Document:

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                                                                   EXHIBIT 10.14

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                                 LEASE AGREEMENT

      THIS LEASE AGREEMENT is made this 18th day of May, 2000, between ARE-3770
TANSY STREET, LLC, a Delaware limited liability company ("LANDLORD"), and
STRUCTURAL GENOMIX, INC., a Delaware corporation ("TENANT").

ADDRESS: 3770 Tansy Street, San Diego, California

PREMISES: The real property described on EXHIBIT A together with the building
containing approximately 15,410 rentable sq. ft. located thereon, and all
appurtenances thereto, and including Area A, Area B and Area C as follows:

AREA A PREMISES: That portion of the building located on the Premises containing
approximately 3,127 rentable square feet ("RSF") as identified on EXHIBIT A-1

AREA B PREMISES: That portion of the building located on the Premises containing
approximately 6,283 RSF as identified on EXHIBIT A-2

AREA C PREMISES: That portion of the building located on the Premises containing
approximately 6,000 RSF as identified on EXHIBIT A-3

BASE RENT: $2.03 per RSF per month

RENTABLE AREA OF PREMISES: Approximately 15,410 sq. ft.

TENANT'S PRO RATA SHARE OF THE PREMISES: Upon Area B Commencement Date, 40.77%;
                                         upon Area A Commencement Date, 61.06%;
                                         upon Area C Commencement Date, 100%.

SECURITY DEPOSIT: $125,129.20

AREA B COMMENCEMENT DATE: August 1, 2000

AREA A COMMENCEMENT DATE: November 1, 2000

AREA COMMENCEMENT DATE: March 1, 2001

RENT ADJUSTMENT PERCENTAGE: 4.00%

TERM: From the Area B Commencement Date until December 31, 2005

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 92121
Attention: President

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

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[X] EXHIBIT A - PREMISES DESCRIPTION (Includes Exhibits A-1, A-2 and A-3)
[X] EXHIBIT B - WORK LETTER
[X] EXHIBIT C - COMMENCEMENT DATE
[X] EXHIBIT D - TENANT'S PERSONAL PROPERTY
[X] EXHIBIT E - ESTOPPEL CERTIFICATE
[X] EXHIBIT F - NONDISTURBANCE AGREEMENT
[X] EXHIBIT G - CONDITION OF AREA B UPON TERMINATION

      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 10505 ROSELLE LEASE: Tenant is a tenant of Landlord's under a lease
      dated as of September 20th, 1999, for certain premises at a property
      located at 10505 Roselle Street, San Diego. California. As a condition
      precedent to the Commencement Date of this Lease, Landlord and Tenant
      shall have executed an amendment to the Roselle Street Lease under which
      the Term of the Roselle Street Lease shall be extended to December 31,
      2005.

      2. DELIVERY; ACCEPTANCE OF PREMISES; COMMENCEMENT DATE. Landlord shall use
reasonable efforts to deliver the Area A Premises to Tenant on or before the
Area A Commencement Date, the Area B Premises to Tenant on or before the Area B
Commencement Date, and the Area C Premises to Tenant on or before the Area C
Commencement Date. Landlord's delivery of the Area A Premises, the Area B
Premises or the Area C Premises shall be referred to herein as "DELIVERY" or
"DELIVER". If Landlord fails to timely Deliver any of the Area A Premises, the
Area B Premises or the Area C 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, but the payment of rent shall abate until
the date that Landlord shall actually Deliver any portion of the Premises.

      Notwithstanding anything to the contrary herein, (i) Tenant shall accept
the each portion of the Premises in their condition as of the Area A
Commencement Date, the Area B Commencement Date, and the Area C Commencement
Date respectively, 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 that the Tenant accepts the Premises and that
the Premises were in good condition at the time possession was taken. Any
occupancy of Area A prior to the Area A Commencement Date, or Area C prior to
the Area C Commencement Date by Tenant before the any Commencement Date shall be
subject to all of the terms and conditions of this Lease, including the
obligation to pay Rent. Tenant shall be entitled to use all of the common areas
of the Premises after the Area B Commencement Date. Tenant shall have access to
the Premises prior to any Commencement Date for the purposes of installing
Tenant's equipment and preparing for occupancy as set forth in the Work Letter
attached as Exhibit B.

      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.

      Upon the expiration or earlier termination of this Lease, upon the
election of Landlord, Tenant shall return the Area B Premises to Landlord in
substantially the condition shown on EXHIBIT G, "Condition of Area B Upon
Termination". Any alterations or improvements made by Tenant during the Term
which are not shown on EXHIBIT G will be removed by Tenant at Tenant's sole cost
prior to the Termination Date at Landlord's election.

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      3. RENT.

      (a) BASE RENT. The first month's Base Rent for the Area B Premises and the
Security Deposit shall be due and payable on delivery of an executed copy of
this Lease to Landlord. Tenant's obligation to pay Base Rent for the Area A
Premises shall commence as of the Area A Commencement Date. Tenant's obligation
to pay Base Rent for the Area B Premises shall commence as of the Area B
Commencement Date. Tenant's obligation to pay Base Rent for the Area C Premises
shall commence as of the Area C Commencement Date. 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.

      (b) ADDITIONAL RENT. In addition to Base Rent, Tenant agrees to pay to
Landlord as additional rent ("ADDITIONAL Rent"): (i) Tenant's Pro Rata Share of
"Operating Expenses," and (ii) Tenant's Pro Rata Share of 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 Tenant's Pro Rata Share 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;

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

      (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;

      (I)   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

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Operating Expenses for such year Landlord shall, in its sale 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.

      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

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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 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 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 sale 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.

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      9. TAXES. Landlord shall pay, as part of Operating Expenses, Tenant's Pro
Rata Share of all taxes, levies, assessments and governmental charges of any
kind (collectively referred to as "TAXES") imposed by any federal, state,
regional, municipal, local or other governmental authority or agency, including,
without limitation, quasi-public agencies (collectively, "GOVERNMENTAL
AUTHORITY") during the Term, including, without limitation all Taxes: (i)
imposed on or measured by or based, in whole or in part, on rent payable to
Landlord under this Lease and/or from the rental by Landlord of the 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. At no additional cost, Tenant shall have the right to use
Tenant's Pro Rata Share of parking spaces at the Project in common with other
tenants of the Project, and to park passenger vehicles (including cars,
passenger vans, utility vehicles, and light trucks) only 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

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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 sale cost and expense, all Alterations
to comply with insurance requirements and with legal Requirements and shall
implement at its sale 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 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. Nothing in this Section 12 shall be construed to eliminate
Tenant's obligation to return the Area Premises to Landlord at the expiration or
earlier termination of the Lease in substantially the condition shown on EXHIBIT
G if Landlord so elects.

      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

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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 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 Area held by
Tenant.

      16. INDEMNIFICATION. Tenant hereby indemnifies and agrees to defend, save
and hold Landlord harmless from and against any and all Claims for injury or
death to persons or damage to property occurring within or about the Premises,
arising directly or indirectly out of use or occupancy of the Premises or a
breach or default by Tenant in the performance of any of its obligations
hereunder, unless caused solely by the willful misconduct or gross negligence of
Landlord. Landlord shall not be liable to Tenant for, and Tenant assumes all
risk of damage to, personal property (including, without

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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 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

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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.

      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

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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 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).

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      (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.

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 anyone 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

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

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

                  (D) Any other amount necessary to compensate Landlord for all
            the detriment proximately caused by Tenant's failure to perform its
            obligations under this Lease or which in the ordinary course of
            things would be likely to result therefrom, specifically including
            but not limited to, brokerage commissions and advertising expenses
            incurred, 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 sale 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

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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 sale 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.

      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)

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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").

      (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

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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.

      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.

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      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. Nothing in this Section 28
shall be construed to eliminate Tenant's obligation to surrender the Area B
Premises to Landlord in substantially the condition shown on EXHIBIT G if
Landlord so elects. 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
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 air, sailor 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,

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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 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 sale and absolute discretion); and all closure plans or
any other documents required by any and all federal, state and focal
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
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

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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 sale 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 any fraction thereof, natural gas liquids, liquefied
natural gas, or synthetic gas usable for fuel (or mixtures bf 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

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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, 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

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Net Single-Tenant Laboratory       3770 Tansy/Structural GenomiX, Inc. - Page 22

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 sale cost and
expense of Tenant, and shall be of a size, 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, expenses 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

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Net Single-Tenant Laboratory       3770 Tansy/Structural GenomiX, Inc. - Page 23

      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.

            (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 Tenant 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

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Net Single-Tenant Laboratory       3770 Tansy/Structural GenomiX, Inc. - Page 24

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.

      (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.

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Net Single-Tenant Laboratory       3770 Tansy/Structural GenomiX, Inc. - Page 25

      (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       3770 Tansy/Structural GenomiX, Inc. - Page 26

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

                                 TENANT:

                                 STRUCTURAL GENOMIX, INC.,
                                 a Delaware corporation

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

                                 LANDLORD:

                                 ARE-3770 TANSY 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>

Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                               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 3770 Tansy Street, more
particularly described as follows:

                                   [ATTACHED]
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Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                                   SCHEDULE A

Your Ref:

                                                   Policy No. B355637-P
                                                   Premium: $2,300.00

Amount of Insurance: $2,000,000.00
Date of Policy: September 2, 1998 at 10:39 AM

1.    Name of Insured:

ARE-3770 TANSY STREET, LLC., A DELAWARE LIMITED LIABILITY COMPANY

2.    The estate or interest in the land which is covered by this policy is:

A FEE

3.    Title to the estate or interest in the land is vested in:

ARE-3770 TANSY STREET, LLC., A DELAWARE LIMITED LIABILITY COMPANY

4.    The land referred to in this policy is situated in the State of
      California, County of and is described as follows:

PARCEL 1 IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AS
SHOWN AT PAGE 6427 OF PARCEL MAPS FILED IN THE OFFICE OF THE COUNTY RECORDER OF
SAN DIEGO COUNTY, OCTOBER 7, 1977.

               This Policy valid only if Schedule B is attached.

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Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 2

                                   [SITE PLAN]

<PAGE>

Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                              EXHIBIT A-1 TO LEASE

                         DESCRIPTION OF AREA A PREMISES

                                   [ATTACHED]

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Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                                     AREA A

                                  [FLOOR PLAN]

<PAGE>

Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                              EXHIBIT A-2 TO LEASE

                         DESCRIPTION OF AREA B PREMISES

                                   [ATTACHED]

<PAGE>

Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                                     AREA B

                                  [FLOOR MAP]

<PAGE>

Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                              EXHIBIT A-3 TO LEASE

                         DESCRIPTION OF AREA C PREMISES

                                   [ATTACHED]

<PAGE>

Net Single-Tenant Laboratory        3770 Tansy/Structural GenomiX, Inc. - Page 1

                                     AREA C

                                  [FLOOR PLAN]

<PAGE>

Major Construction - Tenant Build   3770 Tansy/Structural GenomiX, Inc. - Page 1

                               EXHIBIT B TO LEASE
                                 [Tenant Build]

                                   WORK LETTER

      THIS WORK LETTER dated May 19th, 2000, (this "WORK LETTER") is made and
entered into by and between ARE-3770 TANSY STREET, LLC, a Delaware limited
liability company ("LANDLORD"), and STRUCTURAL GENOMIX, INC., a Delaware
corporation ("TENANT"), and is attached to and made a part of the Lease dated
May 10, 2000 (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

      a. TENANT'S AUTHORIZED REPRESENTATIVE. Tenant designates Geneva Davis and
____________________ (either such individual acting alone, "TENANT'S
REPRESENTATIVE") as the only persons 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 either 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).

      b. LANDLORD'S AUTHORIZED REPRESENTATIVE. Landlord designates Jeffrey Ryan
and Vin Ciruzzi (either such individual acting alone, "LANDLORD'S
REPRESENTATIVE") as the only persons 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 either 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 persons authorized
to direct Landlord's contractors in the performance of Landlord's Work.

