<PAGE>

                                                                   EXHIBIT 10.12

Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 1

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT is made as of December 13, 2001, between
ARE-5100/5110 CAMPUS DRIVE, L.P., a Delaware limited partnership ("Landlord"),
and Genaera Corporation, a Delaware corporation ("Tenant").

Building:    5110 Campus Drive, Plymouth Meeting, Pennsylvania

Premises:    The Building, containing approximately 21,000 rentable square feet,
             as shown on Exhibit A, together with the real property on which the
             Building is located, together with all improvements thereon and
             appurtenances thereto as described on Exhibit B.

Base Rent:   $27,167.00 per month    Rentable Area of Premises: 21,000 sq. ft.

Tenant's Share:    100%              Security Deposit: $56,250

Commencement Date:    December 13, 2001

Rent Adjustment Percentage:    Greater of 3.5% or the CPI Adjustment Percentage
                               not to exceed 7.0%

Base Term:    Beginning on the Commencement Date and ending 72 months from the
              Commencement Date

Permitted Use:    Research and development laboratory, related office and other
                  related uses consistent with the character of the Project and
                  otherwise in compliance with the provisions of Section 7
                                                                 ---------
                  hereof.

Address for Rent Payment:                   Landlord's Notice Address:
135 N. Los Robles Avenue, Suite 250         135 N. Los Robles Avenue, Suite 250
Pasadena, CA 91101                          Pasadena, CA 91101
Attention: Accounts Receivable              Attention: Corporate Secretary

Tenant's Notice Address:
5110 Campus Drive
Plymouth Meeting, Pennsylvania
Attention: Christopher P. Schnittker

The following Exhibits and Addenda are attached hereto and incorporated herein
by this reference:

<TABLE>
<CAPTION>
<S>  <C>                                 <C>  <C>
[X]  EXHIBIT A - PREMISES DESCRIPTION    [X]  EXHIBIT B - DESCRIPTION OF PROJECT
[_]  EXHIBIT C - INTENTIONALLY OMITTED   [_]  EXHIBIT D - INTENTIONALLY OMITTED
[X]  EXHIBIT E - RULES AND REGULATIONS   [X]  EXHIBIT F - TENANT'S PERSONAL PROPERTY
</TABLE>
<PAGE>

Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 1

                                    RECITALS

         A.    As of the date hereof, the Premises are leased by tenant pursuant
to: (i) that certain Agreement of Lease dated February 10, 1989, between
Whitemarsh Business Associates, a Pennsylvania general partnership, as landlord,
and Tenant's predecessor by name change Magainin Sciences, Inc., a Delaware
corporation, as tenant; and (ii) a certain First Amendment to Lease dated as of
November 25, 1998, between Landlord, as successor in interest to Whitemarsh
Business Associates and Tenant (collectively, the "Prior Lease").

         B.    The term of the Prior Lease expires on November 30, 2002. Tenant
desires to extend its right to occupy the Premises beyond the term of the Prior
Lease, and Landlord is willing to permit Tenant to so extend the term of the
Prior Lease, but only if: (i) Landlord and Tenant enter into this Lease; and
(ii) Landlord and Tenant terminate the Prior Lease effective as of November 30,
2001, as provided herein.

                                    AGREEMENT

         1.    Lease of Premises. Upon and subject to all of the terms and
conditions hereof, Landlord hereby leases the Premises to Tenant and Tenant
hereby leases the Premises from Landlord.

         2.    Termination of Prior Lease; Commencement Date; Term; Acceptance
of Premises.

         (a)   Termination of Prior Lease.

               (i) Landlord and Tenant hereby acknowledge and agree that, as of
         the Lease Date, the Prior Lease contains the complete agreement between
         Landlord and Tenant with respect to the Premises.

               (ii) Tenant hereby certifies to Landlord (and its successors and
         assigns) that, as of the Lease Date, (A) Tenant has no right, title, or
         interest in or to the Premises or the Project other than as a lessee of
         the Premises under the Prior Lease, (B) Tenant has no option, right of
         first refusal, right of first offer, or other right to acquire or
         purchase all or any portion of, or interest in, the Premises or the
         Project, (C) Tenant has not sublet any portion of the Premises or
         assigned any portion of the Prior Lease to any sublessee or assignee,
         and no one except Tenant and its employees currently occupy the
         Premises, (D) Tenant has not prepaid any of the rent due under the
         Prior Lease, (E) the security deposit held by Landlord under the Prior
         Lease is $56,250 in cash (the "Prior Lease Deposit"), and (F) Landlord
         has performed all obligations required of Landlord pursuant to the
         Prior Lease, and Tenant is not entitled to any refunds or rebates of
         rent or to any other payments or services from Landlord upon the
         termination of the Prior Lease.

               (iii) Landlord and Tenant hereby terminate the Prior Lease
         effective as of midnight December 12, 2001. As of the time such
         termination becomes effective (the "Prior Lease Termination Date"), the
         Prior Lease shall be of no further force or effect and Tenant shall
         have no other right, title, or interest, of any kind, direct or
         indirect, in any portion of the Premises or the Project, except as
         expressly provided in this Lease. All obligations of Tenant under the
         Prior Lease not fully performed as of the Prior Lease Termination Date
         (including, without limitation, indemnity obligations and obligations
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         concerning the condition (including the environmental condition) and
         repair of the Premises and/or the Project) (the "Prior Lease
         Obligations") shall survive such termination of the Prior Lease for the
         benefit of Landlord (and its successors and assigns) and shall
         constitute obligations under this Lease. Landlord hereby reserves all
         rights and claims that Landlord may have against Tenant for any such
         Prior Lease Obligations.

         (iv)    Landlord and Tenant will calculate and agree upon the amount
         of accrued interest owed by Landlord to Tenant on Tenant's security
         deposit under the Prior Lease. Landlord will pay such amount to Tenant
         in cash within two business days of the execution and delivery of this
         Lease.

         (b)    Commencement Date; Term. The "Commencement Date" shall be
December 1, 2001, and the "Term" of this Lease shall be the Base Term.

         (c)   Acceptance of Premises. Tenant has been in possession of, and
conducting business in, the Premises under the Prior Lease and intends to
continue conducting business in the Premises, from and after the Commencement
Date. As a result, Tenant is the party most familiar with the condition of the
Premises as of the Commencement Date and, as conclusively evidenced by Tenant's
execution and delivery of this Lease, Tenant accepts the Premises "as is", in
their condition as of the date hereof and as of the Commencement Date, without
any qualifications, restrictions, or limitations, subject to all applicable
Legal Requirements (as defined in Section 7 hereof). Further, because the
                                  ---------
Premises will not be empty and/or unoccupied at any time prior to the
Commencement Date and Landlord will have no opportunity to inspect, examine,
and/or audit the Premises in order to establish the condition of the Premises as
of the Commencement Date, Landlord shall have no liability for any defects in
the Premises (whether latent or patent) and shall have no obligation to perform
any work or to refurbish, finish, or otherwise alter the Premises in order
to prepare the Premises for Tenant's use or occupancy. Tenant agrees
and acknowledges that neither Landlord nor any agent of Landlord has made
any representation or warranty with respect to the condition of all or any
portion of the Premises or the Project, and/or the suitability of the Premises
or the Project for the conduct of Tenant's business, and Tenant waives any
implied warranty that the Premises or the Project are suitable for the Permitted
Use. This Lease constitutes the complete agreement of Landlord and Tenant
with respect to the subject matter hereof and supersedes any and all
prior representations, inducements, promises, agreements, understandings,
and negotiations that are not contained herein. Landlord, in executing this
Lease, does so in reliance upon Tenant's representations, warranties,
acknowledgments, and agreements contained herein.

         3.    Rent.

         (a)   Base Rent. Tenant shall pay to Landlord in advance, without
demand, abatement, deduction or set-off, except to the extent expressly provided
herein, monthly installments of Base Rent on or before the first day of each
calendar month during the Term hereof, in lawful money of the United States of
America, at the office of Landlord for payment of Rent set forth above, or to
such other person or at such other place as Landlord may from time to time
designate in writing. Payments of Base Rent for any fractional calendar month
shall be prorated. The obligation of Tenant to pay Base Rent and other sums to
Landlord and the obligations of Landlord under this Lease are independent
obligations. Tenant shall have no right at any time to abate, reduce, or set-off
any Rent (as defined in Section 5) due hereunder except for any abatement as may
                        ---------
be expressly provided in this Lease.

                                                         (C) All rights reserved
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Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 3

         (b)   Additional Rent. In addition to Base Rent, Tenant agrees to pay
to Landlord as additional rent ("Additional Rent"): (i) Tenant's Share of
"Operating Expenses" (as defined in Section 5), and (ii) any and all other
                                    ---------
amounts Tenant assumes or agrees to pay under the provisions of this Lease,
including, without limitation, any and all other sums that may become due by
reason of any default of Tenant or failure to comply with the agreements, terms,
covenants and conditions of this Lease to be performed by Tenant, after any
applicable notice and cure period.

         4.    Base Rent Adjustments. Base Rent shall be increased December 1,
2002 to $17.00 per rentable foot of the Premises. Commencing December 1, 2003,
and continuing annually thereafter, Base Rent shall be increased on each annual
anniversary of the first day of the first full month during the Term of this
Lease (each an "Adjustment Date") by multiplying the Base Rent payable
immediately before such Adjustment Date by the Rent Adjustment Percentage and
adding the resulting amount to the Base Rent payable immediately before such
Adjustment Date. Base Rent, as so adjusted, shall thereafter be due as provided
herein. Base Rent adjustments for any fractional calendar month shall be
prorated. "CPI Adjustment Percentage" means (i) a fraction, stated as a
percentage, the numerator of which shall be the Index for the calendar month 3
months before the month in which the Adjustment Date occurs, and the denominator
of which shall be the Index for the calendar month 3 months before the last
Adjustment Date or, if no prior Base Rent adjustment has been made, 3 months
before the first day of the first full month during the Term of this Lease, less
(ii) 1.00. "Index" means the "Consumer Price Index-All Urban
Consumers-Philadelphia-Wilmington-Atlantic City Metropolitan Area, All Items"
compiled by the U.S. Department of Labor, Bureau of Labor Statistics, (1982-84 =
100). If a substantial change is made in the Index, the revised Index shall be
used, subject to such adjustments as Landlord and Tenant may together agree is
appropriate in order to make the revised Index comparable to the prior Index. If
the Bureau of Labor Statistics ceases to publish the Index, then the successor
or most nearly comparable index, as reasonably determined by Landlord and
Tenant, shall be used, subject to such adjustments as Landlord and Tenant may
together agree is appropriate in order to make the new index comparable to the
Index. Landlord shall give Tenant written notice indicating the Base Rent, as
adjusted pursuant to this Section, and the method of computation and Tenant
shall pay to Landlord an amount equal to any underpayment of Base Rent by Tenant
within 30 days of Landlord's notice to Tenant. Failure to deliver such notice
shall not reduce, abate, waive or diminish Tenant's obligation to pay the
adjusted Base Rent and delivery of such notice shall not limit Tenant's right in
good faith to contest such determination.

         5.    Operating Expense Payments. Landlord shall deliver to Tenant a
written estimate of Operating Expenses for each calendar year during the Term
(the "Annual Estimate"), which may be revised by Landlord from time to time
during such calendar year. During each month of the Term, on the same date that
Base Rent is due, Tenant shall pay Landlord an amount equal to 1/12 of Tenant's
Share of the Annual Estimate. Payments for any fractional calendar month shall
be prorated.

