Document:

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[STRUCTURAL GENOMIX LOGO]
                                                                   EXHIBIT 10.12

April 13, 2001

                                  CONFIDENTIAL

Stelios Papadopoulos
c/o SG Cowen Securities Corporation
1221 Avenue of the Americas, 12th Floor
New York, NY  10020

            RE:  NON-EMPLOYEE DIRECTOR COMPENSATION

Dear Stelios:

Structural GenomiX, Inc. (the "Company") is very happy that you have expressed
an interest in joining our Board of Directors (the "Board"). The Board is
pleased to offer you the position on the Board ("Non-Employee Director"),
effective July 12, 2001 (the "Vesting Commencement Date"), on the following
terms:

Your compensation will be $2,000 for every three (3) months of service as a
Non-Employee Director. The Company will also reimburse reasonable out-of-pocket
expenses, which you incur in connection with your service as a Non-Employee
Director.

Subject to approval by the Board, you will be granted two compensatory stock
options ("Option A" and "Option B") to purchase one hundred twenty thousand
(120,000) shares and sixty thousand shares (60,000), respectively, of the common
stock of the Company (the "Common Stock") under the Company's 2000 Equity
Incentive Plan (the "Incentive Plan"). Both Options will be nonstatutory stock
options and are not intended to qualify as "incentive stock options" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended. The
shares covered by the Options will have an exercise price equal to $0.85 per
share, which represents the fair market value per share of the Common Stock on
the date of grant.

The shares covered by Option A will vest over four (4) years according to the
following schedule: 1/4th of the shares will vest on the first anniversary of
the Vesting Commencement Date and 1/48th of the shares will vest monthly
thereafter for the next three (3) years. The shares covered by Option B will
vest on the sixth anniversary of the Vesting Commencement Date; however, the
vesting on the shares covered by Option B may be accelerated upon the
achievement of certain objectives (e.g., direct involvement in the Company
closing a significant

<PAGE>

Stelios Papadopoulos                                              April 13, 2001
                                                                          Page 2

collaboration, establishment of a relationship with EMBL, etc.), which will be
established by the Board. All vesting of shares covered by Option A and Option B
will cease upon termination of your service as a Non-Employee Director. All
other terms of both Options will be in accordance with the terms and
requirements of the Incentive Plan and the Company's form of stock option
agreement.

Subject to requisite approvals of existing stockholders of the Company, the
Company will also offer to you the opportunity to purchase one hundred thousand
(100,000) shares of Series C Preferred Stock. The purchase price of the shares
will be $8.45 per share.

The Company will cover you under its director and officers liability insurance
both during, and while potential liability exists, after your termination of
service with the Company in the same amount and to the same extent as the
Company covers its other Non-Employee Directors.

In your capacity as a Non-Employee Director of the Company, you will be expected
not to use or disclose any confidential information, including, but not limited
to, trade secrets of any former employer or other person to whom you have an
obligation of confidentiality. Rather, you will be expected to use only that
information which is generally known and used by persons with training and
experience comparable to your own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.

You acknowledge that as a result of your service as a Non-Employee Director you
will obtain confidential information as to the Company and its affiliates and
the Company and its affiliates will suffer substantial damage, which would be
difficult to ascertain, if you should use such confidential information. During
and after your service with the Company, you shall not use for your benefit or
disclose confidential information, knowledge or data relating to the Company and
its affiliates. In the event you disclose confidential information, you
acknowledge that the Company and its affiliates will be caused irreparable
injury and that money damages may not be an adequate remedy and agree that the
Company and its affiliates shall be entitled to injunctive relief (in addition
to its other remedies at law).

The terms of this letter supersede any other agreements or promises made to you
by anyone, whether oral or written.

The Company has exciting opportunities facing it, and we believe that your
experience and background can greatly assist the Company in meeting those
opportunities.

Sincerely,

/s/Tim Harris

Tim Harris, Ph.D.
President and CEO

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                              STELIOS PAPADOPOULOS

May 15, 2001

Dr. Tim Harris
President and CEO
Structural GenomiX
10505 Roselle Street
San Diego, CA 92121

Dear Tim:

I am in receipt of your letter of April 27, 2001, regarding my joining the Board
of Directors of Structural GenomiX. I am honored by the invitation and I am
delighted to accept your offer to join the board on the basis of the terms you
outline in your letter.

Looking forward to a long and productive collaboration,

Sincerely,

/s/Stelios Papadopoulos

Stelios Papadopoulos

                    STRUCTURAL GENOMIX, INC. www.stromix.com
     CORPORATE HEADQUARTERS - 10505 Roselle Street - San Diego, CA 92121 -
                        858.558.4850 - 858.558.4859 fax
                  SGX BEAMLINE - Argonne Nactional Laboratory,
   Bldg. 438A - 9700 S. Cass Avenue, IL 60439-630.252.0820 - 630.252.0835 fax
  SGX SAN FRANCISCO - 525 Brannan Street, Ste. 200 - San Francisco, CA 94107 -
                        415.777.0868 - 415.777.0975 fax<PAGE>
                                                                  EXHIBIT 10.13

Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 1

                                 LEASE AGREEMENT

         THIS LEASE AGREEMENT is made this 20th day of September, 1999, between
ARE-10505 ROSELLE STREET, LLC, a Delaware limited liability company
("LANDLORD"), and PROTARCH, INC., a Delaware corporation ("TENANT").

ADDRESS: 10505 Roselle Street, San Diego, California

PREMISES: The real property described on EXHIBIT A together with the building
containing approximately 17,603 sq. ft. located thereon, and all appurtenances
thereto

SUITE A PREMISES: That portion of the building located on the Premises
containing approximately 7,471 rentable square feet ("RSF") as identified on
EXHIBIT A-1

SUITE B PREMISES: That portion of the building located on the Premises
containing approximately 10,132 RSF as identified on EXHIBIT A-2

BASE RENT:   $1.85 per RSF per month

RENTABLE AREA OF PREMISES:  Approximately 17,603 sq. ft.

SECURITY DEPOSIT:  $130,240

SUITE A PREMISES TARGET COMMENCEMENT DATE:  September 15, 1999

SUITE B PREMISES TARGET COMMENCEMENT DATE:  February 1, 2000

RENT ADJUSTMENT PERCENTAGE:  4.00%

TERM:           48 months from October 1, 1999

PERMITTED USE:  research and development laboratory, office and other related
                uses

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: General Counsel

TENANT'S NOTICE ADDRESS:
10505 Roselle Street
San Diego, California
Attention: President

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

[X] EXHIBIT A - PREMISES DESCRIPTION
[X] EXHIBIT B - SUITE B PREMISES WORK LETTER
[X] EXHIBIT C - COMMENCEMENT DATE    [X] EXHIBIT D - TENANT'S PERSONAL PROPERTY
[X] EXHIBIT E - ESTOPPEL CERTIFICATE [X] EXHIBIT F - NONDISTURBANCE AGREEMENT

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 2

                               EXHIBIT A TO LEASE

                             DESCRIPTION OF PREMISES

That certain real property located in the City of San Diego, County of San
Diego, State of California, having a street address of 10505 Roselle Street,
more particularly described as follows:

                                   [ATTACHED]

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PARCEL 2 OF PARCEL MAP 6427, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, OCTOBER 7, 1977.

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 2

         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.

                  1.1. TERMINATION OF PRIOR LEASE. Landlord and Tenant entered
into that certain Lease Agreement dated as of July 12, 1999 (the "PRIOR LEASE")
pursuant to which Tenant leased a portion of the Premises. Upon the execution of
this Lease, the Prior Lease shall terminate and all rights and obligations
contained therein shall terminate, except for those obligations which explicitly
survive termination. The balance of any Security Deposit previously deposited by
Tenant with Landlord pursuant to the terms of the Prior Lease shall be applied
to the Security Deposit due under the terms of this Lease.

     2. DELIVERY; ACCEPTANCE OF PREMISES; COMMENCEMENT DATE. Landlord shall use
reasonable efforts to deliver the Suite A Premises to Tenant on or before the
Suite A Premises Target Commencement Date and the Suite B Premises to Tenant on
or before the Suite B Premises Target Commencement Date, with Landlord's Work,
if any, Substantially Completed. Landlord's delivery of either the Suite A
Premises or the Suite B Premises with Landlord's Work Substantially Completed
shall be referred to herein as "DELIVERY" or "DELIVER". If Landlord fails to
timely Deliver the Suite A Premises or the Suite B Premises, Landlord shall not
be liable to Tenant for any loss or damage resulting therefrom, and this Lease
shall not be void or voidable except as provided herein. If Landlord does not
Deliver the Suite A Premises or the Suite B Premises within 45 days of the Suite
A Premises Target Commencement Date or the Suite B Premises Target Commencement
Date, as applicable, for any reason other than Tenant Delays, this Lease shall
be voidable by Landlord or Tenant by written notice to the other, and if so
voided by either: (a) so long as Tenant is not in default hereunder, the
Security Deposit and any unearned Base Rent shall be returned to Tenant, and (b)
neither Landlord nor Tenant shall have any further rights, duties or obligations
under this Lease, except with respect to provisions which expressly survive
termination of this Lease. As used herein, the terms "TENANT DELAYS" and
"SUBSTANTIALLY COMPLETED" shall have the meanings set forth for such terms in
the Suite B Premises Work Letter. If neither Landlord nor Tenant elects to void
this Lease within 5 business days of the lapse of such 45 day period, such right
to void this Lease shall be waived and this Lease shall remain in full force and
effect.

         The "COMMENCEMENT DATE" shall be September 15, 1999, regardless of the
date this Lease is executed. The "SUITE B PREMISES RENT COMMENCEMENT DATE" shall
be the earliest of: (i) the date Landlord Delivers the Suite B Premises to
Tenant; (ii) the date Landlord could have Delivered the Suite B Premises but for
Tenant Delays; and (iii) the date Tenant conducts any business in the Suite B
Premises or any part thereof. Upon request of Landlord, Tenant shall execute and
deliver a written acknowledgment of the Commencement Date and the expiration
date of the Term when such are established in the form attached to this Lease as
EXHIBIT C; provided, however, Tenant's failure to execute and deliver such
acknowledgment shall not affect Landlord's rights hereunder.

         Except as set forth in the Suite B Premises Work Letter and that
certain Suite A Premises Work Letter dated as of August 18, 1999 (the "SUITE A
PREMISES WORK LETTER"), if applicable: (i) Tenant shall accept the Premises in
their condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions; (ii) Landlord shall have no
obligation for any defects in the Premises; and (ii) Tenant's taking possession
of the Premises shall be conclusive evidence that Tenant accepts the Premises
and that the Premises were in good condition at the time possession was taken.
Any occupancy of the Premises by Tenant before the Commencement Date shall be
subject to all of the terms and conditions of this Lease, including the
obligation to pay Rent.

         Tenant agrees and acknowledges that neither Landlord nor any agent of
Landlord has made any representation or warranty with respect to the condition
of any or all of the Premises, and/or the suitability of the Premises for the
conduct of Tenant's business, and Tenant waives any implied warranty that the
Premises 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 which are not contained herein. Landlord in
executing this Lease does so in reliance upon Tenant's representations,
warranties, acknowledgments and agreements contained herein.

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 3

         3. RENT.

         (a) BASE RENT. The first month's Base Rent and the Security Deposit
(less the balance of any Security Deposit previously deposited with Landlord
pursuant to the Prior Lease) shall be due and payable on delivery of an executed
copy of this Lease to Landlord. Tenant shall pay to Landlord in advance, without
demand, abatement (except as specifically provided for in Section 18), deduction
or set-off, 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 designate in
writing. Payments of Base Rent for any fractional calendar month shall be
prorated and paid on the basis of a 30 day month. 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 due hereunder except for any abatement as
may be expressly provided in this Lease. Notwithstanding anything to the
contrary contained herein, Base Rent with respect to the Suite B Premises shall
not be payable until the Suite B Premises Rent Commencement Date.

         (b) ADDITIONAL RENT. In addition to Base Rent, Tenant agrees to pay to
Landlord as additional rent ("ADDITIONAL RENT"): (i) "Operating Expenses," 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 on each annual
anniversary of the first day of the first full month following the Commencement
Date during the Term of this Lease by multiplying the Base Rent payable
immediately before such adjustment by the Rent Adjustment Percentage and adding
the resulting amount to the Base Rent payable immediately before such
adjustment. Base Rent, as so adjusted, shall thereafter be due as provided
herein. Base Rent adjustments for any fractional calendar month shall be
prorated.