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

      2. TENANT IMPROVEMENTS.

      a. TENANT IMPROVEMENTS DEFINED. As used herein, "TENANT IMPROVEMENTS"
shall mean all improvements to the 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 Premises for Tenant's use and occupancy.

      b. TENANT'S SPACE PLANS. Tenant shall deliver to Landlord schematic
drawings and outline specifications (the "TI DESIGN DRAWINGS") detailing
Tenant's requirements for the Tenant Improvements within 15 business days of the
date hereof. Tenant shall give Landlord 5 days prior notice of the date on which
the TI Design Drawings shall be delivered. Not more than 10 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 10 business days thereafter. Such process shall continue until Landlord
has approved the TI Design Drawings.

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Major Construction - Tenant Build   3770 Tansy/Structural GenomiX, Inc. - Page 2

      c. WORKING DRAWINGS. Not later than 20 business days following the
approval of the TI Design Drawings by Landlord, Tenant shall cause the TI
Architect to prepare and deliver to Landlord 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. Landlord shall deliver its written comments on the TI
Construction Drawings to Tenant not later than 10 business days after Landlord's
receipt of the same; provided, however, that Landlord may not disapprove any
matter that is consistent with the TI Design Drawings. Tenant and the TI
Architect shall consider all such comments in good faith and shall, within 10
business days after receipt, notify Landlord how Tenant proposes to respond to
such comments. Any disputes in connection with such comments shall be resolved
in accordance with Section 2(d) hereof. Provided that the design reflected in
the TI Construction Drawings is consistent with the TI Design Drawings, Landlord
shall approve the TI Construction Drawings submitted by Tenant. Once approved by
Landlord, subject to the provisions of Section 2(d) below, Tenant shall not
materially modify the TI Construction Drawings except as may be reasonably
required in connection with the issuance of the TI Permit (as defined in Section
3(b) below).

      d. APPROVAL AND COMPLETION. Upon any dispute regarding the design of the
Tenant Improvements, which is not settled within 10 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(d) 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 TENANT'S WORK

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

      b. COMMENCEMENT AND PERMITTING OF TENANT'S WORK. Tenant 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 Landlord. The cost of obtaining
the TI Permit shall be payable from the TI Fund. Landlord shall assist Tenant in
obtaining the TI Permit.

      c. SELECTION OF MATERIALS, ETC. Where more than one type of material or
structure is indicated on the TI Construction Drawings approved by Tenant and
Landlord, the option will be within Tenant's reasonable discretion.

      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, such approval not to be
unreasonably withheld, conditioned or delayed.

      a. TENANT'S RIGHT TO REQUEST CHANGES. If Tenant shall request changes
("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 review and approve or disapprove such Change Request within 10 business
days thereafter, provided that Landlord's approval shall not be unreasonably
withheld, conditioned or delayed.

      b. IMPLEMENTATION OF CHANGES. If Landlord approves such Change and Tenant
deposits with Landlord any Excess TI Costs (as defined in Section 5(d) below)
required in connection with such Change, Tenant may cause the approved Change to
be instituted.

<PAGE>

Major Construction - Tenant Build   3770 Tansy/Structural GenomiX, Inc. - Page 3

      5. COSTS

      a. BUDGET FOR TENANT IMPROVEMENTS. Before the commencement of construction
of the Tenant Improvements, Tenant shall obtain a detailed breakdown, by trade,
of the costs incurred or which will be incurred, in connection with the design
and construction of Tenant's Work (the "BUDGET"). The Budget shall be based upon
the TI Construction Drawings approved by Landlord and shall include a payment to
Landlord of administrative rent ("ADMINISTRATIVE RENT") equal to 2% of the TI
Costs (as hereinafter defined) for monitoring and inspecting the construction of
Tenant'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(d).

      b. TI ALLOWANCE. With respect to the Area A Premises, Landlord shall
provide to Tenant a tenant improvement allowance ("AREA A TI ALLOWANCE") of
$38,000. The Area A TI Allowance shall be disbursed in accordance with this Work
Letter. With respect to the Area B Premises and the Area C Premises, Landlord
shall provide to Tenant a tenant improvement allowance ("AREA B AND AREA C TI
ALLOWANCE") of $412,667. The Area B and Area C TI Allowance shall be used only
in connection with improvements to the Area B Premises or the Area C Premises,
in accordance with plans and specifications submitted by Tenant and approved by
Landlord.

      c. 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, 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.

      d. 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 pay 100% of the then current TI Cost in excess of the
remaining TI Allowance ("EXCESS TI COSTS") before Landlord shall be obligated to
disburse any remaining part of the TI Allowance. If Tenant fails to pay any
Excess TI Costs, 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 Excess TI Costs, together with the remaining TI
Allowance, is herein referred to as the "TI FUND". Notwithstanding anything to
the contrary set forth in this Section 5(d), 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.

      e. PAYMENT FOR TI COSTS. Landlord shall pay TI Costs once a month against
a draw request in Landlord's standard form, containing such certifications, lien
waivers, inspection reports and other matters as Landlord customarily obtains,
to the extent of Landlord's approval thereof for payment, no later than 30 days
following receipt of such draw request.

<PAGE>

Major Construction - Tenant Build   3770 Tansy/Structural GenomiX, Inc. - Page 4

      6. MISCELLANEOUS

      a. 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.

      b. 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.

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

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

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

      f. 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.

      g. 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.

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

      i. 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 - Tenant Build   3770 Tansy/Structural GenomiX, Inc. - Page 5

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

                                 TENANT:

                                 STRUCTURAL GENOMIX, INC.,
                                 a Delaware corporation

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

                                 LANDLORD

                                 ARE-3770 TANSY 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>

Commencement Date                   3770 Tansy/Structural GenomiX, Inc. - Page 1

                               EXHIBIT C TO LEASE

                       ACKNOWLEDGMENT OF COMMENCEMENT DATE

      This ACKNOWLEDGMENT OF COMMENCEMENT DATE is made this ___ day of
__________, ______, between ARE-3770 TANSY STREET LLC, a Delaware limited
liability company ("LANDLORD"), and STRUCTURAL GENOMIX, INC., a Delaware
corporation ("TENANT"), and is attached to and made a part of the Lease dated
May ____, 2000 (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 August 1, 2000 and
the termination date of the Lease shall be midnight on December 31, 2005.

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

                                 TENANT:

                                 STRUCTURAL GENOMIX, INC.,
                                 a Delaware corporation

                                 By: ________________________________
                                 Its: _______________________________

                                 LANDLORD:

                                 ARE-3770 TANSY 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                   3770 Tansy/Structural GenomiX, Inc. - Page 1

                               EXHIBIT D TO LEASE

                           TENANT'S PERSONAL PROPERTY

                       NONE (UNLESS OTHERWISE NOTED BELOW)

<PAGE>

Estoppel Certificate                3770 Tansy/Structural GenomiX, 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 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                3770 Tansy/Structural GenomiX, 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

<PAGE>

Estoppel Certificate                3770 Tansy/Structural GenomiX, Inc. - Page 3

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.")

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 Properly.

<PAGE>

Estoppel Certificate                3770 Tansy/Structural GenomiX, Inc. - Page 4

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

TENANT:                          STRUCTURAL GENOMIX, INC.,
                                 a Delaware corporation

                                 By: ___________________________________________
                                     Name: _____________________________________
                                     Its:  _____________________________________

<PAGE>

Estoppel Certificate                3770 Tansy/Structural GenomiX, Inc. - Page 5

                        EXHIBIT A TO ESTOPPEL CERTIFICATE

                                LEGAL DESCRIPTION

<PAGE>

Estoppel Certificate                3770 Tansy/Structural GenomiX, Inc. - Page 1

                        EXHIBIT B TO ESTOPPEL CERTIFICATE

                                  COPY OF LEASE

<PAGE>

Subordination Agreement             3770 Tansy/Structural GenomiX, 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-3770 TANSY 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             3770 Tansy/Structural GenomiX, 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             3770 Tansy/Structural GenomiX, 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 lo 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 91101
                       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.

<PAGE>

Subordination Agreement             3770 Tansy/Structural GenomiX, Inc. - Page 4

      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 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             3770 Tansy/Structural GenomiX, 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:                          STRUCTURAL GENOMIX, INC.,
                                 a Delaware corporation

                                 By: ____________________________________
                                 Its: ___________________________________

LANDLORD:                        ARE-3770 TANSY 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             3770 Tansy/Structural GenomiX, Inc. - Page 6

                      EXHIBIT A TO SUBORDINATION AGREEMENT

                                Legal Description

<PAGE>

Area B Diagram                      3770 Tansy/Structural GenomiX, Inc. - Page 1

                               EXHIBIT G TO LEASE

                      CONDITION OF AREA B UPON TERMINATION

                                  See Attached

<PAGE>

                                   EXHIBIT G

                                  [FLOOR PLAN]<PAGE>

                                                                   EXHIBIT 10.15

                                                                        EXECUTED
                                                                        ORIGINAL

                                      LEASE

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                                BRS TORREY I, LLC
                      a Delaware limited liability company

                                  as Landlord,

                                       and

                            STRUCTURAL GENOMIX, INC.,
                             a Delaware corporation

                                    as Tenant

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                       SUMMARY OF BASIC LEASE INFORMATION

               The undersigned hereby agree to the following terms of this
Summary of Basic Lease Information (the "SUMMARY"). This Summary is hereby
incorporated into and made a part of the attached Lease (the "LEASE") which
pertains to the "Project," as that term is defined in the Lease, commonly known
as "10575/10581 ROSELLE STREET" located in San Diego, California. This Summary
and the Lease are collectively referred to herein as the "LEASE". Each reference
in the Lease to any term of this Summary shall have the meaning set forth in
this Summary for such term. In the event of a conflict between the terms of this
Summary and the Lease, the terms of the Lease shall prevail. Any capitalized
terms used herein and not otherwise defined herein shall have the meanings set
forth in the Lease.

           TERMS OF LEASE
      (REFERENCES ARE TO THE LEASE)             DESCRIPTION
1.    Date:                              6.1, 2001 ("EFFECTIVE DATE")

2.    Landlord:                          BRS TORREY I, LLC
                                         a Delaware limited liability company
                                         c/o Mr. Matt Root
                                         The Shidler Group
                                         4660 La Jolla Village  Drive, Suite 800
                                         San Diego, CA 92122

3.    Tenant:                            STRUCTURAL GENOMIX, INC.,
                                         a Delaware corporation

4.    Premises (Article 1).

      4.1  Addresses of Buildings:       10575/10581 Roselle Street
                                         San Diego, California 92121

      4.2  Premises:                     24,805 rentable square feet as further
                                         set forth in Exhibit "A" to the Lease.

5.    Lease Term (Article 2).

      5.1  Length of Term:               Seven (7) years.

      5.2  Lease Commencement Date:      The Lease Commencement Date shall occur
                                         as set forth in Article 2 of the Lease.
                                         The Lease Commencement Date is
                                         anticipated to be September 1, 2001.

      5.3  Lease Expiration Date:        The last day of the month in which the
                                         seventh (7th) anniversary of the Lease
                                         Commencement Date occurs.

6.    Base Rent and Ground Rent
      (Article 3)

      6.1  Ground Rent:                  $3,742.10 per month during the
                                         Pre-Commencement Period, as described
                                         in Section 3.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      (i)
<PAGE>

      6.2  Base Rent:

<TABLE>
<CAPTION>
                                             Monthly       Monthly Rental Rate
                                         Installment of            Per
Lease Year           Annual Base Rent       Base Rent          Square Foot
----------           ----------------    --------------    -------------------
<S>                  <C>                 <C>               <C>
    1                  $669,501.00         $58,291.75               $2.35
    2                  $723,313.80         $60,276.15               $2.43
    3                  $750,103.20         $62,508.60               $2.52
    4                  $776,892.60         $64,741.05               $2.61
    5                  $803,682.00         $66,973.50               $2.70
    6                  $830,471.40         $69,205.95               $2.79
    7                  $860,237.40         $71,686.45               $2.89
</TABLE>

7.    Additional Rent (Article 4).

      7.1  Tenant's Share:               Sixty Five and ninety-four hundredths
                                         percent (65.94%)

8.    Security Deposit (Article 21);     $349,750.50

9.    Parking Pass Ratio                 Pro-rata basis.
      (Article 28):

10.   Broker(s) (Section 31.17):         Neil Fox, Phase 3 Properties
                                         (Landlord's Broker)

                                         Neil Fox, Phase 3 Properties (Tenant's
                                         Broker)

11.   Address of Tenant                  STRUCTURAL GENOMIX, INC.,
      (Section 31.12):                   10505 Roselle Street
                                         San Diego, California 92121
                                         Attention:  Ms. Geneva Davis
                                         (Prior to Lease Commencement Date)

                                                       and

                                         10505 Roselle Street
                                         San Diego, California 92121
                                         Attention:  Ms. Geneva Davis
                                         (After to Lease Commencement Date)

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      (ii)

<PAGE>

The foregoing terms of this Summary are hereby agreed to by Landlord and Tenant.

