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                                                                   Exhibit 10.26
                                                                   -------------

                                  WORK LETTER
                                  -----------

     This WORK LETTER, dated July 27, 1999 (this "WORK LETTER"), is made and
entered into by and between ARE-104 ALEXANDER ROAD, LLC, a Delaware limited
liability company ("LANDLORD"), and PARADIGM GENETICS, INC., a North Carolina
corporation ("TENANT"), and is attached to and made a part of the Lease
Agreement dated July 27, 1999 (the "LEASE"), by and between Landlord and Tenant.
Any initially capitalized terms used but not defined herein shall have the
meanings given them in the Lease.

                                    RECITALS

     A.  Landlord has entered into or is entering into a Ground Lease Agreement
(the "GROUND LEASE") with Triangle Service Center, Inc., a North Carolina
corporation ("GROUND LESSOR"), pursuant to which Landlord has leased or is
leasing approximately 6.084 acres of land more fully described in Exhibit A-1
attached to the Lease (the "SITE"). Pursuant to the Ground Lease, the Site will
be cleared and graded prior to the commencement of the term of the Ground Lease.

     B.  Subject to the terms and conditions of the Lease, Landlord has agreed
to cause to be constructed on the Site, or to permit to be constructed on the
Site, certain improvements including, but not limited to, a first-class
scientific research and development building containing approximately 53,750
rentable square feet (the "BUILDING") and a commercial greenhouse, headhouse,
and growth room facility containing approximately 5,000 rentable square feet
(the "GREENHOUSE").

     C.  This Work Letter contains the agreements of the parties with respect to
the design and construction of the shell and core of the Building, the site
improvements appurtenant to the Building, all fixed and permanent improvements
to the Building (commonly referred to as the "tenant improvements"), and all
components of the Greenhouse.

                                   AGREEMENT

     1.  General Requirements.
         --------------------

          1.1.  Tenant's Authorized Representative.  Tenant designates Larry
                ----------------------------------
Daquioag and Stanford White & Associates (collectively, "TENANT'S
REPRESENTATIVE") as the only persons authorized to initial or approve plans,
drawings, or change orders or otherwise to act for Tenant pursuant to this Work
Letter. Stanford White & Associates shall act for Tenant during any period that
Mr. Daquioag is not available. Landlord shall not be obligated to respond to or
act upon any request, approval, inquiry, or other communication
("COMMUNICATION") from or on behalf of Tenant in connection with this Work
Letter unless such Communication is in writing and has been initialed or
approved in writing by Tenant's Representative. Tenant may change Tenant's
Representative at any time upon not less than 5 business days advance Notice to
Landlord. No period set forth herein for any approval of any matter by Tenant
shall be extended by reason of any change in Tenant's Representative. Neither
Tenant nor Tenant's Representative shall be
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authorized to direct Landlord's contractors in the performance of "LANDLORD'S
WORK" (as hereinafter defined) except as may be expressly provided otherwise
herein.

          1.2.  Development Schedule. The schedule for design and development of
                --------------------
the "BASE BUILDING WORK" (as defined below), the "TENANT IMPROVEMENTS" (as
defined below), and the Greenhouse, including, without limitation, the time
periods for preparation, delivery, review, and approval of construction
documents and performance pursuant to such documents, shall be in accordance
with the Development Schedule attached hereto as Schedule A, subject to
adjustment as mutually agreed by the parties in writing or as provided in this
Work Letter (the "DEVELOPMENT SCHEDULE").

          1.3.  Architects, Consultants and Contractors. The architect (the
                ----------------------------------------
"PROJECT ARCHITECT"), engineers, designers, and general contractor (the "PROJECT
CONTRACTOR") responsible for the design, development, and construction of the
Base Building Work and other components of the Project as a whole (collectively,
the "PROJECT WORK"), the architect (the "TI ARCHITECT"), engineers, designers,
and general contractor (the "TI CONTRACTOR") responsible for the design,
development, and construction of the Tenant Improvements, and the general
contractor (the "GREENHOUSE CONTRACTOR") responsible for the construction of the
Greenhouse, shall be selected by Landlord, subject to Tenant's approval, which
approval shall not be unreasonably withheld, conditioned, or delayed. The
architect (the "GREENHOUSE ARCHITECT"), engineers, and designers responsible for
the design and development of the Greenhouse shall be selected by Tenant,
subject to Landlord's approval, which approval shall not be unreasonably
withheld, conditioned, or delayed. The Project Contractor shall select all
subcontractors to be used for the Project Work, the TI Contractor shall select
all subcontractors to be used for the Tenant Improvements, and the Greenhouse
Contractor shall select all subcontractors to be used for the Greenhouse,
provided that any subcontractors ("MAJOR SUBCONTRACTORS") under subcontracts in
excess of $100,000.00 ("MAJOR SUBCONTRACTS") shall be subject to the mutual
approval of Landlord and Tenant. The TI Architect, the TI Contractor, the
Greenhouse Architect, and the Greenhouse Contractor shall coordinate with the
Project Architect in a manner reasonably satisfactory to Landlord. Landlord and
Tenant hereby acknowledge and agree that: (i) O'Brien Atkins & Associates has
been pre-approved as the Project Architect and the TI Architect; (ii) Miller
Building Corporation has been pre-approved as the Project Contractor, the TI
Contractor, and the Greenhouse Contractor; and (iii) Bartholomew Associates,
Inc. has been pre-approved as the Greenhouse Architect. For purposes of this
Work Letter, the Project Architect and the TI Architect may be referred to
collectively as the "PRIMARY ARCHITECTS", the Project Architect, the TI
Architect, and the Greenhouse Architect may be referred to collectively as the
"ARCHITECTS", the Project Contractor, the TI Contractor, and the Greenhouse
Contractor may be referred to collectively as the "CONTRACTORS", and the
Architects and the Contractors may be referred to generally as "DEVELOPERS".

     2.  Building Work.
         -------------

          2.1.  Base Building Work Defined. As used herein, "BASE BUILDING WORK"
                --------------------------
shall mean all of the work required to design and construct, in their entirety,
the improvements described on Schedule B attached hereto, and shall include on-
site surface parking of not less than 140 spaces (as may be limited by, and
subject to, any changes mandated by Legal

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Requirements (including zoning restrictions) that may be enacted or first
effective after the Effective Date and to any changes in the design of the
Building requested or approved by Tenant and made after the Effective Date).

          2.2.  Tenant Improvements Defined. As used herein, "TENANT
                ---------------------------
IMPROVEMENTS" shall mean all improvements to the Building desired by Tenant of a
fixed and permanent nature, exclusive of the Base Building Work. Other than the
Base Building Work and the Tenant Improvements (collectively, the "BUILDING
WORK") and the Greenhouse, Landlord shall have no obligation whatsoever with
respect to the finishing, outfitting, equipping, or furnishing of the Premises
for Tenant's use and occupancy.

