
pay any amount in excess of such severance damages required to complete such
repair.

15. BROKER'S FEE. Upon execution of this Lease by both parties, Lessor shall pay
to CB COMMERCIAL, a licensed real estate broker, a fee as set forth in a
separate agreement between Lessor and said broker, for brokerage services
rendered by said broker to Lessor in this transaction. Lessor further agrees
that if Lessee exercises any option granted herein or any option substantially
similar thereto, either to extend the term of this Lease, to renew this Lease,
to purchase said Premises or any part thereof and/or any adjacent property which
Lessor may own or in which Lessor has an interest, or any other option granted
herein, or if said broker is the procuring cause of any other lease or sale
entered into between the parties pertaining to the Premises and/or any adjacent
property in which Lessor has an interest, then as to any of said transactions
Lessor shall pay said broker a fee in accordance with the schedule of said
broker in effect at the time of execution of this lease. Lessor agrees to pay
said fee not only on behalf of Lessor but also on behalf of any person,
corporation, association, or other entity having an ownership interest in said
real property or any part thereof, when such fee is due hereunder. Any
transferee of Lessor's interest in this Lease, by accepting an assignment of
such interest, shall be deemed to have assumed Lessor's obligation under this
Paragraph 15. Said broker shall be a third party beneficiary of the provisions
of this Paragraph.

16.      GENERAL PROVISIONS.

         16.1     ESTOPPEL CERTIFICATE.

                  (a) Lessee shall at any time upon not less than ten (10) days
prior written notice from Lessor execute, acknowledge and deliver to Lessor a
statement in writing (i) certifying that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and effect) and the
date to which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to Lessee's knowledge, any uncured defaults on
the part of Lessor hereunder, or specifying such defaults if any are claimed.
Any such statement may be conclusively relied upon by any prospective purchaser
or encombrancer of the Premises.

                  (b) Lessee's failure to deliver such statement within such
time shall be conclusive upon Lessee (i) that this Lease is in full force and
effect without modification except as may be represented by Lessor, (ii) that
there are no uncured defaults in Lessor's performance, and (iii) that not more
than one month's rent has been paid in advance or such failure may be considered
by Lessor as a default by Lessee under this Lease.

                  (c) If Lessor desires to finance or refinance the Premises, or
nay part thereof, Lessee hereby agrees to deliver to any lender designated by
Lessor such financial statements of Lessee as may be reasonably required by such
lender. Such statements shall include the past

                                      -13-

<PAGE>

three years financial statements of Lessee. All such financial statements shall
be received by Lessor in confidence and shall be used only for the purposes
herein set forth.

         16.2 LESSOR'S LIABILITY. The term "Lessor" as used herein shall mean
only the owner or owners at the time in question of the fee title or a lessee's
interest in a ground lease of the Premises, and except as expressly provided in
Paragraph 15, in the event of any transfer of such title or interest. Lessor
herein named (and in case of any subsequent transfers the then grantor) shall be
relieved from and after the date of such transfer of all liability as respects
Lessor's obligations thereafter to be performed, provided that any funds in the
hands of Lessor or the then grantor at the time of such transfer, in which
Lessee has an interest, shall be delivered to the grantee. The obligations
contained in this Lease to be performed by Lessor shall, subject as aforesaid,
be binding on Lessor's successors and assigns, only during their respective
periods of ownership.

         16.3 SEVERABILITY. The invalidity of any provision of this Lease as
determined by a court of competent jurisdiction, shall in no way affect the
validity of any other provision hereof.

         16.4 INTEREST ON PAST-DUE OBLIGATIONS. Except as expressly herein
provided, any amount due to Lessor not paid when due shall bear interest at 10%
per annum from the date due. Payment of such interest shall not excuse or cure
any default by Lessee under this Lease, provided, however, that interest shall
not be payable on late charges incurred by Lessee nor on any amounts upon which
late charges are paid by Lessee.