         The term "Operating Expenses" means all costs and expenses of any kind
or description whatsoever incurred or accrued each calendar year by Landlord
with respect to the Project (including, without duplication, Taxes (as defined
in Section 9), reasonable reserves consistent with good business practice for
   -----------
future repairs and replacements, capital repairs and improvements amortized over
the lesser of 7 years and the useful life of such capital items (except that any
replacement of the roof shall be amortized over the lesser of 10 years and the
useful life of the roof), and the costs of Landlord's third party property
manager or, if there is no

                                                         (C) All rights reserved
                                             Alexandra Real Estate Equities 2001
                                        CONFIDENTIAL - DO NOT COPY OR DISTRIBUTE
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Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 4

third party property manager, administration rent in the amount of 3.0% of Base
Rent), excluding only:

         (a)    the original construction costs of the Project and renovation
prior to the date of the Lease and costs of correcting defects in such original
construction or renovation;

         (b)    capital expenditures for expansion or redevelopment of the
Project;

         (c)    interest, principal payments of Mortgage (as defined in Section
                                                                        -------
27) debts of Landlord, financing costs and amortization of funds borrowed by
---
Landlord, whether secured or unsecured and all payments of base rent (but not
taxes or operating expenses) under any ground lease or other underlying lease of
all or any portion of the Project;

         (d)    depreciation of the Project (except for capital improvements,
 the cost of which are includable in Operating  Expenses as provided above);

         (e)    advertising, legal and space planning expenses and leasing
commissions, and all costs and expenses incurred in procuring and leasing space
to tenants for the Project, including any leasing office maintained in the
Project, free rent and construction allowances for tenants;

         (f)    except as provided in this Lease, legal and other expenses
incurred in the negotiation or enforcement of leases, financing transactions
and other project matters;

         (g)    completing, fixturing, improving, renovating, painting,
redecorating or other work, which Landlord pays for or performs for specific
tenants within their premises, and costs of correcting defects in such work;

         (h)    costs to be reimbursed by other tenants of the Project or Taxes
to be paid directly by Tenant or other tenants of the Project, whether or not
actually paid;

         (i)    salaries, wages, benefits and other compensation paid to
officers and employees of Landlord who are not assigned in whole or in part to
the operation, management, maintenance or repair of the Project;

         (j)    general organizational, administrative and overhead costs
relating to maintaining Landlord's existence, either as a corporation,
partnership, or other entity, including general corporate, legal and accounting
expenses;

         (k)    costs (including attorneys' fees and costs of settlement,
judgments and payments in lieu thereof) incurred in connection with disputes
with tenants, other occupants, or prospective tenants, and costs and expenses,
including legal fees, incurred in connection with negotiations or disputes with
employees, consultants, management agents, leasing agents, purchasers or
mortgagees of the Building;

         (l)    costs incurred by Landlord due to the violation by Landlord, its
employees, agents or contractors or any tenant of the terms and conditions of
any lease of space in the Project or any Legal Requirement (as defined in
Section 7);
----------

         (m)    tax penalties, fines or interest incurred as a result of
Landlord's negligence, inability or unwillingness to make payment and/or to
file any tax or informational returns when

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due, or from Landlord's failure to make any payment required to be made by
Landlord hereunder before delinquency;

         (n)    overhead and profit increment paid to Landlord or to
subsidiaries or affiliates of Landlord for goods and/or services in or to the
Project to the extent the same exceeds the costs of such goods and/or services
rendered by unaffiliated third parties on a competitive basis;

         (o)    costs arising from Landlord's charitable or political
contributions or fine art maintained at the Project;

         (p)    costs in connection with services (including electricity), items
or other benefits of a type which are not standard for the Project and which are
not available to Tenant without specific charges therefor, but which are
provided to another tenant or occupant of the Project, whether or not such other
tenant or occupant is specifically charged therefor by Landlord;

         (q)    costs incurred in the sale or refinancing of the Project;

         (r)    net income taxes of Landlord or the owner of any interest in the
Project, franchise, capital stock, gift, estate or inheritance taxes or any
federal, state or local documentary taxes imposed against the Project or any
portion thereof or interest therein; and

         (s)    any expenses otherwise includable within Operating Expenses to
the extent actually reimbursed by persons other than tenants of the Project
under leases for space in the Project.

         Within 90 days after the end of each calendar year (or such longer
period as may be reasonably required, but in no event later than June 1),
Landlord shall furnish to Tenant a statement (an "Annual Statement") showing in
reasonable detail: (a) the total and Tenant's Share of actual Operating Expenses
for the previous calendar year, and (b) the total of Tenant's payments in
respect of Operating Expenses for such year. If Tenant's Share of actual
Operating Expenses for such year exceeds Tenant's payments of Operating Expenses
for such year, the excess shall be due and payable by Tenant as Rent within 30
days after delivery of such Annual Statement to Tenant. If Tenant's payments of
Operating Expenses for such year exceed Tenant's Share of actual Operating
Expenses for such year Landlord shall pay the excess to Tenant within 30 days
after delivery of such Annual Statement, except that after the expiration, or
earlier termination of the Term or if Tenant is delinquent in its obligation to
pay Rent, Landlord shall pay the excess to Tenant after deducting all other
amounts due Landlord.

         The Annual Statement shall be final and binding upon Tenant unless
Tenant, within 90 days after Tenant's receipt thereof, shall contest any item
therein by giving written notice to Landlord, specifying each item contested and
the reason therefor. If, during such 90 day period, Tenant reasonably and in
good faith questions or contests the correctness of Landlord's statement of
Tenant's Share of Operating Expenses, Landlord will provide Tenant with access
to Landlord's books and records relating to the operation of the Project and
such information as Tenant shall reasonably and in good faith request (the
"Expense Information"). If after Tenant's review of such Expense Information,
Landlord and Tenant cannot agree upon the amount of Tenant's Share of Operating
Expenses, then Tenant shall have the right to have an independent public
accounting firm with a national reputation selected by Tenant (or such other
firm approved by Landlord, which approval will not be unreasonably withheld,
delayed or conditioned) and working pursuant to a fee arrangement other than a
contingent fee at Tenant's sole cost and expense, audit and/or review the
Expense Information for the year in question (the

                                                         (C) All rights reserved
                                             Alexandra Real Estate Equities 2001
                                        CONFIDENTIAL - DO NOT COPY OR DISTRIBUTE
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Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 6

"Independent Review"). The results of any such Independent Review shall be
binding on Landlord and Tenant. If the Independent Review shows that the
payments actually made by Tenant with respect to Operating Expenses for the
calendar year in question exceeded Tenant's Share of Operating Expenses for such
calendar year, Landlord shall at Landlord's option either (i) credit the excess
amount to the next succeeding installments of estimated Operating Expenses or
(ii) pay the excess to Tenant within 30 days after delivery of such statement,
except that after the expiration or earlier termination of the Term or if Tenant
is delinquent in its obligation to pay Rent, Landlord shall pay the excess to
Tenant after deducting all other amounts due Landlord. If the Independent Review
shows that Tenant's payments with respect to Operating Expenses for such
calendar year were less than Tenant's Share of Operating Expenses for the
calendar year, Tenant shall pay the deficiency to Landlord within 30 days after
delivery of such statement. If the Independent Review shows that Tenant has
overpaid with respect to Operating Expenses by more than 5% then Landlord shall
reimburse Tenant for all costs incurred by Tenant for the Independent Review.
Operating Expenses for the calendar years in which Tenant's obligation to share
therein begins and ends shall be prorated.

         "Tenant's Share" shall be the percentage set forth on the first page of
this Lease as Tenant's Share.

         6.    Security Deposit. Landlord holds the Security Deposit as security
for the performance of Tenant's obligations under this Lease. The Security
Deposit is not an advance rental deposit or a measure of Landlord's damages in
case of Tenant's default. Upon each occurrence of a Default (as defined in
Section 20), Landlord may use all or part of the Security Deposit to pay
----------
delinquent payments due under this Lease, and the cost of any damage, injury,
expense or liability caused by such Default, without prejudice to any other
remedy provided herein or provided by law. Upon any such use of all or any
portion of the Security Deposit, Tenant shall pay Landlord on demand the amount
that will restore the Security Deposit to its original amount. Upon bankruptcy
or other debtor-creditor proceedings against Tenant, the Security Deposit shall
be deemed to be applied first to the payment of Rent and other charges due
Landlord for periods prior to the filing of such proceedings. Landlord's
obligation respecting the Security Deposit is that of a debtor, not a trustee;
no interest shall accrue thereon. The Security Deposit shall be the property of
Landlord, but shall be paid to Tenant when Tenant's obligations under this Lease
have been completely fulfilled. Landlord shall be released from any obligation
with respect to the Security Deposit upon transfer of this Lease and the
Premises to a person or entity assuming Landlord's obligations under this
Section 6. Tenant hereby waives the provisions of any law, now or hereafter in
---------
force, which provide that Landlord may claim from a security deposit only those
sums reasonably necessary to remedy defaults in the payment of Rent, to repair
damage caused by Tenant or to clean the Premises, it being agreed that Landlord
may, in addition, claim those sums reasonably necessary to compensate Landlord
for any other loss or damage, foreseeable or unforeseeable, caused by the act
or omission of Tenant or any officer, employee, agent or invitee of Tenant. The
Security Deposit, or any balance thereof (i.e., after deducting therefrom all
amounts to which Landlord is entitled under the provisions of this Lease), shall
be returned to Tenant (or, at Landlord's option, to the last assignee of
Tenant's interest hereunder) within 90 days after the expiration or earlier
termination of this Lease.

         7.    Use. The Premises shall be used solely for the Permitted Use set
forth in the Basic Lease Provisions, in compliance with all laws, orders,
judgments, ordinances, regulations, codes, directives, permits, licenses,
covenants and restrictions now or hereafter applicable to the Premises, and the
use and occupancy thereof, including, without limitation, the Americans
With Disabilities Act, 42 U.S.C. ss. 12101, et seq. (together with the
regulations promulgated

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Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 7

pursuant thereto, "ADA") (collectively, "Legal Requirements"). Tenant shall,
upon 5 days' written notice from Landlord, discontinue any use of the Premises
which is declared by any Governmental Authority (as defined in Section 9) having
                                                               ---------
jurisdiction to be a violation of any Legal Requirement. Tenant will not use or
permit the Premises to be used for any purpose or in any manner that would void
Tenant's or Landlord's insurance, increase the insurance risk, or cause the
disallowance of any sprinkler or other credits. Tenant shall reimburse Landlord
promptly upon demand for any additional premium charged for any such insurance
policy by reason of Tenant's failure to comply with the provisions of this
Section or otherwise caused by Tenant's use and/or occupancy of the Premises.
Tenant will use the Premises in a careful, safe and proper manner and will not
commit waste, overload the floor or structure of the Premises, subject the
Premises to use that would damage the Premises or obstruct or interfere with the
rights of Landlord, including conducting or giving notice of any auction,
liquidation, or going out of business sale on the Premises, or using or allowing
the Premises to be used for any unlawful purpose. Tenant shall cause any
equipment or machinery to be installed in the Premises so as to reasonably
prevent sounds or vibrations from the Premises from extending into Common Areas,
or other space in the Project. Tenant shall not place any machinery or equipment
weighing 500 pounds or more in or upon the Premises or transport or move such
items through the Common Areas of the Project without the prior written consent
of Landlord. Except as may be provided under the Work Letter, Tenant shall not,
without the prior written consent of Landlord, use the Premises in any manner
which will require ventilation, air exchange, heating, gas, steam, electricity
or water beyond the existing capacity of the Project as proportionately
allocated to the Premises based upon Tenant's Share as usually furnished for the
Permitted Use.

         Tenant, at its sole expense, shall make any alterations or
modifications to the Premises or the Project that are required by Legal
Requirements (including, without limitation, compliance of the Premises with the
Americans With Disabilities Act, 42 U.S.C. ss. 12101, et seq. (together with
regulations promulgated pursuant thereto, "ADA")). Notwithstanding any other
provision herein to the contrary, Tenant shall be responsible for any and all
demands, claims, liabilities, losses, costs, expenses, actions, causes of
action, damages or judgments, and all reasonable expenses incurred in
investigating or resisting the same (including, without limitation, reasonable
attorneys' fees, charges and disbursements and costs of suit) (collectively,
"Claims") arising out of or in connection with Legal Requirements, and Tenant
shall indemnify, defend, hold and save Landlord harmless from and against any
and all Claims arising out of or in connection with any failure of the Premises
to comply with any Legal Requirement.