          2.3.  Building Design Program. Within 5 business days after the mutual
                -----------------------
execution of this Work Letter, Tenant shall prepare and deliver to Landlord and
the Primary Architects outline specifications detailing Tenant's requirements
for the Building Work (the "BUILDING DESIGN PROGRAM"). Within 5 business days
after Landlord's and the Primary Architects' receipt of the Building Design
Program, Landlord shall deliver to Tenant any written objections, questions,
and/or comments (generally, "COMMENTS") that Landlord and/or the Primary
Architects may have regarding such Building Design Program. Within 5 business
days after Tenant's receipt of any such Comments, Tenant shall cause the
Building Design Program to be revised to address such Comments and to be
resubmitted to Landlord and the Primary Architects for approval. Any disputes in
connection with such Comments shall be resolved in accordance with Section 4.

          2.4.  Building Schematic Plans. Within 15 business days after the
                ------------------------
Building Design Program has been approved, Landlord shall cause the Primary
Architects to prepare and submit to Tenant for Tenant's review and comment
schematic drawings for the development of the Building Work (the "BUILDING
SCHEMATIC PLANS"). Tenant shall be solely responsible for ensuring that the
Building Schematic Plans reflect Tenant's requirements for the Building Work.
Within 5 business days after Tenant's receipt of the Building Schematic Plans,
Tenant shall deliver to Landlord and the Primary Architects any Comments that
Tenant may have regarding the Building Schematic Plans; provided, however, that
Tenant may not disapprove any matter that is substantially consistent with the
Building Design Program without submitting a "CHANGE REQUEST" (as defined in
Section 6.1). Within 10 business days after Landlord's and the Primary
Architects' receipt of any such Comments, Landlord and the Primary Architects
shall consider all such Comments in good faith and shall notify Tenant how
Landlord proposes to respond to such Comments. Any disputes in connection with
such Comments shall be resolved in accordance with Section 4.

          2.5.  Building Design Development Plans. Within 15 business days after
                ---------------------------------
the Building Schematic Plans have been approved, Landlord shall cause the
Primary Architects to prepare and submit to Tenant for Tenant's review and
comment design development plans and specifications for the development of the
Building Work (the "BUILDING DESIGN DEVELOPMENT PLANS"). Tenant shall be solely
responsible for ensuring that the Building Design Development Plans reflect
Tenant's requirements for the Building Work. Within 5 business days after
Tenant's receipt of the Building Design Development Plans, Tenant shall deliver
to Landlord and the Primary Architects any Comments that Tenant may have
regarding the Building Design

                                       3
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Development Plans; provided, however, that Tenant may not disapprove any matter
that is substantially consistent with the Building Schematic Plans without
submitting a Change Request. Within 10 business days after Landlord's and the
Primary Architects' receipt of any such Comments, Landlord and the Primary
Architects shall consider all such Comments in good faith and shall notify
Tenant how Landlord proposes to respond to such Comments. Any disputes in
connection with such Comments shall be resolved in accordance with Section 4.

          2.6.  Building Construction Drawings. Within 45 business days after
                ------------------------------
the Building Design Development Plans have been approved, Landlord shall cause
the Primary Architects to prepare and deliver to Tenant for Tenant's review and
comment construction plans, specifications, and drawings for the Building Work
("BUILDING CONSTRUCTION DRAWINGS"), which Building Construction Drawings shall
be prepared substantially in accordance with the Building Design Development
Plans. Tenant shall be solely responsible for ensuring that the Building
Construction Drawings reflect Tenant's requirements for the Building Work.
Within 5 business days after Tenant's receipt of the Building Construction
Drawings, Tenant shall deliver to Landlord and the Primary Architects any
Comments that Tenant may have regarding the Building Construction Drawings;
provided, however, that Tenant may not disapprove any matter that is
substantially consistent with the Building Design Development Plans without
submitting a Change Request. Within 10 business days after Landlord's and the
Primary Architects' receipt of any such Comments, Landlord and the Primary
Architects shall consider all such Comments in good faith and shall notify
Tenant how Landlord proposes to respond to such Comments. Any disputes in
connection with such Comments shall be resolved in accordance with Section 4.
Once approved by Tenant, Landlord shall not materially modify the Building
Construction Drawings except as may be reasonably required in connection with
the issuance of any of the "PERMITS" (as defined in Section 5.2). Landlord will
give Tenant prompt Notice of any such material modifications.

     3.  Greenhouse.
         ----------

          3.1.  Greenhouse Design Program.  Within 5 business days after the
                -------------------------
mutual execution of this Work Letter, Tenant shall prepare and deliver to
Landlord and the Greenhouse Architect outline specifications detailing Tenant's
requirements for the Greenhouse (the "GREENHOUSE DESIGN PROGRAM"). Within 5
business days after Landlord's and the Greenhouse Architect's receipt of the
Greenhouse Design Program, Landlord shall deliver to Tenant any Comments that
Landlord may have regarding such Greenhouse Design Program. Within 5 business
days after Tenant's receipt of any such Comments, Tenant shall cause the
Greenhouse Design Program to be revised to address such Comments and to be
resubmitted to Landlord and the Greenhouse Architect for approval. Any disputes
in connection with such Comments shall be resolved in accordance with Section 4.

          3.2.  Greenhouse Schematic Plans. Within 15 business days after the
                --------------------------
Greenhouse Design Program has been approved, Tenant shall cause the Greenhouse
Architect to prepare and submit to Landlord for Landlord's review and comment
schematic drawings for the development of the Greenhouse (the "GREENHOUSE
SCHEMATIC PLANS"). Tenant shall be solely responsible for ensuring that the
Greenhouse Schematic Plans reflect Tenant's requirements for the Greenhouse.
Within 5 business days after Landlord's receipt of the Greenhouse Schematic

                                       4
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Plans, Landlord shall deliver to Tenant and the Greenhouse Architect any
Comments that Landlord may have regarding the Greenhouse Schematic Plans;
provided, however, that Landlord may not disapprove any matter that is
substantially consistent with the Greenhouse Design Program. Within 10 business
days after Tenant's and the Greenhouse Architect's receipt of any such Comments,
Tenant and the Greenhouse Architect shall consider all such Comments in good
faith and shall notify Landlord how Tenant proposes to respond to such Comments.
Any disputes in connection with such Comments shall be resolved in accordance
with Section 4. The cost of any changes to the Building Construction Drawings
that become necessary because of any changes to the Greenhouse Schematic Plans
requested by Landlord shall be payable by Landlord.