         16.5     TIME OF ESSENCE.  Time is of the essence.

         16.6     CAPTIONS.  Article and paragraph captions are not a part
hereof.

         16.7 INCORPORATION OF PRIOR AGREEMENTS; AMENDMENTS. This Lease contains
all agreements of the parties with respect to any matter mentioned herein. No
prior agreement or understanding pertaining to any such matter shall be
effective. This Lease may be modified in writing only, signed by the parties in
interest at the time of the modification. Except as otherwise stated in this
Lease, Lessee hereby acknowledges that neither the real estate broker listed in
Paragraph 15 hereof nor any cooperating broker on this transaction nor the
Lessor or any employees or agents of any of said persons has made any oral or
written warranties or representations to Lessee relative to the condition or use
by Lessee of said Premises and Lessee acknowledges that Lessee assumes all
responsibility regarding the Occupational Safety Health Act, the legal use and
adaptability of the Premises and the compliance thereof with all applicable laws
and regulations in effect during the term of this Lease except as otherwise
specifically stated in this Lease.

         16.8 NOTICES. Any notice required or permitted to be given hereunder
shall be in writing and may be given by personal delivery or by certified mail,
and if given personally or by mail, shall be deemed sufficiently given if
addressed to Lessee or to Lessor at the address noted below the signature of the
respective parties, as the case may be. Either party may be notice to the other
specify a different address for notice purposes except that upon Lessee's taking
possession of the Premises, the Premises shall constitute Lessee's address for
notice purposes. A

                                      -14-

<PAGE>

copy of all notices required or permitted to be given to Lessor hereunder shall
be concurrently transmitted to such party or parties at such addresses as Lessor
may from time to time hereafter designate by notice to Lessee.

         16.9 WAIVERS. No waiver by Lessee of any provision hereof shall be
deemed a waiver of any other provision hereof or of any subsequent breach by
Lessee of the same or any other provision. Lessor's consent to or approval of
any act shall not be deemed to render unnecessary the obtaining of Lessor's
consent to or approval of any subsequent act by Lessee. The acceptance of rent
hereunder by Lessor shall not be a waiver of any preceding breach by Lessee of
any provision hereof, other than the failure of Lessee to pay the particular
rent so accepted, regardless of Lessor's knowledge of such preceding breach at
the time of acceptance of such rent.

         16.10 RECORDING. Lessee shall not record this Lease without Lessor's
prior written consent, and such recordation shall, at the option of Lessor,
constitute a non-curable default of Lessee hereunder. Either party shall, upon
request of the other, execute, acknowledge and deliver to the other a "short
form" memorandum of this Lease for recording purposes.

         16.11 HOLDING OVER. If Lessee remains in possession of the Premises or
any part thereof after the expiration of the term hereof without the express
written consent of Lessor, such occupancy shall be a tenancy from month to month
at a rental in the amount of the last monthly rental plus al other charges
payable hereunder, and upon all the terms hereof applicable to a month-to-month
tenancy.

         16.12 CUMULATIVE REMEDIES. No remedy or election hereunder shall be
deemed exclusive but shall, wherever possible, be cumulative with all other
remedies at law or in equity.

         16.13 COVENANTS AND CONDITIONS. Each provision of this Lease
performable by Lessee shall be deemed both a covenant and a condition.

         16.14 BINDING EFFECT; CHOICE OF LAW. Subject to any provisions hereof
restricting assignment or subletting by Lessee and subject to the provisions of
Paragraph 16.2, this Lease shall bind the parties, their personal
representatives, successors and assigns. This Lease shall be governed by the
laws of the State of California.