         8.    Holding Over. If, with Landlord's express written consent, Tenant
retains possession of the Premises after the termination of the Term, (i) unless
otherwise agreed in such written consent, such possession shall be subject to
immediate termination by Landlord at any time, (ii) all of the other terms and
provisions of this Lease (including, without limitation, the adjustment of Base
Rent pursuant to Section 4 hereof) shall remain in full force and effect
                 ---------
(excluding any expansion or renewal option or other similar right or option)
during such holdover period, (iii) Tenant shall continue to pay Base Rent in the
amount payable upon the date of the expiration or earlier termination of this
Lease or such other amount as Landlord may indicate, in Landlord's sole and
absolute discretion, in such written consent, and (iv) all other payments shall
continue under the terms of this Lease. If Tenant remains in possession of the
Premises after the expiration or earlier termination of the Term without the
express written consent of Landlord, (A) Tenant shall become a tenant at
sufferance upon the terms of this Lease except that the monthly rental shall be
equal to 150% of the Rent in effect during the last 30 days of the Term, and (B)
Tenant shall be responsible for all damages suffered by Landlord resulting from
or occasioned by Tenant's holding over, including consequential damages. No
holding over by

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Net Single Tenant Office/Laboratory         5110 Campus Drive/Genaera - Page 8

Tenant, whether with or without consent of Landlord, shall operate to extend
this Lease except as otherwise expressly provided, and this Section 8 shall not
                                                            ---------
be construed as consent for Tenant to retain possession of the Premises.
Acceptance by Landlord of Rent after the expiration of the Term or earlier
termination of this Lease shall not result in a renewal or reinstatement of this
Lease.

         9.    Taxes. Landlord shall pay, as part of Operating Expenses, all
taxes, levies, assessments and governmental charges of any kind (collectively
referred to as "Taxes") imposed by any federal, state, regional, municipal,
local or other governmental authority or agency, including, without limitation,
quasi-public agencies (collectively, "Governmental Authority") during the Term,
including, without limitation, all Taxes: (i) imposed on or measured by or
based, in whole or in part, on rent payable to Landlord under this Lease and/or
from the rental by Landlord of the Project or any portion thereof, or (ii) based
on the square footage, assessed value or other measure or valuation of any kind
of the Premises or the Project, or (iii) assessed or imposed by or on the
operation or maintenance of any portion of the Premises or the Project,
including parking, or (iv) assessed or imposed by, or at the direction of, or
resulting from statutes or regulations, or interpretations thereof, promulgated
by, any Governmental Authority, or (v) imposed as a license or other fee on
Landlord's business of leasing space in the Project. Landlord may contest by
appropriate legal proceedings the amount, validity, or application of any Taxes
or liens securing Taxes. Taxes shall not include any net income taxes imposed on
Landlord unless such net income taxes are in substitution for any Taxes payable
hereunder. If any such Tax is levied or assessed directly against Tenant, then
Tenant shall be responsible for and shall pay the same at such times and in such
manner as the taxing authority shall require. Tenant shall pay, prior to
delinquency, any and all Taxes levied or assessed against any personal property
or trade fixtures placed by Tenant in the Premises, whether levied or assessed
against Landlord or Tenant. If any Taxes on Tenant's personal property or trade
fixtures are levied against Landlord or Landlord's property, or if the assessed
valuation of the Project is increased by a value attributable to improvements in
or alterations to the Premises, whether owned by Landlord or Tenant and whether
or not affixed to the real property so as to become a part thereof, higher than
the base valuation on which Landlord from time-to-time allocates Taxes to all
tenants in the Project, Landlord shall have the right, but not the obligation,
to pay such Taxes. Landlord's determination of any excess assessed valuation
shall be binding and conclusive, absent manifest error. The amount of any such
payment by Landlord shall constitute Additional Rent due from Tenant to
Landlord immediately upon demand.

         10.    Parking. Tenant shall have the right to park in those areas
designated for parking at the Project, subject in each case to Landlord's rules
and regulations. Landlord shall not be responsible for enforcing Tenant's
parking rights against any third parties.

         11.    Utilities, Services. Tenant shall pay directly to the provider,
prior to delinquency, for all water, electricity, heat, light, power, telephone,
sewer, and other utilities (including gas and fire sprinklers to the extent the
Project is plumbed for such services), refuse and trash collection and
janitorial services (collectively, "Utilities") and all maintenance charges for
Utilities, and any storm sewer charges or other similar charges for Utilities
imposed by any Governmental Authority or Utility provider, and any taxes,
penalties, surcharges or similar charges thereon. No interruption or failure of
Utilities, from any cause whatsoever shall result in eviction or constructive
eviction of Tenant, termination of this Lease or the abatement of Rent.

         12.    Alterations and Tenant's Property. Any alterations, additions,
or improvements made to the Premises by or on behalf of Tenant,
including additional locks or bolts of any kind or nature upon any doors or
windows in the Premises, but excluding

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installation, removal or realignment of furniture systems (other than removal of
furniture systems owned or paid for by Landlord) not involving any modifications
to the structure or connections (other then by ordinary plugs or jacks) to
Building Systems (as defined in Section 13) ("Alterations") shall be subject to
                                ----------
Landlord's prior written consent, which may be given or withheld in Landlord's
sole discretion if any such Alteration affects the structure or Building
Systems, but which shall otherwise not be unreasonably withheld, delayed or
condtioned. Tenant may construct nonstructural Alterations in the Premises
without Landlord's prior approval if the aggregate cost of all such work in any
12 month period does not exceed $50,000 (a "Notice-Only Alteration"), provided
Tenant notifies Landlord in writing of such intended Notice-Only Alteration, and
such notice shall be accompanied by such information concerning the nature and
cost of the Notice-Only Alteration as may be reasonably requested by Landlord,
which notice and accompanying materials shall be delivered to Landlord not less
than 15 business days in advance of any proposed construction. If Landlord
approves any other Alterations, Landlord may impose such reasonable conditions
on Tenant in connection with the commencement, performance and completion of
such Alterations as Landlord may deem appropriate in Landlord's reasonable
discretion. Any request for approval shall be in writing, delivered not less
than 15 business days in advance of any proposed construction, and accompanied
by plans, specifications, bid proposals, work contracts and such other
information concerning the nature and cost of the alterations as may be
reasonably requested by Landlord, including the identities and mailing addresses
of all persons performing work or supplying materials. Landlord's right to
review plans and specifications and to monitor construction shall be solely for
its own benefit, and Landlord shall have no duty to ensure that such plans and
specifications or construction comply with applicable Legal Requirements. Tenant
shall cause, at its sole cost and expense, all Alterations to comply with
insurance requirements and with Legal Requirements and shall implement at its
sole cost and expense any alteration or modification required by Legal
Requirements as a result of any Alterations. Tenant shall pay to Landlord, as
Additional Rent, on demand Landlord's actual out-of-pocket expenses for plan
review, coordination, scheduling and supervision. Before Tenant begins any
Alteration, Landlord may post on and about the Premises notices of
non-responsibility pursuant to applicable law. Tenant shall reimburse Landlord
for, and indemnify and hold Landlord harmless from, any expense incurred by
Landlord by reason of faulty work done by Tenant or its contractors, delays
caused by such work, or inadequate cleanup.

         Tenant shall furnish security or make other arrangements satisfactory
to Landlord to assure payment for the completion of all Alterations work free
and clear of liens, and shall provide (and cause each contractor or
subcontractor to provide) certificates of insurance for workers' compensation
and other coverage in amounts and from an insurance company reasonably
satisfactory to Landlord protecting Landlord against liability for personal
injury or property damage during construction. Upon completion of any
Alterations, Tenant shall deliver to Landlord: (i) sworn statements setting
forth the names of all contractors and subcontractors who did the work and final
lien waivers from all such contractors and subcontractors; and (ii) "as built"
plans for any such Alteration.

         Other than (i) the items, if any, listed on Exhibit F attached hereto,
(ii) any items agreed by Landlord in writing to be included on Exhibit F in the
future, and (iii) any trade fixtures, machinery, equipment and other personal
property not paid for out of the TI Fund (as defined in the Work Letter) which
may be removed without material damage to the Premises, which damage shall be
repaired (including capping or terminating utility hook-ups behind walls) by
Tenant during the Term (collectively, "Tenant's Property"), all property of any
kind paid for with the TI Fund, all Alterations, real property fixtures,
built-in machinery and equipment, built-in casework and cabinets and other
similar additions and improvements built into the Premises so

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as to become an integral part of the Premises such as fume hoods which penetrate
the roof or plenum area, built-in cold rooms, built-in warm rooms, walk-in cold
rooms, walk-in warm rooms, deionized water systems, glass washing equipment,
autoclaves, chillers, built-in plumbing, electrical and mechanical equipment and
systems, and any power generator and transfer switch (collectively,
"Installations") shall be and shall remain the property of Landlord during the
Term and following the expiration or earlier termination of the Term, shall not
be removed by Tenant at any time during the Term and shall remain upon and be
surrendered with the Premises as a part thereof in accordance with Section 28
                                                                   ----------
following the expiration or earlier termination of this Lease; provided,
                                                               --------
however, that Landlord shall, at the time its approval of such Installation is
-------
requested or at the time it receives notice of a Notice-Only Alteration notify
Tenant if it has elected to cause Tenant to remove such Installation upon the
expiration or earlier termination of this Lease. If Landlord has so elected at
such time, Tenant shall remove such Installation upon the expiration or earlier
termination of this Lease and restore any damage caused by or occasioned as a
result of such removal, including, when removing any of Tenant's Property which
was plumbed, wired or otherwise connected to any of the Building Systems,
capping off all such connections behind the walls of the Premises and repairing
any holes. During any such restoration period, Tenant shall pay Rent to Landlord
as provided herein as if said space were otherwise occupied by Tenant.

         13.    Landlord's Repairs. Landlord, as an Operating Expense, shall
maintain the landscaping, sidewalk and parking lot (including ice and snow
removal) the structure of the Building and its component parts, and the roof of
the Building (including the water tightness thereof) in good repair, reasonable
wear and tear and uninsured losses and damages caused by Tenant, or by any of
Tenant's agents, servants, employees, invitees and contractors (collectively,
"Tenant Parties") excluded. Losses and damages caused by Tenant or any Tenant
Party shall be repaired by Landlord, to the extent not covered by insurance,
at Tenant's sole cost and expense. Tenant shall promptly give Landlord
written notice of any repair required by Landlord pursuant to this Section,
after which Landlord shall have a reasonable opportunity to effect such repair.
Landlord shall not be liable for any failure to make any repairs or to perform
any maintenance unless such failure shall persist for an unreasonable time
after Tenant's written notice of the need for such repairs or maintenance.
Tenant waives its rights under any state or local law to terminate this Lease or
to make such repairs at Landlord's expense and agrees that the parties'
respective rights with respect to such matters shall be solely as set forth
herein. Repairs required as the result of fire, earthquake, flood, vandalism,
war, or similar cause of damage or destruction shall be controlled by
Section 18. Without limitation of Landlord's responsibility to maintain and
----------
repair as herein provided, Tenant shall have the right to perform, or to have
performed by reputable contractors, any maintenance, repairs or replacements
which Landlord fails to perform after reasonable advance notice of the
requirement therefor; and in the event of an emergency presenting a bona fide
threat of damage or harm to persons or property, Tenant shall have the right to
perform or to have performed all such repairs as shall be reasonably required to
resolve such emergency. Tenant shall bear the entire cost of such repairs, all
of which are Operating Expenses hereunder.

         14.    Tenant's Repairs. Subject to Section 13 hereof, Tenant, at its
                                             ----------
expense, shall repair, replace and maintain in good condition all portions of
the Premises, including, without limitation, HVAC (through a third party
contractor reasonably acceptable to Landlord), plumbing, fire sprinklers and all
other building systems serving the Premises ("Building Systems"), entries,
doors, ceilings, interior windows, interior walls, and the interior side of
demising walls. Such repair and replacements may include capital expenditures
and repairs whose benefit may extend beyond the Term. Should Tenant fail to make
any such repair or replacement or fail to maintain the Premises, Landlord shall
give Tenant notice of such failure. If Tenant fails to

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commence cure of such default within 10 days of Landlord's notice, and
thereafter diligently prosecute such cure to completion, Landlord may perform
such work and shall be reimbursed by Tenant within 10 days after demand
therefor; provided, however, that if such default by Tenant creates or could
create an emergency, Landlord may immediately commence cure of such default and
shall thereafter be entitled to recover the costs of such cure from Tenant.
Subject to Sections 17 and 18, Tenant shall bear the full uninsured cost of any
           -----------     --
repair or replacement to any part of the Project that results from damage caused
by Tenant or any Tenant Party and any repair that benefits only the Premises.