          3.3.  Greenhouse Design Development Plans. Within 15 business days
                -----------------------------------
after the Greenhouse Schematic Plans have been approved, Tenant shall cause the
Greenhouse Architect to prepare and submit to Landlord for Landlord's review and
comment design development plans and specifications for the development of the
Greenhouse (the "GREENHOUSE DESIGN DEVELOPMENT PLANS"). Tenant shall be solely
responsible for ensuring that the Greenhouse Design Development Plans reflect
Tenant's requirements for the Greenhouse. Within 5 business days after
Landlord's receipt of the Greenhouse Design Development Plans, Landlord shall
deliver to Tenant and the Greenhouse Architect any Comments that Landlord may
have regarding the Greenhouse Design Development Plans; provided, however, that
Landlord may not disapprove any matter that is substantially consistent with the
Greenhouse Schematic Plans. Within 10 business days after Tenant's and the
Greenhouse Architect's receipt of any such Comments, Tenant and the Greenhouse
Architect shall consider all such Comments in good faith and shall notify
Landlord how Tenant proposes to respond to such Comments. Any disputes in
connection with such Comments shall be resolved in accordance with Section 4.
The cost of any changes to the Building. Construction Drawings that become
necessary because of any changes to the Greenhouse Design Development Plans
requested by Landlord shall be payable by Landlord.

          3.4.  Greenhouse Construction Drawings. Within 45 business days after
                --------------------------------
the Greenhouse Design Development Plans have been approved, Tenant shall cause
the Greenhouse Architect to prepare and deliver to Landlord for Landlord's
review and comment construction plans, specifications, and drawings for the
Greenhouse ("GREENHOUSE CONSTRUCTION DRAWINGS"), which Greenhouse Construction
Drawings shall be prepared substantially in accordance with the Greenhouse
Design Development Plans. Tenant shall be solely responsible for ensuring that
the Greenhouse Construction Drawings reflect Tenant's requirements for the
Greenhouse. Within 10 business days after Landlord's receipt of the Greenhouse
Construction Drawings, Landlord shall deliver to Tenant and the Greenhouse
Architect any Comments that Landlord may have regarding the Greenhouse
Construction Drawings; provided, however, that Landlord may not disapprove any
matter that is substantially consistent with the Greenhouse Design Development
Plans. Within 10 business days after Tenant's and the Greenhouse Architect's
receipt of any such Comments, Tenant and the Greenhouse Architect shall consider
all such Comments in good faith and shall notify Landlord how Tenant proposes to
respond to such Comments. Any disputes in connection with such Comments shall be
resolved in accordance with Section 4. The cost of any changes to the Building
Construction Drawings that become necessary because of any changes to the
Greenhouse Construction Drawings requested

                                       5
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by Landlord shall be payable by Landlord. Once approved by Landlord, Tenant
shall not materially modify the Greenhouse Construction Drawings except as may
be reasonably required in connection with the issuance of any of the Permits.
Tenant will give Landlord prompt Notice of any such material modifications.

     4.  Approval and Completion. Landlord and Tenant hereby acknowledge that Q)
         -----------------------
the Building Construction Drawings must be completed and approved not later than
December 31,1999, in order for the Building Work to be "SUBSTANTIALLY COMPLETE"
(as defined in Section 5.3) by the Target Commencement Date, and (ii) the
Greenhouse Construction Drawings must be completed and approved not later than
December 31, 1999, in order for the Greenhouse to be Substantially Complete by
the Target Commencement Date (the Building Construction Drawings and the
Greenhouse Construction Drawings may be referred to collectively as the
"CONSTRUCTION DRAWINGS"). If there is any dispute regarding the design of the
Building Work or the Greenhouse that is not settled within 5 business days after
Notice of such dispute is delivered by one party to the other, (x) Landlord
shall have the right to make the final decision if the dispute concerns the
design of the Base Building Work, provided Landlord acts reasonably and such
final decision is either consistent with or a reasonable compromise between
Landlord's and Tenant's positions with respect to such dispute, and (y) Tenant
shall have the right to make the final decision if the dispute concerns the
design of the Tenant Improvements or the Greenhouse, provided Tenant acts
reasonably and such final decision is either consistent with or a reasonable
compromise between Landlord's and Tenant's positions with respect to such
dispute. All costs and expenses resulting from any final decision with respect
to the Building Work shall be payable out of the "BUILDING FUND" (as defined in
Section 7.5) and resulting from any final decision with respect to the
Greenhouse shall be payable out of the "GREENHOUSE FUND" (as defined in Section
7.8). Any changes to the Construction Drawings requested by Tenant following
Landlord's and Tenant's approval of same shall be processed as provided in
Section 6 hereof.

     5.  Performance of Landlord's Work.
         ------------------------------

          5.1.  Definition of Landlord's Work. As used herein, "LANDLORD'S WORK"
                -----------------------------
shall mean the work of constructing the Building Work and the Greenhouse.

          5.2.  Permitting and Commencement of Landlord's Work. Once the
                ----------------------------------------------
Building Construction Drawings have been approved, Landlord shall commence
construction of the Base Building Work upon obtaining a building permit
authorizing the construction of the Base Building Work as contemplated in this
Work Letter (the "BASE BUILDING PERMIT"). Tenant shall cooperate and assist
Landlord in obtaining the Base Building Permit, the cost of which shall be
payable from the Building Fund. Thereafter, Landlord shall commence construction
of the Tenant Improvements upon the later of (a) the date that Landlord obtains
a building permit authorizing the construction of the Tenant Improvements as'
contemplated in this Work Letter (the "TI PERMIT"), and (b) the date that the
Base Building Work has been sufficiently completed such that the work of
constructing the Tenant Improvements can be efficiently performed. Tenant shall
cooperate and assist Landlord in obtaining the TI Permit, the cost of which
shall be payable from the Building Fund. Once the Greenhouse Construction
Drawings have been approved, Landlord shall commence construction of the
Greenhouse upon the later of (x) the date that Landlord obtains a building
permit authorizing the construction of the Greenhouse as

                                       6
<PAGE>

contemplated in this Work Letter (the "GREENHOUSE PERMIT"), and (y) the date
that the Base Building Work has been sufficiently completed such that the work
of constructing the Greenhouse can be efficiently performed. Tenant shall
cooperate and assist Landlord in obtaining the Greenhouse Permit, the cost of
which shall be payable from the Greenhouse Fund. If any governmental or
quasi-governmental authorities having jurisdiction over the performance of any
portion of Landlord's Work (a "GOVERNMENTAL AUTHORITY") or any permit, license,
or approval required in connection therewith shall impose terms or conditions on
the Base Building Permit, the TI Permit, or the Greenhouse Permit (which may be
referred to collectively as the "PERMITS") that: (i) are inconsistent with
Landlord's obligations under this Work Letter; (ii) are substantially
inconsistent with any of the Construction Drawings; (iii) materially increase
the cost of performing Landlord's Work; or (iv) will materially delay the
performance of Landlord's Work, Landlord and Tenant shall reasonably and in good
faith seek means by which to mitigate or eliminate any such adverse terms or
conditions.