         5. OPERATING EXPENSE PAYMENTS. Landlord shall deliver to Tenant a
written estimate of Operating Expenses for each calendar year during the Term in
reasonable detail by the type of expense (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 the annual cost, as reasonably estimated by
Landlord from time to time, of Operating Expenses. 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 by Landlord with respect to the
Premises (including Taxes, reasonable reserves consistent with good business
practice for future replacements of capital items, capital repairs and
improvements amortized over the lesser of 7 years and the useful life of such
capital items and the costs of Landlord's third party property manager or, if
there is no third party property manager, administration rent in the amount of
3.0% of Base Rent), excluding only:

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

         (b)      completing, fixturing, improving, renovating, painting,
                  redecorating or other work, which Landlord pays for or
                  performs for tenants within the Premises and costs of
                  correcting defects in such work;

         (c)      capital expenditures for expansion of the Premises;

         (d)      ground lease payments, interest, financing costs and
                  amortization of funds borrowed by Landlord, whether secured or
                  unsecured;

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 4

         (e)      depreciation of the Premises (except for capital improvements,
                  the cost of which are includable in Operating Expenses);

         (f)      advertising, legal and space planning expenses, leasing
                  commissions and other costs and expenses incurred in procuring
                  tenants for the Premises, including any leasing office
                  maintained in the Premises;

         (g)      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 Premises;

         (h)      any expenses otherwise includable within Operating Expenses to
                  the extent intended to be reimbursed by persons other than
                  Tenant;

         (i)      costs relating to maintaining Landlord's existence, either as
                  a corporation, partnership, or other entity;

         (j)      costs (including attorneys' fees and costs of settlement,
                  judgments and payments in lieu thereof) arising from claims,
                  disputes or potential disputes pertaining to Landlord, but not
                  the Premises, or from Landlord's failure to make any payment
                  required to be made by Landlord hereunder before delinquency;

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

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

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

         (n)      costs incurred in the sale or refinancing of the Premises;

         (o)      net income, franchise, capital stock, estate or inheritance
                  taxes;

         (p)      costs of repairs and other work due to fire, windstorm, or
                  other casualty to the extent of any net insurance recovery;

         (q)      costs of correcting any building code or other violations
                  which were violations prior to the Commencement Date of this
                  Lease; and

         (r)      costs incurred by Landlord due to the violation by Landlord,
                  its employees, agents or contractors of any Legal Requirement.

         Within 90 days after the end of each calendar year (or such longer
period as may be reasonably required), Landlord shall furnish to Tenant a
statement (an "ANNUAL STATEMENT") showing in reasonable detail: (a) the total
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 actual
Operating Expenses for such year exceed Tenant's payments of Operating Expenses
for such year, the excess shall be immediately due and payable by Tenant as
Rent. If Tenant's payments of Operating Expenses for such year exceed actual
Operating Expenses for such year Landlord shall, in its sole and absolute
discretion, either: (i) credit the excess amount to the next succeeding
installments of Operating Expenses due hereunder, or (ii) pay the excess to
Tenant within 30 days after delivery of such Annual Statement, except that after
expiration, or earlier termination of the Term, Landlord shall pay the excess to
Tenant after deducting all other amounts due Landlord.

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 5

         The Annual Statement shall be final and binding upon Tenant unless
Tenant, within 30 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 30 day period, Tenant reasonably and in
good faith questions or contests the correctness of Landlord's statement of
Operating Expenses, Landlord will provide Tenant with access to Landlord's books
and records relating to the operation of the Premises and such information as
Landlord reasonably determines to be responsive to Tenant's questions. If after
Tenant's review of such information, Landlord and Tenant cannot agree upon the
amount of Operating Expenses, then Tenant shall have the right to have an
independent public accounting firm selected from among the 6 largest in the
United States, hired by Tenant (at Tenant's sole cost and expense) and approved
by Landlord (which approval shall not be unreasonably withheld or delayed),
audit and/or review Landlord's books and records relating to the operation of
the Premises and such other information relating to the operation of the
Premises for the year in question (the "INDEPENDENT REVIEW"). The results of any
such Independent Review shall be binding on Landlord and Tenant. If the
Independent Review shows that the Operating Expenses actually paid by Tenant for
the calendar year in question exceeded Tenant's obligations 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 expiration or earlier termination of the Term, Landlord shall pay the
excess to Tenant after deducting all other amounts due Landlord. If the
Independent Review shows that Tenant's payments of Operating Expenses for such
calendar year were less than Tenant's obligation for the calendar year, Tenant
shall pay the deficiency to the Landlord within 30 days after delivery of such
statement. If the Independent Review shows that Tenant has overpaid Operating
Expenses by more than 10% 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 pay the same begins and ends
shall be prorated.

         Base Rent, Operating Expenses and all other amounts payable by Tenant
to Landlord hereunder are collectively referred to herein as "RENT".

         6. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord 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, 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 the balance remaining, if any,
after Tenant's obligations under this Lease have been completely fulfilled shall
be paid to Tenant. 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. If Tenant shall fully perform
every provision of this Lease to be performed by Tenant, the Security Deposit,
or any balance thereof, shall be returned to Tenant (or, at Landlord's option,
to the last assignee of Tenant's interest hereunder) within 60 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 and for lawful purposes incidental thereto,
all in compliance with all laws, orders, judgments, ordinances, regulations,
codes, directives, permits, licenses, covenants and restrictions now

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 6

or hereafter applicable to the Premises, and the use and occupancy thereof
(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 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 or other tenants
or occupants of the Premises, 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 not
place any machinery or equipment weighing 500 pounds or more in or upon the
Premises or transport or move such items within the Premises or in the elevators
without the prior written consent of Landlord. Except as may be provided under
the Suite A Premises Work Letter and Suite B Premises 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 Premises. Landlord
shall be responsible for the compliance of the exterior of the Premises,
including access requirements, with the Americans With Disabilities Act, 42
U.S.C. Section 12101, et seq. (together with regulations promulgated pursuant
thereto, "ADA") as of the Commencement Date. Tenant, at its sole expense, shall
make any alterations or modifications, to the interior or exterior of the
Premises, that are required by Legal Requirements (including, without
limitation, compliance of the interior of the Premises with the ADA as of the
Commencement Date) related to Tenant's use or occupancy of the Premises.
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 Tenant to comply with the requirements of this Section.

         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. No holding over by 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 Term Expiration Date 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

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this Lease and/or from the rental by Landlord of the Premises or any portion
thereof, or (ii) based on the square footage, assessed value or other measure or
evaluation of any kind of the Premises, or (iii) assessed or imposed by or on
the operation or maintenance of any portion of the Premises, including parking,
or (iv) assessed or imposed on the Premises or the rent payable to Landlord
under this Lease and/or from the rental by Landlord of the Premises or any
portion thereof 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 Premises. 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 or any corporate, franchise,
value-added, inheritance or similar taxes imposed on Landlord unless such 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 Premises 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 Premises,
Landlord shall have the right, but not the obligation, to pay such Taxes.
Landlord's reasonable 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 18 cars prior to the
Suite B Premise Commencement Date, and an aggregate of 42 cars thereafter (2.4
cars per 1,000 RSF of the Premises), in those areas designated for parking
subject in each case to Landlord's rules and regulations.

         11. UTILITIES, SERVICES.

                  Tenant shall pay directly to the utility 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
Premises is plumbed for such services), refuse and trash collection and
janitorial services furnished to the Premises (collectively, "UTILITIES"). No
interruption or failure of Utilities, from any cause whatsoever other than
Landlord's willful misconduct, 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 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 ("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. Tenant shall be allowed to make alterations, additions or improvements
to the Premises without Landlord's prior consent provided that such alterations,
additions, or improvements do not exceed $25,000 in cost in any 12 month period
and do not affect the structure or building systems. If Landlord approves any
Alterations, Landlord may impose such 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

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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 an amount equal to
10% of all charges incurred by Tenant or its contractors or agents in connection
with any Alteration to cover Landlord's overhead and expenses for plan review,
coordination, scheduling and supervision (and no charge in respect of such
services shall be included in Operating Expenses). 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 Alteration work free and
clear of liens, and shall provide certificates of insurance for worker's
compensation and other coverage in amounts and from an insurance company
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) a general contractor's
affidavit 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 in excess of $10,000.

         Other than (i) the items, if any, listed on EXHIBIT D attached hereto
and, (ii) any items agreed by Landlord in writing to be included on EXHIBIT D 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 Suite A
Premises Work Letter and Suite B Premises Work Letter) which may be removed
without material damage to the Premises, which damage shall be repaired 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 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 system, 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 following the expiration or earlier termination
of this Lease; provided, however, that Landlord shall, at the time its approval
of such Installation is requested notify Tenant if it has elected to cause
Tenant to remove such Installation upon the expiration or earlier termination of
this Lease. If Landlord so elects, 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.

         Subject to the provisions of Section 15 herein, Landlord agrees (i)
that Tenant shall have the right, at its discretion, to hypothecate Tenant's
trade fixtures, equipment and other personal property within the Premises as
security for its obligations under any equipment lease or other financing
arrangement related to the conduct of Tenant's business, and (ii) to execute
within 10 business days of delivery to Landlord or as soon as reasonably
possible thereafter documentation reasonably required to waive any rights
Landlord may have in and to any such personal property, including trade fixtures
and equipment, which Tenant may wish to lease or finance.

         13. LANDLORD'S REPAIRS. Landlord shall maintain the exterior and
structural portions of the Premises, including the foundation, floor slab, roof
and curtain walls, in good repair, reasonable wear and tear and uninsured losses
and damages caused by Tenant, its agents, servants, employees, invitees and
contractors excluded. Losses and damages caused by Tenant, its agents, servants,
employees, invitees and contractors shall be repaired by Landlord, to the extent
not covered by insurance, at Tenant's sole

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cost and expense. Landlord shall have no responsibility or liability for any
maintenance, repair or interruption of Utility services from any cause
whatsoever, all of which shall be Tenant's responsibility pursuant to Section 14
hereof. 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 it 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.

         14. TENANT'S REPAIRS. Subject to Section 13 hereof, Tenant, at its
expense, shall repair, replace and maintain in good condition all interior
portions of the Premises, including, without limitation, entries, doors,
ceilings, interior windows, interior walls, the interior side of demising walls,
and all Utility systems including HVAC, plumbing, fire sprinklers, elevators and
all other building systems serving the Premises using contractors under service
agreements approved by Landlord. 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 commence cure of such default within 10 business 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 business 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 Premises that results from
damage caused by Tenant, its agents, contractors, or invitees 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 for work claimed to have been done
for, or materials claimed to have been furnished to, Tenant within 10 days after
the filing thereof, at Tenant's sole cost and shall otherwise keep the Premises
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 Premises 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 Premises 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 or 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 Premises or of any other third party.

         17. INSURANCE. Landlord shall maintain all insurance against any peril
generally included within the classification "Fire and Extended Coverage,"
sprinkler damage (if applicable), vandalism and malicious mischief covering the
full replacement cost of the Premises or such lesser coverage amount as

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Landlord may elect provided such coverage amount is not less than 90% of such
full replacement cost. Landlord shall further carry commercial general liability
insurance with a single loss limit of not less than $2,000,000 for death or
bodily injury, or property damage with respect to the Premises. 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 (if earthquake coverage is available at commercially
reasonable rates), loss or failure of building equipment, errors and omissions,
rental loss during the period of repair or rebuilding, workmen's 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 Premises. All such insurance shall be
included as part of the Operating Expenses. The Premises may be included in a
blanket policy (in which case the cost of such insurance allocable to the
Premises will be determined by Landlord based upon the insurer's cost
calculations). Tenant shall also reimburse Landlord for any increased premiums
or additional insurance which Landlord reasonably deems necessary as a result of
Tenant's use of the Premises.

         Tenant, at its sole cost and expense, shall maintain during the Term:
all risk property insurance covering the full replacement cost of all property
and improvements installed or placed in the Premises by Tenant at Tenant's
expense; worker's compensation insurance with no less than the minimum limits
required by law; employer's liability insurance with such limits as required by
law; and commercial general liability insurance, with a minimum limit of not
less than $2,000,000 per occurrence for death or bodily injury and not less than
$1,000,000 for property damage with respect to the Premises. The commercial
general liability insurance policies shall name Landlord, its officers,
directors, employees, managers, agents, invitees and contractors (collectively,
"RELATED PARTIES"), as additional insureds; insure on an occurrence and not a
claims-made basis; 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 XII in "Best's Insurance Guide"; shall not be cancelable unless 30 days
prior written notice shall have been given to Landlord from the insuror; 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's
policy may be a "blanket policy" which specifically provides that the amount of
insurance shall not be prejudiced by other losses covered by the policy. Tenant
shall, at least 20 days prior to the expiration of such policies, furnish
Landlord with renewals or binders. Tenant agrees that if Tenant does not take
out and maintain such insurance, Landlord may (but shall not be required to)
procure said insurance on Tenant's behalf and at its cost to be paid as
Additional Rent.