         15.    Mechanic's Liens. Tenant shall discharge, by bond or otherwise,
any mechanic's lien filed against the Premises or against the Project for
work claimed to have been done for, or materials claimed to have been furnished
to, Tenant within 30 days after Tenant shall have received written notice
thereof, at Tenant's sole cost and shall otherwise keep the Premises and the
Project free from any liens arising out of work performed, materials furnished
or obligations incurred by Tenant. Should Tenant fail to discharge any lien
described herein, Landlord shall have the right, but not the obligation, to pay
such claim or post a bond or otherwise provide security to eliminate the lien as
a claim against title to the Project and the cost thereof shall be immediately
due from Tenant as Additional Rent. If Tenant shall lease or finance the
acquisition of office equipment, furnishings, or other personal property of a
removable nature utilized by Tenant in the operation of Tenant's business,
Tenant warrants that any Uniform Commercial Code Financing Statement executed by
Tenant will upon its face or by exhibit thereto indicate that such Financing
Statement is applicable only to removable personal property of Tenant located
within the Premises. In no event shall the address of the Project be furnished
on the statement without qualifying language as to applicability of the lien
only to removable personal property, located in an identified suite held by
Tenant.

         16.    Indemnification. Tenant hereby indemnifies and agrees to defend,
save and hold Landlord harmless from and against any and all Claims for injury
or death to persons or damage to property occurring within or about the
Premises, arising directly or indirectly out of use or occupancy of the Premises
or a breach or default by Tenant in the performance of any of its obligations
hereunder, unless caused solely by the willful misconduct or gross negligence of
Landlord. Landlord shall not be liable to Tenant for, and Tenant assumes all
risk of damage to, personal property (including, without limitation, loss of
records kept within the Premises). Tenant further waives any and all Claims for
injury to Tenant's business or loss of income relating to any such damage
or destruction of personal property (including, without limitation, any loss
of records). Landlord shall not be liable for any damages arising from any
act, omission or neglect of any tenant in the Project or of any other third
party.

         17.    Insurance. Landlord shall maintain all risk property and, if
applicable, sprinkler damage insurance covering the full replacement cost of the
Project. Landlord shall further procure and maintain commercial general
liability insurance with a single loss limit of not less than $2,000,000 for
bodily injury and property damage with respect to the Project. Landlord may, but
is not obligated to, maintain such other insurance and additional coverages as
it may deem necessary, including, but not limited to, flood, environmental
hazard and earthquake, loss or failure of building equipment, errors and
omissions, rental loss during the period of repair or rebuilding, workers'
compensation insurance and fidelity bonds for employees employed to perform
services and insurance for any improvements installed by Tenant or which are in
addition to the standard  improvements customarily furnished by Landlord without
regard to whether or not such are made a part of the Project. All such insurance
shall be included as part of the Operating Expenses. The Project may be included
in a blanket policy (in which case the

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cost of such insurance allocable to the Project will be determined by Landlord
based upon the insurer's cost calculations).

         Tenant, at its sole cost and expense, shall maintain during the Term:
all risk property insurance with business interruption and extra expense
coverage, covering the full replacement cost of all property and improvements
installed or placed in the Premises by Tenant at Tenant's expense; workers'
compensation insurance with no less than the minimum limits required by law;
employer's liability insurance with such limits as required by law; commercial
general liability insurance, with a minimum limit of not less than $2,000,000
per occurrence for bodily injury and property damage with respect to the
Premises and pollution legal liability insurance with a minimum limit of not
less than $1,000,000 per occurrence The commercial general liability insurance
policy shall name Landlord, its officers, directors, employees, managers,
agents, invitees and contractors (collectively, "Landlord Parties"), as
additional insureds. The commercial general liability and pollution legal
liability insurance policies shall insure on an occurrence and not a claims-made
basis; shall be issued by insurance companies which have a rating of not less
than policyholder rating of A and financial category rating of at least Class X
in "Best's Insurance Guide"; shall not be cancelable except in case of
nonpayment of premium for which a minimum of 10 days prior written notice shall
be given to Landlord from the insurer; contain a hostile fire endorsement and a
contractual liability endorsement; and provide primary coverage to Landlord (any
policy issued to Landlord providing duplicate or similar coverage shall be
deemed excess over Tenant's policies). Such policies or certificates thereof
shall be delivered to Landlord by Tenant upon commencement of the Term and upon
each renewal of said insurance. Tenant shall, at least 5 days prior to the
expiration of such policies, furnish Landlord with renewal certificates.

         In each instance where insurance is to name Landlord as an additional
insured, Tenant shall upon written request of Landlord also designate and
furnish certificates so evidencing Landlord as additional insured to: (i) any
lender of Landlord holding a security interest in the Project or any portion
thereof, (ii) the landlord under any lease wherein Landlord is tenant of the
real property on which the Project is located, if the interest of Landlord is or
shall become that of a tenant under a ground or other underlying lease rather
than that of a fee owner, and/or (iii) any management company retained by
Landlord to manage the Project.

         The property insurance obtained by Landlord and Tenant shall include a
waiver of subrogation by the insurers and all rights based upon an assignment
from its insured, against Landlord or Tenant, and their respective officers,
directors, employees, managers, agents, invitees and contractors ("Related
Parties"), in connection with any loss or damage thereby insured against. Any
provision in this lease to the contrary notwithstanding, neither party nor its
respective Related Parties shall be liable to the other for loss or damage
caused by any risk insured against under property insurance required to be
maintained hereunder, whether or not such insurance is sufficient to cover the
entire loss, and each party waives any claims against the other party, and its
respective Related Parties, for such loss or damage. The failure of a party to
insure its property shall not void this waiver. Landlord and its respective
Related Parties shall not be liable for, and Tenant hereby waives all claims
against such parties for, business interruption and losses occasioned thereby
sustained by Tenant or any person claiming through Tenant resulting from any
accident or occurrence in or upon the Premises or the Project from any cause
whatsoever. If the foregoing waivers shall contravene any law with respect to
exculpatory agreements, the liability of Landlord or Tenant shall be deemed not
released but shall be secondary to the other's insurer.

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         Landlord may not more frequently than once every 24 months require
insurance policy limits to be raised to conform with requirements of Landlord's
lender and/or to bring coverage limits to levels then being generally required
of new tenants within the Project, provided, however, that no such increase
shall be required of Tenant absent a concomitant increase in Landlord's
coverages.

         18.    Restoration. If at any time during the Term the Project or the
Premises are damaged or destroyed by a fire or other insured casualty, Landlord
shall within 60 days after discovery of such damage cause an independent
registered architect or licensed general contractor, reasonably acceptable to
Tenant, to state its opinion of the amount of time reasonably required to
restore the Project or the Premises, as applicable (the "Restoration Period").
If the Restoration Period is estimated to exceed 9 months (the "Maximum
Restoration Period"), Landlord may, in such notice, elect to terminate this
Lease; provided, however, that notwithstanding Landlord's election to restore,
       --------  -------
Tenant may elect to terminate this Lease by written notice to Landlord delivered
within 5 business days of receipt of a notice from Landlord estimating a
Restoration Period for the Premises longer than the Maximum Restoration Period.
Unless either Landlord or Tenant so elects to terminate this Lease, Landlord
shall, subject to receipt of sufficient insurance proceeds (with any
commercially reasonable deductible to be treated as a current Operating
Expense), promptly restore the Premises (excluding the improvements installed by
Tenant or by Landlord and paid for by Tenant), subject to delays arising from
the collection of insurance proceeds, from Force Majeure events or as needed to
obtain any license, clearance or other authorization of any kind required to
enter into and restore the Premises issued by any Governmental Authority having
jurisdiction over the use, storage, handling, treatment, generation, release,
disposal, removal or remediation of Hazardous Materials (as defined in
Section 30) in, on or about the Premises (collectively referred to herein as
----------
"Hazardous  Materials Clearances"); provided, however, that if repair or
                                    --------  -------
restoration of the Premises is not substantially complete as of the end of the
Maximum Restoration Period or, if longer, the Restoration Period, Landlord may,
in its sole and absolute discretion, elect not to proceed with such repair and
restoration, or Tenant may by written notice to Landlord delivered within 5
business days of the expiration of the Maximum Restoration Period or, if longer,
the Restoration Period, elect to terminate this Lease, in which event Landlord
shall be relieved of its obligation to make such repairs or restoration and this
Lease shall terminate, but Landlord shall retain any Rent paid and the right to
any Rent payable by Tenant prior to such election by Landlord or Tenant. Any
termination of this Lease pursuant to this Section 18 shall be effective as of
                                           ----------
the as of the date that is 75 days after the later of: (i) discovery of such
damage or destruction, or (ii) the date all required Hazardous Materials
Clearances are obtained.

         Provided this Lease shall not have been terminated as provided above,
Tenant, at its expense, shall promptly perform, subject to delays arising from
the collection of insurance proceeds, from Force Majeure (as defined in
Section 34) events or to obtain Hazardous Material Clearances, all repairs or
----------
restoration not required to be done by Landlord and shall promptly re-enter the
Premises and commence doing business in accordance with this Lease.
Notwithstanding the foregoing, either party may terminate this Lease if the
Premises are damaged during the last 1 year of the Term and Landlord reasonably
estimates that it will take more than 2 months to repair such damage, or if
insurance proceeds are not available for such restoration. Rent shall be abated
from the date all required Hazardous Material Clearances are obtained until the
Premises are repaired and restored, in the proportion which the area of the
Premises, if any, which is not usable by Tenant bears to the total area of the
Premises, unless Landlord provides Tenant with other space during the period of
repair that is suitable for the temporary conduct of Tenant's business. Such
abatement shall be the sole remedy of Tenant,

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and except as provided herein, Tenant waives any right to terminate the Lease by
reason of damage or casualty loss.

         The provisions of this Lease, including this Section 18, constitute
                                                      ----------
an express agreement between Landlord and Tenant with respect to any and all
damage to, or destruction of, all or any part of the Premises, or any other
portion of the Project, and any statute or regulation which is now or may
hereafter be in effect shall have no application to this Lease or any damage or
destruction to all or any part of the Premises or any other portion of the
Project, the parties hereto expressly agreeing that this Section 18 sets forth
                                                         ----------
their entire understanding and agreement with respect to such matters.

         19.    Condemnation. If the whole or any material part of the Premises
or the Project is taken for any public or quasi-public use under governmental
law, ordinance, or regulation, or by right of eminent domain, or by private
purchase in lieu thereof (a "Taking" or "Taken"), and the Taking would in
Landlord's reasonable judgment either prevent or materially interfere with
Tenant's use of the Premises or materially interfere with or impair Landlord's
ownership or operation of the Project, then upon written notice by Landlord this
Lease shall terminate and Rent shall be apportioned as of said date. If part of
the Premises shall be Taken, and this Lease is not terminated as provided above,
Landlord shall promptly restore the Premises and the Project as nearly as is
commercially reasonable under the circumstances to their condition prior to such
partial Taking and the rentable square footage of the Building, the rentable
square footage of the Premises, Tenant's Share of Operating Expenses and the
Rent payable hereunder during the unexpired Term shall be reduced to such extent
as may be fair and reasonable under the circumstances. Upon any such
Taking, Landlord shall be entitled to receive the entire price or award from any
such Taking without any payment to Tenant, and Tenant hereby assigns to
Landlord Tenant's interest, if any, in such award. Tenant shall have the right,
to the extent that same shall not diminish Landlord's award, to make a separate
claim against the condemning authority (but not Landlord) for such compensation
as may be separately awarded or recoverable by Tenant for moving expenses and
damage to Tenant's trade fixtures, if a separate award for such items is made to
Tenant. Tenant hereby waives any and all rights it might otherwise have pursuant
to any provision of state law to terminate this Lease upon a partial Taking of
the Premises or the Project.

         20.    Events of Default.  Each of the following events shall be a
default ("Default") by Tenant under this Lease:

         (a)    Payment Defaults. Tenant shall fail to pay any installment of
Rent or any other payment hereunder when due; provided, however, that Landlord
will give Tenant notice and an opportunity to cure any failure to pay Rent
within 3 days of any such notice not more than once in any 12 month period and
Tenant agrees that such notice shall be in lieu of and not in addition to, or
shall be deemed to be, any notice required by law.