          5.3.  Completion of Landlord's Work. In recognition and consideration
                -----------------------------
of the fact that the Building, the Tenant Improvements, and the Greenhouse are
yet to be designed and/or constructed, the parties to this Work Letter hereby
agree that Landlord may make "MINOR VARIATIONS" (as defined below) in the size,
design, engineering, configuration, and placement of any portion of Landlord's
Work, and such Minor Variations shall not render the Lease void or voidable nor
give Tenant the right to any reduction or abatement in Rent, notwithstanding
anything contained in this Work Letter or any rule of law or equity to the
contrary. On or before the Commencement Date (subject only to "TENANT CAUSED
DELAYS" (as defined in Section 5.6) and delays cause by Force Majeure ("FORCE
MAJEURE DELAYS")), Landlord shall substantially complete or cause to be
substantially completed Landlord's Work in accordance with the Permits, and
shall obtain at least a temporary certificate of occupancy for the Building and
the Greenhouse that will allow Tenant to use and occupy such Building and
Greenhouse for substantially the purposes contemplated in the Permitted Use
(collectively, the "TEMPORARY CERTIFICATE"), subject to Minor Variations and
customary "punch list" items of a non-material nature that do not adversely
affect Tenant's use or occupancy of the Building and the Greenhouse for
substantially the purposes contemplated in the Permitted Use or the validity of
the Temporary Certificate ("SUBSTANTIALLY COMPLETE" or "SUBSTANTIAL
COMPLETION"); provided, however, that Landlord shall have no obligation to
obtain or maintain, and shall not obtain or maintain, any permits, licenses,
approvals, certificates, or other entitlements necessary or appropriate to
Tenant's specific use of the Premises or the conduct of Tenant's specific
business operations on the Premises. Upon the Substantial Completion of
Landlord's Work, each Architect shall be required to execute and deliver, for
the benefit of Tenant and Landlord, a Certificate of Substantial Completion in
the form of the American Institute of Architects document G704. For purposes of
this Work Letter, "MINOR VARIATIONS" shall mean any modifications reasonably
required: (i) to comply with all applicable Legal Requirements (including the
North Carolina State Building Code, as adopted by the City of Durham (the
"CODE")) and/or to obtain or to comply with any required permit (including the
Permits); (ii) to comply with any request by the Tenant for modifications to
Landlord's Work; (iii) to make reasonable, but minor, adjustments in order to
comport with good design, engineering, and construction practices; or (iv) to
make reasonable adjustments for field deviations or conditions encountered
during the performance of Landlord's Work.

                                       7
<PAGE>

          5.4.  Selection of Materials, Etc. Where more than one type of
                ---------------------------
material or structure is indicated on any of the Construction Drawings approved
by Landlord and Tenant, the option will be within Landlord's reasonable
discretion as to the Building Work and the option will be within Tenant's
reasonable discretion as to the Greenhouse. As to all building materials and
equipment that Landlord is obligated to supply under this Work Letter, Landlord
shall select the manufacturer thereof in Landlord's reasonable discretion.

          5.5.  Delivery of the Premises. When Landlord's Work is Substantially
                ------------------------
Complete, subject to the remaining terms and provisions of this Section, Tenant
shall accept the Premises in their then existing condition. Tenant's taking
possession and acceptance of the Premises shall not constitute a waiver of: (i)
any warranty, including those with respect to workmanship (including
installation of equipment) or material (exclusive of equipment provided directly
to Tenant by manufacturers), (ii) any non-compliance of Landlord's Work with
Legal Requirements (including the Code), or (iii) any claim that Landlord's Work
was not completed substantially in accordance with any of the Construction
Drawings (subject to Minor Variations and such other changes as are permitted
hereunder) (collectively, a "CONSTRUCTION DEFECT"). Tenant shall have 1 year
after Substantial Completion within which to notify Landlord of any such
Construction Defect discovered by Tenant, and Landlord shall use reasonable
efforts to remedy or cause the responsible contractor to remedy any such
Construction Defect within 30 days thereafter. Notwithstanding the foregoing,
Landlord shall not be in default under the Lease if:

          (a) with respect to Construction Defects that Landlord reasonably
determines, in good faith, involve or may involve structural components of the
Premises or pose or may pose a significant risk of personal injury or
substantial property damage ("SERIOUS CONSTRUCTION DEFECTS"), the applicable
contractor, despite Landlord's reasonable efforts, fails to remedy such
Construction Defect within such 30-day period, but Landlord, within 30 days
thereafter, commences and diligently and continuously pursues such remedial
action to completion, at Landlord's sole cost and expense;

          (b) with respect to Construction Defects that Landlord reasonably
determines, in good faith, are not Serious Construction Defects or involve
Tenant's Property, the applicable contractor, despite Landlord's reasonable
efforts, fails to remedy such Construction Defect within such 30-day period, in
which case Landlord shall have no further obligation with respect to such
Construction Defect other than to cooperate, at no cost to Landlord, with Tenant
should Tenant elect to pursue a claim against such contractor, provided that
Tenant indemnifies and holds Landlord harmless from and against any liability,
loss, cost, damage or expense in connection with any such claim; or

          (c) with respect to any part of Landlord's Work, any action by Tenant
to the extent such action results in the invalidation of any otherwise
enforceable warranty or bond that would cover the cost of remedying such
Construction Defect.

Any determination made by Landlord pursuant to paragraph (a) or (b) above shall
be deemed reasonable and in good faith if based on advice received by Landlord
from an independent and duly licensed design or construction consultant (a
"DEFECT CONSULTANT"). Tenant may ask a

                                       8
<PAGE>

Defect Consultant to provide written confirmation of the advice given Landlord
in connection with a determination by Landlord that a specific Construction
Defect is not a Serious Construction Defect if, and only if, (i) Tenant gives
Landlord Notice of such desire within 3 business days after receiving Notice of
Landlord's determination, and (ii) Tenant is solely responsible for any fee,
cost, charge, or other assessment imposed by the Defect Consultant for providing
such written confirmation; provided, however, that Tenant understands and agrees
that Landlord's waiver of the potential conflict of interest facing the Defect
Consultant shall be strictly limited to the advice, and only the advice, given
Landlord in the specific instance in question and shall not apply, under any
circumstances, to any other advice or matters that may be the subject of the
services provided to Landlord by the Defect Consultant.