         In each instance where insurance is to name Landlord as 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 Premises or any portion
thereof, (ii) the landlord under any lease wherein Landlord is tenant of the
real property on which the Premises is located, if the interest of Landlord is
or shall become that of a tenant under a ground lease rather than that of a fee
owner, and/or (iii) any management company retained by Landlord to manage the
Premises.

         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 Related
Parties, in connection with any loss or damage thereby insured against. 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, 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 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 from time to time require reasonable increases in
insurance policy limits or such increases as are necessary to conform with
requirements of Landlord's lender.

         18. RESTORATION. If at any time during the Term the Premises are
damaged by a fire or other insured casualty, Landlord shall notify Tenant as
soon as reasonably possible, but in any event within 60 days after discovery of
such damage as to the amount of time Landlord reasonably estimates it will take
to restore the Premises. If the restoration time is estimated to exceed 9
months, Landlord may, in such notice, elect to terminate this Lease as of the
date that is 75 days after the date of discovery of such damage or destruction;
provided, however, that if Landlord estimates the restoration period to be
greater than 9 months, then notwithstanding Landlord's election to restore the
Premises, Tenant may elect to terminate this Lease by written notice to Landlord
delivered within 5 business days of receipt of Landlord's notice electing to
restore the Premises. Unless either Landlord or Tenant elects to terminate this
Lease, Landlord shall, subject to receipt of sufficient insurance proceeds (with
any deductible to be treated as a current Operating Expense; provided, however
that with respect to the deductible for earthquake insurance the maximum amount
included in current Operating Expenses shall be 5% of the replacement value of
the Premises), 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 or
quasi-governmental agency having jurisdiction over the use, storage, release or
removal of Hazardous Materials 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 9 months from the date of damage or destruction, 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 such 9 month 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 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.

         Tenant, at its expense, shall promptly perform, subject to delays
arising from the collection of insurance proceeds, from Force Majeure events or
to obtain Hazardous Material Clearances, all repairs or restoration to Tenant's
Alterations, personal property and trade fixtures 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, Landlord or Tenant
may terminate this Lease if the Premises are damaged during the last year of the
Term and Landlord reasonably estimates that it will take more than 3 months to
repair such damage, or if insurance proceeds are not available for such
restoration, by written notice to the other party delivered within 5 business
days of receipt of Landlord's notice to Tenant of such damage. 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, 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, 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,
the parties hereto expressly agreeing this Section 18 sets forth their entire
understanding and agreement with respect to such matters.

         19. CONDEMNATION. If any part of the Premises 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 Premises, then
upon written notice by Landlord or Tenant this

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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 as nearly as is commercially
reasonable under the circumstances to their condition prior to such partial
taking 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.

         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 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.

         (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 of any lien placed upon the Premises in violation of this Lease within
10 days after 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 business days after written notice thereof from Landlord to Tenant.

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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 10 days to cure,
then Tenant shall not be deemed to be in default if Tenant commences such cure
within said 10 day period and thereafter diligently prosecutes the same to
completion; provided, however, that such cure shall be completed no later than
60 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.

         (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 upon notice from Landlord shall pay to Landlord an additional sum of
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 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

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                           (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, reasonable
                  expenses of remodeling the Premises or any portion thereof for
                  a new tenant and any special concessions reasonably 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.

         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. 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, 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' 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
and any attempt to do any of the foregoing shall be void and of no effect. If
Tenant is a corporation, the shares of which are not actively traded upon a
stock exchange or in the over-the-counter market, a transfer or series of
transfers whereby 25% or more of the issued and outstanding shares of such
corporation are, or voting control is, transferred (but excepting transfers upon
deaths of individual shareholders and transfers in connection with one or more
public or private offerings of the capital stock of Tenant for the purpose of
raising capital for Tenant's ongoing operations) from a person or persons or
entity or entities which were owners thereof at time of execution of this Lease
to persons or entities who were not owners of shares of the corporation at time
of execution of this Lease, shall be deemed an assignment of this Lease
requiring the consent of Landlord as provided in this Section 22.

         (b) PERMITTED TRANSFERS. If Tenant desires to assign, sublease,
hypothecate or otherwise transfer this Lease or sublet the Premises, other than
pursuant to a Permitted Assignment (as defined below), 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 or stored in 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 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.

         In addition, Tenant shall have the right to assign this Lease, upon 30
days prior written notice to Landlord but without obtaining Landlord's prior
written consent, to a corporation or other entity which is a
successor-in-interest to Tenant, by way of merger, consolidation or corporate
reorganization, or by the purchase of all or substantially all of the assets or
the ownership interests of the Tenant provided that (i) such merger or
consolidation, or such acquisition or assumption, as the case may be, is for a
good business purpose and not principally for the purpose of transferring the
Lease, and (ii) the net worth (as determined in accordance with generally
accepted accounting principles, consistently applied ("GAAP")) of the assignee
is not less than the net worth (as determined in accordance with GAAP) of Tenant
as of the Effective Date, (iii) such assignee shall agree in writing to assume
all of the terms, covenants and conditions of this Lease arising after the
effective date of the assignment, and (iv) the Rent to be paid by such assignee
to Landlord pursuant to this Lease will be treated as "rents from real property"
under Section 856 of the Internal Revenue Code (a "PERMITTED ASSIGNMENT").

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         (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 or store in the Premises together
         with copies of all documents relating to the handling, storage,
         disposal and emission of Hazardous Materials by the proposed assignee
         or subtenant in the Premises or on the Premises, 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 Premises (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 agencies and
         authorities for any storage tanks installed in, on or under the
         Premises 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 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 RENT. 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) exceeds the rental payable under this Lease, (excluding
however, any Rent payable under this Section), then Tenant shall be bound and
obligated to pay Landlord as Additional Rent hereunder 50% of such excess rental
and other excess consideration 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 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) TERMINATION OF LEASE. 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, or (ii) the proposed assignee or sublessee is subject to an
enforcement order issued by any governmental authority in connection with the
use, disposal or storage of Hazardous Materials, Landlord shall have the
absolute right to refuse to consent to any assignment or subletting to any such
party.

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         23. ESTOPPEL CERTIFICATE. Tenant shall within 10 business days of
written notice from Landlord, execute, acknowledge and deliver a statement in
writing substantially in the form attached to this Lease as EXHIBIT E with the
blanks filled in, and on any other 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 reasonably requested thereon. Any such statement may be
relied upon by any prospective purchaser or encumbrancer of all or any portion
of the real property of which the Premises are a part. Tenant's failure to
deliver such statement within such time shall, at the option of Landlord,
constitute a Default under this Lease, and, in any event, 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. [INTENTIONALLY OMITTED]

         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 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, Tenant's right to possession of the Premises
shall not 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 a Subordination,
Non-disturbance and Attornment Agreement in the form attached hereto as EXHIBIT
F, or such other 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 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 permitted by Landlord
to remain in the Premises, free of Hazardous Materials brought upon, kept or
used in or about the Premise by any person other than Landlord, its agents,
employees, contractors or invitees 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. Tenant shall immediately
return to Landlord all keys and/or access cards to parking, 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

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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 or
used in or about the Premises in violation of applicable law by Tenant, its
agents, employees, contractors or invitees. If Tenant breaches the obligation
stated in the preceding sentence, or if the presence of Hazardous Materials in
or on the Premises during the Term of this Lease results in contamination of the
Premises, or any adjacent property or if contamination of the Premises, or any
adjacent property by Hazardous Materials brought into the Premises by anyone
other than Landlord and Landlord's employees, agents and contractors otherwise
occurs during the term of this Lease or any extension or renewal hereof or
holding over hereunder, Tenant hereby indemnifies and shall defend and hold
Landlord, its officers, directors, employees, agents and contractors harmless
from and against any and all claims, judgments, damages, penalties, fines,
costs, liabilities, or losses (including, without limitation, diminution in
value of the Premises or any portion of the Premises, damages for the loss or
restriction on use of rentable or usable space or of any amenity of the
Premises, damages arising from any adverse impact on marketing of space in the
Premises, and sums paid in settlement of claims, attorneys' fees, charges,
disbursements, consultants' fees and experts' fees) which arise during or after
the Lease 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, remedial, removal,
materials, or restoration work required by any federal, state or local
governmental agency or political subdivision because of Hazardous Materials
present in the repair, soil or ground water above, on, or under the Premises.
Without limiting the foregoing, if the presence of any Hazardous Materials on
the Premises, or any adjacent property, caused or permitted by Tenant results in
any contamination of the Premises, or any adjacent property, Tenant shall
promptly take all actions at its sole expense and in accordance with applicable
law as are necessary to return the Premises, or any adjacent property, as near
to the condition existing prior to the time of such contamination as is
commercially practicable and in no event in a condition which could result in
any violation of any applicable federal, state or local law, rule, regulation or
administrative order or ruling, 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.

         (b) BUSINESS. Landlord acknowledges that it is not the intent of this
Article 30 to prohibit Tenant from using the Premises for the Permitted Use.
Tenant may operate its business according to the custom of the industry so long
as the use or presence of Hazardous Materials is strictly and properly monitored
according to all applicable governmental 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 present on the Premises
and setting forth any and all governmental approvals or permits required in
connection with the presence of such Hazardous Materials on 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(s) is brought onto the Premises. Tenant
shall deliver to Landlord true and correct copies of the following documents
(the "HAZ MAT

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DOCUMENTS") relating to the handling, use, storage, disposal and emission of
Hazardous Materials prior to the Commencement Date, or if unavailable at that
time, concurrent with the receipt from or submission to a governmental agency:
permits; approvals; reports and correspondence; storage and management plans,
notice of violations of any laws; plans relating to the installation of any
underground storage tanks to be installed in or under the Premises (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); and all closure plans or any other documents
required by any and all federal, state and local governmental agencies and
authorities for any storage tanks installed in, on or under the Premises for the
closure of any such tanks. 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 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) neither Tenant nor any of its legal predecessors
has 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 of such
predecessor or resulted from Tenant's or such predecessor'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, disposal or
storage of a Hazardous Materials. 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 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
to determine if contamination has occurred as a result of Tenant's use of the
Premises. 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, without
representation or warranty of, subject to a confidentiality agreement, Tenant
with a copy of all third party, non-confidential reports and tests of the
Premises made by or on behalf of Landlord. Landlord's receipt of or satisfaction
with any environmental assessment in no way waives any rights that Landlord
holds against Tenant.

         (e) UNDERGROUND TANKS. If underground or other storage tanks storing
Hazardous Materials are located on the Premises as of the date hereof and used
at any time by Tenant or are hereafter placed on the Premises by Tenant, its
agents, servants, employees, invitees and contractors, Tenant shall monitor the
storage tanks, maintain appropriate records, implement reporting procedures,
properly close any underground storage tanks, and take or cause to be taken all
other actions necessary or required under applicable state and federal law, as
such now exists or may hereafter be adopted or amended.

         (f) TENANT'S OBLIGATIONS. Tenant's obligations under this Article 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 and the release and termination of any licenses or permits
restricting the use of the Premises, 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) DEFINITION OF "HAZARDOUS MATERIALS." 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

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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, its agents, employees, contractors or
invitees, 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 beneficiary, Holder and/or
landlord a reasonable opportunity to cure the default, including time to obtain
possession of the Premises 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.

         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, and 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. Subject to Tenant's reasonable security and
safety requirements, 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 are 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. Tenant shall at Tenant's cost obtain insurance coverage to the extent
Tenant desires protection against such criminal acts.

         34. FORCE MAJEURE. Landlord shall not be held responsible for delays in
the performance of its obligations hereunder when caused by strikes, lockouts,
labor disputes, weather, natural disasters,

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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 Landlord ("FORCE MAJEURE"). Tenant shall not be held responsible for
delays in the performance of its obligations, excluding Tenant's monetary
obligations or any obligation that may be satisfied by the payment of any
commercially reasonable sum to any person, hereunder when caused by Force
Majeure delays.

         35. BROKERS, ENTIRE AGREEMENT, AMENDMENT. Landlord and Tenant each
represent and warrant 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, other than CB Richard Ellis, Inc. and
John Burnham Real Estate Services, Inc., who will be paid a commission by
Landlord pursuant to a separate agreement. Landlord and Tenant each hereby agree
to indemnify and hold the other harmless from and against any claims by any
other Broker 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. This Lease may not be amended except by an instrument in writing
signed by both parties hereto.