         (b)    Insurance. Any insurance required to be maintained by Tenant
pursuant to this Lease shall be canceled or terminated or shall expire or shall
be reduced or materially changed, or Landlord shall receive a notice of
nonrenewal of any such insurance and Tenant shall fail to obtain replacement
insurance at least 20 days before the expiration of the current coverage.

         (c)    Abandonment. Tenant shall abandon the Premises; provided,
however, that foregoing shall not preclude Tenant from vacating the Premises
prior to the expiration of the Lease Term.

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         (d)    Improper Transfer. Tenant shall assign, sublease or otherwise
transfer or attempt to transfer all or any portion of Tenant's interest in this
Lease or the Premises except as expressly permitted herein, or Tenant's interest
in this Lease shall be attached, executed upon, or otherwise judicially seized
and such action is not released within 90 days of the action.

         (e)    Liens. Tenant shall fail to discharge or otherwise obtain the
release or bonding over of any lien placed upon the Premises in violation of
this Lease within 30 days after written notice to Tenant that any such lien is
filed against the Premises.

         (f)    Insolvency Events. Tenant or any guarantor or surety of Tenant's
obligations hereunder shall: (A) make a general assignment for the benefit of
creditors; (B) commence any case, proceeding or other action seeking to have an
order for relief entered on its behalf as a debtor or to adjudicate it a
bankrupt or insolvent, or seeking reorganization, arrangement, adjustment,
liquidation, dissolution or composition of it or its debts or seeking
appointment of a receiver, trustee, custodian or other similar official for it
or for all or of any substantial part of its property (collectively a
"Proceeding for Relief"); (C) become the subject of any Proceeding for Relief
which is not dismissed within 90 days of its filing or entry; or (D) die or
suffer a legal disability (if Tenant, guarantor, or surety is an individual) or
be dissolved or otherwise fail to maintain its legal existence (if Tenant,
guarantor or surety is a corporation, partnership or other entity).

         (g)    Estoppel Certificate or Subordination Agreement. Tenant fails to
execute any document required from Tenant under Sections 23 or 27 within 5 days
                                                -----------    --
after a second notice requesting such document.

         (h)    Other Defaults. Tenant shall fail to comply with any provision
of this Lease other than those specifically referred to in this Section 20, and,
                                                                -----------
except as otherwise expressly provided herein, such failure shall continue for a
period of 10 days after written notice thereof from Landlord to Tenant.

Any notice given under Section 20(h) hereof shall: (i) specify the alleged
                       -------------
default, (ii) demand that Tenant cure such default, (iii) be in lieu of, and not
in addition to, or shall be deemed to be, any notice required under any
provision of applicable law, and (iv) not be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice;
provided that if the nature of Tenant's default pursuant to Section 20(h) is
--------                                                    -------------
such that it cannot be cured by the payment of money and reasonably requires
more than 30 days to cure, then Tenant shall not be deemed to be in default if
Tenant commences such cure within said 30 day period and thereafter diligently
prosecutes the same to completion; provided, however, that such cure shall be
                                   --------  -------
completed no later than 120 days from the date of Landlord's notice.

         21.    Landlord's Remedies.

         (a)    Payment By Landlord; Interest. Upon a Default by Tenant
hereunder, Landlord may, without waiving or releasing any obligation of Tenant
hereunder, make such payment or perform such act. All sums so paid or incurred
by Landlord, together with interest thereon, from the date such sums were paid
or incurred, at the annual rate equal to 12% per annum or the highest rate
permitted by law (the "Default Rate"), whichever is less, shall be payable to
Landlord on demand as Additional Rent. Nothing herein shall be construed to
create or impose a duty on Landlord to mitigate any damages resulting from
Tenant's Default hereunder.

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         (b)    Late Payment Rent. Late payment by Tenant to Landlord of Rent
and other sums due will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult and impracticable
to ascertain. Such costs include, but are not limited to, processing and
accounting charges and late charges which may be imposed on Landlord under any
Mortgage covering the Premises. Therefore, if any installment of Rent due from
Tenant is not received by Landlord within 5 days after the date such payment is
due, Tenant shall pay to Landlord an additional sum equal to 6% of the overdue
Rent as a late charge. The parties agree that this late charge represents a fair
and reasonable estimate of the costs Landlord will incur by reason of late
payment by Tenant. In addition to the late charge, Rent not paid when due shall
bear interest at the Default Rate from the 5th day after the date due until
paid.

         (c)    Remedies. Upon the occurrence of a Default, Landlord, at its
option, without further notice or demand to Tenant, shall have in addition to
all other rights and remedies provided in this Lease, at law or in equity, the
option to pursue any one or more of the following remedies, each and all of
which shall be cumulative and nonexclusive, without any further notice or demand
whatsoever.

                  (i)    Terminate this Lease, or at Landlord's option, Tenant's
         right to possession only, in which event Tenant shall immediately
         surrender the Premises to Landlord, and if Tenant fails to do so,
         Landlord may, without prejudice to any other remedy which it may have
         for possession or arrearages in rent, enter upon and take possession of
         the Premises and expel or remove Tenant and any other person who may be
         occupying the Premises or any part thereof, without being liable for
         prosecution or any claim or damages therefor;

                  (ii)   Upon any termination of this Lease,  whether  pursuant
         to the foregoing  Section  21(c)(i) or otherwise,  Landlord may recover
                           -----------------
         from Tenant the following:

                           (A)    The worth at the time of award of any unpaid
                  rent which has been earned at the time of such termination;
                  plus

                           (B)    The worth at the time of award of the amount
                  by which the unpaid rent which would have been earned after
                  termination until the time of award exceeds the amount of such
                  rental loss that Tenant proves could have been reasonably
                  avoided; plus

                           (C)    The worth at the time of award of the amount
                  by which the unpaid rent for the balance of the Term after the
                  time of award exceeds the amount of such rental loss that
                  Tenant proves could have been reasonably avoided; plus

                           (D)    Any other amount necessary to compensate
                  Landlord for all the detriment proximately caused by Tenant's
                  failure to perform its obligations under this Lease or which
                  in the ordinary course of things would be likely to result
                  therefrom, specifically including, but not limited to,
                  brokerage commissions and advertising expenses incurred,
                  expenses of remodeling the Premises or any portion thereof for
                  a new tenant, whether for the same or a different use, and
                  any special concessions made to obtain a new tenant; and

                           (E)    At Landlord's election, such other amounts in
                  addition to or in lieu of the foregoing as may be permitted
                  from time to time by applicable law.

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         The term "rent" as used in this Section 21 shall be deemed to be and to
                                         ----------
         mean all sums of every nature required to be paid by Tenant pursuant to
         the terms of this Lease, whether to Landlord or to others. As used in
         Sections 21(c)(ii) (A) and (B), above, the "worth at the time of award"
         ----------------------     ---
         shall be computed by allowing interest at the Default Rate. As used in
         Section 21(c)(ii)(C) above, the "worth at the time of award" shall be
         --------------------
         computed by discounting such amount at the discount rate of the Federal
         Reserve Bank of San Francisco at the time of award plus 1%.

                  (iii)   Landlord may continue this Lease in effect after
         Tenant's Default and recover rent as it becomes due (Landlord and
         Tenant hereby agreeing that Tenant has the right to sublet or assign
         hereunder, subject only to reasonable limitations). Accordingly, if
         Landlord does not elect to terminate this Lease following a Default by
         Tenant, Landlord may, from time to time, without terminating this
         Lease, enforce all of its rights and remedies hereunder, including the
         right to recover all Rent as it becomes due.

                  (iv)    Whether or not Landlord elects to terminate this Lease
         following a Default by Tenant, Landlord shall have the right to
         terminate any and all subleases, licenses, concessions or other
         consensual arrangements for possession entered into by Tenant and
         affecting the Premises or may, in Landlord's sole discretion, succeed
         to Tenant's interest in such subleases, licenses, concessions or
         arrangements. Upon Landlord's election to succeed to Tenant's interest
         in any such subleases, licenses, concessions or arrangements, Tenant
         shall, as of the date of notice by Landlord of such election, have no
         further right to or interest in the rent or other consideration
         receivable thereunder.

                  (v)     Independent of the exercise of any other remedy of
         Landlord hereunder or under applicable law, Landlord may conduct an
         environmental test of the Premises as generally described in Section
                                                                      -------
         30(d) hereof, at Tenant's expense.
         -----

         (d)    Effect of Exercise. Exercise by Landlord of any remedies
hereunder or otherwise available shall not be deemed to be an acceptance of
surrender of the Premises and/or a termination of this Lease by Landlord, it
being understood that such surrender and/or termination can be effected only by
the express written agreement of Landlord and Tenant. Any law, usage, or custom
to the contrary notwithstanding, Landlord shall have the right at all times to
enforce the provisions of this Lease in strict accordance with the terms hereof;
and the failure of Landlord at any time to enforce its rights under this Lease
strictly in accordance with same shall not be construed as having created a
custom in any way or manner contrary to the specific terms, provisions, and
covenants of this Lease or as having modified the same and shall not be deemed a
waiver of Landlord's right to enforce one or more of its rights in connection
with any subsequent default. A receipt by Landlord of Rent or other payment with
knowledge of the breach of any covenant hereof shall not be deemed a waiver of
such breach, and no waiver by Landlord of any provision of this Lease shall be
deemed to have been made unless expressed in writing and signed by Landlord. To
the greatest extent permitted by law, Tenant waives the service of notice of
Landlord's intention to re-enter, re-take or otherwise obtain possession of the
Premises as provided in any statute, or to institute legal proceedings to that
end, and also waives all right of redemption in case Tenant shall be
dispossessed by a judgment or by warrant of any court or judge. Any reletting of
the Premises or any portion thereof shall be on such terms and conditions as
Landlord in its sole discretion may determine. Landlord shall not be liable for,
nor shall Tenant's obligations hereunder be diminished because of, Landlord's
failure to relet the Premises or collect rent due in respect of such reletting
or otherwise to mitigate any damages arising by reason of Tenant's Default.

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         22.    Assignment and Subletting.

         a)     General Prohibition. Without Landlord's prior written consent
subject to and on the conditions described in this Section 22, Tenant shall not,
                                                   ----------
directly or indirectly, voluntarily or by operation of law, assign this Lease or
sublease the Premises or any part thereof or mortgage, pledge, or hypothecate
its leasehold interest or grant any concession or license within the Premises,
except as specifically provided herein, and any attempt to do any of the
foregoing shall be void and of no effect.

         (b)    Permitted Transfers. If Tenant desires to assign,
sublease, hypothecate or otherwise transfer this Lease or sublet the Premises,
then at least 15 business days, but not more than 45 business days, before the
date Tenant desires the assignment or sublease to be effective (the "Assignment
Date"), Tenant shall give Landlord a notice (the "Assignment Notice") containing
such information about the proposed assignee or sublessee, including the
proposed use of the Premises and any Hazardous Materials proposed to be used,
stored handled, treated, generated in or released or disposed of from
the Premises, the Assignment Date, any relationship between Tenant and
the proposed assignee or sublessee, and all material terms and conditions
of the proposed assignment or sublease, including a copy of any proposed
assignment or sublease in its final form, and such other information as Landlord
may deem reasonably necessary or appropriate to its consideration whether to
grant its consent. Landlord may, by giving written notice to Tenant within 15
business days after receipt of the Assignment Notice: (i) grant or refuse such
consent, in its sole discretion with respect to a proposed assignment,
hypothecation or other transfer or subletting of more than (together with all
other then effective subleases) 50% of the Premises, or grant or refuse
such consent, in its reasonable discretion with respect to a proposed
subletting of up to (together with all other then effective subleases) 50% of
the Premises (provided that Landlord shall further have the right to review and
approve or disapprove the proposed form of sublease prior to the effective date
of any such subletting), or (ii) terminate this Lease with respect to the space
described in the Assignment Notice as of the Assignment Date (an "Assignment
Termination"). If Landlord elects an Assignment Termination, Tenant shall have
the right to withdraw such Assignment Notice by written notice to Landlord of
such election within 5 days after Landlord's notice electing to exercise
the Assignment Termination. If Tenant withdraws such Assignment Notice,
this Lease shall continue in full force and effect. If Tenant does not withdraw
such Assignment Notice, this Lease, and the term and estate herein granted,
shall terminate as of the Assignment Date with respect to the space described in
such Assignment Notice. No failure of Landlord to exercise any such option to
terminate this Lease shall be deemed to be Landlord's consent to the proposed
assignment, sublease or other transfer. Tenant shall reimburse Landlord for all
of Landlord's reasonable out-of-pocket expenses in connection with its
consideration of any Assignment Notice not to exceed $2,500 per transaction.
The provisions of this Section 22(b) shall not prohibit Tenant from
permitting any Venture Partner to share temporarily a portion of the Premises in
common with Tenant for the limited purpose of working together on the matter
which is the subject of Tenant's agreement with such Venture Partner, provided
that (i) such portion of the Premises which is subject to sharing of space shall
be at all times less than 50% of the Premises, (ii) Tenant notifies Landlord in
writing of the space sharing agreement with such Venture Partner prior to the
occupancy of the Premises by such Venture Partner, and (iii) Tenant has updated
its Hazardous Materials List (as defined in Section 30) to include any materials
to be used by either Tenant or its Venture Partner. "Venture Partner" shall mean
any person with whom Tenant has made an agreement to collaborate jointly in a
business undertaking. The provisions of this Section 22(b) relating to space
sharing with any Venture Partner shall not be deemed at any time to relieve
Tenant for its obligations under the Lease

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with respect to any portion of the Premises which is the subject of a space
sharing arrangement with any Venture Partner.