     Landlord shall use commercially reasonable efforts to cause the following
to be included in the agreements ("DEVELOPMENT AGREEMENTS") entered into with
each Developer other than the Greenhouse Architect, and Tenant shall use
commercially reasonable efforts to cause the following to be included in the
Development Agreement entered into with the Greenhouse Architect: (i) an express
statement or agreement by each such Developer that Tenant (if Landlord is the
contracting party) or Landlord (if Tenant is the contracting party) is an
"intended third party beneficiary" with respect to all express representations
and warranties contained in such Developer's Development Agreement and with
respect to all warranties implied, at law or in equity, from the relationship
created by such Developer's Development Agreement or from the work performed by
or on behalf of such Developer pursuant to such Developer's Development
Agreement; (ii) express representations and warranties from each Developer that
are "industry standard" for such professionals when providing services to
Similar Facilities in the Sub-Market, which representations and warranties also
shall be expressly assignable to Tenant (if Landlord is the contracting party)
or Landlord (if Tenant is the contracting party) and, as to each Architect,
shall include, but not be limited to, a representation or warranty that the
Construction Drawings prepared by or on behalf of such Architect comply with all
applicable Legal Requirements (including the Code), subject to Minor Variations
and such other changes as are permitted hereunder; (iii) as to the Project
Architect, an express requirement that the Project Architect obtain and/or
maintain errors and omissions insurance with a minimum limit of not less than
$2,000,000.00; (iv) as to each Developer, an express requirement that Tenant (if
Landlord is the contracting party) or Landlord (if Tenant is the contracting
party) be added as an additional insured under any insurance for which the
contracting party is to be named an additional insured; and (v) as to each
Contractor, an express requirement that such Contractor direct all manufacturers
supplying equipment to be installed in the Building or the Greenhouse to name
both Landlord and Tenant as the parties entitled to the benefits of the
manufacturers' equipment warranties. In all events, Tenant shall be entitled to
receive the benefit of all design and construction warranties and all
manufacturers' equipment warranties for equipment installed in the Building or
the Greenhouse, and Landlord, if requested by Tenant, will cooperate with Tenant
in obtaining the benefit of all such warranties (subject to the limitations
described in paragraphs (a), (b), and (c) above). If requested by Tenant,
Landlord shall use commercially reasonable efforts to obtain extended warranties
from the manufacturers and suppliers of any equipment to be installed in the
Building or the Greenhouse, provided that the cost of any such extended
warranties shall be subject to Tenant's approval and, unless paid directly by
Tenant, at Tenant's option, shall be paid solely out of the Building Fund for
equipment installed in the Building and shall be paid solely out of the
Greenhouse Fund for equipment installed in the

                                       9
<PAGE>

Greenhouse. Within 5 days after receiving Notice from Tenant identifying punch
list items, Landlord shall undertake the correction of such punch list items and
shall complete, or cause to be completed, the correction of all punch list items
within 20 days thereafter; provided, however, if the nature of the punch list
items are such that they reasonably require more than 20 days to correct, then
Landlord shall not be deemed to be in default hereunder if Landlord commences
such correction within said 20-day period and thereafter diligently pursues the
same to completion; provided further, however, that such correction shall be
completed no later than 45 days from the date of Tenant's Notice regarding punch
list items (subject to Force Majeure Delays).

          5.6.  Commencement Date Delay. The Commencement Date shall occur when
                -----------------------
Landlord's Work has been Substantially Completed (the "COMPLETION DATE"), except
to the extent that completion of Landlord's Work shall have been actually
delayed by any one or more of the following causes (a "TENANT CAUSED DELAY"):

               (a) Tenant's Representative was not available to give or receive
any Communication (in the manner required under the notice provisions contained
in Section 44(a) of the Lease) or to take any other action required to be taken
by Tenant hereunder;

               (b) Any Change Request, whether or not the Change that is the
subject of the Change Request is actually performed;

               (c)  Construction of any Change;

               (d) Tenant's request for materials, finishes, or installations
requiring unusually long lead times;

               (e) Tenant's delay in reviewing, revising, providing Comments, or
approving specifications, plans, drawings, or other materials beyond the periods
set forth herein;

               (f) Tenant's delay in providing information critical to the
normal progression of Landlord's Work (Tenant shall provide such information as
soon as reasonably possible, but in no event longer than 1 week after receipt of
any request for such information from Landlord that is transmitted in the manner
required under the notice provisions contained in Section 44(a) of the Lease);

               (g) Tenant's delay in making payments to Landlord for "EXCESS
BUILDING COSTS" (as defined in Section 7.5) or "EXCESS GREENHOUSE COSTS" (as
defined in Section 7.8) or

               (h) Any other act or omission by Tenant or its agents,
contractors, or persons employed by any of such persons.

If the Commencement Date is delayed for any of the foregoing reasons, then
Landlord shall cause the Project Architect (with respect to the Base Building
Work), the TI Architect (with respect to the Tenant Improvements), and the
Greenhouse Architect (with respect to the

                                       10
<PAGE>

Greenhouse) to certify the date on which Landlord's Work would have been
Substantially Completed but for such Tenant Caused Delay and such certified date
shall be the Commencement Date under the Lease.

     6.  Changes. Any changes requested by Tenant to Landlord's Work ("CHANGES")
         -------
after the mutual approval of any of the Construction Drawings shall be requested
and instituted in accordance with the provisions of this Section and shall be
subject to the written approval of Landlord and the appropriate Architect, such
approval not to be unreasonably withheld, conditioned, or delayed.

          6.1.  Tenant's Right to Request Changes. Tenant shall request Changes,
                ---------------------------------
if any, by giving Notice to Landlord in substantially the same form as the AIA
standard change order form (a "CHANGE REQUEST"), which Change Request shall
detail the nature and extent of any such Change. Tenant's Representative must
sign such Change Request. Landlord, before proceeding with any Change, shall use
commercially reasonable efforts to respond to Tenant as soon as reasonably
possible with an estimate of: (i) the period of time, if any, that the Change
will extend the date on which Landlord's Work will be Substantially Complete;
and (ii) the architectural and engineering fees and costs that will be incurred
to analyze such Change Request. Within 10 business days after Landlord's receipt
of the Change Request (or such longer period of time as is reasonably required
depending on the extent of the Change Request), Landlord shall submit to Tenant
a written analysis of the additional cost or savings involved, including,
without limitation, architectural and engineering costs and the period of time,
if any, that the Change will extend the date on which Landlord's Work will be
Substantially Complete. Any such delay in the completion of Landlord's Work
caused by a Change, including any suspension of Landlord's Work while any such
Change is being evaluated and/or designed, shall be a Tenant Caused Delay.
Notwithstanding the foregoing, Landlord's Work may not be suspended as a result
of any Change Request unless specifically approved by Tenant.

          6.2.  Implementation of Changes. If Tenant: (i) approves in writing
                -------------------------
the cost or savings and the estimated extension in the time for completion of
Landlord's Work, if any, and (ii) deposits with Landlord any Excess Building
Costs required in connection with any Change of the Building Work or any Excess
Greenhouse Costs required in connection with any Change of the Greenhouse,
Landlord shall cause the approved Change to be instituted. Notwithstanding any
approval or disapproval by Tenant of any estimate of the delay caused by such
proposed Change, the appropriate Architect's determination of the amount of
Tenant Caused Delay in connection with such Change shall be final and binding on
Landlord and Tenant.

     7.  Costs.
         -----

          7.1.  Budget for Landlord's Work. Before commencing Landlord's Work,
                --------------------------
Landlord shall obtain a detailed budget (the "BUDGET"), by trade, of the costs
incurred or that will be incurred in connection with the design, permitting, and
construction of the Building Work (the "BUILDING COSTS"), and the design,
permitting, and construction of the Greenhouse (the "GREENHOUSE COSTS"). The
Budget shall be based upon the Construction Drawings and shall include a payment
to Landlord of administrative rent ("ADMINISTRATIVE RENT") equal to 2.50% of the
Building Costs and the Greenhouse Costs (collectively, "PROJECT COSTS") for

                                       11
<PAGE>

administering, monitoring, and inspecting Landlord's Work, which sum shall be
payable from the Building Fund and/or the Greenhouse Fund. Such Administrative
Rent shall include, without limitation, all out-of-pocket costs, expenses, and
fees incurred by or on behalf of Landlord arising from, out of, or in connection
with, such administration, monitoring, and inspection of Landlord's Work.
Landlord shall have the right (but not the obligation) to engage a project or
development manager to assist in performing such administration, monitoring, and
inspection of Landlord's Work and any payments to any such manager (excluding
payments for any services performed by such manager at Tenant's direct request
or direction) shall be payable from Administrative Rent.