           "LANDLORD"                    BRS TORREY I, LLC,
                                         a Delaware limited liability company

                                         By:           /s/ [Illegible]
                                               ---------------------------------
                                               _________________________________

                                         Its:            Member

                                               By:
                                                     ___________________________
                                                     Its:
                                                           _____________________

           "TENANT"                      STRUCTURAL GENOMIX, INC.,
                                         a Delaware corporation

                                         By:           /s/ Tim Harris
                                               ---------------------------------
                                               Name:        T. Harris
                                               Title:       Pres & CEO

                                         By:         /s/ [Illegible]
                                               ---------------------------------
                                               Name:        [Illegible]
                                               Title:       EVP

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                     (iii)

<PAGE>

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE                            SUBJECT MATTER                           PAGE
-------                            --------------                           ----
<S>           <C>                                                           <C>
ARTICLE 1     PREMISES, BUILDING, PROJECT, AND COMMON AREAS ................   1

ARTICLE 2     LEASE TERM ...................................................   2

ARTICLE 3     BASE RENT AND GROUND RENT ....................................   2

ARTICLE 4     ADDITIONAL RENT ..............................................   2

ARTICLE 5     USE OF PREMISES ..............................................   6

ARTICLE 6     SERVICES AND UTILITIES .......................................   7

ARTICLE 7     REPAIRS ......................................................   8

ARTICLE 8     ADDITIONS AND ALTERATIONS ....................................   8

ARTICLE 9     COVENANT AGAINST LIENS .......................................   9

ARTICLE 10    INSURANCE ....................................................   9

ARTICLE 11    DAMAGE AND DESTRUCTION .......................................  11

ARTICLE 12    NONWAIVER ....................................................  12

ARTICLE 13    CONDEMNATION .................................................  12

ARTICLE 14    ASSIGNMENT AND SUBLETTING ....................................  13

ARTICLE 15    SURRENDER OF PREMISES; REMOVAL OF TRADE FIXTURES .............  16

ARTICLE 16    HOLDING OVER .................................................  17

ARTICLE 17    ESTOPPEL CERTIFICATES ........................................  17

ARTICLE 18    SUBORDINATION ................................................  17

ARTICLE 19    DEFAULTS; REMEDIES ...........................................  18

ARTICLE 20    COVENANT OF QUIET ENJOYMENT ..................................  20

ARTICLE 21    SECURITY DEPOSIT .............................................  20

ARTICLE 22    INTENTIONALLY OMITTED ........................................  20

ARTICLE 23    SIGNS ........................................................  20

ARTICLE 24    COMPLIANCE WITH LAW ..........................................  21

ARTICLE 25    LATE CHARGES .................................................  21

ARTICLE 26    LANDLORD'S RIGHT TO CURE DEFAULT; PAYMENTS BY TENANT .........  22

ARTICLE 27    ENTRY BY LANDLORD ............................................  22
</TABLE>

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      (iv)
<PAGE>

<TABLE>
<S>           <C>                                                             <C>
ARTICLE 28    TENANT PARKING ...............................................  23

ARTICLE 29    EARLY TERMINATION AND CONFIDENTIALITY ........................  23

ARTICLE 30    RIGHT OF FIRST REFUSAL .......................................  23

ARTICLE 31    MISCELLANEOUS PROVISIONS .....................................  24
</TABLE>

EXHIBIT "A"   OUTLINE OF FLOOR PLAN OF PREMISES
EXHIBIT "B"   NOTICE OF LEASE TERM DATES
EXHIBIT "C"   RULES AND REGULATIONS
EXHIBIT "D"   FORM OF TENANT'S ESTOPPEL CERTIFICATE
EXHIBIT "E"   TENANT WORK LETTER
EXHIBIT "F'   ENVIRONMENTAL DOCUMENTS

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      (v)
<PAGE>

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                             INDEX OF DEFINED TERMS

<TABLE>
<S>                                                                    <C>
Additional Rent...................................................             3
Affiliate ........................................................            16
Alterations ......................................................             8
Approved Plans....................................................     Exhibit E
Architect.........................................................     Exhibit E
Arroyo Parkway Plaza .............................................             1
Base Building.....................................................     Exhibit E
Base Rent ........................................................             2
Brokers ..........................................................            26
Building .........................................................             1
Building Common Areas.............................................             1
Common Areas .....................................................             1
Construction Drawings ............................................     Exhibit E
Contract..........................................................     Exhibit E
Contractor .......................................................     Exhibit E
Control ..........................................................            16
Cost Pools........................................................             4
Delivery Date.....................................................     Exhibit E
Early Termination Date ...........................................            23
Effective Date ...................................................       Summary
Engineers ........................................................     Exhibit E
Environmental Documents ..........................................            28
Estimate..........................................................             6
Estimate Statement ...............................................             6
Estimated Amount .................................................             6
Excess............................................................             5
Existing Hazardous Materials .....................................            29
Expense Year .....................................................             3
Extraction Unit ..................................................            22
First Offer Commencement Date ....................................            24
First Offer Notice ...............................................            24
First Offer Rent .................................................            24
First Offer Space ................................................            24
Force Majeure-....................................................            26
Ground Rent.......................................................             2
Hazardous Material ...............................................            27
Landlord .........................................................             1
Landlord Consulting Fee ..........................................     Exhibit E
Landlord Indemnities .............................................            28
Landlord Parties .................................................             9
Landlord's Work ..................................................     Exhibit E
Lease.............................................................             1
Lease Commencement Date ..........................................             2
Lease Expiration Date ............................................             2
Lease Term .......................................................             2
Lease Year .......................................................             2
Losses ...........................................................            28
Monitoring Well(s) ...............................................            22
Notices...........................................................            26
number of days ...................................................     Exhibit E
Operating Expenses ...............................................             3
</TABLE>

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      (vi)
<PAGE>

<TABLE>
<S>                                                                    <C>
Option Notice ....................................................            23
Other Improvements ...............................................            29
Pre-Commencement Period ..........................................             2
Premises .........................................................             1
Project ..........................................................             1
Project Common Areas .............................................             1
Project Expenses .................................................             4
Proposition 13 ...................................................             4
Rent .............................................................             3
Security Deposit .................................................            20
Seller ...........................................................            23
Statement ........................................................             5
Subject Space ....................................................            13
Subleasing Costs .................................................            l4
Substances .......................................................            28
Substantial Completion ...........................................             2
Summary ..........................................................             1
Tax Expenses .....................................................             4
Tenant ...........................................................             1
Tenant Improvement Allowance .....................................     Exhibit E
Tenant Improvement Allowance Items ...............................     Exhibit E
Tenant Improvements ..............................................     Exhibit E
Tenant Notice ....................................................            24
Tenant Work ......................................................             2
Tenant's Agents ..................................................     Exhibit E
Tenant's Share ...................................................             5
Transfer Notice ..................................................            13
Transfer Premium .................................................            14
Transferee .......................................................            13
Transfers ........................................................            13
Violations .......................................................            28
Worker or Workers ................................................            28
</TABLE>

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                     (vii)
<PAGE>

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                                      LEASE

      This Lease, which includes the preceding Summary of Basic Lease
Information (the "SUMMARY") attached hereto and incorporated herein by this
reference (the Lease and Summary are sometimes collectively referred to herein
as the "LEASE"), dated as of the date set forth in Section 1 of the Summary is
made by and between BRS TORREY I, LLC, a Delaware limited liability company
("LANDLORD"), and STRUCTURAL GENOMIX, INC., a Delaware corporation ("TENANT").

                                    ARTICLE 1

                  PREMISES, BUILDING, PROJECT, AND COMMON AREAS

      1.1 Premises, Building, Project and Common Areas.

            1.1.1 The Premises. Upon and subject to the terms hereinafter set
forth in this Lease, Landlord hereby leases to Tenant and Tenant hereby leases
from Landlord the premises set forth in Section 4.2 of the Summary (the
"PREMISES"), which Premises are located in the "Building," as that term is
defined in Section 1.1.2, below. The outline of the Premises is set forth in
Exhibit "A" attached hereto.

            1.1.2 The Building and the Project. The Premises are a part of the
buildings set forth in Section 4.1 of the Summary (the "BUILDING") located in
San Diego, California. The Building is part of a project known as "10575/10581
ROSELLE STREET". The term "PROJECT," as used in this Lease, shall mean (i) the
Buildings and the "Common Areas", as that term is defined in Section 1.1.3
below, (ii) the land (which is improved with landscaping, parking facilities and
other improvements) upon which the Building, parking facilities and the Common
Areas are located, and (iii) at Landlord's discretion, any additional real
property, areas, buildings or other improvements added thereto.

            1.1.3 Common Areas. Tenant shall have the non-exclusive right to use
in common with other tenants in the Project, and subject to the rules and
regulations referred to in Article 5 of this Lease, those portions of the
Project which are provided, from time to time, for use in common by Landlord,
Tenant and any other tenants of the Project, whether or not those areas are open
to the general public (such areas, together with such other portions of the
Project designated by Landlord, in its discretion are collectively referred to
herein as the "COMMON AREAS"). The Common Areas shall consist of the "Project
Common Areas" and the "Building Common Areas". The term "PROJECT COMMON Areas",
as used in this Lease, shall mean the portion of the Project designated as such
by Landlord. "BUILDING COMMON AREAS", as used in this Lease, shall mean the
portions of the Common Areas of the Buildings designated as such by Landlord.
The manner in which the Common Areas are maintained and operated shall be at the
sole discretion of Landlord. Landlord reserves the right to make alterations or
additions to, or to change the location of, elements of the Project and the
Common Areas.

      1.2 Number of Square Feet of Premises, Building, and Project. For purposes
of this Lease, and unless otherwise provided herein, "usable square feet" and
"rentable square feet" and any other statement of square footage set forth in
this Lease for the Premises, the Building, the Project, or any portion thereof,
or that may otherwise be used in calculating amounts owed Landlord by Tenant,
including but not limited to rental, security deposit, additional rental and/or
Tenant's Share of Operating Expenses, is an approximation which Landlord and
Tenant agree is reasonable and the rental and Tenant's Share based thereon is
not subject to revision whether or not the actual square footage is more or
less.