         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 PREMISES, AND 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, EMPLOYEES, AGENTS OR CONTRACTORS. UNDER
NO CIRCUMSTANCES SHALL LANDLORD OR ANY OF LANDLORD'S OFFICERS, 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 terms to such illegal, invalid or unenforceable clause or
provision as may be possible and 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 Premises, (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, (vi) paint, affix or exhibit on
any part of the Premises any signs, notices, window or door lettering, placards,
decorations, or advertising media of any type which can be viewed from the
exterior of the Premises. Interior signs on doors and the directory tablet shall
be inscribed, painted or affixed for Tenant by Landlord at the sole cost and
expense of Tenant, and shall be of a size,

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color and type acceptable to Landlord. Nothing may be placed on the exterior of
corridor walls or corridor doors other than Landlord's standard lettering. The
directory tablet shall be provided exclusively for the display of the name and
location of tenants. Notwithstanding anything contained in this Section to the
contrary, Tenant shall have the right to place one sign ("TENANT'S SIGN") with
Tenant's name on the exterior of the Premises, conforming to the size and design
of signs in the area in which the Premises are located, with the consent of
Landlord, which consent Landlord shall not unreasonably withhold. Tenant shall
be solely responsible for all costs, fees, charges, expense or other sums
related to Tenant's Sign, including without limitation, costs related to (i)
manufacture and installation of Tenant's Sign, (ii) removal of Tenant's Sign
upon the expiration or earlier termination of the Term, (iii) permits required
by any Governmental Authority with respect to Tenant's Sign, and (iv) conforming
Tenant's Sign to Legal Requirements. Tenant acknowledges that Landlord shall
have the right to place a monument sign on the Premises with respect to the
office park in which the Premises are located.

         39. RIGHT TO EXTEND TERM. Tenant shall have the right to extend the
Term of the Lease upon the following terms and conditions:

         (a) EXTENSION RIGHT. Tenant shall have the right ("EXTENSION RIGHT") to
extend the term of this Lease for 3 years ("EXTENSION TERM") on the same terms
and conditions as this Lease by giving Landlord written notice of its election
to exercise the Extension Right at least six months prior to the expiration of
the initial Term of the Lease.

         During the Extension Term, Base Rent shall be payable at the greater
of: (i) the Market Rate (as defined below), and (ii) 104% of the Base Rent
payable during the month immediately preceding the commencement of the Extension
Term. Base Rent shall be increased on each annual anniversary of the
commencement of such Extension Term by 4% of the Base Rent payable during the
last month of the immediately preceding Lease Year. As used herein, "MARKET
RATE" shall mean the then triple net market rental rate as determined by
Landlord and agreed to by Tenant, which shall in no event be less than the Base
Rent payable as of the date immediately preceding the commencement of such
Extension Term increased by the Rent Adjustment Percentage multiplied by such
Base Rent. In addition, to the extent not included in the Market Rate for the
Premises, Landlord may impose a market rent for the parking rights provided
hereunder. If, on or before the date which is 120 days prior to the expiration
of the initial Term of this Lease, Tenant has not agreed with Landlord's
determination of the Market Rate and the rent escalations during such subsequent
Extension Term after negotiating in good faith, Tenant may by written notice to
Landlord elect arbitration as described in Section 39(b) below. If Tenant does
not elect such arbitration, Tenant shall be deemed to have waived any right to
extend, or further extend, the Term of the Lease.

         (b) ARBITRATION.

             i.            Within 10 days of Tenant's notice to Landlord of its
                  election to arbitrate Market Rate and escalations, each party
                  shall deliver to the other a proposal containing the Market
                  Rate and escalations that the submitting party believes to be
                  correct ("EXTENSION PROPOSAL"). If either party fails to
                  timely submit an Extension Proposal, the other party's
                  submitted proposal shall determine the Base Rent for the
                  Extension Term. If both parties submit Extension Proposals,
                  then Landlord and Tenant shall meet within 7 days after
                  delivery of the last Extension Proposal and make a good faith
                  attempt to mutually appoint a single Arbitrator to determine
                  the Market Rate and escalations. If Landlord and Tenant are
                  unable to agree upon a single Arbitrator, then each shall, by
                  written notice delivered to the other within 10 days after the
                  meeting, select an Arbitrator. If either party fails to timely
                  give notice of its selection for an Arbitrator, the other
                  party's submitted proposal shall determine the Base Rent for
                  the Extension Term. The 2 Arbitrators so appointed shall,
                  within 5 business days after their appointment, appoint a
                  third Arbitrator. If the 2 Arbitrators so selected cannot
                  agree on the selection of the third Arbitrator within the time
                  above specified, then either party, on behalf of both parties
                  may request such appointment of such third Arbitrator by
                  application to any state court of general jurisdiction in the
                  jurisdiction in which the Premises are located upon 10 days
                  prior written notice to the other party of such intent.

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            ii.            The decision of the Arbitrator(s) shall be made
                  within 30 days after the appointment of a single Arbitrator or
                  the third Arbitrator, as applicable. The decision of the
                  single Arbitrator shall be final and binding upon the parties.
                  The average of the two closest Arbitrators in a three
                  Arbitrator panel shall be final and binding upon the parties.
                  Each party shall pay the fees and expenses of the Arbitrator
                  appointed by or on behalf of such party and the fees and
                  expenses of the third Arbitrator shall be borne equally by
                  both parties. If the Market Rate and escalations are not
                  determined by the first day of the Extension Term, then Tenant
                  shall pay Landlord Base Rent in an amount equal to the Base
                  Rent in effect immediately prior to the Extension Term and
                  increased by the Rent Adjustment Percentage until such
                  determination is made. After the determination of the Market
                  Rate and escalations, the parties shall make any necessary
                  adjustments to such payments made by Tenant. Landlord and
                  Tenant shall then execute an amendment recognizing the Market
                  Rate and escalations for the Extension Term.

           iii.            An "ARBITRATOR" shall be any person appointed by or
                  on behalf of either party or appointed pursuant to the
                  provisions hereof and: (i) shall be (A) a member of the
                  American Institute of Real Estate Appraisers with not less
                  than 10 years of experience in the appraisal of improved
                  office and high tech industrial real estate in the greater San
                  Diego metropolitan area, or (B) a licensed commercial real
                  estate broker with not less than 15 years experience
                  representing landlords and/or tenants in the leasing of high
                  tech or life sciences space in the greater San Diego
                  metropolitan area, (ii) devoting substantially all of their
                  time to professional appraisal or brokerage work, as
                  applicable, at the time of appointment and (iii) be in all
                  respects impartial and disinterested.

         (c) RIGHTS PERSONAL. The Extension Right is personal to Protarch, Inc.
and is not assignable without Landlord's consent, which may be granted or
withheld in Landlord's sole discretion, except that it may be assigned in
connection with any Permitted Assignment of this Lease.

         (d) EXCEPTIONS. Notwithstanding anything set forth above to the
contrary, the Extension Right shall not be in effect and Tenant may not exercise
the Extension Right:

                  (i) during any period of time that Tenant is in Default under
         any provision of this Lease; or

                  (ii) if Tenant has been in Default under any provision of this
         Lease 3 or more times, whether or not the Defaults are cured, during
         the 12 month period immediately prior to the date that Tenant intends
         to exercise the Extension Right, whether or not the Defaults are cured.

         (e) NO EXTENSIONS. The period of time within which the Extension Right
may be exercised shall not be extended or enlarged by reason of the Tenant's
inability to exercise the Extension Right.

         (f) TERMINATION. The Extension Right shall terminate and be of no
further force or effect even after Tenant's due and timely exercise of the
Extension Right, if, after such exercise, but prior to the commencement date of
the Extension Term, (i) Tenant fails to timely cure any Default by Tenant under
this Lease, or (ii) Tenant has Defaulted 3 or more times during the period from
the date of the exercise of the Extension Right to the date of the commencement
of the Extension Term, whether or not such Defaults are cured.

         40. 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.

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         (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) FINANCIAL INFORMATION. Tenant shall furnish Landlord with true and
complete copies of (i) Tenant's most recent audited annual financial statements,
or unaudited annual financial statements if audited financial statements are not
prepared, within 30 days of the end of each of Tenant's fiscal years during the
Term, (ii) Tenant's most recent quarterly financial statements within 30 days of
the end of each of Tenant's first three fiscal quarters of each of Tenant's
fiscal year during the Term, (iii) at Landlord's request from time to time,
updated business plans, including cash flow projections and/or pro forma balance
sheets and income statements, all of which shall be treated by Landlord as
confidential information belonging to Tenant, (iv) corporate brochures and/or
profiles prepared by Tenant for prospective investors, and (v) any other
financial information or summaries that Tenant typically provides to its lenders
or shareholders. Such information shall be held in confidence by Landlord,
provided that Landlord shall be permitted to disclose such information if
required by applicable laws, regulations or Governmental Authorities, or to
Landlord's employees and consultants who have a need to know such information in
connection with the services rendered to Landlord.

         (d) 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.

         (e) 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.

         (f) NOT BINDING UNTIL EXECUTED. The submission by Landlord to Tenant of
this Lease 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.

         (g) 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, 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.

         (h) 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.

         (i) TIME. Time is of the essence as to the performance of Tenant's
obligations under this Lease.

         (j) 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.

                            [Signature Page Follows]

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Net Single-Tenant Laboratory       10505 Roselle Street/Protarch, Inc. - Page 25

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

                                         TENANT:

                                  PROTARCH, INC.,
                                  a Delaware corporation

                                  By:  /s/ Tim Harris
                                       ---------------------------------
                                  Its: President & CEO
                                       ---------------------------------

                                  LANDLORD:

                                  ARE-10505 ROSELLE STREET, LLC,
                                  a Delaware limited liability company

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

                                       By:  ARE-QRS CORP.,
                                            a Maryland corporation,
                                            its general partner

                                  By:  /s/ Lynn Anne Shapiro
                                       ----------------------------------
                                  Its: General Counsel
                                       ----------------------------------

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 1

                              EXHIBIT A-1 TO LEASE

                         DESCRIPTION OF SUITE A PREMISES

                                   [ATTACHED]

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                                  EXHIBIT A-1

                            (ROSELLE STREET GRAPHIC)

<PAGE>

Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 1

                              EXHIBIT A-2 TO LEASE

                         DESCRIPTION OF SUITE B PREMISES

                                   [ATTACHED]

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Net Single-Tenant Laboratory        10505 Roselle Street/Protarch, Inc. - Page 2

                            (ROSELLE STREET GRAPHIC)

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 1

                               EXHIBIT B TO LEASE

                          SUITE B PREMISES WORK LETTER

         THIS WORK LETTER dated September 20, 1999 (this "WORK LETTER") is made
and entered into by and between ARE-10505 ROSELLE STREET, LLC, a Delaware
limited liability company ("LANDLORD"), and PROTARCH, INC., a Delaware
corporation ("TENANT"), with respect to the Suite B Premises, and is attached to
and made a part of the Lease dated September 20, 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.

1.                GENERAL REQUIREMENTS

         1.1      TENANT'S AUTHORIZED REPRESENTATIVE. Tenant designates Tim
                  Harris ("TENANT'S REPRESENTATIVE") as the only person
                  authorized to act for Tenant pursuant to this Work Letter.
                  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
                  from Tenant's Representative. Tenant may change Tenant's
                  Representative at any time upon not less than 5 business days
                  advance written notice to Landlord. No period set forth herein
                  for any approval of any matter by Tenant's Representative
                  shall be extended by reason of any change in Tenant's
                  Representative. Neither Tenant nor Tenant's Representative
                  shall be authorized to direct Landlord's contractors in the
                  performance of Landlord's Work (as hereinafter defined).

         1.2      LANDLORD'S AUTHORIZED REPRESENTATIVE. Landlord designates
                  Jeffrey Ryan ("LANDLORD'S REPRESENTATIVE") as the only person
                  authorized to act for Landlord pursuant to this Work Letter.
                  Tenant shall not be obligated to respond to or act upon any
                  request, approval, inquiry or other Communication from or on
                  behalf of Landlord in connection with this Work Letter unless
                  such Communication is in writing from Landlord's
                  Representative. Landlord may change Landlord's Representative
                  at any time upon not less than 5 business days advance written
                  notice to Tenant. No period set forth herein for any approval
                  of any matter by Landlord's Representative shall be extended
                  by reason of any change in Landlord's Representative.
                  Landlord's Representative shall be the sole person authorized
                  to direct Landlord's contractors in the performance of
                  Landlord's Work.

         1.3      DEVELOPMENT SCHEDULE. The schedule for design and development
                  of the Tenant Improvements (as defined below), including
                  without limitation the time periods for delivery of
                  construction documents and performance, 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").

         1.4      ARCHITECTS, CONSULTANTS AND CONTRACTORS. Landlord and Tenant
                  hereby acknowledge and agree that: (i) Landlord shall select
                  the architect (the "TI ARCHITECT") for the Tenant
                  Improvements, and (ii) the general contractor and any
                  subcontractors for the Tenant Improvements shall be selected
                  by Landlord, subject to Tenant's approval, which approval
                  shall not be unreasonably withheld, conditioned or delayed.