          7.2.  Excess Line Item Costs. If at any time and from time-to-time
                ----------------------
Landlord reasonably determines that the actual cost of certain services or
materials required for the Building Work will exceed the line item in the Budget
for such services or materials, Landlord shall give Notice to Tenant of same and
Tenant thereafter either shall approve or disapprove the excess line item cost
within 5 business days after Landlord's Notice. If Tenant approves the excess
line item cost, Landlord shall proceed with the Building Work and the excess
line item cost will be included in "BASE CONSTRUCTION COSTS" (as defined in
Section 3(a) of the Lease). If Tenant disapproves the excess line item cost,
Landlord and Tenant shall reasonably and in good faith seek means by which to
mitigate or eliminate such excess line item cost. Any excess line item cost not
approved by Tenant shall not be included in Base Construction Costs.

          7.3.  Building Allowance. Landlord shall provide to Tenant a building
                ------------------
allowance ("BUILDING ALLOWANCE") of not more than $155.00 (in increments of
$10.00) per rentable square foot of the Building, provided that under no
circumstances (including an increase in the rentable square footage of the
Building) shall the aggregate amount of the Building Allowance exceed
$8,331,250.00. Within 10 business days after Tenant's receipt of the Budget from
Landlord, Tenant shall give Landlord Notice of how much of the Building
Allowance Tenant has elected to receive from Landlord. Such election shall be
final and binding on Tenant, and may not thereafter be modified without
Landlord's consent, which may be granted or withheld in Landlord's sole and
absolute discretion. If the Budget for the Building Work is greater than the
Building Allowance, Tenant shall deposit with Landlord the difference, in cash,
prior to the commencement of Landlord's Work, for disbursement by Landlord to
pay Building Costs.

          7.4.  Costs Includable in Building Allowance. The Building Allowance
                --------------------------------------
shall be used solely for the payment of design, permitting, and construction
costs in connection with the construction of the Building Work, including,
without limitation, the cost of preparing the Building Design Program, the
Building Schematic Plans, the Building Design Development Plans, and the
Building Construction Drawings, all costs set forth in the Budget, including
Administrative Rent and Landlord's out-of-pocket expenses and other costs
resulting from Tenant Caused Delays and the cost of Changes, to the extent of
the Building Allowance. The items that may be paid for using the Building
Allowance include, without limitation, the shell and core of the Building, the
site improvements appurtenant to the Building, HVAC systems, utility
distribution systems, laboratory benches and casework, and hazardous waste
containment equipment. Notwithstanding anything to the contrary contained
herein, the Building Allowance shall not be used to pay for trade fixtures,
emergency generators or related emergency power

                                       12
<PAGE>

equipment, furniture, personal property, or other non-building system materials
or equipment, including, but not be limited to, biological safety cabinets and
other scientific equipment not incorporated into the Building.

          7.5.  Excess Building Costs. It is understood and agreed that Landlord
                ---------------------
is under no obligation to bear any portion of the cost of any of the Building
Work except to the extent of the Building Allowance. If at any time and from
time-to-time Landlord reasonably determines that the remaining Building Costs
under the Budget exceed the remaining unexpended Building Allowance, Landlord
shall give Notice to Tenant of same and Tenant thereafter shall deposit with
Landlord, as a condition precedent to Landlord's obligation to complete the
Building Work, 100% of the then current Building Costs in excess of the
remaining Building Allowance ("EXCESS BUILDING COSTS"). If Tenant fails to
deposit with Landlord, or deposits with Landlord after the date demanded in
Landlord's Notice (which shall not be less than 5 business days after Landlord's
Notice), the amount of any Excess Building Costs, Landlord may suspend
Landlord's Work until the required deposit has been made and shall have all of
the rights and remedies set forth in the Lease for nonpayment of Rent
(including, but not limited to, the right to interest at the Default Rate and
the right to assess a late charge), and for purposes of any litigation
instituted with regard to such amounts the same will be considered Rent. Such
deposits of Excess Building Costs, together with the proceeds of the Building
Allowance, are herein referred to as the "BUILDING FUND". Funds so deposited by
Tenant shall be the first thereafter disbursed to pay Building Costs.
Notwithstanding anything to the contrary set forth in this Section, Tenant shall
be fully and solely liable for Building Costs and the cost of Minor Variations
in excess of the Building Allowance (except as may be provided otherwise in
Section 7.2 above). If upon Substantial Completion of the Building Work and the
payment of all sums due in connection therewith there remains any undisbursed
Building Allowance, Tenant shall be entitled to such undisbursed Building
Allowance solely to the extent of any deposits of Excess Building Costs that
Tenant has actually made with Landlord.

          7.6.  Greenhouse Loan. Pursuant to Section 42 of the Lease and in
                ---------------
accordance with the Greenhouse Loan Documents, Landlord is making a loan to
Tenant in the maximum amount of $1,200,000.00 to be used by Tenant solely for
the construction of the Greenhouse (the "GREENHOUSE LOAN").

          7.7.  Costs Includable in Greenhouse Loan. The Greenhouse Loan shall
                -----------------------------------
be used solely for the payment of design, permitting, and construction costs in
connection with the construction of the Greenhouse, including, without
limitation, the cost of preparing the Greenhouse Design Program, the Greenhouse
Schematic Plans, the Greenhouse Design Development Plans, and the Greenhouse
Construction Drawings, all other costs set forth in the Budget, including
Administrative Rent and Landlord's out-of-pocket expenses and other costs
resulting from Tenant Caused Delays and the cost of Changes. Notwithstanding
anything to the contrary contained herein, the Greenhouse Loan shall not be used
to pay for trade fixtures, emergency generators or related emergency power
equipment, furniture, personal property, or other non-building system materials
or equipment, including, but not be limited to, biological safety cabinets and
other scientific equipment not incorporated into the Greenhouse.