      1.3 Base, Shell and Core Work in the Premises. Except as specifically set
forth in this Lease and in the Tenant Work Letter attached hereto as Exhibit "E"
(if applicable), Landlord shall not be obligated to provide or pay for any
improvement work or services related to the improvement of the Premises. Tenant
also acknowledges that Landlord has made no representation or warranty regarding
the condition of the Premises or the Project except as specifically set forth in
this Lease and the Tenant Work Letter.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                                    ARTICLE 2

                                   LEASE TERM

      2.1 Lease Term. The terms and provisions of this Lease shall be effective
as of the date of this Lease. The term of this Lease (the "LEASE TERM") shall be
as set forth in Section 5.1 of the Summary, shall commence on the date which is
the earlier to occur of (i) one hundred twenty (120) days from the Effective
Date, (ii) the date Tenant takes occupancy of the Premises, and (iii) the date
of "Substantial Completion", as that term is defined in this Article 2, of the
Premises ("LEASE COMMENCEMENT DATE"), and shall terminate on the date set forth
in Section 5.3 of the Summary (the "LEASE EXPIRATION DATE") unless this Lease is
sooner terminated as hereinafter provided. For purposes of this Lease, the term
"LEASE YEAR" shall mean each consecutive twelve (12) month period during the
Lease Term; provided, however, that the first Lease Year shall commence on the
Lease Commencement Date and end on the last day of the eleventh month thereafter
and the second and each succeeding Lease Year shall commence on the first day of
the next calendar month; and further provided that the last Lease Year shall end
on the Lease Expiration Date. For purposes of this Lease, "SUBSTANTIAL
COMPLETION" of the Premises shall occur upon the completion of construction, as
reasonably determined by Landlord, of the "Tenant Improvements," as that term is
defined in the Tenant Work Letter, in the Premises pursuant to the plans and
drawings which are prepared pursuant to the terms of the Tenant Work Letter,
with the exception of any punch list items and any tenant fixtures,
work-stations, built-in furniture, or equipment to be installed by Tenant in the
Premises pursuant to the terms of the Tenant Work Letter or to be installed
under the supervision of "Contractor" as that term is defined in the Tenant Work
Letter (the "TENANT WORK"). At any time during the Lease Term, Landlord may
deliver to Tenant a notice in the form as set forth in Exhibit "B", attached
hereto which notice Tenant shall execute and return to Landlord within five (5)
days of receipt thereof.

                                    ARTICLE 3

                            BASE RENT AND GROUND RENT

      Tenant shall pay, without notice or demand, to Landlord or Landlord's
agent at the management office of the Project, or at such other place as
Landlord may from time to time designate in writing, in currency or a check for
currency which, at the time of payment, is legal tender for private or public
debts in the United States of America, (i) base rent ("BASE RENT") as set forth
in Section 6 of the Summary, payable in equal monthly installments as set forth
in Section 6 of the Summary in advance on or before the first day of each and
every month during the Lease Term, without any setoff or deduction whatsoever;
and (ii) an amount equal to $3,742.10 per month (the "GROUND RENT") during the
period commencing upon the date Landlord becomes obligated to begin paying the
Ground Rent to the current owner of the property and ending upon the Lease
Commencement Date (the "PRE-COMMENCEMENT PERIOD"). The Base Rent for the first
full month of the Lease Term, together with the Ground Rent for the first month
of the Pre-Commencement Period, shall be paid at the time of Tenant's execution
of this Lease. If any Rent payment date (including the Lease Commencement Date)
falls on a day of the month other than the first day of such month or if any
payment of Rent is for a period which is shorter than one month, the Rent for
any fractional month shall accrue on a daily basis for the period from the date
such payment is due to the end of such calendar month or to the end of the Lease
Term at a rate per day which is equal to 1/365 of the Rent. All other payments
or adjustments required to be made under the terms of this Lease that require
proration on a time basis shall be prorated on the same basis.

                                    ARTICLE 4

                                 ADDITIONAL RENT

      4.1 General Terms. As set forth in this Article 4, in addition to paying
the Base Rent Specified in Article 3 of this Lease, Tenant shall pay "Tenant's
Share" of the annual "Project Expenses," as those terms are defined in Sections
4.2.5 and 4.2.3 of this Lease, respectively, allocated to the tenants of the
Building pursuant to the terms of Section 4.3 below. Such payments by Tenant,
together with any and all other amounts payable by Tenant to Landlord pursuant
to the terms of this Lease, are hereinafter collectively referred to as the
"ADDITIONAL RENT", and the Base Rent and the Additional Rent are sometimes
herein collectively referred to as "RENT." All amounts due under this Article 4
as Additional Rent shall be payable for the same periods and in the same manner
as the Base

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -2-
<PAGE>

Rent. No Additional Rent shall be due or owing for the Pre-Commencement Period.
Without limitation on other obligations of Tenant which survive the expiration
of the Lease Term, the obligations of Tenant to pay the Additional Rent provided
for in this Article 4 shall survive the expiration of the Lease Term, and
Landlord shall use commercially reasonable efforts to deliver the Statement, as
defined below, of any Additional Rent to Tenant within six (6) months after the
expiration or termination of this Lease, as applicable.

      4.2 Definitions. As used in this Article 4, the following terms shall have
the meanings hereinafter set forth:

            4.2.1 "EXPENSE YEAR" shall mean each calendar year in which any
portion of the Lease Term falls, through and including the calendar year in
which the Lease Term expires.

            4.2.2 "OPERATING EXPENSES" shall mean all expenses, costs and
amounts of every kind and nature incurred in connection with the ownership,
management, maintenance, repair, replacement, restoration or operation of the
Project, including, without limitation, any amounts paid or incurred for (i) the
cost of supplying all utilities servicing the Project, the cost of operating,
maintaining, repairing, renovating, complying with conservation measures in
connection with, and managing the utility systems, mechanical systems, sanitary
and storm drainage systems, and elevator systems, and the cost of supplies and
equipment, maintenance, and service contracts in connection therewith; (ii) the
cost of licenses, certificates, permits and inspections and the cost of
contesting the validity or applicability of any governmental enactments which
may affect Operating Expenses, and the costs incurred in connection with the
implementation and operation of a transportation system management program or a
municipal or public shuttle service or parking program; (iii) the cost of all
insurance carried in connection with the Project, or any portion thereof; (iv)
the cost of landscaping, relamping, and all supplies, tools, equipment and
materials used in the operation, repair and maintenance of the Project, or any
portion thereof; (v) the cost of parking area repair, restoration, and
maintenance, including, but not limited to, resurfacing, repainting,
restripping, and cleaning; (vi) fees, charges and other costs, including
consulting fees, legal fees and accounting fees, of all contractors and
consultants; (vii) payments under any equipment rental agreements or management
agreements (including the cost of any management fee and the fair rental value
of any office space provided thereunder); (viii) wages, salaries and other
compensation and benefits of all persons engaged in the operation, maintenance,
management, or security of the Project, or any portion thereof, including
employer's Social Security taxes, unemployment taxes or insurance, and any other
taxes which may be levied on such wages, salaries, compensation and benefits;
(ix) payments under any easement, license, operating agreement, declaration,
covenant, conditions and restrictions, or any other instrument pertaining to the
sharing of costs by the Project, or any portion thereof; (x) the cost of
operation, repair, maintenance and replacement of all systems and equipment
which serve the Project in whole or part; (xi) exterior window cleaning, trash
removal, maintenance and replacement of curbs and walkways, repair to roofs and
re-roofing; and (xii) the cost of any capital improvements made to the Project
which are intended as a labor-saving device or to effect other economies in the
operation or maintenance of the Project, or any portion thereof, or made to all
or any portion of the Project, or any portion thereof, after the Lease
Commencement Date that are required under any governmental law or regulation
that was not applicable to the Project at the time that permits for the
construction of the Building were obtained; provided, however, that each such
permitted capital expenditure shall be amortized (including interest on the
unamortized cost) over its useful life as Landlord shall reasonably determine.
If the Building is not fully occupied during all or a portion of any Expense
Year, or if all Operating Expenses allocable to a particular Expense Year have
not been billed to Landlord or paid in such Expense Year, Landlord shall make an
appropriate adjustment to the variable components of Operating Expenses for such
year or applicable portion thereof, employing sound accounting and management
principles, to determine the amount of Operating Expenses that would have been
paid had the Building been fully occupied or if all Operating Expenses had been
billed or paid in such Expense Year. Landlord shall have the right, from time to
time, to equitably allocate some or all of the Operating Expenses among
different tenants of the Project and/or the Building (the "COST POOLS").

            Notwithstanding the foregoing, Operating Expenses shall not include:

                  (i) Legal fees incurred in negotiating and enforcing tenant
leases;

                  (ii) Real estate brokers' leasing commissions;

                  (iii) The cost of providing any service directly to and paid
directly by any tenant;

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -3-
<PAGE>

                  (iv) Costs of any items to the extent Landlord receives
reimbursement from insurance proceeds or from a third party (such proceeds to be
credited to Operating Expenses in the year in which received, except that any
deductible amount under any insurance policy shall be included within Operating
Expenses);

                  (v) Costs arising from Landlord's charitable or political
contributions;

                  (vi) Depreciation, interest and principal payments on any
mortgage or mortgages, and rental under any ground or underlying lease or
leases, including without limitation, costs incurred in obtaining or refinancing
any such financing and any other debt costs:

                  (vii) All costs and expenses for which Tenant or other tenants
directly reimburse Landlord other than as part of Rent or Operating Expenses;

                  (viii) Costs incurred (including permit, license, and
inspection fees but excluding utilities) or cash consideration paid in
renovating otherwise improving, decorating, painting or redecorating space for
tenants, prospective tenants, other occupants, vacant space available for those
tenants, prospective tenants, or other occupants; however, this exclusion does
not apply to remove from Operating Expenses the costs of ordinary maintenance
supplied to the tenants of the Building or the costs of ordinary maintenance of
the common areas, or other modifications to the common areas of the Building
other than the scope of work currently being performed by the Landlord as
described herein.

            4.2.3 "PROJECT EXPENSES" shall mean the sum of "Operating Expenses"
and "Tax Expenses".

            4.2.4 "TAX EXPENSES" shall mean all federal, state; county, or local
governmental or municipal taxes, fees, charges or other impositions of every
kind and nature, whether general, special, ordinary or extraordinary (including,
without limitation, real estate taxes, general and special assessments, transit
taxes, leasehold taxes or taxes based upon the receipt of rent, including gross
receipts or sales taxes applicable to the receipt of rent, unless required to be
paid by Tenant, personal property taxes imposed upon the fixtures, machinery,
equipment, apparatus, systems and equipment, appurtenances, furniture and other
personal property used in connection with all or any portion of the Project),
which shall be paid during any Expense Year (without regard to any different
fiscal year used by such governmental or municipal authority) because of or in
connection with the ownership, leasing and operation of the Project, or any
portion thereof.

            4.2.4.1 Tax Expenses shall include, without limitation:

                  (i) Any assessment, tax, fee, levy or charge in addition to,
      or in substitution, partially or totally, of any assessment, tax, fee,
      levy or charge previously included within the definition of real property
      tax, it being acknowledged by Tenant and Landlord that Proposition 13 was
      adopted by the voters of the State of California in the June 1978 election
      ("PROPOSITION 13") and that assessments, taxes, fees, levies and charges
      may be imposed by governmental agencies for such services as fire
      protection, street, sidewalk and road maintenance, refuse removal and for
      other governmental services formerly provided without charge to property
      owners or occupants, and, in further recognition of the decrease in the
      level and quality of governmental services and amenities as a result of
      Proposition 13, Tax Expenses shall also include any governmental or
      private assessments or the Project's contribution towards a governmental
      or private cost-sharing agreement for the purpose of augmenting or
      improving the quality of services and amenities normally provided by
      governmental agencies. It is the intention of Tenant and Landlord that all
      such new and increased assessments, taxes, fees, levies, and charges and
      all similar assessments, taxes, fees, levies and charges be included
      within the definition of Tax Expenses for the purposes of this Lease;

                  (ii) Any assessment, tax, fee, levy, or charge allocable to or
      measured by the area of the Premises or the Rent payable hereunder,
      including, without limitation, any gross income tax with respect to the
      receipt of such rent, or upon or with respect to the possession, leasing,
      operating,

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -4-
<PAGE>

      management, maintenance, alteration, repair, use or occupancy by Tenant of
      the Premises, or any portion thereof;

                  (iii) Any assessment, tax, fee, levy or charge, upon this
      transaction or any document to which Tenant is a party, creating or
      transferring an interest or an estate in the Premises; and

                  (iv) Any possessory taxes charged or levied in lieu of real
      estate taxes.

            4.2.5 "TENANT'S SHARE" shall mean the percentage set forth in
Section 7.1 of the Summary. Tenant's Share was calculated by multiplying the
number of rentable square feet of the Premises by 100, and dividing the product
by the total rentable square feet in the Building. It is understood and agreed
that the square footage figures set forth in the Basic Lease Provisions may not
be strictly calculated pursuant to BOMA standards and are approximations which
Landlord and Tenant agree are reasonable and shall not be subject to revision
except in connection with an actual change in the size of the Premises or a
change in the space available for lease in the Building or in the Project, as
determined by Landlord.