         (c)   Additional Conditions. As a condition to any such assignment or
subletting, whether or not Landlord's consent is required, Landlord may require:

                  (i)    that any assignee or subtenant agree, in writing at the
         time of such assignment or subletting, that if Landlord gives such
         party notice that Tenant is in default under this Lease, such party
         shall thereafter make all payments otherwise due Tenant directly to
         Landlord, which payments will be received by Landlord without any
         liability except to credit such payment against those due under the
         Lease, and any such third party shall agree to attorn to Landlord or
         its successors and assigns should this Lease be terminated for any
         reason; provided, however, in no event shall Landlord or its successors
                 --------  -------
         or assigns be obligated to accept such attornment; and

                  (ii)   A list of Hazardous Materials, certified by the
         proposed assignee or sublessee to be true and correct, which the
         proposed assignee or sublessee intends to use, store, handle, treat,
         generate in or release or dispose of from the Premises, together with
         copies of all documents relating to such use, storage, handling,
         treatment, generation, release or disposal of Hazardous Materials by
         the proposed assignee or subtenant in the Premises or on the Project,
         prior to the proposed assignment or subletting, including, without
         limitation: permits; approvals; reports and correspondence; storage and
         management plans; plans relating to the installation of any storage
         tanks to be installed in or under the Project (provided, said
         installation of tanks shall only be permitted after Landlord has given
         its written consent to do so, which consent may be withheld in
         Landlord's sole and absolute discretion); and all closure plans or any
         other documents required by any and all federal, state and local
         Governmental Authorities for any storage tanks installed in, on or
         under the Project for the closure of any such tanks. Neither Tenant nor
         any such proposed assignee or subtenant is required, however, to
         provide Landlord with any portion(s) of the such documents containing
         information of a proprietary nature which, in and of themselves, do not
         contain a reference to any Hazardous Materials or hazardous activities.

         (d)    No Release of Tenant, Sharing of Excess Rents. Notwithstanding
any assignment or subletting, Tenant and any guarantor or surety of Tenant's
obligations under this Lease shall at all times remain fully and primarily
responsible and liable for the payment of Rent and for compliance with all of
Tenant's other obligations under this Lease. If the Rent due and payable by a
sublessee or assignee (or a combination of the rental payable under such
sublease or assignment plus any bonus or other consideration therefor or
incident thereto in any form) exceeds the rental payable under this Lease,
(excluding however, any Rent payable under this Section) ("Excess Rent"), then
Tenant shall be bound and obligated to pay Landlord as Additional Rent hereunder
50% of such Excess Rent within 10 days following receipt thereof by Tenant. If
Tenant shall sublet the Premises or any part thereof, Tenant hereby immediately
and irrevocably assigns to Landlord, as security for Tenant's obligations under
this Lease, all rent from any such subletting, and Landlord as assignee and as
attorney-in-fact for Tenant, or a receiver for Tenant appointed on Landlord's
application, may collect such rent and apply it toward Tenant's obligations
under this Lease; except that, until the occurrence of a Default, Tenant shall
have the right to collect such rent.

         (e)    No Waiver. The consent by Landlord to an assignment or
subletting shall not relieve Tenant or any assignees of this Lease or any
sublessees of the Premises from obtaining

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the consent of Landlord to any further assignment or subletting nor shall it
release Tenant or any assignee or sublessee of Tenant from full and primary
liability under the Lease. The acceptance of Rent hereunder, or the acceptance
of performance of any other term, covenant, or condition thereof, from any other
person or entity shall not be deemed to be a waiver of any of the provisions of
this Lease or a consent to any subletting, assignment or other transfer of the
Premises.

         (f)    Prior Conduct of Proposed Transferee. Notwithstanding any
other provision of this Section 22, if (i) the proposed assignee or sublessee of
                        ----------
Tenant has been required by any prior landlord, lender or Governmental Authority
to take remedial action in connection with Hazardous Materials contaminating a
property, where the contamination resulted from such party's action or use of
the property in question, (ii) the proposed assignee or sublessee is subject to
an enforcement order issued by any Governmental Authority in connection with
the use, storage, handling, treatment, generation, release or disposal of
Hazardous Materials (including, without limitation, any order related to the
failure to make a required reporting to any Governmental Authority), or (iii)
because of the existence of a pre-existing environmental condition in the
vicinity of or underlying the Project, the risk that Landlord would be targeted
as a responsible party in connection with the remediation of such
pre-existing environmental condition would be materially increased or
exacerbated by the proposed use of Hazardous Materials by such proposed assignee
or sublessee, Landlord shall have the absolute right to refuse to consent to any
assignment or subletting to any such party.

         23.    Estoppel Certificate. Tenant shall, within 10 business days of
written notice from Landlord, execute, acknowledge and deliver a statement in
writing in any form reasonably requested by a proposed lender or purchaser, (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 dates to which the rental
and other charges are paid in advance, if any, (ii) acknowledging that there are
not any uncured defaults on the part of Landlord hereunder, or specifying
such defaults if any are claimed, and (iii) setting forth such further
information with respect to the status of this Lease or the Premises as may be
requested thereon. Any prospective purchaser or encumbrancer of all or any
portion of the real property of which the Premises are a part may rely upon any
such statement. Tenant's failure to deliver such statement within such time
shall, at the option of Landlord, shall be conclusive upon Tenant that the Lease
is in full force and effect and without modification except as may be
represented by Landlord in any certificate prepared by Landlord and delivered to
Tenant for execution.

         24.    Quiet Enjoyment. So long as Tenant shall perform all of the
covenants and agreements herein required to be performed by Tenant, Tenant
shall, subject to the terms of this Lease, at all times during the Term, have
peaceful and quiet enjoyment of the Premises against any person claiming by,
through or under Landlord.

         25.    Prorations.  All  prorations  required or permitted to be made
hereunder  shall be made on the basis of a 360 day year and 30 day months.

         26.    Rules and Regulations. Tenant shall, at all times during the
Term and any extension thereof, comply with all reasonable rules and regulations
at any time or from time to time established by Landlord covering use of the
Premises and the Project. The current rules and regulations are attached hereto
as Exhibit E. If there is any conflict between said rules and regulations and
other provisions of this Lease, the terms and provisions of this Lease shall
control. Landlord shall not enforce such rules and regulations in a
discriminatory manner.

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         27.    Subordination. This Lease and Tenant's interest and rights
hereunder are and shall be subject and subordinate at all times to the lien of
any Mortgage now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant; provided,
                                                                  --------
however that so long as there is no Default hereunder, neither Tenant's right to
------
peaceful and quiet possession of the Premises, nor any other of Tenant's rights
or privileges hereunder, shall be disturbed by the Holder of any such Mortgage.
Tenant agrees, at the election of the Holder of any such Mortgage, to attorn to
any such Holder. Tenant agrees upon demand to execute, acknowledge and deliver
such instruments, confirming such subordination, and such instruments of
attornment as shall be requested by any such Holder, provided any such
instruments contain appropriate non-disturbance provisions assuring Tenant's
quiet enjoyment of the Premises as set forth in Section 24 hereof.
                                                ----------
Notwithstanding the foregoing, any such Holder may at any time subordinate its
Mortgage to this Lease, without Tenant's consent, by notice in writing to
Tenant, and thereupon this Lease shall be deemed prior to such Mortgage without
regard to their respective dates of execution, delivery or recording and in that
event such Holder shall have the same rights with respect to this Lease as
though this Lease had been executed prior to the execution, delivery and
recording of such Mortgage and had been assigned to such Holder. The term
"Mortgage" whenever used in this Lease shall be deemed to include deeds of
trust, security assignments and any other encumbrances, and any reference to the
"Holder" of a Mortgage shall be deemed to include the beneficiary under a deed
of trust.

         28.    Surrender. Upon the expiration of the Term or earlier
termination of Tenant's right of possession, Tenant shall surrender the Premises
to Landlord in the same condition as received, subject to any Alterations or
Installations permitted by Landlord to remain in the Premises, free of Hazardous
Materials brought upon, kept, used, stored, handled, treated, generated in, or
released or disposed of from, the Premises by any person other than a Landlord
Party (collectively, "Tenant HazMat Operations") and released of all
Hazardous Materials Clearances, broom clean, ordinary wear and tear and casualty
loss and condemnation covered by Sections 18 and 19 excepted. At least 3 months
                                 -----------     --
prior to the surrender of the Premises, Tenant shall deliver to Landlord a
narrative description of the actions proposed (or required by any Governmental
Authority) to be taken by Tenant in order to surrender the Premises (including
any Installations permitted by Landlord to remain in the Premises) at the
expiration or earlier termination of the Term, free from any residual impact
from the Tenant HazMat Operations and otherwise released for unrestricted use
and occupancy (the "Surrender Plan"). Such Surrender Plan shall be accompanied
by a current listing of (i) all Hazardous Materials licenses and permits held by
or on behalf of any Tenant Party with respect to the Premises, and (ii)
all Hazardous Materials used, stored, handled, treated, generated, released
or disposed of from the Premises, and shall be subject to the review and
approval of Landlord's environmental consultant. In connection with the review
and approval of the Surrender Plan, upon the request of Landlord, Tenant
shall deliver to Landlord or its consultant such additional
non-proprietary information concerning Tenant HazMat Operations as Landlord
shall request. On or before such surrender, Tenant shall deliver to Landlord
evidence that the approved Surrender Plan shall have been satisfactorily
completed and Landlord shall have the right, subject to reimbursement at
Tenant's expense as set forth below, to cause Landlord's environmental
consultant to inspect the Premises and perform such additional procedures as may
be deemed reasonably necessary to confirm that the Premises are, as of the
effective date of such surrender or early termination of the Lease, free from
any residual impact from Tenant HazMat Operations. Tenant shall reimburse
Landlord, as Additional Rent, for the actual out-of pocket expense incurred by
Landlord for Landlord's environmental consultant to review and approve the
Surrender Plan and to visit the Premises and verify satisfactory completion of
the

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same, which cost shall not exceed $5,000. Landlord shall have the unrestricted
right to deliver such Surrender Plan and any report by Landlord's environmental
consultant with respect to the surrender of the Premises to third parties.