                                       13
<PAGE>

          7.8.  Excess Greenhouse Costs. It is understood and agreed that
                -----------------------
Landlord is under no obligation to bear any portion of the cost of the
Greenhouse, and has only the obligation to disburse proceeds of the Greenhouse
Loan in accordance with the terms and conditions of the Greenhouse Loan
Documents. If at any time and from time-to-time Landlord reasonably determines
that the remaining Greenhouse Costs under the Budget exceed the remaining
undisbursed proceeds of the Greenhouse Loan, Landlord shall give Notice to
Tenant of same and Tenant thereafter shall deposit with Landlord, as a condition
precedent to Landlord's obligation to complete the Greenhouse, 100% of the then
current Greenhouse Costs in excess of the remaining undisbursed proceeds of the
Greenhouse Loan ("EXCESS GREENHOUSE COSTS"). If Tenant fails to deposit with
Landlord, or deposits with Landlord after the date demanded in Landlord's Notice
(which shall not be less than 5 business days after Landlord's Notice), the
amount of any Excess Greenhouse Costs, Landlord may suspend Landlord's Work
until the required deposit has been made and shall have all of the rights and
remedies set forth in the Greenhouse Loan Documents for nonpayment of principal,
interest, and other monies due in connection with the Greenhouse Loan
(including, but not limited to, the right to interest at the "DEFAULT INTEREST
RATE" (as defined in the Greenhouse Loan Documents) and the right to assess a
late charge). Such deposit of Excess Greenhouse Costs, together with the
proceeds of the Greenhouse Loan, are herein referred to as the "GREENHOUSE
FUND". Funds so deposited by Tenant shall be the first thereafter disbursed to
pay Greenhouse Costs. Notwithstanding anything to the contrary set forth in this
Section, Tenant shall be fully and solely liable for Greenhouse Costs and the
cost of Minor Variations in excess of the amount of the Greenhouse Loan. If upon
Substantial Completion of the Greenhouse and the payment of all sums due in
connection therewith there remains any undisbursed proceeds of the Greenhouse
Loan, Tenant shall be entitled to such undisbursed proceeds solely to the extent
of any deposits of Excess Greenhouse Costs that Tenant has actually made with
Landlord.

     8.  Tenant Access.
         -------------

          8.1.  Tenant's Access Rights. Landlord hereby agrees to permit Tenant
                ----------------------
access to the Building, at Tenant's sole risk and expense, (i) 30 days prior to
the Commencement Date to perform any work ("TENANT'S WORK") required by Tenant
other than Landlord's Work (including, as examples only, installation of
telephones, cables, and, to the extent reasonably practical, trade fixtures and
furniture), provided that such Tenant's Work is coordinated with the TI
Architect and the TI Contractor and complies with the Lease and all other
reasonable restrictions and conditions Landlord may impose, and (ii) prior to
the completion of Landlord's Work, to inspect and observe work in process; all
such access shall be during normal business hours or at such other times as are
reasonably designated by Landlord. Notwithstanding the foregoing, Tenant shall
have no right to enter onto the Premises or the Building unless and until Tenant
shall deliver to Landlord evidence reasonably satisfactory to Landlord
demonstrating that any insurance reasonably required by Landlord in connection
with such pre-commencement access (including, but not limited to, any insurance
that Landlord may require pursuant to the Lease) is in full force and effect.

          8.2.  No Interference. Neither Tenant nor its employees, consultants,
agents, contractors, and suppliers shall interfere with the performance of
Landlord's Work, nor with any inspections or issuance of final approvals by
Durham County, North Carolina, or the City of

                                       14
<PAGE>

Durham, and upon any such interference, Landlord shall have the right to exclude
Tenant and Tenant's employees, consultants, agents, contractors, and suppliers
from the Premises and the Building until Substantial Completion of Landlord's
Work.

          8.3.  No Acceptance of Premises. So long as Tenant engages only in the
                -------------------------
activities enumerated in Section 8.1, the fact that Tenant, with Landlord's
consent, may enter the Building prior to the date Landlord's Work is
Substantially Complete shall not be deemed an acceptance by Tenant of possession
of the Premises, but in such event Tenant shall indemnify and hold Landlord
harmless from any loss of or damage to Tenant property, completed work,
fixtures, equipment, materials or merchandise, and from liability for death of,
or injury to, any person, caused by the willful misconduct or negligence of
Tenant or its agents.

     9.  Notification of Delays. Not less than once each calendar month from the
         ----------------------
date of this Work Letter through the Commencement Date, Landlord shall deliver
to Tenant written notification of the number of days during the immediately
preceding calendar month Landlord's performance under this Work Letter or the
Lease was delayed as a result of Tenant Caused Delays or Force Majeure Delays,
which written notification shall also include a description of the nature of
such Tenant Caused Delay or Force Majeure Delay.

     10.  Miscellaneous
          -------------

          10.1.  Consents. Whenever consent or approval of either party is
                 --------
required under this Work Letter, that party shall not unreasonably withhold,
condition, or delay such consent or approval, except as may be expressly set
forth herein to the contrary. Notwithstanding the foregoing, and regardless of
any standard that may be applicable to any consent or approval rights given to
Landlord hereunder, Landlord shall be justified in withholding, and shall not
incur any liability for so withholding, any consent or approval to any action,
document, or matter that Landlord determines, in its sole and absolute
discretion, will or might adversely affect Landlord's status as a "real estate
investment trust".

          10.2.  Modification. No modification, waiver, or amendment of this
                 ------------
Work Letter or of any of its conditions or provisions shall be binding upon
Landlord or Tenant unless in writing signed by Landlord and Tenant.

          10.3.  Counterparts. This Work Letter may be executed in any number of
                 ------------
counterparts, each of which shall be deemed an original and all of which, taken
together, shall constitute a single agreement with the same effect as if all
parties had signed the same signature page. Any signature page from any
counterpart of this Work Letter, signed only by one party, may be detached from
such counterpart and re-attached to any other counterpart of this Work Letter
that has a signature page signed only by the other party.

          10.4.  Governing Law. This Work Letter shall be governed by, construed
                 -------------
and enforced in accordance with the internal laws of the state in which the
Premises are located, without regard to choice of law principles of such State.

                                       15
<PAGE>

          10.5.  Time of the Essence. Time is of the essence of this Work Letter
                 -------------------
and of each and all provisions thereof.

          10.6.  Severability. If any term or provision of this Work Letter is
                 ------------
declared invalid or unenforceable, the remainder of this Work Letter shall not
be affected by such determination and shall continue to be valid and
enforceable.

          10.7.  Merger. All understandings and agreements, oral or written,
                 ------
heretofore made between the parties hereto and relating to Landlord's Work are
merged in this Work Letter, which alone (but inclusive of provisions of the
Lease incorporated herein and the final approved constructions drawings and
specifications prepared pursuant hereto) fully and completely expresses the
agreement between Landlord and Tenant with regard to the matters set forth in
this Work Letter.

          10.8.  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 Work Letter or any schedules 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 Work Letter are for convenience only and in no way define,
limit or otherwise describe the scope or intent of this Work Letter, or any
provision hereof, or in any way affect the interpretation of this Work Letter.