2.                TENANT IMPROVEMENTS.

         2.1      TENANT IMPROVEMENTS DEFINED. As used herein, "TENANT
                  IMPROVEMENTS" shall mean all improvements to the Suite B
                  Premises desired by Tenant of a fixed and permanent nature.
                  Other than funding the TI Allowance (as defined below) as
                  provided herein, Landlord shall not have any obligation
                  whatsoever with respect to the finishing of the Suite B
                  Premises for Tenant's use and occupancy.

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Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 2

         2.2      TENANT'S SPACE PLANS. Tenant shall deliver to Landlord and the
                  TI Architect schematic drawings and outline specifications
                  (the "TI DESIGN DRAWINGS") detailing Tenant's requirements for
                  the Tenant Improvements within 5 business days of the date
                  hereof. Not more than 5 business days thereafter, Landlord
                  shall deliver to Tenant the written objections, questions or
                  comments of Landlord and the TI Architect with regard to the
                  TI Design Drawings. Tenant shall cause the TI Design Drawings
                  to be revised to address such written comments and shall
                  resubmit said drawings to Landlord for approval within 5
                  business days thereafter. Such process shall continue until
                  Landlord has approved the TI Design Drawings.

         2.3      WORKING DRAWINGS. Not later than 5 business days following the
                  approval of the TI Design Drawings by Landlord, Landlord shall
                  cause the TI Architect to prepare and deliver to Tenant for
                  review and comment construction plans, specifications and
                  drawings for the Tenant Improvements ("TI CONSTRUCTION
                  DRAWINGS"), which TI Construction Drawings shall be prepared
                  substantially in accordance with the TI Design Drawings.
                  Tenant shall be solely responsible for ensuring that the TI
                  Construction Drawings reflect Tenant's requirements for the
                  Tenant Improvements. Tenant shall deliver its written comments
                  on the TI Construction Drawings to Landlord not later than 5
                  business days after Tenant's receipt of the same; provided,
                  however, that Tenant may not disapprove any matter that is
                  consistent with the TI Design Drawings without submitting a
                  Change Request. Landlord and the TI Architect shall consider
                  all such comments in good faith and shall, within 5 business
                  days after receipt, notify Tenant how Landlord proposes to
                  respond to such comments, but Tenant's review rights pursuant
                  to the foregoing sentence shall not delay the design or
                  construction schedule for the Tenant Improvements. Any
                  disputes in connection with such comments shall be resolved in
                  accordance with Section 2.4 hereof. Provided that the design
                  reflected in the TI Construction Drawings is consistent with
                  the TI Design Drawings, Tenant shall approve the TI
                  Construction Drawings submitted by Landlord, unless Tenant
                  submits a Change Request. Once approved by Tenant, subject to
                  the provisions of Section 2.4 below, Landlord shall not
                  materially modify the TI Construction Drawings except as may
                  be reasonably required in connection with the issuance of the
                  TI Permit.

         2.4      APPROVAL AND COMPLETION. It is hereby acknowledged by Landlord
                  and Tenant that the TI Construction Drawings must be completed
                  and approved not later than October 15, 1999, in order for the
                  Tenant Improvements to be Substantially Complete by the Suite
                  B Premises Target Commencement Date. Upon any dispute
                  regarding the design of the Tenant Improvements, which is not
                  settled within 5 business days after notice of such dispute is
                  delivered by one party to the other, Tenant shall make the
                  final decision regarding the design of the Tenant
                  Improvements, provided Tenant acts reasonably and such final
                  decision is either consistent with or a compromise between
                  Landlord's and Tenant's positions with respect to such
                  dispute, provided further that all costs and expenses
                  resulting from any such decision by Tenant shall be payable
                  out of the TI Fund, as defined in Section 5.4 below. Any
                  changes to the TI Construction Drawings following Landlord's
                  and Tenant's approval of same requested by Tenant shall be
                  processed as provided in Section 4 hereof.

3.                PERFORMANCE OF LANDLORD'S WORK.

         3.1      DEFINITION OF LANDLORD'S WORK. As used herein, "LANDLORD'S
                  WORK" shall mean the work of constructing the Tenant
                  Improvements.

         3.2      COMMENCEMENT AND PERMITTING OF LANDLORD'S WORK. Landlord shall
                  commence construction of the Tenant Improvements upon
                  obtaining a building permit (the "TI PERMIT") authorizing the
                  construction of the Tenant Improvements consistent with the TI
                  Construction Drawings approved by Tenant. The cost of
                  obtaining the TI Permit shall be payable from the TI Fund.
                  Tenant shall assist Landlord in obtaining the TI Permit. If
                  any Governmental Authority having jurisdiction over the
                  construction of Landlord's Work or

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 3

                  any portion thereof shall impose terms or conditions upon the
                  construction thereof which: (i) are inconsistent with
                  Landlord's obligations hereunder, (ii) increase the cost of
                  constructing Landlord's Work, or (iii) will materially delay
                  the construction 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 and conditions.

         3.3      COMPLETION OF LANDLORD'S WORK. On or before the Suite B
                  Premises Target Commencement Date (subject to Tenant Delays
                  and Force Majeure Delays), Landlord shall substantially
                  complete or cause to be substantially completed Landlord's
                  Work in a good and workmanlike manner, in accordance with the
                  TI Permit subject, in each case, to Minor Variations and
                  normal "punch list" items of a non-material nature which do
                  not interfere with the use of the Suite B Premises
                  ("SUBSTANTIAL COMPLETION"). Upon the Substantial Completion of
                  Landlord's Work, Landlord shall require the TI Architect and
                  the general contractor 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 and/or to
                  obtain or to comply with any required permit (including the TI
                  Permit); (ii) to comply with any request by the Tenant for
                  modifications to Landlord's Work; (iii) to comport with good
                  design, engineering, and construction practices which are not
                  material; or (iv) to make reasonable adjustments for field
                  deviations or conditions encountered during the construction
                  of Landlord's Work.

         3.4      SELECTION OF MATERIALS, ETC. Where more than one type of
                  material or structure is indicated on the TI Construction
                  Drawings approved by Landlord and Tenant, the option will be
                  within Landlord's sole discretion. As to all building
                  materials and equipment which Landlord is obligated to supply
                  under this Work Letter, Landlord shall select the manufacturer
                  thereof in its sole discretion.

         3.5      DELIVERY OF THE SUITE B PREMISES. When Landlord's Work is
                  Substantially Complete, subject to the remaining terms and
                  provisions of this Section 3.5, Tenant shall accept the Suite
                  B Premises. Tenant's taking possession and acceptance of the
                  Suite B Premises shall not constitute a waiver of: (i) any
                  warranty with respect to workmanship (including installation
                  of equipment) or material (exclusive of equipment provided
                  directly by manufacturers), (ii) any non-compliance of
                  Landlord's Work with applicable building codes, or (iii) any
                  claim that Landlord's Work was not completed substantially in
                  accordance with the TI Construction Drawings (subject to Minor
                  Variations and such other changes as are permitted hereunder)
                  (collectively, a "CONSTRUCTION DEFECT"). Tenant shall have one
                  (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 sixty (60) days thereafter. Notwithstanding the
                  foregoing, Landlord shall not be in default under the Lease if
                  the applicable contractor, despite Landlord's reasonable
                  efforts, fails to remedy such Construction Defect within such
                  sixty (60) 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.

Tenant shall be entitled to receive the benefit of all construction warranties
and manufacturer's equipment warranties relating to equipment installed in the
Suite B Premises. If requested by Tenant, Landlord shall attempt to obtain
extended warranties from manufacturers and suppliers of such equipment, but the
cost of any such extended warranties shall be borne solely out of the TI Fund.
Landlord shall diligently pursue any claims arising out of latent defects in the
Tenant Improvements. Landlord shall promptly undertake and complete, or cause to
be completed, all punch list items.

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 4

         3.6      COMMENCEMENT DATE DELAY. The Suite B Premises shall be
                  Delivered when Landlord's Work has been Substantially
                  Completed, except to the extent that completion of Landlord's
                  Work shall has been actually delayed by any one or more of the
                  following causes (a "TENANT DELAY"):

                  a.     Tenant's Representative was not available to give or
                         receive any Communication or to take any other action
                         required to be taken by Tenant hereunder;

                  b.     Tenant's request for Change Requests whether or not any
                         such Change Requests are actually performed;

                  c.     Construction of any Change Requests;

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

                  e.     Tenant's delay in reviewing, revising or approving
                         plans and specifications beyond the periods set forth
                         herein;

                  f.     Tenant's delay in providing information critical to the
                         normal progression of the project. Tenant shall provide
                         such information as soon as reasonably possible, but in
                         no event longer than one week after receipt of any
                         request for such information from Landlord;

                  g.     Tenant's delay in making payments to Landlord for
                         Excess TI Costs; or

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

If the Delivery of the Suite B Premises is delayed for any of the foregoing
reasons, then Landlord shall cause the TI Architect to certify the date on which
the Tenant Improvements would have been completed but for such Tenant Delay and
such certified date shall be the date of Delivery of the Suite B Premises under
the Lease.

4.                CHANGES. Any changes requested by Tenant to the Tenant
         Improvements after the delivery and approval by Landlord of the TI
         Design Drawings, shall be requested and instituted in accordance with
         the provisions of this Section 4 and shall be subject to the written
         approval of Landlord and the TI Architect, such approval not to be
         unreasonably withheld, conditioned or delayed.

         4.1      TENANT'S RIGHT TO REQUEST CHANGES. If Tenant shall request
                  changes to Landlord's Work ("CHANGES"), Tenant shall request
                  such Changes by notifying Landlord in writing 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. Such Change Request must be signed
                  by Tenant's Representative. Landlord shall, before proceeding
                  with any Change, use its best efforts to respond to Tenant as
                  soon as is reasonably possible with an estimate of: (i) the
                  time it will take, and (ii) the architectural and engineering
                  fees and costs which will be incurred to analyze such Change
                  Request (which costs shall be paid from the TI Fund to the
                  extent actually incurred, whether or not such change is
                  implemented). Landlord shall thereafter submit to Tenant in
                  writing, within 5 business days of receipt of the Change
                  Request (or such longer period of time as is reasonably
                  required depending on the extent of the Change Request), an
                  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 Delay.

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 5

         4.2      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 TI Costs (as defined below) required
                  in connection with such Change, 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 TI Architect's determination of
                  the amount of Tenant Delay in connection with such Change
                  shall be final and binding on Landlord and Tenant.

5.                COSTS

         5.1      BUDGET FOR TENANT IMPROVEMENTS. Before the commencement of
                  construction of the Tenant Improvements, Landlord shall obtain
                  a detailed breakdown, by trade, of the costs incurred or which
                  will be incurred, in connection with the design and
                  construction of Landlord's Work (the "BUDGET"). The Budget
                  shall be based upon the TI Construction Drawings approved by
                  Tenant and shall include a payment to Landlord, of
                  administrative rent ("ADMINISTRATIVE RENT") equal to 5% of the
                  TI Costs (as hereinafter defined) for monitoring and
                  inspecting the construction of Landlord's Work, which sum
                  shall be payable from the TI 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 monitoring of the
                  construction of the Tenant's Improvements, and shall be
                  payable out of the TI Fund. If the Budget is greater than the
                  TI Allowance, Tenant shall deposit with Landlord the
                  difference, in cash, prior to the commencement of construction
                  of the Tenant Improvements, for disbursement by Landlord as
                  described in Section 5.4.

         5.2      TI ALLOWANCE. Landlord shall provide to Tenant a tenant
                  improvement allowance ("TI ALLOWANCE") of $550,000. The TI
                  Allowance shall be disbursed in accordance with this Work
                  Letter.

         5.3      COSTS INCLUDABLE IN TI FUND. The TI Fund shall be used solely
                  for the payment of design and construction costs in connection
                  with the construction of the Tenant Improvements, including,
                  without limitation, the cost of preparing the TI Design
                  Drawings and the TI Construction Drawings, all costs set forth
                  in the Budget, including Landlord's Administrative Rent,
                  Landlord's out-of-pocket expenses, costs resulting from Tenant
                  Delays and the cost of Changes (collectively, "TI COSTS").
                  Notwithstanding anything to the contrary contained herein, the
                  TI Fund shall not be used to purchase any 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
                  Improvements.

         5.4      EXCESS TI COSTS. It is understood and agreed that Landlord is
                  under no obligation to bear any portion of the cost of any of
                  the Tenant Improvements except to the extent of the TI
                  Allowance. If at any time and from time-to-time, the remaining
                  TI Costs under the Budget exceed the remaining unexpended TI
                  Allowance, Tenant shall deposit with Landlord, as a condition
                  precedent to Landlord's obligation to complete the Tenant
                  Improvements, 100% of the then current TI Cost in excess of
                  the remaining TI Allowance ("EXCESS TI COSTS"). If Tenant
                  fails to deposit, or is late in depositing, any Excess TI
                  Costs amount with Landlord, Landlord 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 deposit of
                  Excess TI Costs, together with the remaining TI Allowance, is
                  herein referred to as the "TI FUND". Funds so deposited by
                  Tenant shall be the first thereafter disbursed to pay TI

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 6

                  Costs. Notwithstanding anything to the contrary set forth in
                  this Section 5.4, Tenant shall be fully and solely liable for
                  TI Costs and the cost of Minor Variations in excess of the TI
                  Allowance. If upon Substantial Completion of the Tenant
                  Improvements and the payment of all sums due in connection
                  therewith there remains any undisbursed TI Fund, Tenant shall
                  be entitled to such undisbursed TI Fund solely to the extent
                  of any Excess TI Costs deposit Tenant has actually made with
                  Landlord.