         16.15    SUBORDINATION.

                  (a) This Lease, at Lessor's option, shall be subordinate to
any ground lease, mortgage, deed of trust, or any other hypothecation for
security now or hereafter placed upon the real property of which the Premises
are a part and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Lessee's right to quiet possession of the
Premises shall not be disturbed if Lessee is not in default and so long as
Lessee shall pay the rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms, if any
mortgagee, trustee or ground lessor shall elect to have this Lease prior to the
lien of its mortgage, deed of trust or ground lease, and shall give written
notice thereof to Lessee, this Lease shall be deemed prior to such mortgage,
deed of trust or ground lease, whether this Lease

                                      -15-

<PAGE>

is dated prior or subsequent to the date of said mortgage, deed of trust or
ground lease or the date of recording thereof.

                  (b) Lessee agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien of any
mortgage, deed of trust or ground lease, as the case may be, and failing to do
so within ten (10) days after written demand, does hereby make, constitute and
irrevocably appoint Lessor as Lessee's attorney in fact and in Lessee's name,
place and stead, to do so.

         16.16 ATTORNEY'S FEES. If either party or the broker named herein
brings an action to enforce the terms hereof or declare rights hereunder, the
prevailing party in any such action, on trial or appeal, shall be entitled to
his reasonable attorney's fees to be paid by the losing party as fixed by the
court. The provisions of this paragraph shall inure to the benefit of the broker
named herein who seeks to enforce a right hereunder.

         16.17 LESSOR'S ACCESS. Lessor and Lessor's agents shall have the right
to enter the Premises at reasonable times for the purpose of inspecting the
same, showing the same to prospective purchasers, lenders, or lessees, and
making such alterations, repairs, improvements or additions to the Premises or
to the building of which they are a part as Lessor may deem necessary or
desirable. Lessor may at any time place on or about the Premises any ordinary
"For Sale" signs and Lessor may at any time during the last 120 days of the
terms hereof place on or about the Premises any ordinary "For Lease" signs, all
without rebate of rent or liability to Lessee.

         16.18 SIGNS AND AUCTIONS. Lessee shall not place any sign upon the
Premises or conduct any auction thereon without Lessor's prior written consent
except that Lessee shall have the right, without the prior permission of Lessor
to place ordinary and usual for rent or sublet signs thereon.

         16.19 MERGER. The voluntary or other surrender of this Lease by Lessee,
or a mutual cancellation thereof, or a termination by Lessor, shall not work a
merger, and shall, at the option of Lessor, terminate all or any existing
subtenancies or may, at the option of Lessor, operate as an assignment to Lessor
of any or all of such subtenancies.

         16.20 CORPORATE AUTHORITY. If Lessee is a corporation, each individual
executing this Lease on behalf of said corporation represents and warrants that
he is duly authorized to execute and deliver this Lease on behalf of said
corporation in accordance with a duly adopted resolution of the Board of
Directors of said corporation or in accordance with the Bylaws of said
corporation, and that this Lease is binding upon said corporation in accordance
with its terms. If Lessee is a corporation Lessee shall, within thirty (30) days
after execution of this Lease, deliver to Lessor a certified copy of a
resolution of the Board of Directors of said corporation authorizing or
ratifying the execution of this Lease.

         16.21 CONSENTS. Wherever in this Lease the consent of one party is
required to an act of the other party such consent shall not be unreasonably
withheld.

                                      -16-

<PAGE>

         16.22 GUARANTOR. In the event that there is a guarantor of this Lease,
said guarantor shall have the same obligations as Lessee under Paragraphs 16.1
and 16.20 of this Lease.

         16.23 QUIET POSSESSION. Upon Lessee paying the fixed rent reserved
hereunder and observing and performing all of the covenants, conditions and
provisions on Lessee's part to be observed and performed hereunder, Lessee shall
have quiet possession of the Premises for the entire term hereof subject to all
of the provisions of this Lease.