         If Tenant shall fail to prepare or submit a Surrender Plan approved by
Landlord, or if Tenant shall fail to complete the approved Surrender Plan, or if
such Surrender Plan, whether or not approved by Landlord, shall fail to
adequately address any residual effect of Tenant HazMat Operations in, on or
about the Premises, Landlord shall have the right to take such actions as
Landlord may deem reasonable or appropriate to assure that the Premises and the
Project are surrendered free from any residual impact from Tenant HazMat
Operations, the cost of which actions shall be reimbursed by Tenant as
Additional Rent, without regard to the limitation set forth in the first
paragraph of this Section 28.
                  -----------

         Tenant shall immediately return to Landlord all keys and/or access
cards to parking, the Project, restrooms or all or any portion of the Premises
furnished to or otherwise procured by Tenant. If any such access card or key is
lost, Tenant shall pay to Landlord, at Landlord's election, either the cost of
replacing such lost access card or key or the cost of reprogramming the access
security system in which such access card was used or changing the lock or locks
opened by such lost key. Any Tenant's Property, Alterations and property not so
removed by Tenant as permitted or required herein shall be deemed abandoned and
may be stored, removed, and disposed of by Landlord at Tenant's expense, and
Tenant waives all claims against Landlord for any damages resulting from
Landlord's retention and/or disposition of such property. All obligations of
Tenant hereunder not fully performed as of the termination of the Term,
including the obligations of Tenant under Section 30 hereof, shall survive the
                                          ----------
expiration or earlier termination of the Term, including, without limitation,
indemnity obligations, payment obligations with respect to Rent and obligations
concerning the condition and repair of the Premises.

         29.    Waiver of Jury Trial. TENANT AND LANDLORD WAIVE ANY RIGHT TO
TRIAL BY JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING
OUT OF THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.

         30.    Environmental Requirements.

         (a)    Prohibition/Compliance/Indemnity. Tenant shall not cause or
permit any Hazardous Materials (as hereinafter defined) to be brought upon,
kept, used, stored, handled, treated, generated in or about, or released or
disposed of from, the Premises or the Project in violation of applicable
Environmental Requirements (as hereinafter defined) by Tenant or any Tenant
Party. If Tenant breaches the obligation stated in the preceding sentence, or if
the presence of Hazardous Materials in the Premises during the Term or any
holding over results in contamination of the Premises, the Project or any
adjacent property or if contamination of the Premises, the Project or any
adjacent property by Hazardous Materials brought into, kept, used, stored,
handled, treated, generated in or about, or released or disposed of from, the
Premises by anyone other than Landlord and Landlord's employees, agents and
contractors otherwise occurs during the Term or any holding over, Tenant hereby
indemnifies and shall defend and hold Landlord, its officers, directors,
employees, agents and contractors harmless from any and all actions (including,
without limitation, remedial or enforcement actions of any kind, administrative
or judicial proceedings, and orders or judgments arising out of or resulting

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therefrom), costs, claims, damages (including, without limitation, punitive
damages and damages based upon diminution in value of the Premises or the
Project, or the loss of, or restriction on, use of the Premises or any portion
of the Project), expenses (including, without limitation, attorneys',
consultants' and experts' fees, court costs and amounts paid in settlement of
any claims or actions), fines, forfeitures or other civil, administrative or
criminal penalties, injunctive or other relief (whether or not based upon
personal injury, property damage, or contamination of, or adverse effects upon,
the environment, water tables or natural resources), liabilities or losses
(collectively, "Environmental Claims") which arise during or after the Term as a
result of such contamination. This indemnification of Landlord by Tenant
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, treatment, remedial, removal,
or restoration work required by any federal, state or local Governmental
Authority because of Hazardous Materials present in the air, soil or ground
water above, on, or under the Premises. Without limiting the foregoing, if the
presence of any Hazardous Materials on the Premises, the Project or any adjacent
property caused or permitted by Tenant or any Tenant Party results in any
contamination of the Premises, the Project or any adjacent property, Tenant
shall promptly take all actions at its sole expense and in accordance with
applicable Environmental Requirements as are necessary to return the Premises,
the Project or any adjacent property to the condition existing prior to the time
of such contamination, provided that Landlord's approval of such action shall
first be obtained, which approval shall not unreasonably be withheld so long as
such actions would not potentially have any material adverse long-term or
short-term effect on the Premises or the Project.

         (b)    Business. Landlord acknowledges that it is not the intent of
this Section 30 to prohibit Tenant from using the Premises for the Permitted
     ----------
Use. Tenant may operate its business according to prudent industry practices so
long as the use or presence of Hazardous Materials is strictly and properly
monitored according to all then applicable Environmental Requirements. As a
material inducement to Landlord to allow Tenant to use Hazardous Materials in
connection with its business, Tenant agrees to deliver to Landlord prior to the
Commencement Date a list identifying each type of Hazardous Materials to be
brought upon, kept, used, stored, handled, treated, generated on, or released or
disposed of from, the Premises and setting forth any and all governmental
approvals or permits required in connection with the presence, use, storage,
handling, treatment, generation, release or disposal of such Hazardous Materials
on or from the Premises ("Hazardous Materials List"). Tenant shall deliver to
Landlord an updated Hazardous Materials List at least once a year and shall also
deliver an updated list before any new Hazardous Material is brought onto, kept,
used, stored, handled, treated, generated on, or released or disposed of from,
the Premises. Tenant shall deliver to Landlord true and correct copies of
the following documents (the "Haz Mat Documents") relating to the use,
storage, handling, treatment, generation, release or disposal of Hazardous
Materials prior to the Commencement Date, or if unavailable at that time,
concurrent with the receipt from or submission to a Governmental Authority:
permits; approvals; reports and correspondence; storage and management plans,
notice of violations of any Legal Requirements; plans relating to the
installation of any storage tanks to be installed in or under the Project
(provided, said installation of tanks shall only be permitted after Landlord has
given Tenant its written consent to do so, which consent may be withheld in
Landlord's sole and absolute discretion); all closure plans or any other
documents required by any and all federal, state and local Governmental
Authorities for any storage tanks installed in, on or under the Project for the
closure of any such tanks; and a Surrender Plan (to the extent surrender in
accordance with Section 28 cannot be accomplished in 3 months). Tenant is not
                ----------
required, however, to provide Landlord with any portion(s) of the Haz Mat
Documents containing information of a proprietary nature which, in and of
themselves, do not contain a reference to any Hazardous Materials or hazardous
activities. It is not the intent of this Section to provide

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Landlord with information which could be detrimental to Tenant's business should
such information become possessed by Tenant's competitors.

         (c)    Tenant Representation and Warranty. Tenant hereby represents and
warrants to Landlord that (i) Tenant has not been required by any prior
landlord, lender or Governmental Authority at any time to take remedial action
in connection with Hazardous Materials contaminating a property which
contamination was permitted by Tenant or resulted from Tenant's action or use of
the property in question, and (ii) Tenant is not subject to any enforcement
order issued by any Governmental Authority in connection with the use, storage,
handling, treatment, generation, release or disposal of Hazardous Materials
(including, without limitation, any order related to the failure to make a
required reporting to any Governmental Authority). If Landlord determines that
this representation and warranty was not true as of the date of this lease,
Landlord shall have the right to terminate this Lease in Landlord's sole and
absolute discretion.

         (d)    Testing. Landlord shall have the right to conduct annual tests
of the Premises to determine whether any contamination of the Premises or the
Project has occurred as a result of Tenant's use. Tenant shall be required to
pay the cost of such annual test of the Premises; provided, however, that if
Tenant conducts its own tests of the Premises using third party contractors and
test procedures acceptable to Landlord which tests are certified to
Landlord, Landlord shall accept such tests in lieu of the annual tests to be
paid for by Tenant. In addition, at any time, and from time to time, prior to
the expiration or earlier termination of the Term, Landlord shall have the right
to conduct appropriate tests of the Premises and the Project to determine if
contamination has occurred as a result of Tenant's use of the Premises. In
connection with such testing, upon the request of Landlord, Tenant shall deliver
to Landlord or its consultant such non-proprietary information concerning the
use of Hazardous Materials in or about the Premises by Tenant or any Tenant
Party. If contamination has occurred for which Tenant is liable under this
Section 30, Tenant shall pay all costs to conduct such tests. If no such
----------
contamination is found, Landlord shall pay the costs of such tests (which shall
not constitute an Operating Expense). Landlord shall provide Tenant with a copy
of all third party, non-confidential reports and tests of the Premises made by
or on behalf of Landlord during the Term without representation or warranty and
subject to a confidentiality agreement. Tenant shall, at its sole cost and
expense, promptly and satisfactorily remediate any environmental conditions
identified by such testing in accordance with all Environmental Requirements.
Landlord's receipt of or satisfaction with any environmental assessment in no
way waives any rights which Landlord may have against Tenant.

         (e)    Underground Tanks. If underground or other storage tanks storing
Hazardous Materials located on the Premises or the Project are used by Tenant or
are hereafter placed on the Premises or the Project by Tenant, Tenant shall
install, use, monitor, operate, maintain, upgrade and manage such storage tanks,
maintain appropriate records, obtain and maintain appropriate insurance,
implement reporting procedures, properly close any such underground storage
tanks, and take or cause to be taken all other actions necessary or required
under applicable state and federal Legal Requirements, as such now exists or
may hereafter be adopted or amended in connection with the installation,
use, maintenance, management, operation, upgrading and closure of such storage
tanks.

         (f)    Tenant's Obligations. Tenant's obligations under this Section 30
                                                                      ----------
shall survive the expiration or earlier termination of the Lease. During any
period of time after the expiration or earlier termination of this Lease
required by Tenant or Landlord to complete the removal from the Premises of any
Hazardous Materials (including, without limitation, the release and

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termination of any licenses or permits restricting the use of the Premises and
the completion of the approved Surrender Plan), Tenant shall continue to pay the
full Rent in accordance with this Lease for any portion of the Premises not
relet by Landlord in Landlord's sole discretion, which Rent shall be prorated
daily.

         (g)    Definitions. As used herein, the term "Environmental
Requirements" means all applicable present and future statutes, regulations,
ordinances, rules, codes, judgments, orders or other similar enactments of any
Governmental Authority regulating or relating to health, safety, or
environmental conditions on, under, or about the Premises or the Project, or the
environment, including without limitation, the following: the Comprehensive
Environmental Response, Compensation and Liability Act; the Resource
Conservation and Recovery Act; and all state and local counterparts thereto, and
any regulations or policies promulgated or issued thereunder. As used herein,
the term "Hazardous Materials" means and includes any substance, material,
waste, pollutant, or contaminant listed or defined as hazardous or toxic, or
regulated by reason of its impact or potential impact on humans, animals and/or
the environment under any Environmental Requirements, asbestos and petroleum,
including crude oil or any fraction thereof, natural gas liquids, liquefied
natural gas, or synthetic gas usable for fuel (or mixtures of natural gas and
such synthetic gas). As defined in Environmental Requirements, Tenant is and
shall be deemed to be the "operator" of Tenant's "facility" and the "owner" of
all Hazardous Materials brought on the Premises by Tenant or any Tenant Party,
and the wastes, by-products, or residues generated, resulting, or produced
therefrom.

         31.    Tenant's Remedies/Limitation of Liability. Landlord shall not be
in default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying such
failure (unless such performance will, due to the nature of the obligation,
require a period of time in excess of 30 days, then after such period of time as
is reasonably necessary). Upon any default by Landlord, Tenant shall give notice
by registered or certified mail to any Holder of a Mortgage covering the
Premises and to any landlord of any lease of property in or on which the
Premises are located and Tenant shall offer such Holder and/or landlord a
reasonable opportunity to cure the default, including time to obtain possession
of the Project by power of sale or a judicial action if such should prove
necessary to effect a cure; provided Landlord shall have furnished to Tenant in
                            --------
writing the names and addresses of all such persons who are to receive such
notices. All obligations of Landlord hereunder shall be construed as covenants,
not conditions; and, except as may be otherwise expressly provided in this
Lease, Tenant may not terminate this Lease for breach of Landlord's obligations
hereunder.