      4.3 Allocation of Project Expenses to Tenants of the Building. Except as
provided herein, Project Expenses (i.e., Operating Expenses and Tax Expenses)
are determined annually for the Project as a whole. If the Building is only one
of multiple buildings which constitute the Project, Project Expenses shall be
allocated by Landlord, in its reasonable discretion, to both the tenants of the
Building and the tenants of the other buildings in the Project, and the portion
of Project Expenses allocated to the tenants of the Building shall consist of
(i) all Project Expenses attributable solely to the Building and (ii) an
equitable portion of Project Expenses attributable to the Project as a whole and
not attributable solely to the Building or to any other building of the Project.
Landlord shall use commercially reasonable efforts to install separate metering
devices for all tenants for utility services utilized solely by such tenant and
in such event, the tenants shall pay the cost of such services directly to
Landlord or the utility company, as determined by Landlord, upon demand,
including the cost of the metering devices. So long as the separately metered
tenants pay such expenses, such costs shall be excluded from Operating Expenses.
Tenant shall not be obligated to pay, as Operating Expenses, any utility costs
solely attributable to any other tenant.

      4.4 Calculation and Payment of Additional Rent.

            4.4.1 Calculation of Excess. If for any Expense Year ending or
commencing within the Lease Term, Tenant's Share of Project Expenses allocated
to the tenants of the Building pursuant to Section 4.3 above for such Expense
Year exceeds Tenant's Share of the Project Expenses paid by Tenant, then Tenant
shall pay to Landlord, in the manner set forth in Section 4.4.2, below, and as
Additional Rent, an amount equal to Tenant's Share.

            4.4.2 Statement of Actual Project Expenses and Payment by Tenant.
Landlord shall endeavor to give to Tenant on or before the first day of April
following the end of each Expense Year, a statement (the "STATEMENT") which
shall state the Project Expenses incurred or accrued for such preceding Expense
Year and the amount thereof allocated to the tenants of the Building, and which
shall indicate the amount, if any, of any excess ("EXCESS"). Upon receipt of the
Statement for each Expense Year ending during the Lease Term, if an Excess is
present, Tenant shall pay, with its next installment of Base Rent due, the full
amount of the Excess for such Expense Year, less the amounts, if any, paid
during such Expense Year as "Estimated Amount," as that term is defined in
Section 4.4.3, below. The failure of Landlord to timely furnish the Statement
for any Expense Year shall not prejudice Landlord or Tenant from enforcing its
rights under this Article 4. Even though the Lease Term has expired and Tenant
has vacated the Premises, when the final determination is made of Tenant's Share
of Project Expenses allocated to the tenants of the Building for the Expense
Year in which this Lease terminates, if an Excess is present, Tenant shall
immediately pay to Landlord an amount as calculated pursuant to the provisions
of Section 4.4.1 of this Lease. The provisions of this Section 4.4.2 shall
survive the expiration or earlier termination of the Lease Term for six (6)
months. In the event Tenant's payment of Project Expenses for an Expense Year
exceeds Tenant's Share of Project Expenses for such year, Landlord shall credit
such excess to the amount of Project Expenses next becoming due from Tenant.

            4.4.3 Statement of Estimated Project Expenses. In addition, Landlord
shall endeavor to give Tenant a yearly expense estimate statement (the "ESTIMATE
STATEMENT") which shall set forth Landlord's reasonable

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -5-
<PAGE>

estimate (the "ESTIMATE") of what the total amount of Project Expenses for the
then-current Expense Year shall be, the amount thereof to be allocated to the
tenants of the Building, and the estimated amount (the "ESTIMATED AMOUNT"). The
failure of Landlord to timely furnish the Estimate Statement for any Expense
Year shall not preclude Landlord from enforcing its rights to collect any
Estimated Amount under this Article 4. If pursuant to the Estimate Statement an
Estimated Amount is calculated for the then-current Expense Year, Tenant shall
pay, with its next installment of Base Rent due, a fraction of the Estimated
Amount for the then-current Expense Year (reduced by any amounts paid pursuant
to the last sentence of this Section 4.4.3). Such fraction shall have as its
numerator the number of months which have elapsed in such current Expense Year,
including the month of such payment, and twelve (12) as its denominator. Until a
new Estimate Statement is furnished (which Landlord shall have the right to
deliver to Tenant at any time), Tenant shall pay monthly, with the monthly Base
Rent installments, an amount equal to one-twelfth (1/12) of the total Estimated
Amount set forth in the previous Estimate Statement delivered by Landlord to
Tenant.

      4.5 Taxes and Other Charges for Which Tenant Is Directly Responsible.
Tenant shall reimburse Landlord upon demand for any and all taxes required to be
paid by Landlord, excluding state, local and federal personal or corporate
income taxes measured by the net income of Landlord from all sources and estate
and inheritance taxes, whether or not now customary or within the contemplation
of the parties hereto, when:

            4.5.1 Said taxes are measured by or reasonably attributable to the
cost or value of Tenant's equipment, furniture, fixtures and other personal
property located in the Premises, or by the cost or value of any leasehold
improvements made in or to the Premises by or for Tenant, to the extent the cost
or value of such leasehold improvements exceeds the cost or value of a building
standard build-out as determined by Landlord regardless of whether title to such
improvements shall be vested in Tenant or Landlord;

            4.5.2 Said taxes are assessed upon or with respect to the
possession, leasing, operation, management, maintenance, alteration, repair, use
or occupancy by Tenant of the Premises or any portion of the Project (including
the Project parking facility); or

            4.5.3 Said taxes are assessed upon this transaction or any document
to which Tenant is a party creating or transferring an interest or an estate in
the Premises.

                                    ARTICLE 5

                                 USE OF PREMISES

      Tenant shall use the Premises solely for biotechnology research and
general office and related purposes consistent with the character of the
Building, and Tenant shall not use or permit the Premises to be used for any
other purpose or purposes whatsoever. Tenant further covenants and agrees that
Tenant shall not use, or suffer or permit any person or persons to use, the
Premises or any part thereof for any use or purpose contrary to the provisions
of the Rules and Regulations set forth in Exhibit "C", attached hereto, or in
violation of the laws of the United States of America, the State of California,
or the ordinances, regulations or requirements of the local municipal or county
governing body or other lawful authorities having jurisdiction over the Project.
Tenant shall comply with all recorded covenants, conditions, and restrictions
now or hereafter affecting the Project. Tenant shall not use or allow another
person or entity to use any part of the Premises for the storage, use,
treatment, manufacture or sale of "Hazardous Material," as that term is defined
in Section 31.22 of this Lease, which is in violation of federal, state, or
local law.

                                    ARTICLE 6

                             SERVICES AND UTILITIES

      6.1 Standard Tenant Services. Except as set forth herein, Landlord shall
provide to the Building and the Project (subject to the reimbursement either
through Tenant's Share of Project Expenses or direct payment by Tenant either to
Landlord or to the service provider, all as may be provided herein) the
following services on all days (unless otherwise stated below) during the Lease
Term.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -6-
<PAGE>

            6.1.1 Landlord shall provide adequate electrical wiring and
facilities and power for normal general commercial use as determined by
Landlord. Tenant shall bear the cost of replacement of lamps, starters and
ballasts for lighting fixtures within the Premises.

            6.1.2 Landlord shall provide water for drinking, lavatory and toilet
purposes.

      6.2 Overstandard Tenant Use. Tenant shall have the right to install
separate metering devices, supplementary air conditioning units or other
facilities in the Premises, including supplementary or additional metering
devices, and the cost thereof, including the cost of installation, operation and
maintenance, increased wear and tear on existing equipment and other similar
charges, shall be paid by Tenant. If the Premises are not separately metered,
should Tenant use water, electricity, heat or air conditioning in excess of that
otherwise paid for by Tenant's Share of Operating Expenses pursuant to this
Lease, Tenant shall pay to Landlord, upon billing, the cost of such excess
consumption, the cost of the installation, operation, and maintenance of
equipment which is installed in order to supply such excess consumption, and the
cost of the increased wear and tear on existing equipment caused by such excess
consumption; and Landlord may install devices to separately meter any increased
use and in such event Tenant shall pay the increased cost directly to Landlord,
on demand, including the cost of such additional metering devices.

      6.3 Interruption of Use. Landlord shall use commercially reasonable
efforts to furnish services described in this section; provided, however, Tenant
agrees that Landlord shall not be liable for damages, by abatement of Rent or
otherwise, for failure to furnish or delay in furnishing any service (including
telephone and telecommunication services), or for any diminution in the quality
or quantity thereof, when such failure or delay or diminution is occasioned, in
whole or in part, by repairs, replacements, or improvements, by any strike,
lockout or other labor trouble, by inability to secure electricity, gas, water,
or other fuel at the Building or Project after reasonable effort to do so, by
any accident or casualty whatsoever, by act or default of Tenant or other
parties, or by any other cause beyond Landlord's reasonable control; and such
failures or delays or diminution shall never be deemed to constitute an eviction
or disturbance of Tenant's use and possession of the Premises or relieve Tenant
from paying Rent or performing any of its obligations under this Lease.
Furthermore, Landlord shall not be liable under any circumstances for a loss of,
or injury to, property or for injury to, or interference with, Tenant's
business, including, without limitation, loss of profits, however occurring,
through or in connection with or incidental to a failure to furnish any of the
services or utilities as set forth in this Article 6. However, should Tenant be
unable to use the Premises for the purpose set forth herein for a period of
greater than five (5) consecutive business days, and if such inability to use
the Premises for the purpose stated herein is solely due to Landlord's failure
to use commercially reasonable efforts to provide the services described in this
section, then Tenant shall be entitled to an equitable abatement of Base Rent
only. Landlord hereby agrees that Tenant shall be entitled to install, at
Tenant's sole cost and expense, and upon Landlord's further written approval as
to the size and location and installation of such generator, which approval
shall not be unreasonably withheld, conditioned or delayed, a generator or other
alternate provider of such utilities for purposes of providing alternate utility
service to the Premises.

                                    ARTICLE 7

                                     REPAIRS

      Tenant shall, at Tenant's own expense, keep the Premises, including all
improvements, fixtures and furnishings therein, in good order, repair and
condition at all times during the Lease Term. In addition, Tenant shall, at
Tenant's own expense and within any reasonable period of time specified by
Landlord, promptly and adequately repair all damage to the Premises and replace
or repair all damaged, broken, or worn fixtures and appurtenances; provided
however, that, if Tenant fails to make such repairs within a reasonable period
of time, Landlord may, but need not, make such repairs and replacements, and
Tenant shall pay Landlord the cost thereof, including a reasonable percentage of
the cost thereof sufficient to reimburse Landlord for all overhead, general
conditions, fees and other costs or expenses arising from Landlord's involvement
with such repairs and replacements forthwith upon being billed for same.
Landlord may, but shall not be required to, enter the Premises at all reasonable
times to make such repairs, alterations, improvements or additions to the
Premises or to the Project or to any equipment located in the Project as
Landlord shall desire or deem necessary or as Landlord may be required to do by
governmental or quasi-governmental authority or court order or decree. Tenant
hereby waives and releases its right to make repairs at

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -7-
<PAGE>

Landlord's expense under Sections 1941 and 1942 of the California Civil Code or
under any similar law, statute, or ordinance now or hereafter in effect.

                                    ARTICLE 8

                            ADDITIONS AND ALTERATIONS

      8.1 Landlord's Consent to Alterations. Subsequent to the completion of the
Tenant Work, as described in the Tenant Work Letter, Tenant may not make any
improvements, alterations, additions or changes to the Premises (collectively,
the "ALTERATIONS") without first procuring the prior written consent of Landlord
to such Alterations, which consent shall be requested by Tenant not less than
ten (10) days prior to the commencement thereof, and which consent shall not be
unreasonably withheld or delayed by Landlord; provided however, that Tenant may
make non-structural, interior, non-penetrating modifications to the Premises,
not exceeding a threshold of $50,000 per instance, or $100,000 per year or
$200,000 during the Lease Term, upon fifteen (15) days prior notice to Landlord.
Tenant may, however, install power, cable and related equipment and make
non-structural, interior, non-penetrating modifications to the Premises not
exceeding $10,000 per instance without prior notice to Landlord. The
construction of the initial improvements to the Premises shall be governed by
the terms of the Tenant Work Letter and not the terms of this Article 8.