6.                TENANT ACCESS.

         6.1      TENANT'S ACCESS RIGHTS. Landlord hereby agrees to permit
                  Tenant access, at Tenant's sole risk and expense, to the Suite
                  B Premises (i) thirty (30) days prior to the Suite B Premises
                  Rent Commencement Date to perform any work ("TENANT'S WORK")
                  required by Tenant other than Landlord's Work and provided
                  that such Tenant's Work is coordinated with the TI Architect
                  and the general 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 Suite
                  B Premises 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 which Landlord may require
                  pursuant to the Lease) is in full force and effect. Any entry
                  by Tenant shall comply with all established safety practices
                  of Landlord's contractor and Landlord until completion of
                  Landlord's Work and acceptance thereof by Tenant.

         6.2      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 San Diego
                  County or the City of San Diego, and upon any such
                  interference, Landlord shall have the right to exclude Tenant
                  and Tenant's employees, consultants, contractors and agents
                  from the Suite B Premises until Substantial Completion of
                  Landlord's Work.

         6.3      NO ACCEPTANCE OF SUITE B PREMISES. The fact that Tenant may,
                  with Landlord's consent, enter into the Suite B Premises prior
                  to the date Landlord's Work is Substantially Complete for the
                  purpose of performing any Tenant's Work shall not be deemed an
                  acceptance by Tenant of possession of the Suite B 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.

7.                NOTIFICATION OF DELAYS. Not less than once each calendar month
         from the date of this Work Letter through the Suite B Premises Rent
         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 Delays or delays arising by
         reason of any Force Majeure as defined in Section 34 of the Lease (a
         "FORCE MAJEURE DELAY"), which written notification shall also include a
         description of the nature of such Tenant Delay or Force Majeure Delay.

8.                MISCELLANEOUS

         8.1      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.

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 7

         8.2      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.

         8.3      COUNTERPARTS. This Work Letter may be executed in any number
                  of counterparts but all counterparts taken together shall
                  constitute a single document.

         8.4      GOVERNING LAW. This Work Letter shall be governed by,
                  construed and enforced in accordance with the internal laws of
                  the state in which the Suite B Premises are located, without
                  regard to choice of law principles of such State.

         8.5      TIME OF THE ESSENCE. Time is of the essence of this Work
                  Agreement and of each and all provisions thereof.

         8.6      DEFAULT. Notwithstanding anything set forth herein or in the
                  Lease to the contrary, Landlord shall not have any obligation
                  to perform any work hereunder or to fund any portion of the TI
                  Fund during any period Tenant is in Default under the Lease.

         8.7      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.

         8.8      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 construction 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.

         8.9      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.

<PAGE>
Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 8

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

                                  TENANT:

                                  PROTARCH, INC.,
                                  a Delaware corporation

                                  By:   /s/ Tim Harris
                                        ------------------------------------
                                  Its:  President & CEO
                                        ------------------------------------

                                  LANDLORD:

                                  ARE-10505 ROSELLE STREET, LLC,
                                  a Delaware limited liability company

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

                                       By:  ARE-QRS CORP.,
                                            a Maryland corporation,
                                            its general partner

                                            By:  /s/ Lynn Anne Shapiro
                                                 ---------------------------
                                            Its: General Counsel
                                                 ---------------------------

<PAGE>

Major Construction - Landlord Build 10505 Roselle Street/Protarch, Inc. - Page 9

                            SCHEDULE A TO WORK LETTER

                              Development Schedule

<Table>
<Caption>

Event                                                                   Date
<S>                                                                     <C>
Execution of lease                                                      09/20/99

Naming of Tenant's Representatives                                      09/20/99

Delivery of space plans for TI Design Drawings pursuant to              09/20/99
Section 2.2 of the Work Letter

Delivery of TI Construction Drawings pursuant to Section                09/25/99
2.3 of the Work Letter

Commence construction of Tenant Improvements                            11/01/99

Substantial Completion of Tenant Improvements                           01/31/00

Issuance of Temporary Certificate of Occupancy                          01/31/00
</Table>

<PAGE>

Commencement Date                   10505 Roselle Street/Protarch, Inc. - Page 1

                               EXHIBIT C TO LEASE

                       ACKNOWLEDGMENT OF COMMENCEMENT DATE

         This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this _______ day of
__________, _______, between ARE-10505 ROSELLE STREET LLC, a Delaware limited
liability company ("LANDLORD"), and PROTARCH, INC., a Delaware corporation
("TENANT"), and is attached to and made a part of the Lease dated September ___,
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.

         Landlord and Tenant hereby acknowledge and agree, for all purposes of
the Lease, that the Commencement Date of the Term of the Lease is September 15,
1999 and the termination date of the Lease shall be midnight on _____________,
_______.

         IN WITNESS WHEREOF, Landlord and Tenant have executed this
ACKNOWLEDGMENT OF COMMENCEMENT DATE to be effective on the date first above
written.

                                   TENANT:

                                   PROTARCH, INC.,
                                   a Delaware corporation

                                   By:
                                         -------------------------------------
                                   Its:
                                         -------------------------------------

                                   LANDLORD:

                                   ARE-10505 ROSELLE STREET, LLC,
                                   a Delaware limited liability company

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

                                        By:  ARE-QRS CORP.,
                                             a Maryland corporation,
                                             its general partner

                                             By:
                                                   ---------------------------
                                             Its:
                                                   ---------------------------

<PAGE>

Commencement Date                   10505 Roselle Street/Protarch, Inc. - Page 1

                               EXHIBIT D TO LEASE

                           TENANT'S PERSONAL PROPERTY

                                   [ATTACHED]

<PAGE>

<Table>
<Caption>
EQUIPMENT NAME           MANUFACTURER     MODEL NO.   VWR NO.      COMMENTS                                                NUMBER
<S>                      <C>              <C>         <C>          <C>                                                     <C>
Dishwasher               VWR              44004       66074-008                                                              1
Fridge                   Sears                                     115V, 60Hz, 4Amp                                          3
Freezer - 20             Sears                                     115V, 60Hz, ? Upright                                     2
Freezer - 20             Sears            3676                     115V, 60Hz, 15 ft3 chest                                  2
Deli fridge              Forma            3775                     115V, 9.6amp 49 ft3 hinged doors 115V 60Hz 9.6A           3
Ice machine              Scotsman                     35741-153    1/4" intake H2) floor drain 230V 50Hz single phase        1
Incubator for
  mol. Boil              VWR              1925        35962-095    40 ft3 upright incubator 115V, 60Hz                       2
Freezer - 80             Forma            958                      230V 60Hz, 24amp 20 ft3 chest                             1
Freezer - 80             Forma            8584                     230V 60Hz, 24amp 23 ft3 upright, double door              1
Shaker floor             Lab-line         3526        57019-337    120V, 50/60Hz, 800W or 240V, 50/60Hz, 800W                2
Autoclave + boiler                                                 208/230V, 3phase, water line, drain                       1
Centrifuge               Beckman          Avanti                                                                             1
Constant Temperature
  Rooms                  Haggarty                                  4,12 and 20 degree rooms                                  3
Ionics water purifier    Ionics                                    Wash room                                                 1
Millipore ultrapure
  water purifier         Millipore                                 Wash room                                                 1
PHAST gel systems        Pharmacia                                                                                           2
9700 PCR machines        PE Biosystems    9700                                                                               2
Akta FLPC
  chromatography         Pharmacia        Explorer                 Complete chromatography systems                           1
Akta FLPC
  chromatography         Pharmacia        FPLC                     Complete chromatography systems                           2
XK 26/100 columns        Pharmacia                                                                                           2
X-ray generator and
  associated             MSC                                       x-ray generator, chiller, detector, computer, cryo, etc.  1
Cubicles                                                           Office areas                                             12
Lab tables                                                         Constant temp rooms, lab, storage areas                   8
Lab shelving                                                       Constant temp rooms, lab, storage areas                   8
Sun computer
  server/system                                                    Mechanical room                                           2
Phone system             Mills                                     All rooms
Security system          Biostruct                                 All rooms
</Table>

<PAGE>

Estoppel Certificate                10505 Roselle Street/Protarch, Inc. - Page 1

                               EXHIBIT E TO LEASE

                              ESTOPPEL CERTIFICATE

         THIS TENANT ESTOPPEL CERTIFICATE ("CERTIFICATE"), dated as of
_________, __, is executed by ("TENANT") in favor of [BUYER], a
________________________, together with its nominees, designees and assigns
(collectively, "BUYER"), and in favor of ____________________, together with its
nominees, designees and assigns (collectively, "LENDER").

                                    RECITALS

         A. Buyer and ____________ ("LANDLORD"), have entered into that certain
Purchase and Sale Agreement and Joint Escrow Instructions, dated as of
__________, 19__ (the "PURCHASE AGREEMENT"), whereby Buyer has agreed to
purchase, among other things, the improved real property located in the City of
_____________, County of ___________, State of __________, more particularly
described on Exhibit A attached to the Purchase Agreement (the "PROPERTY").

         B. Tenant and Landlord have entered into that certain Lease Agreement,
dated as of ___________ (together with all amendments, modifications,
supplements, guarantees and restatements thereof, the "LEASE"), for a portion of
the Property.

         C. Pursuant to the Lease, Tenant has agreed that upon the request of
Landlord, Tenant would execute and deliver an estoppel certificate certifying
the status of the Lease.

         D. In connection with the Purchase Agreement, Landlord has requested
that Tenant execute this Certificate with an understanding that Lender will rely
on the representations and agreements below in granting to Buyer a loan.

         NOW, THEREFORE, Tenant certifies, warrants, and represents to Buyer and
Lender as follows:

1. LEASE. Attached hereto as Exhibit B is a true, correct and complete copy of
the Lease, including the following amendments, modifications, supplements,
guarantees and restatements thereof, which together represent all of the
amendments, modifications, supplements, guarantees and restatements supplements,
guarantees and restatements thereof:

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

--------------------------------------------------------------------------------
(If none, please state "None.")

2. PREMISES. Pursuant to the Lease, Tenant leases those certain premises (the
"PREMISES") consisting of approximately ___________ rentable square feet within
the Property, as more particularly described in the Lease. In addition, pursuant
to the terms of the Lease, Tenant has the non-exclusive right to use ________
parking spaces located on the Property during the term of the Lease.

3. FULL FORCE OF LEASE. The Lease has been duly authorized, executed and
delivered by Tenant, is in full force and effect, has not been terminated, and
constitutes a legally valid instrument, binding and enforceable against Tenant
in accordance with its terms, subject only to applicable limitations imposed by
laws relating to bankruptcy and creditor's rights.

4. COMPLETE AGREEMENT. The Lease constitutes the complete agreement between
Landlord and Tenant for the Premises and the Property, and except as modified by
the Lease amendments noted above (if any), has not been modified, altered or
amended.

5. ACCEPTANCE OF PREMISES. Tenant has accepted possession and is currently
occupying the Premises.

<PAGE>

Estoppel Certificate                10505 Roselle Street/Protarch, Inc. - Page 2

6. LEASE TERM. The term of the Lease commenced on ______________ and ends on
___________, subject to the following options to extend: _______________________
__________________________________________________________________.
(If none, please state "None.")

7. PURCHASE RIGHTS. Tenant has no option, right of first refusal, right of first
offer, or other right to acquire or purchase all or any portion of the Premises
or all or any portion of, or interest in, the Property, except as follows: _____
________________________________________________________________
(If none, please state "None.")

8. RIGHTS OF TENANT. Except as expressly stated in this Certificate, Tenant:

                  (a) has no right to renew or extend the term of the Lease;

                  (b) has no option or other right to purchase all or any part
         of the Premises or all or any part of the Property;

                  (c) has no right, title, or interest in the Premises, other
         than as Tenant under the Lease

9. RENT.

                  (a) The obligation to pay rent under the Lease commenced on
         _____________. The rent under the Lease is current, and Tenant is not
         in default in the performance of any of its obligations under the
         Lease.

                  (b) Tenant is currently paying base rent under the Lease In
         the amount of $ ________ per month Tenant has not received and IS not
         presently entitled to any abatement, refunds, rebates, concessions or
         forgiveness of rent or other charges, free rent, partial rent, or
         credits, offsets or reductions in rent, except as follows: ____________
         ______________________________________________________________________.
         (If none, please state "None.")