         Notwithstanding the foregoing, if any claimed Landlord default
hereunder will immediately, materially and adversely affect Tenant's ability to
conduct its business in the Premises (a "Material Landlord Default"), Tenant
shall, as soon as reasonably possible, but in any event within 2 business days
of obtaining knowledge of such claimed Material Landlord Default, give Landlord
written notice of such claim and telephonic notice to Tenant's principal contact
with Landlord. Landlord shall then have 2 business days to commence cure of such
claimed Material Landlord Default and shall diligently prosecute such cure to
completion. If such claimed Material Landlord Default is not a default by
Landlord hereunder, or if Tenant failed to give Landlord the notice required
hereunder within 2 business days of learning of the conditions giving rise to
the claimed Material Landlord Default, Landlord shall be entitled to recover
from Tenant, as Additional Rent, any costs incurred by Landlord in connection
with such cure in excess of the costs, if any, that Landlord would otherwise
have been liable to pay hereunder. If Landlord fails to commence cure of any
claimed Material Landlord Default as provided above, Tenant may commence and
prosecute such cure to completion, and shall be

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entitled to recover the costs of such cure (but not any consequential or other
damages) from Landlord, to the extent of Landlord's obligation to cure such
claimed Material Landlord Default hereunder, subject to the limitations set
forth in the immediately preceding sentence of this paragraph and the other
provisions of this Lease.

         All obligations of Landlord under this Lease will be binding upon
Landlord only during the period of its ownership of the Premises and not
thereafter. The term "Landlord" in this Lease shall mean only the owner for the
time being of the Premises. Upon the transfer by such owner of its interest in
the Premises, such owner shall thereupon be released and discharged from all
obligations of Landlord thereafter accruing, but such obligations shall be
binding during the Term upon each new owner for the duration of such owner's
ownership.

         32.    Inspection and Access. Landlord and its agents, representatives,
and contractors may enter the Premises at any reasonable time to inspect
the Premises and to make such repairs as may be required or permitted pursuant
to this Lease and for any other business purpose. Landlord and Landlord's
representatives may enter the Premises during business hours on not less than 48
hours advance written notice (except in the case of emergencies in which case no
such notice shall be required and such entry may be at any time) for the purpose
of effecting any such repairs, inspecting the Premises, showing the Premises to
prospective purchasers and, during the last year of the Term, to prospective
tenants or for any other business purpose. Landlord may erect a suitable sign on
the Premises stating the Premises are available to let or that the Project is
available for sale. Landlord may grant easements, make public dedications,
designate Common Areas and create restrictions on or about the Premises,
provided that no such easement, dedication, designation or restriction
--------
materially, adversely affects Tenant's use or occupancy of the Premises for the
Permitted Use. At Landlord's request, Tenant shall execute such instruments as
may be necessary for such easements, dedications or restrictions. Tenant shall
at all times, except in the case of emergencies, have the right to escort
Landlord or its agents, representatives, contractors or guests while the same
are in the Premises, provided such escort does not materially and adversely
affect Landlord's access rights hereunder.

         33.    Security. Tenant acknowledges and agrees that security devices
and services, if any, while intended to deter crime may not in given instances
prevent theft or other criminal acts and that Landlord is not providing any
security services with respect to the Premises. Tenant agrees that Landlord
shall not be liable to Tenant for, and Tenant waives any claim against Landlord
with respect to, any loss by theft or any other damage suffered or incurred by
Tenant in connection with any unauthorized entry into the Premises or any other
breach of security with respect to the Premises. Tenant shall be solely
responsible for the personal safety of Tenant's officers, employees, agents,
contractors, guests and invitees while any such person is in, on or about the
Premises and/or the Project. Tenant shall at Tenant's cost obtain insurance
coverage to the extent Tenant desires protection against such criminal acts.

         34.    Force Majeure. Neither party shall be held responsible for
delays in the performance of its obligations hereunder when caused by strikes,
lockouts, labor disputes, weather, natural disasters, inability to obtain labor
or materials or reasonable substitutes therefor, governmental restrictions,
governmental regulations, governmental controls, delay in issuance of permits,
enemy or hostile governmental action, civil commotion, fire or other casualty,
and other causes beyond the reasonable control of the party from whom such
performance is otherwise required ("Force Majeure").

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         35.    Brokers, Entire Agreement, Amendment. Landlord and Tenant each
represents and warrants that it has not dealt with any broker, agent or other
person (collectively, "Broker) in connection with this transaction and that no
Broker brought about this transaction. Landlord and Tenant each hereby agree
to indemnify and hold the other harmless from and against any claims by any
Broker, other than the broker, if any named in this Section 35, claiming a
                                                    ----------
commission or other form of compensation by virtue of having dealt with Tenant
or Landlord, as applicable, with regard to this leasing transaction.

         36.    Limitation on Landlord's Liability. NOTWITHSTANDING ANYTHING SET
FORTH HEREIN OR IN ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT TO THE
CONTRARY: (A) LANDLORD SHALL NOT BE LIABLE TO TENANT OR ANY OTHER PERSON FOR
(AND TENANT AND EACH SUCH OTHER PERSON ASSUME ALL RISK OF) LOSS, DAMAGE OR
INJURY, WHETHER ACTUAL OR CONSEQUENTIAL TO: TENANT'S PERSONAL PROPERTY OF EVERY
KIND AND DESCRIPTION, INCLUDING, WITHOUT LIMITATION TRADE FIXTURES, EQUIPMENT,
INVENTORY, SCIENTIFIC RESEARCH, SCIENTIFIC EXPERIMENTS, LABORATORY ANIMALS,
PRODUCT, SPECIMENS, SAMPLES, AND/OR SCIENTIFIC, BUSINESS, ACCOUNTING AND OTHER
RECORDS OF EVERY KIND AND DESCRIPTION KEPT AT THE PREMISES AND ANY AND ALL
INCOME DERIVED OR DERIVABLE THEREFROM; (B) THERE SHALL BE NO PERSONAL RECOURSE
TO LANDLORD FOR ANY ACT OR OCCURRENCE IN, ON OR ABOUT THE PREMISES OR ARISING IN
ANY WAY UNDER THIS LEASE OR ANY OTHER AGREEMENT BETWEEN LANDLORD AND TENANT WITH
RESPECT TO THE SUBJECT MATTER HEREOF AND ANY LIABILITY OF LANDLORD HEREUNDER
SHALL BE STRICTLY LIMITED SOLELY TO LANDLORD'S INTEREST IN THE PROJECT OR ANY
PROCEEDS FROM SALE OR CONDEMNATION THEREOF AND ANY INSURANCE PROCEEDS PAYABLE IN
RESPECT OF LANDLORD'S INTEREST IN THE PROJECT OR IN CONNECTION WITH ANY SUCH
LOSS; AND (C) IN NO EVENT SHALL ANY PERSONAL LIABILITY BE ASSERTED AGAINST
LANDLORD IN CONNECTION WITH THIS LEASE NOR SHALL ANY RECOURSE BE HAD TO ANY
OTHER PROPERTY OR ASSETS OF LANDLORD OR ANY OF LANDLORD'S OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS OR CONTRACTORS. UNDER NO CIRCUMSTANCES SHALL LANDLORD OR ANY
OF LANDLORD'S OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR CONTRACTORS BE LIABLE
FOR INJURY TO TENANT'S BUSINESS OR FOR ANY LOSS OF INCOME OR PROFIT THEREFROM.

         37.    Severability. If any clause or provision of this Lease is
illegal, invalid or unenforceable under present or future laws, then and in that
event, it is the intention of the parties hereto that the remainder of this
Lease shall not be affected thereby. It is also the intention of the parties to
this Lease that in lieu of each clause or provision of this Lease that is
illegal, invalid or unenforceable, there be added, as a part of this Lease, a
clause or provision as similar in effect to such illegal, invalid or
unenforceable clause or provision as shall be legal, valid and enforceable.

         38.    Signs; Exterior Appearance. Tenant shall not, without the prior
written consent of Landlord, which may be granted or withheld in Landlord's sole
discretion: (i) attach any awnings, exterior lights, decorations, balloons,
flags, pennants, banners, painting or other projection to any outside wall of
the Project, (ii) use any curtains, blinds, shades or screens other than
Landlord's standard window coverings, (iii) coat or otherwise sunscreen the
interior or exterior of any windows, (iv) place any bottles, parcels, or other
articles on the window sills, (v) place any equipment, furniture or other items
of personal property on any exterior balcony, or (vi) paint, affix or exhibit on
any part of the Premises or the Project any signs, notices, window

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or door lettering, placards, decorations, or advertising media of any type which
can be viewed from the exterior of the Premises.

         39.    Miscellaneous.

         (a)    Notices. All notices or other communications between the parties
shall be in writing and shall be deemed duly given upon delivery or refusal to
accept delivery by the addressee thereof if delivered in person, or upon actual
receipt if delivered by reputable overnight guaranty courier, addressed and sent
to the parties at their addresses set forth above. Landlord and Tenant may from
time to time by written notice to the other designate another address for
receipt of future notices.

         (b)    Joint and Several Liability. If and when included within the
term "Tenant," as used in this instrument, there is more than one person or
entity, each shall be jointly and severally liable for the obligations of
Tenant.

         (c)    Recordation. Neither this Lease nor a memorandum of lease shall
be filed by or on behalf of Tenant in any public record. Landlord may prepare
and file, and upon request by Landlord Tenant will execute, a memorandum
of lease.

         (d)    Interpretation. The normal rule of construction to the effect
that any ambiguities are to be resolved against the drafting party shall not be
employed in the interpretation of this Lease or any exhibits or amendments
hereto. Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions inserted
in this Lease are for convenience only and in no way define, limit or otherwise
describe the scope or intent of this Lease, or any provision hereof, or in any
way affect the interpretation of this Lease.

         (e)    Not Binding Until Executed. The submission of this Lease by
either party to the other shall have no binding force or effect, shall not
constitute an option for the leasing of the Premises, nor confer any right or
impose any obligations upon either party until execution of this Lease by both
parties.

         (f)    Limitations on Interest. It is expressly the intent of Landlord
and Tenant at all times to comply with applicable law governing the maximum rate
or amount of any interest payable on or in connection with this Lease. If
applicable law is ever judicially interpreted so as to render usurious any
interest called for under this Lease, or contracted for, charged, taken,
reserved, or received with respect to this Lease, then it is Landlord's and
Tenant's express intent that all excess amounts theretofore collected by
Landlord be credited on the applicable obligation (or, if the obligation has
been or would thereby be paid in full, promptly refunded to Tenant), and the
provisions of this Lease immediately shall be deemed reformed and the amounts
thereafter collectible hereunder reduced, without the necessity of the execution
of any new document, so as to comply with the applicable law, but so as to
permit the recovery of the fullest amount otherwise called for hereunder.

         (g)    Choice of Law. Construction and interpretation of this Lease
shall be governed by the internal laws of the state in which the Premises are
located, excluding any principles of conflicts of laws.

         (h)    Time.  Time is of the essence as to the performance of
Landlord's and Tenant's respective obligations under this Lease.

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         (i)    Incorporation by Reference. All exhibits and addenda attached
hereto are hereby incorporated into this Lease and made a part hereof. If there
is any conflict between such exhibits or addenda and the terms of this Lease,
such exhibits or addenda shall control.

         (j)    Hazardous Activities. Notwithstanding any other provision of
this Lease, Landlord, for itself and its employees, agents and contractors,
reserves the right to refuse to perform any repairs or services in any portion
of the Premises which, pursuant to Tenant's routine safety guidelines, practices
or custom or prudent industry practices, require any form of protective clothing
or equipment other than safety glasses. In any such case, Tenant shall contract
with parties who are acceptable to Landlord, in Landlord's reasonable
discretion, for all such repairs and services, and Landlord shall, to the extent
required, equitably adjust Tenant's Share of Operating Expenses in respect of
such repairs or services to reflect that Landlord is not providing such repairs
or services to Tenant.

                           [ Signatures on next page ]

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         IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of
the day and year first above written.

                                       TENANT:

                                       GENAERA CORPORATION,
                                       a Delaware corporation


                                       By:  /s/ Roy C. Levitt, M.D.
                                           ------------------------
                                       Its: President and CEO
                                           ------------------------


                                       LANDLORD:

                                       ARE-5100/5110 CAMPUS DRIVE, L.P.,
                                       a Delaware limited partnership

                                       By:   AREE-HOLDINGS, L.P.,
                                             a Delaware limited partnership,
                                             general partner

                                             By:   ARE-GP HOLDINGS QRS CORP.,
                                                   a Delaware corporation,
                                                   general partner

                                                   By: /s/ Laurie A. Allen
                                                       -------------------
                                                         LAURIE A. ALLEN
                                                       SENIOR VICE PRESIDENT,
                                                        BUSINESS DEVELOPMENT
                                                          & LEGAL AFFAIRS

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