          10.9.  Attorneys Fees. If either Landlord or Tenant reasonably seeks
                 --------------
legal services with respect to the proper interpretation or enforcement of this
Work Letter, the party receiving substantially the result it sought or defended
(the "PREVAILING PARTY"), whether by award, judgment, stipulation, settlement,
workout, default, or otherwise and whether or not any legal action may have been
instituted or instituted and then voluntarily dismissed, shall be entitled to
recover from the adverse party all reasonable fees and costs incurred by the
Prevailing Party in connection with such legal services ("LEGAL FEES"). Legal
Fees include, without limitation, (i) fees, costs, and expenses of any
engineers, accountants, appraisers, consultants, brokers, and other
professionals or experts retained or consulted by the Prevailing Party, and
other costs and expenses of investigation or analysis incurred by the Prevailing
Party in support of its position, and (ii) all such fees, costs, and expenses
incurred in any aspect of the legal process, whether out-of-court negotiations,
mediation, arbitration, commencement of suit, discovery, law and motion, trial,
appellate proceedings, or any action or participation in, or in connection with,
any case or proceeding under Chapter 7, 11, or 13 of the Bankruptcy Code, 11
U.S.C. Section 101 et seq., or any successor statutes.

          10.10.  No Third Party Benefits. Landlord and Tenant do not intend by
                  -----------------------
any provision of this Work Letter to confer any right, remedy, or benefit upon
any third party, and no third party shall be entitled to enforce, or otherwise
shall acquire any right, remedy, or benefit by reason of, any provision of this
Work Letter.

          10.11.  No Waiver: Remedies Cumulative. No purported waiver of any
                  ------------------------------
provision of this Work Letter shall be binding unless such waiver is in writing
and signed by the party to

                                       16
<PAGE>

be bound. In addition, no waiver of any provision of this Work Letter shall be
deemed, or shall constitute, a waiver of any other provision of this Work
Letter, whether or not similar, nor shall any waiver constitute a continuing
waiver. Further, no failure to exercise and no delay in exercising any power,
right, remedy, or privilege under this Work Letter shall impair such power,
right, remedy, or privilege or shall be deemed, or shall constitute, a waiver of
any default under this Work Letter or acquiescence therein, nor shall any single
or partial exercise of any such power, right, remedy, or privilege preclude any
other or further exercise thereof or of any other power, right, remedy, or
privilege. Finally, all powers, rights, remedies, and privileges existing under
this Work Letter are cumulative, in addition to, and not exclusive of any other
powers, rights, remedies, or privileges otherwise available to the parties to
this Work Letter.

          10.12.  Incorporation by Reference. All schedules attached hereto are
                  --------------------------
hereby incorporated into this Lease and made a part hereof. If there is any
conflict between such schedules and the terms of this Work Letter, such
schedules shall control.

          10.13.  Entire Agreement. This Work Letter is made as a part of and
                  ----------------
pursuant to the Lease and, together with the Lease, constitutes the entire
agreement of the parties with respect to the subject matter hereof. This Work
Letter is subject to all of the terms and limitation set forth in the Lease, and
neither party shall have any rights or remedies under this Work Letter separate
and apart from their respective remedies pursuant to the Lease.

     IN WITNESS WHEREOF, Landlord and Tenant have executed this Work Letter to
be effective on the date first above written.


                    TENANT:

                    PARADIGM GENETICS, INC.,       (SEAL)
                    a North Carolina corporation


                    By: /s/ Ian Howes
                       --------------------------------
                    Its: Vice President
                        -------------------------------

ATTEST: /s/ John Ryals
       --------------------
Its  Asst. Secretary
   -----------------


[CORPORATE SEAL]

                                       17
<PAGE>

                    LANDLORD:

                    ARE-104 ALEXANDER ROAD, LLC,   (SEAL)
                    a Delaware limited liability company

                    By: ALEXANDRIA REAL ESTATE EQUITIES, L.P.,    (SEAL)
                        a Delaware limited partnership, managing member

                        By: ARE-QRS CORP.,         (SEAL)
                            a Maryland corporation, general partner


                            By:  Joel S. Marcus
                               --------------------------------
                            Its: Chief Executive Officer
                                -------------------------------


ATTEST: /s/ Lynn Anne Shapiro
       ----------------------
Its     Asst. Secretary
       -----------------


[CORPORATE SEAL]

                                       18
<PAGE>

                            SCHEDULE A TO WORK LETTER

                              Development Schedule
                              --------------------


Event                                                              Date
-----                                                              ----

Execution of Ground Lease                                        07/  /99

Execution of Lease                                               07/  /99

Naming of Tenant's Representative                                07/  /99

Delivery of specifications for Building
Design Program pursuant to Section 2.3                           07/  /99

Delivery of specifications for Greenhouse
Design Program pursuant to Section 3.1                           07/  /99

Delivery of final Building
Construction Drawings to Tenant                                  12/15/99

Final approval of Building Construction
Drawings pursuant to Section 4(ii)                               12/31/99

Final approval of Greenhouse Construction
Drawings pursuant to Section 4(u)                                12/31/99

Issuance of Base Building Permit                                 01/01/00

Commencement of
construction of Base Building Work                               01/01/00

Issuance of TI Permit                                            01/01/00

Issuance of Greenhouse Permit                                    01/01/00

Commencement of
construction of Tenant Improvements                              01/01/00

Commencement of
construction of Greenhouse                                       01/01/00

Substantial Completion of Landlord's Work                        06/01/00

Issuance of Temporary Certificate of Occupancy                   06/01/00


                                       i
<PAGE>

                            SCHEDULE B TO WORK LETTER

                               Base Building Work
                               ------------------

================================================================================

Description of Base Building Work - Shell and Core*

 .    Concrete Foundations and Floors
 .    Structural/Steel Frame
 .    Exterior Walls/Facade/Windows
 .    Exterior Doors
 .    Exterior Painting
 .    Roofing/Fireproofing /Caulking and Sealant
 .    Roof Hatch
 .    Shell and Core Mechanical/Plumbing
     (Includes roof drains, hose bibs, main service backflow preventer, garage
     exhaust (if req'd by Code))
 .    Shell and Core Electrical
     (Main electrical switchgear req'd by Code to service shell only, incl.
     req'd safety improvements)
 .    Shell and Core Fire Sprinklers
     (Fire riser to shell for Ordinary Group 2 fire system)
 .    Loading Area/Dock Bumpers
 .    Exit Stairs
     (As req'd by Code)
 .    Related Shell Architectural/Engineering Fees; Building Permit and
     Inspection Fees
 .    Builder's Risk Insurance Premiums


================================================================================

Description of Base Building Work - Site Improvements *

 .    Finished Grading
 .    Finished Landscape and Hardscape Features
 .    Irrigation Systems
 .    Surface Parking and Striping
     (Parking provided at or near a ratio of 3 spaces per 1,000 rentable sq.
     ft., or as req'd by Code)
 .    Exterior Lighting
     (Parking and landscaped areas)
 .    Trash Enclosure
 .    Utilities Stubbed to the Building
     (Sewer, water, natural gas, and electricity)
 .    Fire Hydrants

                                       ii
<PAGE>

 .    ADA Access and Other Improvements Required by Code
 .    Concrete Pad for Tenant's Emergency Generator
 .    Monument Signage
     (Tenant responsible for its lettering and graphics)

* All materials and labor shall comply with Code and be "industry standard" for
the Sub-Market

                                      iii