                  (c) There are no existing defenses or offsets against rent due
         or to become due under the terms of the Lease, and to Tenant's
         knowledge there presently is no default or other wrongful act or
         omission by Landlord under the Lease or otherwise in connection with
         Tenant's occupancy of the Premises, nor is there a state of facts which
         with the passage of time or the giving of notice or both could ripen
         into a default on the part of Tenant, or to the best knowledge of
         Tenant, could ripen into a default on the part of Landlord under the
         Lease, except as follows:______________________________________________
         ______________________________________________________________________.
         If none, please state "None.")

10. SECURITY DEPOSIT. The amount of Tenant's security deposit held by Landlord
under the Lease is $ ____________.

11. PREPAID RENT. The amount of prepaid rent, separate from the security
deposit, is $ ___________, covering the period from _________ to _________.

12. INSURANCE. All insurance, if any, required to be maintained by Tenant under
the Lease is presently in effect.

13. TENANT IMPROVEMENTS. As of the date of this Certificate, to the best of
Tenant's knowledge, Landlord has performed all obligations required of Landlord
pursuant to the Lease; no offsets, counterclaims, or defenses of Tenant under
the Lease exist against Landlord; and no events have. occurred that, with the
passage of time or the giving of notice, would constitute a basis for offsets,
counterclaims, or defenses against Landlord, except as follows:_____________
_________________________________________________________. (If none, please
state "None.")

<PAGE>

Estoppel Certificate                10505 Roselle Street/Protarch, Inc. - Page 3

14. ASSIGNMENTS BY LANDLORD. Tenant has received no notice of any assignment,
hypothecation or pledge of the Lease or rentals under the Lease by Landlord.
Tenant hereby consents to an assignment of the Lease and rents to be executed by
Landlord to Buyer or Lender in connection with the Loan and acknowledges that
said assignment does not violate the provisions of the Lease. Tenant
acknowledges that the interest of the Landlord under the Lease is to be assigned
to Buyer or Lender solely as security for the purposes specified in said
assignment and Buyer or Lender shall have no duty, liability or obligation
whatsoever under the Lease or any extension or renewal thereof, either by virtue
of said assignment or by any subsequent receipt or collection of rents
thereunder, unless Buyer or Lender shall specifically undertake such liability
in writing. Tenant agrees that upon receipt of a written notice from Buyer or
Lender of a default by Landlord under the Loan, Tenant will thereafter pay rent
to Buyer or Lender in accordance with the terms of the Lease, provided that
Tenant has previously received Landlord's written consent to such payments upon
a default by Landlord under the Loan.

15. ASSIGNMENTS BY TENANT. Tenant has not sublet or assigned the Premises or the
Lease or any portion thereof to any sublessee or assignee, except as follows:
____________________. No one except Tenant and its employees will occupy the
Premises. The address for notices to be sent to Tenant is as set forth in the
Lease, or as follows: __________________________________________________________

16. SUCCESSION OF INTEREST. Tenant agrees that, in the event Buyer or Lender
succeeds to the interest of Landlord under the Lease:

                  (a) Buyer or Lender shall not be liable for any act or
         omission of any prior landlord (including Landlord);

                  (b) Buyer or Lender shall not be liable for the return of any
         security deposit;

                  (c) Buyer or Lender shall not be bound by any rent or
         additional rent which Tenant might have prepaid under the Lease for
         more than the current month;

                  (d) Buyer or Lender shall not be bound by any amendments or
         modifications of the Lease made without prior consent of Buyer or
         Lender;

                  (e) Buyer or Lender shall not be subject to any offsets or
         defenses which Tenant might have against any prior landlord (including
         Landlord); or

                  (f) Buyer or Lender shall not be liable under the Lease to
         Tenant for the performance of Landlord's obligations under the Lease
         beyond Buyer or Lender's interest in the Property.

17. NOTICE OF DEFAULT. Tenant agrees to give Buyer and Lender a copy of any
notice of default under the Lease served upon Landlord at the same time as such
notice is given to Landlord. Tenant further agrees that if Landlord shall fail
to cure such default within the applicable grace period, if any, provided in the
Lease, then Buyer or Lender shall have a reasonable period within which to cure
such default; provided however, that such period of time shall be extended so
long as Buyer or Lender has commenced and is diligently pursuing the remedies
necessary to cure such default (including, but not limited to, commencement of
foreclosure proceedings, if necessary to effect such cure), in which event the
Lease shall not be terminated while such remedies are being pursued.

         Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer and Lender in agreeing to purchase the Property.

         Tenant has executed this Certificate as of the date first written above
by the person named below, who is duly authorized to do so.

<PAGE>

Estoppel Certificate                10505 Roselle Street/Protarch, Inc. - Page 4

TENANT                                 PROTARCH, INC.
                                       a Delaware corporation

                                       By:
                                           -------------------------------------
                                           Name:
                                                --------------------------------
                                           Its:
                                               ---------------------------------

<PAGE>

Estoppel Certificate                10505 Roselle Street/Protarch, Inc. - Page 5

                       EXHIBIT A TO ESTOPPEL CERTIFICATE

                               LEGAL DESCRIPTION
<PAGE>

Estoppel Certificate                10505 Roselle Street/Protarch, Inc. - Page 1

                       EXHIBIT B TO ESTOPPEL CERTIFICATE

                                 COPY OF LEASE

<PAGE>

Subordination Agreement             10505 Roselle Street/Protarch, Inc. - Page 1

                               EXHIBIT F TO LEASE

                       SUBORDINATION, NON-DISTURBANCE AND
                              ATTORNMENT AGREEMENT

         THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT is made
and entered into as of _______________ _____, _______ ("AGREEMENT"), by and
between ARE-10505 ROSELLE STREET, LLC, a Delaware limited liability company
together with its nominees, designees and assigns (collectively, "LANDLORD"),
_________, a _________ ("TENANT"), and _________, a _________ ("MORTGAGEE").

         WHEREAS, Mortgagee is making a loan to Landlord and others evidenced by
a certain promissory note ("NOTE"), and secured by, among other things, a deed
of trust/mortgage to be recorded prior hereto in the public records of the City
of ____________, County of ____________, State of ____________, ("MORTGAGE")
constituting a lien upon the real property described in Exhibit A hereto (the
"REAL PROPERTY"); and

         WHEREAS, _____________________ and Tenant have entered into a Lease
Agreement dated as of _______________ _____, _______ ("LEASE"), for certain
leased premises encompassing _____________________________ located in
________________, containing approximately ______________________ net square
feet (hereinafter collectively referred to as "PREMISES"); and

         WHEREAS, the Lease is subordinate to the Mortgage and to the right,
title, and interests of Mortgagee thereto and thereunder; and

         WHEREAS, Mortgagee wishes to obtain from Tenant certain assurances that
Tenant will attorn to Mortgagee in the event of a foreclosure by Mortgagee or
the exercise of other rights under the Mortgage; and

         WHEREAS, Tenant wishes to obtain from Mortgagee certain assurances that
Tenant's possession of the Premises will not, subject to the terms and
conditions of this Agreement, be disturbed by reason of a foreclosure of the
lien of the Mortgage on the Real Property, and

         WHEREAS, Tenant and Mortgagee are both willing to provide such
assurances to each other upon and subject to the terms and conditions of this
Agreement.

         NOW, THEREFORE, in consideration of the above, the mutual promises
hereinafter set forth, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto mutually
agree as follows:

         1. AFFIRMATION. Tenant hereby agrees that the Lease now is and shall be
subject and subordinate in all respects to the Mortgage and to all renewals,
modifications and extensions thereof until such time that the Mortgage is
released, satisfied or otherwise discharged, subject to the terms and conditions
of this Agreement. Landlord and Tenant hereby affirm that the Lease is in full
force and effect and that the Lease has not been modified or amended, except as
follows: _____________________________. Mortgagee hereby confirms that it is the
holder of the Note and the beneficiary of the Mortgage and has full power and
authority to enter into this Agreement.

         2. ATTORNMENT AND NON-DISTURBANCE.

         (a) So long as Tenant is not in default under the Lease (beyond
Tenant's receipt of notice from Landlord and any grace period granted tenant
under the Lease to cure such default) as would entitle the Landlord to terminate
the Lease or would cause without any further action of the Landlord, the
termination of the Lease or would entitle the Landlord to dispossess Tenant
thereunder, then Mortgagee agrees with Tenant that in the event the interest of
Landlord shall be acquired by Mortgagee or in the event Mortgagee comes into
possession of or acquires title to the Real Property by reason of foreclosure

<PAGE>

Subordination Agreement             10505 Roselle Street/Protarch, Inc. - Page 2

or foreclosure sale or the enforcement of the Mortgage or the Note or other
obligation secured thereby or by a conveyance in lieu thereof, or as a result of
any other means then:

                  (i) Subject to the provisions of this Agreement, Tenant's
         occupancy and possession of the Premises and Tenant's rights and
         privileges under the Lease or any extensions, modifications or renewals
         thereof or substitutions therefor (in accordance with the Lease and the
         Mortgage) shall not be disturbed, diminished or interfered with by
         Mortgagee during the term of the Lease (or any extensions or renewals
         thereof provided for in the Lease);

                  (ii) Mortgagee will not join Tenant as a party defendant in
         any action or proceeding for the purpose of terminating Tenant's
         interest and estate under the Lease because of any default under the
         Mortgage; and

                  (iii) The Lease shall continue in full force and effect and
         shall not be terminated except in accordance with the terms of the
         Lease.

         (b) Tenant shall be bound to Mortgagee under all of the terms,
covenants and conditions of the Lease for the balance of the term thereof
remaining (and any extensions or renewals thereof which may be effected in
accordance with any option contained in the Lease) with the same force and
effect as if Mortgagee were the landlord under the Lease, and Tenant does hereby
agree to attorn to Mortgagee as its landlord, said attornment to be effective
and self-operative without the execution of any other instruments on the part of
either party hereto immediately upon Mortgagee's succeeding to the interest of
Landlord under the Lease. Upon request of Lender or such Purchaser, Tenant shall
execute and deliver to Lender or such Purchaser an agreement reaffirming such
attornment. Tenant hereby agrees that any right of first refusal or right of
first offer to purchase the Property which Tenant may have pursuant to the terms
of the Lease shall not be applicable to Mortgagee's or any Purchaser's
acquisition of the Property by foreclosure, deed in lieu of foreclosure, other
transaction related thereto or in substitution thereof, trustee sale or other
similar statutory conveyance. The foregoing shall not be construed as
diminishing or eliminating any of Tenant's Right of First Refusal or First Offer
to purchase the property that remain valid in the Lease after such Mortgagee's
or Purchaser's acquisition.

         (c) In the event that the Mortgage is foreclosed and any party
("PURCHASER") other than Mortgagee purchases the Premises and succeeds to the
interest of Landlord under the Lease, Tenant shall likewise be bound to
Purchaser and Tenant hereby covenants and agrees to attorn to Purchaser in
accordance with all of the provisions of this Agreement; provided, however, that
purchaser shall have transmitted to Tenant a written document in recordable
form, whereby Purchaser agrees to recognize Tenant as its lessee under the Lease
and agrees to be directly bound to Tenant for the performance and observance of
all the terms and conditions of the Lease required to be performed or observed
by Landlord thereunder, subject to and in accordance with the terms of this
Agreement.

         (d) Mortgagee agrees that if Mortgagee shall succeed to the interest of
Landlord under the Lease as above provided, Mortgagee shall be bound to Tenant
under all of the terms, covenants, and conditions of this Lease, and Tenant
shall, from and after Mortgagee's succession to the interest of Landlord under
the Lease, have the same remedies against Mortgagee that Tenant might have had
under the Lease against Landlord if Mortgagee had not succeeded to the interest
of Landlord; provided, however, that Mortgagee (and Purchaser, as the case may
be) shall not be:

                  (i) liable for any act or omission of any prior lessor
         (including Landlord) occurring prior to the date that Mortgagee or
         purchaser acquired title to the Premises; or

                  (ii) subject to any offsets, counterclaims or defenses which
         Tenant might have against any prior lessor (including Landlord); or

                  (iii) bound by any previous payment of rent or additional rent
         for a period greater than 1 month unless such prepayment shall have
         been consented to in writing by Mortgagee; or

<PAGE>

Subordination Agreement             10505 Roselle Street/Protarch, Inc. - Page 3

                  (iv) bound by any amendment or modification of the Lease made
         prior to the date Mortgagee or Purchaser succeeds to the interest of
         Landlord without Mortgagee's written consent; or

                  (v) liable to Tenant for any loss of business or any other
         indirect or consequential damages from whatever cause; provided,
         however, no inference shall be drawn from this clause (v) that Tenant
         would otherwise be entitled (or not entitled) to recover for loss of
         business or any other indirect or consequential damages; or

                  (vi) liable for the return of any security deposit unless such
         deposit has been paid over to the Mortgagee.