         16.24 OPTIONS. In the event that the Lessee, under the terms of this
Lease, has any option to extend the term of this Lease, or any option to
purchase the premises or any right of first refusal to purchase the premises or
other property of Lessor, then each of such options and rights are personal to
Lessee and may be not exercised or be assigned, voluntarily or involuntarily, by
or to any one other than Lessee except that it may be exercised by or assigned
to any of the entities described in paragraph 12.2 hereof for whom Lessee does
not need the consent of Lessor to assign this Lease. In the event that Lessee
hereunder has any multiple options to extend this Lease a later option to extend
the lease cannot be exercised unless the prior option has been so exercised. No
option may be exercised at a time when the Lessee is in default under its
obligations under this Lease.

         16.25 MULTIPLE TENANT BUILDING. In the event that the Premises are part
of a larger building or group of buildings then Lessee agrees that it will abide
by, keep and observe all reasonable rules and regulations which Lessor may make
from time to time for the management, safety, care, and cleanliness of the
building and grounds, the parking of vehicles and the preservation of good order
therein as well as for the convenience of other occupants and tenants of the
building. Further, Lessee will promptly pay its prorata share, as reasonably
determined by Lessor, of any maintenance or repair of such portion of the
Premises or such portion of the property of which the premises are a part, which
are common areas or used by Lessee and other occupants thereof. The violations
of any such rules and regulations, or the failure to pay such prorata share of
costs, shall be deemed a material breach of this Lease by Lessee.

         16.26 ADDITIONAL PROVISIONS. If there are no additional provisions draw
a line from this point to the next printed word after the space left here. If
there are additional provisions place the same here.

<PAGE>

The parties hereto have executed this Lease at the place on the dates specified
immediately adjacent to their respective signatures.

IF THIS LEASE HAS BEEN FILLED IN IT HAS BEEN PREPARED FOR SUBMISSION TO YOUR
ATTORNEY FOR HIS APPROVAL. NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE
REAL ESTATE BROKER OR ITS AGENTS OR EMPLOYEES AS TO THE LEGAL SUFFICIENCY, LEGAL
EFFECT, OR TAX CONSEQUENCES OF THIS LEASE OR THE TRANSACTION RELATING THERETO.

Executed at                                 C & R Investments
           ----------------------           ----------------------------------
on    1-11-97                               By /s/: Leonard D. Cohn
  -------------------------------              -------------------------------
Address 5 Sierra CT.                        By /s/: Donald Rosenberg
        -------------------------              -------------------------------
         Moraga, CA 94556                           "LESSOR" (Corporate seal)
---------------------------------



Executed at                                 Acacia Biosciences, Inc.
           ----------------------           ----------------------------------
on                                          By /s/: Bruce A. Cohen
  -------------------------------              -------------------------------
Address                                     By
       --------------------------             --------------------------------
                                                    "LESSEE" (Corporate seal)
---------------------------------

<PAGE>

                                 FIRST ADDENDUM

                                       TO

                            STANDARD INDUSTRIAL LEASE

LESSOR:  Leonard and Roberta Cohn, Donald and Diane Rosenberg, et. al.,
         dba C & R Investments

LESSEE:  Acacia Biosciences, Inc., a Delaware corporation

         THIS FIRST ADDENDUM shall amend that certain Standard Industrial Lease
dated as of December 17, 1996 (the "Lease") entered into by and between Leonard
and Roberta Cohn, Donald and Diane Rosenberg, et. al. dba C & R Investments as
Lessor and Acacia Biosciences, Inc. as Lessee. Unless otherwise indicated
herein, all terms initially capitalized herein shall have the same meanings
attributed to such terms in the Lease and references to section numbers
hereinbelow is to sections of the Lease. The Lease is hereby amended as follows:

         1.       BASE RENT [PARAGRAPH 4].

         Base Rent for initial term of this lease shall be as follows:

         March 1, 1997 - February 29, 1998: $.75 per rentable square foot
         March 1, 1998 - February 28, 1999: $.80 per rentable square foot
         March 1, 1999 - February 28, 2000: $.85 per rentable square foot

         2.       OPTION TO RENEW.

         Provided that Lessee is not in default hereunder, either at the time of
exercise or at the time the extended Term commences, Lessee shall have the
option to extend the initial Term of this Lease for three (3) one (1) year
periods on the same terms, covenants and conditions provided herein, except that
upon such renewal the Base Monthly Rent due hereunder shall be as follows:

Option One:       $.90 per rentable square foot;
Option Two:       $.93 per rentable square foot;
Option Three:     $.96 per rentable square foot.