      8.2 Manner of Construction. Landlord may impose, as a condition of its
prior consent to any and all Alterations or repairs of the Premises or about the
Premises, such requirements as Landlord in its sole discretion may deem
desirable, including, but not limited to, the requirement that upon Landlord's
request, Tenant shall, at Tenant's expense, remove such Alterations upon the
expiration or any early termination of the Lease Term (such items to be removed
by Tenant shall be determined by Landlord concurrent with its prior consent to
the Alterations), and/or the requirement that Tenant utilize for such purposes
only contractors, materials, mechanics and materialmen reasonably approved by
Landlord. Tenant shall construct such Alterations and perform such repairs in
conformance with any and all applicable federal, state, county or municipal
laws, rules and regulations and pursuant to a valid building permit, issued by
the City of San Diego, all in conformance with Landlord's construction rules and
regulations. All work with respect to any Alterations must be done in a good and
workmanlike manner and diligently prosecuted to completion to the end that the
Premises shall at all times be a complete unit except during the period of work.
In performing the work of any such Alterations, Tenant shall have the work
performed in such manner so as not to obstruct access to the Project or any
portion thereof, by any other tenant of the Project, and so as not to obstruct
the business of Landlord or other tenants in the Project, or interfere with the
labor force working in the Project. In addition to Tenant's obligations under
Article 9 of this Lease, upon completion of any Alterations, Tenant agrees to
cause a Notice of Completion to be recorded in the office of the Recorder of the
County of San Diego in accordance with Section 3093 of the Civil Code of the
State of California or any successor statute, if required, and Tenant shall
deliver to the Project management office a reproducible copy of the "as built"
drawings of the Alterations.

      8.3 Payment for Improvements. In the event Tenant requests that any
Alterations or repair work be performed directly by Landlord, the charges for
such work shall be deemed Additional Rent under this Lease, payable within five
(5) days of billing therefor, either periodically during construction or upon
the substantial completion of such work, at Landlord's option. Upon completion
of such work, Tenant shall deliver to Landlord evidence of payment, contractors'
affidavits and full and final waivers of all liens for labor, services or
materials. Tenant shall pay to Landlord a percentage of the cost of such work
sufficient to compensate Landlord for all overhead, general conditions, fees and
other costs and expenses arising from Landlord's involvement with such work,
which amount shall not exceed five percent (5%) of the costs of such work.

      8.4 Construction Insurance. In the event that Tenant makes any Alterations
Tenant agrees to carry "Builder's All Risk" insurance in an amount approved by
Landlord covering the construction of such Alterations, and such other insurance
as Landlord may require, it being understood and agreed that all of such
Alterations shall be insured by Tenant pursuant to Article 10 of this Lease
immediately upon completion thereof. In addition, Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of such Alterations and naming Landlord as a
co-obligee.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -8-
<PAGE>

      8.5 Landlord's Property. All Alterations, improvements, fixtures and/or
equipment which may be installed or placed in or about the Premises, and all
signs installed in, on or about the Premises, from time to time, shall be at the
sole cost of Tenant and shall be and become the property of Landlord, except
that Tenant may remove (i) any Alterations, improvements, fixtures and/or
equipment which Tenant can substantiate to Landlord have not been paid for with
any Tenant improvement allowance funds provided to Tenant by Landlord and (ii)
those items approved in writing by Landlord from time to time, provided Tenant
repairs any damage to the Premises and Building caused by such removal.
Furthermore, if Landlord, as a condition to Landlord's consent to any
Alteration, requires, as aforesaid, that Tenant remove any Alteration upon the
expiration or early termination of the Lease Term, Landlord may, by written
notice to Tenant prior to the end of the Lease Term, or given following any
earlier termination of this Lease, require Tenant, at Tenant's expense, to
remove such Alterations and to repair any damage to the Premises and Building
caused by such removal. If Tenant fails to complete such removal and/or to
repair any damage caused by the removal of any Alternations, Landlord may do so
and may charge the cost thereof to Tenant.

                                    ARTICLE 9

                             COVENANT AGAINST LIENS

      Landlord shall have the right at all times to post and keep posted on the
Premises any notice which it deems necessary for protection from such liens.
Tenant covenants and agrees not to suffer or permit any lien of mechanics or
materialmen or others to be placed against the Project, the Building or the
Premises, or any portion thereof, with respect to work or services claimed to
have been performed for or materials claimed to have been furnished to Tenant or
the Premises, and, in case of any such lien attaching or notice of any lien,
Tenant covenants and agrees to cause it to be immediately released and removed
of record. Notwithstanding anything to the contrary set forth in this Lease, in
the event that such lien is not released and removed on or before the date
occurring five (5) days after notice of such lien is delivered by Landlord to
Tenant, Landlord, at its sole option, may immediately take all action necessary
to release and remove such lien, without any duty to investigate the validity
thereof, and all sums, costs and expenses, including reasonable attorneys' fees
and costs, incurred by Landlord in connection with such lien shall be deemed
Additional Rent under this Lease and shall immediately be due and payable by
Tenant.

                                   ARTICLE 10

                                    INSURANCE

      10.1 Indemnification and Waiver. To the extent not prohibited by law,
Landlord, its partners, subpartners and their respective officers, agents,
servants, employees, and independent contractors (collectively, "LANDLORD
PARTIES") shall not be liable for, any damage either to person or property or
resulting from the loss of use thereof, which damage is sustained by Tenant.
Tenant shall, either prior to, during, or after the expiration of the Lease
Term, indemnify, defend, protect, and hold harmless Landlord Parties from any
and all loss, cost, damage, expense and liability (including without limitation
court costs and reasonable attorneys' fees) incurred in connection with or
arising from any cause in, on or about the Premises during the Lease Term,
provided that the terms of the foregoing indemnity shall not apply to the gross
negligence or willful misconduct of Landlord. The provisions of this Section
10.1 shall survive the expiration or sooner termination of this Lease with
respect to any claims or liability occurring prior to such expiration or
termination.

      10.2 Tenant's Compliance with Landlord's Fire and Casualty Insurance.
Tenant shall, at Tenant's expense, comply with all insurance company
requirements pertaining to the use of the Premises. If Tenant's conduct or use
of the Premises causes any increase in the premium for such insurance policies
then Tenant shall reimburse Landlord for any such increase. Tenant, at Tenant's
expense, shall comply with all rules, orders, regulations or requirements of the
American Insurance Association (formerly the National Board of Fire
Underwriters) and with any similar body.

      10.3 Tenant's Insurance. Tenant shall maintain the following coverages in
the following amounts.

            10.3.1 Comprehensive General Liability Insurance covering the
insured against claims of bodily injury, personal injury and property damage
arising out of Tenant's operations, assumed liabilities or use of the Premises,
including a Broad Form Comprehensive General Liability endorsement covering the
insuring provisions

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -9-
<PAGE>

of this Lease and the performance by Tenant of the indemnity agreements set
forth in Section 10.1 of this Lease, for limits of liability not less than:

            Bodily Injury and
            Property Damage Liability         $3,000,000 each occurrence
                                              $3,000,000 annual aggregate
            Personal Injury Liability         $3,000,000 each occurrence
                                              $3,000,000 annual aggregate
                                              0% Insured's participation

            10.3.2 Physical Damage Insurance covering (i) all office furniture,
trade fixtures, office equipment, merchandise and all other items of Tenant's
property on the Premises installed by, for, or at the expense of Tenant, (ii)
the Tenant Improvements, and (iii) all other improvements, alterations and
additions to the Premises. Such insurance shall be written on an "all risks" of
physical loss or damage basis, for the full replacement cost value new without
deduction for depreciation of the covered items and in amounts that meet any
co-insurance clauses of the policies of insurance and shall include a vandalism
and malicious mischief endorsement, sprinkler leakage coverage and earthquake
sprinkler leakage coverage.

            10.3.3 Worker's Compensation and Employer's Liability Insurance,
with a waiver of subrogation endorsement, with minimum limits of $1,000,000 per
employee and $1,000,000 per occurrence.

            10.3.4 Loss of income and extra expense insurance in such amounts as
will reimburse Tenant for direct or indirect loss of earnings attributable to
all perils commonly insured against by prudent tenants or attributable to
prevention of access to the Premises or to the Building as a result of such
perils.

      10.4 Form of Policies. The minimum limits of policies of insurance
required of Tenant under this Lease shall in no event limit the liability of
Tenant under this Lease. All insurance shall (i) be issued by an insurance
company having a rating of not less than A-X in Best's Insurance Guide or which
is otherwise acceptable to Landlord and licensed to do business in the State of
California; and (ii) provide that said insurance shall not be canceled or
coverage changed unless thirty (30) days' prior written notice shall have been
given to Landlord and any mortgagee or ground or underlying lessor of Landlord.
In addition, the insurance described in Section 10.3.1 above shall (a) name
Landlord, and any other party specified by Landlord, as an additional insured;
(b) specifically cover the liability assumed by Tenant under this Lease
including, but not limited to, Tenant's obligations under Section 10.1 of this
Lease; (c) be primary insurance as to all claims thereunder and provide that any
insurance required by Landlord is excess and is non-contributing with any
insurance requirement of Tenant; and (d) contain a cross-liability endorsement
or severability of interest clause acceptable to Landlord. Tenant shall deliver
said policy or policies or certificates thereof to Landlord on or before the
Lease Commencement Date and at least thirty (30) days before the expiration
dates thereof. In the event Tenant shall fail to procure such insurance, or to
deliver such certificate, Landlord may, at its option, procure such policies for
the account of Tenant, and the costs of it shall be paid to Landlord as
Additional Rent within five (5) days after delivery to Tenant of bills therefor.

      10.5 Subrogation. Landlord and Tenant agree to have their respective
insurance companies issuing property damage and loss of insurance and extra
expense insurance waive any rights of subrogation that such companies may have
against Landlord or Tenant, as the case may be, so long as the insurance carried
by Landlord and Tenant, respectively, is not invalidated thereby. As long as
such waivers of subrogation are contained in their respective insurance
policies, Landlord and Tenant hereby waive any right that either may have
against the other on account of any loss or damage to the extent such loss or
damage is insurable under such policies of insurance.

      10.6 Additional Insurance Obligations. Tenant shall carry and maintain
during the entire Lease Term, at Tenant's sole cost and expense, increased
amounts of the insurance required to be carried by Tenant pursuant to this
Article 10, and such other reasonable types of insurance coverage and in such
reasonable amounts covering the Premises and Tenant's operations therein, as may
be reasonably requested by Landlord.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -10-
<PAGE>

                                   ARTICLE 11

                             DAMAGE AND DESTRUCTION

      11.1 Repair of Damage to Premises by Landlord. Tenant shall promptly
notify Landlord of any damage to the Premises resulting from fire or any other
casualty. If the Premises or any Common Areas serving or providing access to the
Premises shall be damaged by fire or other casualty, Landlord shall promptly and
diligently, subject to reasonable delays for insurance adjustment or other
matters beyond Landlord's reasonable control, and subject to all other terms of
this Article 11, restore the Base, Shell, and Core of the Premises and such
Common Areas. Such restoration shall be to substantially the same condition of
the Base, Shell, and Core of the Premises and the Common Areas prior to the
casualty, except for modifications required by zoning and building codes and
other laws or by the holder of a mortgage on the Building or Project or any
other modifications to the Common Areas deemed desirable by Landlord; provided
that access to the Premises and any common restrooms serving the Premises shall
not be materially impaired. Upon the occurrence of any damage to the Premises,
Tenant shall repair any injury or damage to the Tenant Improvements installed in
the Premises and shall return such Tenant Improvements to their original
condition; provided that if the cost of such repair exceeds the amount of
insurance proceeds received by Tenant from Tenant's insurance carrier, the cost
of such repairs shall be paid by Tenant prior to repair of the damage. In
connection with such repairs and replacements, Tenant shall, prior to the
commencement of construction, submit to Landlord, for Landlord's review and
approval, all plans, specifications and working drawings relating thereto, and
Landlord shall reasonably approve the contractors selected by Tenant to perform
such improvement work. Landlord shall not be liable for any inconvenience or
annoyance to Tenant or its visitors, or injury to Tenant's business resulting in
any way from such damage or the repair thereof; provided however, that if such
fire or other casualty shall have damaged the Premises or Common Areas necessary
to Tenant's occupancy, and if such damage is not the result of the negligence or
willful misconduct of Tenant or Tenant's employees, contractors, licensees, or
invitees, Landlord shall allow Tenant a proportionate abatement of Rent to the
extent Landlord is reimbursed from the proceeds of rental interruption insurance
purchased by Landlord as part of Operating Expenses, during the time and to the
extent the Premises are unfit for occupancy for the purposes permitted under
this Lease, and not occupied by Tenant as a result thereof.