                  The foregoing shall not be construed to modify or limit any
         right Tenant may have at law or in equity against Landlord or any other
         prior owner of the Real Property.

         3. NOTICES. All notices required or permitted to be given pursuant to
this Agreement shall be In writing and shall be sent postage prepaid, by
certified mail, return receipt requested or other nationally utilized overnight
delivery service. All notices shall be deemed delivered when received or refused
Rejection or other refusal to accept or inability to deliver because of changed
address of which no notice has been given shall constitute receipt of the
notice, demand or request sent. Any such notice if given to Tenant shall be
addressed as follows:

                               _________________
                               _________________
                               _________________
                               _________________
                               _________________

         if given to Landlord shall be addressed as follows:

                               c/o Alexandria Real Estate Equities, Inc.
                               135 N. Los Robles Avenue
                               Suite 250
                               Pasadena, California 91 101
                               Attention: General Counsel

         if given to Mortgagee shall be addressed as follows:

                               _________________
                               _________________
                               _________________
                               _________________
                               _________________

         4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns. The words "foreclosure" and "foreclosure sale" as used herein shall be
deemed to also include the acquisition of Landlord's estate in the Real Property
by voluntary deed, assignment or other conveyance or transfer in lieu of
foreclosure.

         5. MODIFICATIONS TO LEASE. Tenant shall not modify or amend the Lease
or terminate the same without Mortgagee's prior written consent. If Mortgagee
fails to provide Tenant with a written approval of the proposed modification,
amendment or termination within 10 business days after notice to Mortgagee of
such proposal, then Mortgagee shall be deemed to have rejected such proposal.

         6. ADDITIONAL AGREEMENTS. Tenant agrees that:

         (a) it shall give Mortgagee copies of all notices of default and
requests for approval or consent by Landlord that Tenant gives to Landlord
pursuant to the Lease in the same manner as they are

<PAGE>

Subordination Agreement             10505 Roselle Street/Protarch, Inc. - Page 4

given to Landlord and no such notice or other communication shall be deemed to
be effective until a copy is given to Mortgagee;

         (b) Tenant shall name Mortgagee and any Purchaser as additional
insureds and loss payees, as applicable and appropriate, on all insurance
policies required by the Lease; and

         (c) this Agreement satisfies any condition or requirement in the Lease
relating to the granting of a non-disturbance agreement by Mortgagee, and in the
event that there are inconsistencies between the terms and provisions of this
Agreement and the terms and provisions of the Lease dealing with non-disturbance
by Mortgagee, the terms and provisions hereof shall be controlling; and

         (d) Mortgagee shall have no liability under the Lease until Mortgagee
succeeds to the rights of the Landlord under the Lease, and then only during
such period as Mortgagee is the Landlord. At all times during which Mortgagee is
liable under the Lease, Mortgagee's liability shall be limited to Mortgagee's
interest in the Real Property.

         7. MORTGAGEE CURE RIGHTS. If Landlord shall have failed to cure any
default within the time period provided for in the Lease (including any
applicable notice and grace periods), but not prior thereto Tenant exercises any
right to terminate the Lease, Mortgagee, shall have an additional 30 days within
which to cure such default, or if such default cannot by the exercise of
reasonable efforts by Mortgagee be cured within such period, then such
additional time as may be reasonable necessary to effect such a cure (including,
if necessary, sufficient time to complete foreclosure proceedings) provided that
within such 30-day period Mortgagee shall commence and thereafter diligently
pursue remedies to cure such default. The Lease shall not be terminated (i)
while such remedies are being diligently pursued or (ii) based upon a default
which is personal to Landlord and therefore not susceptible to cure by Mortgagee
or which requires possession of the Premises to cure. Mortgagee shall in no
event be obligated to cure any such default by Landlord unless it forecloses.
Nothing in this Section 7 shall affect any of Tenant's termination rights under
the Lease due to casualty or condemnation.

         8. DIRECTION TO PAY. Landlord hereby directs Tenant and Tenant agrees
to make all payments of amounts owed by Tenant under the Lease directly to
Mortgagee from and after receipt by Tenant of notice from Mortgagee directing
Tenant to make such payments to Mortgagee. (As between Landlord and Mortgagee,
the foregoing provision shall not be construed to modify any rights of Landlord
under or any provisions of the Mortgage or any other instrument securing the
Note).

         9. CONDITIONAL ASSIGNMENT. With reference to any assignment by Landlord
of Landlord's interest in the Lease, or the rents payable thereunder,
conditional in nature or otherwise, which assignment is made to Mortgagee,
Tenant agrees that the execution thereof by Landlord, and the acceptance thereof
by Mortgagee shall never be treated as an assumption by Mortgagee of any of the
obligations of Landlord under the Lease unless and until Mortgagee shall have
succeeded to the interest of Landlord. The foregoing sentence shall not affect
any of Tenant's rights against Landlord under the Lease.

                            [SIGNATURES ON NEXT PAGE]

<PAGE>

Subordination Agreement             10505 Roselle Street/Protarch, Inc. - Page 5

         IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
properly executed by their duly authorized representatives as of the date first
above written.

TENANT:                            PROTARCH, INC.
                                   a Delaware corporation

                                   By:
                                         -----------------------------------
                                   Its:
                                         -----------------------------------

LANDLORD:                          ARE-10505 ROSELLE STREET, LLC,
                                   a Delaware limited liability company

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

                                        By: ARE-QRS CORP.,
                                            A Maryland corporation,,
                                            its general partner

                                            By:
                                                ---------------------------

                                            Its:
                                                ---------------------------

MORTGAGEE:
                                   -----------------------------------------
                                   a

                                   By:
                                        ------------------------------------
                                        Name:
                                             -------------------------------
                                        Its:
                                             -------------------------------

<PAGE>
Subordination Agreement             10505 Roselle Street/Protarch, Inc. - Page 6

                      EXHIBIT A TO SUBORDINATION AGREEMENT

                                Legal description

<PAGE>

                       FIRST AMENDMENT TO LEASE AGREEMENT

         THIS FIRST AMENDMENT TO LEASE AGREEMENT ("Amendment") is dated as of
May 31, 2000, between ARE-10505 ROSELLE STREET, LLC, a Delaware limited
liability company ("Landlord"), and STRUCTURAL GENOMIX, INC. (formerly known as
Protarch, Inc.), a Delaware corporation ("Tenant").

         A. Landlord and Tenant entered into that certain Lease Agreement dated
as of September 20, 1999 (the "Lease"), with respect to certain premises located
at 10505 Roselle Street, San Diego, California (the "Premises"). Unless
otherwise defined in this Amendment, initially-capitalized terms used herein
shall have the meanings set forth in the Lease.

         B. Pursuant to Section 5.4 of the Work Letter attached to the Lease,
Tenant is required to pay TI Costs in excess of the TI Allowance ("Excess TI
Costs"), as defined therein.

         C. Landlord is willing to pay Excess TI Costs, subject to Tenant
agreeing to pay Additional Rent to Landlord as provided herein.

         NOW THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree, and amend the Lease, as follows:

         1. Excess TI Costs.

         The parties agree that the amount of Excess TI Costs is $148,346.75.
Tenant acknowledges that Tenant is obligated under the terms of the Lease to pay
Excess TI Costs.

         2. Payment of Excess TI Costs by Landlord

         Notwithstanding the provisions of the Lease requiring Tenant to pay
Excess TI Costs, Landlord hereby agrees to pay Excess TI Costs, subject to the M
e r terms and conditions of this Amendment. Landlord agrees that Tenant shall
not be in default or breach of Tenant's obligations under the Lease to pay
Excess TI Costs so long as Tenant shall comply with the provisions of this
Amendment.

         3. Tenant's Payment of Excess TI Costs

         In consideration of Landlord's agreement to pay TI Costs, Tenant hereby
agrees to pay, as Additional Rent, the amount of $3,160.95 ("TI Additional
Rent") on the first day of each month for the period beginning July I, 2000 and
ending December 31,2005. Such payment of TI Additional Rent shall be in addition
to the obligations of Tenant to pay Base Rent and Additional Rent under the
Lease. All payment of TI Additional Rent shall be made as provided in Section 3
of the Lease.
<PAGE>

         4. Counterparts.

         This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument. Signature pages may be detached from the counterparts and attached
to a single copy of this Amendment to physically form one document.

         5. Reaffirmation of Obligations.

         Tenant hereby acknowledges and reaffirms its obligations under the
Lease, as such Lease has been amended by this Amendment, and agrees that any
reference made in any other document to the Lease shall mean the Lease as
amended pursuant to this Amendment. Except as expressly provided herein, the
Lease remains unmodified and in full force and effect. Any breach by Tenant of
this Amendment, including any exhibit hereto, shall constitute a breach and
default by Tenant under the Lease.

         6. Time of Essence.

         Time is of the essence with respect to each provision of this
Agreement.

<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to
be duly executed and delivered as of the date first above written.

         LANDLORD

         ARE-10505 ROSELLE STREET, LLC,

         a Delaware limited liability company

         By:   Alexandria Real Estate Equities, L.P.,
         a Delaware limited partnership
         its managing member

               By:   ARE-QRS CORP.,
               a Maryland corporation,
               its general partner

                     By:   /s/ Lynn Anne Shapiro
                           ----------------------
                     Its:  General counsel
                           ----------------------

TENANT

STRUCTURAL GENOMIX,, WC.,
(formerly known as Protarch, Inc.),
a Delaware corporation

By:   /s/ Tim Harris
      ----------------------------
Its:  President and CEO
      ----------------------------

<PAGE>

                       SECOND AMENDMENT TO LEASE AGREEMENT

         THIS SECOND AMENDMENT TO LEASE AGREEMENT ("Amendment") is dated as of
May 18, 2000, between ARE-10505 ROSELLE STREET, LLC, a Delaware limited
liability company ("Landlord), and STRUCTURAL GENOMIX, INC. (formerly known as
Protarch, Inc.), a Delaware corporation ("Tenant").

         A. Landlord and Tenant entered into that certain Lease Agreement dated
as of September 20, 1999 (the "Lease"), with respect to certain premises located
at 10505 Roselle Street, San Diego, California (the "Premises"). Unless
otherwise defined in this Amendment, initially-capitalized terms used herein
shall have the meanings set forth in the Lease.

         B. Landlord and Tenant amended the Lease by that certain First
Amendment to Lease Agreement dated as of May 31, 2000.

         C. Landlord and Tenant have negotiated a separate lease of space in a
property located at 3770 Tansy Street, San Diego, California, and a condition of
the effectiveness of that separate lease is that the Termination Date of the
Lease be extended to December 31, 2005, so that it will terminate on the same
date as the separate lease.

         C. Landlord and Tenant desire to amend the Lease again as set forth
herein.

         NOW THEREFORE, in consideration of the foregoing Recitals, the mutual
covenants and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant agree, and amend the Lease, as follows:

         1. Term.

         The parties agree that definition of "Term", as set forth on page 1 of
the Lease, is hereby deleted in its entirety, and is replaced with the
following.

                  Term The period from the date hereof until December 31, 2005
                  ("Termination Date").

         2. Counterparts.

         This Amendment may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which counterparts taken together shall constitute but one and the same
instrument. Signature pages may be detached from the counterparts and attached
to a single copy of this Amendment to physically form one document,

         3. Reaffirmation of Obligations.

         Landlord and Tenant hereby acknowledge and reaffirm their respective
obligations under the Lease, as such Lease has been amended by this Amendment,
and agrees that any reference

<PAGE>

made in any other document to the Lease shall mean the Lease as amended pursuant
to this Amendment. Except as expressly provided herein, the Lease remains
unmodified and in full force and effect. Any breach by Landlord or Tenant of
this Amendment, including any exhibit hereto, shall constitute a breach and
default by that party under the Lease.

         4. Time of Essence.

         Time is of the essence with respect to each provision of this
Agreement.

                       SIGNATURES APPEAR ON FOLLOWING PAGE

<PAGE>

         IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to
be duly executed and delivered as of the date first above written.

         LANDLORD

         ARE-10505 ROSELLE STREET, LLC,

         a Delaware limited liability company

         By:  Alexandria Real Estate Equities, L.P.,
         a Delaware limited partnership
         its managing member

              By:   ARE-QRS CORP.,
              a Maryland corporation,
              its general partner

                    By:   /s/ Lynn Anne Shapiro
                          -------------------------------
                    Its:  General Counsel
                          ------------------------------

TENANT

STRUCTURAL GENOMIX,, INC.,
(formerly known as Protarch, Inc.),
a Delaware corporation

By:   /s/ Tim Harris
      -------------------------------------
Its:  President and CEO
      -------------------------------------

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