Lessee shall exercise its option by giving Lessor written notice ("Option
Notice") at least one hundred eighty (180) days prior to the expiration of the
initial Term of the Lease.

         3. TENANT IMPROVEMENTS. Lessor, at Lessor's sole cost and expense,
shall provide Lessee with a $10,000 tenant improvement allowance. Said allowance
shall be used for real property improvements only and shall be payable within
thirty (30) days of Lessor's receipt from Lessee of paid approved invoices.

<PAGE>

         4.       MAINTENANCE REPAIRS AND ALTERATIONS. [PARAGRAPH 7]

         Equipment Leasing / Lessor's Lien:

         Notwithstanding anything herein to the contrary, Lessor waives any and
all rights, title and interest Lessor now has, or hereafter may have, whether
statutory or otherwise, to Lessee's inventory, equipment, furnishings, trade
fixtures, books and records, personal property, and tenant improvements paid for
by Lessee located at the Premises (single and/or collectively, the
"Collateral"). Lessor acknowledges that Lessor further agrees that Lessee shall
have the right, at its discretion, to mortgage, pledge, hypothecate or grant a
security interest in the Collateral as security for its obligations under any
equipment lease or other financing arrangement related to the conduct of
Lessee's business at the Premises. Lessor further agrees to execute and deliver
within five (5) business days any UCC filing statement or other documentation
required to be executed by Lessor in connection with any such lease or financing
arrangement, including but not limited to a Lessor's Waiver and Consent form.

         5.       INSURANCE; INDEMNITY [PARAGRAPH 8]

         Notwithstanding anything to the contrary contained herein, Tenant shall
not be required to remove (i) any of the initial Tenant Improvements construct
by or on behalf of Tenant, and (ii) any alterations, additions or improvements
for which Tenant has obtained Landlord's consent, unless Landlord has indicated,
at the time of granting such consent, that such removal will be required. Upon
approval by Lessor, Tenant shall be entitled to remove any alterations,
additions or improvements, provided Tenant repairs any damage to the Premise
caused by such removal.

         6.       DAMAGE AND DESTRUCTION. [PARAGRAPH 9]

         If Tenant is unable, despite its diligent efforts, to secure any
permit, approval, license, occupancy permit or other governmental authorization
needed for Tenant's occupancy of the Premises or the conduct of its business at
the Premises by February 15, 1997, Tenant may thereafter terminate this Lease by
providing Landlord written notice of its election to do so (the "Termination
Notice"), and the Lease shall terminate 2 days from the date of the Termination
Notice. Upon receipt of the Termination Notice, Landlord shall refund to Tenant
all sums and deposits paid hereunder and neither party shall have any further
liability to the other on account hereof.

         7.       CONTROLLING EFFECT.

         The provisions of this First Addendum shall supersede provisions of the
Lease which are inconsistent herewith.

IN WITNESS WHEREOF, the parties have executed this First Addendum to the
Standard Industrial Lease as of the date and year set forth below.

<PAGE>

LESSEE:                                      LESSOR:

Acacia Biosciences, Inc.,                    Leonard and Roberta Cohn, Donald
a Delaware corporation                       and Diane Rosenberg, et. al.
                                             dba C & R Investments

BY:  /s/: Bruce A. Cohen                     BY: /s/: Leonard D. Cohn
     --------------------------                   -----------------------------

BY:  Bruce A. Cohen                          BY: /s/: Donald Rosenberg
     --------------------------                   -----------------------------

ITS: President and CEO                       ITS:
     --------------------------                   -----------------------------

Dated: January 10, 1997                      Dated: January 11, 1997