      11.2 Option to Repair or Terminate. Notwithstanding the terms of Section
11.1 of this Lease, Landlord may elect not to rebuild and/or restore the
Premises, Building and/or Project; and either Landlord or Tenant may instead
elect to terminate this Lease by notifying the other party in writing of such
termination within ten (10) days after the date Landlord's architect notifies
each party pursuant to Subsection 11.2(i) below, such notice to include a
termination date of ninety (90) days after such written election to terminate,
but such party may so elect only if the Building or Project shall be damaged by
fire or other casualty or cause, whether or not the Premises are affected, and
one or more of the following conditions is present: (i) Landlord's architect
determines, and notifies both parties in writing, that repairs cannot reasonably
be completed within one hundred eighty (180) days after the date Landlord
receives or will receive insurance proceeds for such damages (when such repairs
are made without the payment of overtime or other premiums); (ii) the holder of
any mortgage on the Building or Project or ground lessor with respect to the
Building or Project is successful in requiring that the insurance proceeds or
any portion thereof be used to retire the mortgage debt, or shall terminate the
ground lease, as the case may be; (iii) the damage arises from flood, earthquake
or other events not customarily covered by standard replacement insurance
policies; or (iv) any owner of any other portion of the Project, other than
Landlord, does not intend to repair the damage to such portion of the Project.

      11.3 Waiver of Statutory Provisions. The provisions of this Lease,
including this Article 11, 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, the Building or the Project, and any statute or regulation of
the State of California, including, without limitation, Sections 1932(2) and
1933(4) of the California Civil Code, with respect to any rights or obligations
concerning damage or destruction in the absence of an express agreement between
the parties, and any other statute or regulation, now or hereafter in effect,
shall have no application to this Lease or any damage or destruction to all or
any part of the Premises, the Building or the Project.

      11.4 Damage Near End of Term. In the event that the Premises, the
Building, or the Project is destroyed or damaged to any substantial extent,
which would render the repair or replacement an undesirable, unreasonable, or
unsound investment decision taking into account financial feasibility and
timing, as reasonably

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -11-
<PAGE>

determined by Landlord, during the last twelve (12) months of the Lease Term,
then notwithstanding this Article 11, Landlord shall have the option to
terminate this Lease by giving written notice to Tenant of the exercise of such
option within ninety (90) days after Landlord learns of the necessity for
repairs as the result of such damage or destruction, in which event this Lease
shall cease and terminate as of the date of such notice, Tenant shall pay the
Base Rent and Additional Rent, properly apportioned up to such date of damage,
and both parties hereto shall thereafter be freed and discharged of all further
obligations hereunder, except as provided for in provisions of this Lease which
by their terms survive the expiration or earlier termination of the Lease Term.

                                   ARTICLE 12

                                    NONWAIVER

      No waiver of any provision of this Lease shall be implied by any failure
of Landlord to enforce any remedy on account of the violation of such provision,
even if such violation shall continue or be repeated subsequently, and any
waiver by Landlord of any provision of this Lease may only be in writing.
Additionally, no express waiver shall affect any provision other than the one
specified in such waiver and then only for the time and in the manner
specifically stated. No receipt of monies by Landlord from Tenant after the
termination of this Lease shall in any way alter the length of the Lease Term or
of Tenant's right of possession hereunder, or after the giving of any notice
shall reinstate, continue or extend the Lease Term or affect any notice given
Tenant prior to the receipt of such monies, it being agreed that after the
service of notice or the commencement of a suit, or after final judgment for
possession of the Premises, Landlord may receive and collect any Rent due, and
the payment of said Rent shall not waive or affect said notice, suit or
judgment.

                                   ARTICLE 13

                                  CONDEMNATION

      13.1 Permanent Taking. If a substantial part of the Premises, Building or
Project shall be taken by power of eminent domain or condemned by any competent
authority for any public or quasi-public use or purpose, or if Landlord shall
grant a deed or other instrument in lieu of such taking by eminent domain or
condemnation, either party shall have the option to terminate this Lease upon
one hundred eighty (180) days' notice, provided such notice is given no later
than one hundred eighty (180) days after the date of such taking, condemnation,
reconfiguration, vacation, deed or other instrument. If more than twenty-five
percent (25%) of the rentable square feet of the Premises is taken, or if access
to the Premises is substantially impaired, Tenant shall have the option to
terminate this Lease upon ninety (90) days' notice, provided such notice is
given no later than one hundred eighty (180) days after the date of such taking.
Landlord shall be entitled to the entire award or payment in connection
therewith, except that Tenant shall have the right to file any separate claim
available to Tenant for any taking of Tenant's personal property and fixtures
belonging to Tenant and removable by Tenant upon expiration of the Lease Term
pursuant to the terms of this Lease, and for moving expenses, so long as such
claims do not diminish the award available to Landlord, its ground lessor with
respect to the Building or Project or its mortgagee, and such claim is payable
separately to Tenant. All Rent shall be apportioned as of the date of such
termination, or the date of such taking, whichever shall first occur. If any
part of the Premises shall be taken, and this Lease shall not be so terminated,
the Rent shall be proportionately abated. Tenant hereby waives any and all
rights it might otherwise have pursuant to Section 1265.130 of The California
Code of Civil Procedure.

      13.2 Temporary Taking. Notwithstanding anything to the contrary contained
in this Article 13, in the event of a temporary taking of all or any portion of
the Premises for a period of one hundred and eighty (180) days or less, then
this Lease shall not terminate but the Base Rent and the Additional Rent shall
be abated for the period of such taking in proportion to the ratio that the
number of rentable square feet of the Premises taken bears to the total number
of rentable square feet of the Premises. Landlord shall be entitled to receive
the entire award made in connection with any such temporary taking.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -12-
<PAGE>

                                   ARTICLE 14

                            ASSIGNMENT AND SUBLETTING

      14.1 Transfers. Tenant shall not, without the prior written consent of
Landlord, assign, mortgage, pledge, hypothecate, encumber, or permit any lien to
attach to, or otherwise transfer, this Lease or any interest hereunder, permit
any assignment, or other transfer of this Lease or any interest hereunder by
operation of law, sublet the Premises or any part thereof, or permit the use of
the Premises by any persons other than Tenant and its employees (all of the
foregoing are hereinafter sometimes referred to collectively as "TRANSFERS" and
any person to whom any Transfer is made or sought to be made is hereinafter
sometimes referred to as a "TRANSFEREE"). If Tenant desires Landlord's consent
to any Transfer, Tenant shall notify Landlord in writing, which notice (the
"TRANSFER NOTICE") shall include (i) the proposed effective date of the
Transfer, which shall not be less than twenty (20) days nor more than one
hundred eighty (180) days after the date of delivery of the Transfer Notice,
(ii) a description of the portion of the Premises to be transferred (the
"SUBJECT SPACE"), (iii) all of the material terms of the proposed Transfer and
the consideration therefor (including calculation of the "Transfer Premium", as
that term is defined in Section 14.3 below, in connection with such Transfer),
the name and address of the proposed Transferee, and a copy of all existing
executed and/or proposed documentation pertaining to the proposed Transfer,
including all existing operative documents to be executed to evidence such
Transfer or the agreements incidental or related to such Transfer, and (iv)
current financial statements of the proposed Transferee certified by an officer,
partner or owner thereof, and any other information reasonably required by
Landlord to determine the financial responsibility, character, and reputation of
the proposed Transferee, nature of such Transferee's business and proposed use
of the Subject Space, and such other information as Landlord may reasonably
require. Any Transfer made without Landlord's prior written consent shall, at
Landlord's option, be null, void and of no effect, and shall, at Landlord's
option, constitute a default by Tenant under Section 19.1.7 of this Lease.
Whether or not Landlord consents to any proposed Transfer, Tenant shall pay
Landlord's review and processing fees, as well as any reasonable legal fees (up
to $2,500) incurred by Landlord, within thirty (30) days after written request
by Landlord.

      14.2 Landlord's Consent. Landlord shall not unreasonably withhold its
consent to any proposed Transfer of the Subject Space to the Transferee on the
terms specified in the Transfer Notice. Without limitation as to other
reasonable grounds for withholding consent, the parties hereby agree that it
shall be reasonable under this Lease and under any applicable law for Landlord
to withhold consent to any proposed Transfer where one or more of the following
apply:

            14.2.1 The Transferee is of a character or reputation or engaged in
a business which is not consistent with the quality of the Building or the
Project, or would be a significantly less prestigious occupant of the Building
than Tenant;

            14.2.2 The Transferee is either a governmental agency or
instrumentality thereof;

            14.2.3 The Transferee intends to use the Subject Space for purposes
which are not permitted under this Lease;

            14.2.4 The Transfer will result in more than a reasonable and safe
number of occupants per floor within the Subject Space;

            14.2.5 The Transferee is not a party of reasonable financial worth
and/or financial stability in light of the responsibilities involved under the
Lease on the date consent is requested;

            14.2.6 The proposed Transfer would cause a violation of another
lease for space in the Project, or would give an occupant of the Project a right
to cancel its lease;

            14.2.7 The terms of the proposed Transfer will allow the Transferee
to exercise a right of renewal, right of expansion, right of first offer, or
other similar right held by Tenant (or will allow the Transferee to occupy space
leased by Tenant pursuant to any such right); or

            14.2.8 Either the proposed Transferee, or any person or entity which
directly or indirectly, controls, is controlled by, or is under common control
with, the proposed Transferee, (i) occupies space in the

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -13-
<PAGE>

Project at the time of the request for consent, (ii) is negotiating with
Landlord to lease space in the Project at such time, or (iii) has negotiated
with Landlord, for the Project, during the twelve (12)-month period immediately
preceding the Transfer Notice.

            If Landlord consents to any Transfer pursuant to the terms of this
Section 14.2 (and does not exercise any recapture rights Landlord may have under
Section 14.4 of this Lease), Tenant may within six (6) months after Landlord's
consent, but not later than the expiration of said six-month period, enter into
such Transfer of the Premises or portion thereof, upon substantially the same
terms and conditions as are set forth in the Transfer Notice furnished by Tenant
to Landlord pursuant to Section 14.1 of this Lease, provided that if there are
any material changes in the terms and conditions from those specified in the
Transfer Notice (i) such that Landlord would initially have been entitled to
refuse its consent to such Transfer under this Section 14.2, or (ii) which would
cause the proposed Transfer to be more favorable to the Transferee than the
terms set forth in Tenant's original Transfer Notice, Tenant shall again submit
the Transfer to Landlord for its approval and other action under this Article 14
(including Landlord's right of recapture, if any, under Section 14.4 of this
Lease). Notwithstanding any contrary provisions of this Lease, if Tenant or any
proposed Transferee claims that Landlord has unreasonably withheld or delayed
its consent to a proposed Transfer or otherwise has breached its obligations
under this Article, Tenant's and such Transferee's only remedy shall be to seek
a declaratory judgment and/or injunctive relief, and Tenant, on behalf of itself
and, to the extent permitted by law, such proposed Transferee, waives all other
remedies against Landlord, including without limitation, the right to seek
monetary damages or terminate this Lease.

      14.3 Transfer Premium.

            14.3.1 Definition of Transfer Premium. If Landlord consents to a
Transfer, as a condition thereto which the parties hereby agree is reasonable,
Tenant shall pay to Landlord 50% of any "Transfer Premium," as that term is
defined in this Section 14.3, received by Tenant from such Transferee. "TRANSFER
PREMIUM" shall mean all rent, additional rent or other consideration payable by
such Transferee in excess of the Rent and Additional Rent payable by Tenant
under this Lease on a per rentable square foot basis if less than all of the
Premises is transferred, after deducting the reasonable expenses incurred by
Tenant for (i) any changes, alterations and improvements to the Premises in
connection with the Transfer, and (ii) any brokerage commissions in connection
with the Transfer (collectively, the "SUBLEASING COSTS"). "Transfer Premium"
shall also include, but not be limited to, key money and bonus money paid by
Transferee to Tenant in connection with such Transfer, and any payment in excess
of fair market value for (A) services rendered by Tenant to Transferee, or (B)
for assets, fixtures, inventory, equipment, or furniture transferred by Tenant
to Transferee in connection with such Transfer. The payment of a Transfer
Premium shall not apply to those transfers set forth in Section 14.6 or 14.7
below.

            14.3.2 Payment of Transfer Premiums. The determination of the amount
of the Transfer Premium shall be made on an annual basis in accordance with the
terms of this Section 14.3.2, but an estimate of the amount of the Transfer
Premium shall be made each month and one-twelfth of such estimated amount shall
be paid to Landlord promptly, but in no event later than the next date for
payment of Base Rent hereunder, subject to an annual reconciliation on each
anniversary date of the Transfer. If the payments to Landlord under this Section
14.3.2 during the twelve (12) months preceding each annual reconciliation exceed
the amount of Transfer Premium determined on an annual basis, then Landlord
shall credit the overpayment against Tenant's future obligations under this
Section 14.3.2 or if the overpayment occurs during the last year of the Transfer
in question, refund the excess to Tenant. If Tenant has underpaid the Transfer
Premium, as determined by such annual reconciliation, Tenant shall pay the
amount of such deficiency to Landlord promptly, but in no event later than the
next date for payment of Basic Rent hereunder. For purposes of calculating the
Transfer Premium on an annual basis, Tenant's Subleasing Costs shall be deemed
to be offset against the first rent, additional rent or other consideration
payable by the Transferee, until such Subleasing Costs are exhausted.

            14.3.3 Calculations of Rent. In the calculation of the Rent, as it
relates to the Transfer Premium calculated under Section 14.3.1 above, the Rent
paid during each annual period for the Subject Space by Tenant, shall be
computed after adjusting such rent to the actual effective rent to be paid,
taking into consideration any and all leasehold concessions granted in
connection therewith, including, but not limited to, any rent credit and tenant
improvement allowance. For purposes of calculating any such effective rent, all
such concessions shall be amortized on a straight-line basis over the relevant
term.

      14.4 Intentionally Omitted.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -14-
<PAGE>

      14.5 Effect of Transfer. If Landlord consents to a Transfer, (i) the terms
and conditions of this Lease shall in no way be deemed to have been waived or
modified, (ii) such consent shall not be deemed consent to any further Transfer
by either Tenant or a Transferee, (iii) Tenant shall deliver to Landlord,
promptly after execution, an original executed copy of all documentation
pertaining to the Transfer in form reasonably acceptable to Landlord, (iv)
Tenant shall furnish upon Landlord's request a complete statement, certified by
an independent certified public accountant, or Tenant's chief financial officer,
setting forth in detail the computation of any Transfer Premium Tenant has
derived and shall derive from such Transfer, and (v) no Transfer relating to
this Lease or agreement entered into with respect thereto, whether with or
without Landlord's consent, shall relieve Tenant or any guarantor of the Lease
from liability under this Lease. Landlord or its authorized representatives
shall have the right at all reasonable times to audit the books, records and
papers of Tenant relating to any Transfer, and shall have the right to make
copies thereof. If the Transfer Premium respecting any Transfer shall be found
understated, Tenant shall, within thirty (30) days after demand, pay the
deficiency and Landlord's costs of such audit, and if understated by more than
ten percent (l0%), Landlord shall have the right to cancel this Lease upon
thirty (30) days' notice to Tenant.

      14.6 Additional Transfers. For purposes of this Lease, the term "Transfer"
shall also include (i) if Tenant is a partnership, the withdrawal or change,
voluntary, involuntary or by operation of law, of twenty-five percent (25%) or
more of the partners, or transfer of twenty-five percent or more of partnership
interests, within a twelve (12)-month period, or the dissolution of the
partnership without immediate reconstitution thereof, and (ii) if Tenant is a
closely held corporation (i.e., whose stock is not publicly held and not traded
through an exchange or over the counter), (A) the dissolution, merger,
consolidation or other reorganization of Tenant or, (B) the sale or other
transfer of more than an aggregate of twenty-five percent (25%) of the voting
shares of Tenant (other than to immediate family members by reason of gift or
death) within a twelve (12)-month period, or (C) the sale, mortgage,
hypothecation or pledge of more than an aggregate of twenty-five percent (25%)
of the value of the unencumbered assets of Tenant within a twelve (12)-month
period.

      14.7 Permitted Transfers. An "AFFILIATE" means any entity that (i)
controls, is controlled by, or is under common control with Tenant, (ii) results
from the transfer of all or substantially all of Tenant's assets or stock, or
(iii) results from the merger or consolidation of Tenant with another entity.
"CONTROL" means the direct or indirect ownership of more than fifty percent
(50%) of the voting securities of an entity or possession of the right to vote
more than fifty (50%) of the voting interest in the ordinary direction of the
entity's affairs. Notwithstanding anything to the contrary contained in the
Lease, Landlord's consent shall not be required for any assignment of this Lease
or sublease of all or a portion of the Premises to an Affiliate so long as the
following conditions are met: (a) at least thirty (30) business days before any
such assignment or sublease, Landlord receives written notice of such assignment
or sublease (as well as any documents or information reasonably requested by
Landlord regarding the proposed intended transfer and the transferee); (b)
Tenant is not then and has not been in default under this Lease; (c) if the
transfer is an assignment or any other transfer to an Affiliate other than a
sublease, the intended assignee assumes in writing all of Tenant's obligations
under this Lease relating to the Premises in form satisfactory to Landlord or,
if the transfer is a sublease, the intended sublessee accepts the sublease in
form satisfactory to Landlord; (d) the intended transferee has a tangible net
worth, as evidenced by financial statements delivered to Landlord and certified
by an independent certified public accountant in accordance with generally
accepted accounting principles that are consistently applied, at least equal to
the net worth of the original Tenant under the Lease as of the Effective Date ;
(e) the Premises shall continue to be operated solely for the use specified in
the Lease; and (f) Tenant shall pay to Landlord all costs reasonably incurred by
Landlord or any mortgagee or ground lessor for such assignment or subletting,
including, without limitation, reasonable attorneys' fees. No transfer to an
Affiliate in accordance with this subparagraph shall relieve Tenant named herein
of any obligation under this Lease or alter the primary liability of Tenant
named herein for the payment of Rent or for the performance of any other
obligation to be performed by Tenant, including the obligations contained in the
Lease with respect to any Affiliate.

                                   ARTICLE 15

                             SURRENDER OF PREMISES;
                            REMOVAL OF TRADE FIXTURES

      15.1 Surrender of Premises. No act or thing done by Landlord or any agent
or employee of Landlord during the Lease Term shall be deemed to constitute an
acceptance by Landlord of a surrender of the Premises unless such intent is
specifically acknowledged in a writing signed by Landlord. The delivery of keys
to the

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -15-
<PAGE>

Premises to Landlord or any agent or employee of Landlord shall not constitute a
surrender of the Premises or effect a termination of this Lease, whether or not
the keys are thereafter retained by Landlord, and notwithstanding such delivery
Tenant shall be entitled to the return of such keys at any reasonable time upon
request until this Lease shall have been properly terminated. The voluntary or
other surrender of this Lease by Tenant, whether accepted by Landlord or not, or
a mutual termination hereof, shall not work a merger, and at the option of
Landlord shall operate as an assignment to Landlord of all subleases or
subtenancies affecting the Premises.

      15.2 Removal of Tenant Property by Tenant. Upon the expiration of the
Lease Term, or upon any earlier termination of this Lease, Tenant shall, subject
to the provisions of this Article 15, quit and surrender possession of the
Premises to Landlord in as good order and condition as when Tenant took
possession and as thereafter improved by Landlord and/or Tenant, reasonable wear
and tear and repairs which are specifically made the responsibility of Landlord
hereunder excepted. Upon such expiration or termination, Tenant shall, without
expense to Landlord, remove or cause to be removed from the Premises all debris
and rubbish, and such items of furniture, equipment, free-standing cabinet work,
and other articles of personal property owned by Tenant or installed or placed
by Tenant at its expense in the Premises, and such similar articles of any other
persons claiming under Tenant, as Landlord may, in its sole discretion, require
to be removed, and Tenant shall repair at its own expense all damage to the
Premises and Building resulting from such removal.

      15.3 Removal of Tenant's Property by Landlord. Whenever Landlord shall
re-enter the Premises as provided in this Lease, any personal property of Tenant
not removed by Tenant upon the expiration of the Lease Term, or within five (5)
days after a termination by reason of Tenant's default as provided in this
Lease, shall be deemed abandoned by Tenant and may be disposed of by Landlord in
accordance with Sections 1980 through 1991 of the California Civil Code and
Section 1174 of the California Code of Civil Procedure, or in accordance with
any laws or judicial decisions which may supplement or supplant those provisions
from time to time.

      15.4 Landlord's Actions on Premises. Tenant hereby waives, and releases
Landlord from, all claims for damages or other liability in connection with
Landlord's or its agents' or representatives' reentering and taking possession
of the Premises or removing, retaining, storing or selling the property of
Tenant as herein provided, and Tenant hereby indemnifies and holds Landlord
harmless from any such damages or other liability, and no such re-entry shall be
considered or construed to be a forcible entry.

                                   ARTICLE 16

                                  HOLDING OVER

      If Tenant holds over after the expiration of the Lease Term hereof, with
or without the express or implied consent of Landlord, such tenancy shall be
from month-to-month only, and shall not constitute a renewal hereof or an
extension for any further term, and in such case Base Rent shall be payable at a
monthly rate not to exceed one and one-half (1 1/2) the Base Rent applicable
during the last rental period of the Lease Term under this Lease. Such
month-to-month tenancy shall be subject to every other applicable term, covenant
and agreement contained herein. Nothing contained in this Article 16 shall be
construed as consent by Landlord to any holding over by Tenant, and Landlord
expressly reserves the right to require Tenant to surrender possession of the
Premises to Landlord as provided in this Lease upon the expiration or other
termination of this Lease. The provisions of this Article 16 shall not be deemed
to limit or constitute a waiver of any other rights or remedies of Landlord
provided herein or at law. If Tenant fails to surrender the Premises upon the
termination or expiration of this Lease, in addition to any other liabilities to
Landlord accruing therefrom, Tenant shall protect, defend, indemnify and hold
Landlord harmless from all loss, costs (including reasonable attorneys' fees)
and liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender (including such tenant's lost profits) and any
lost profits to Landlord resulting therefrom.

                                   ARTICLE 17

                              ESTOPPEL CERTIFICATES

      Within ten (10) days following a request in writing by Landlord, Tenant
shall execute and deliver to Landlord an estoppel certificate, which, as
submitted by Landlord, shall be substantially in the form of Exhibit "D,"
attached hereto (or such other form as may be required by any prospective
mortgagee or purchaser of the Project, or

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -16-
<PAGE>

any portion thereof), indicating therein any exceptions thereto that may exist
at that time, and shall also contain any other information reasonably requested
by Landlord or Landlord's mortgagee or prospective mortgagee. Tenant shall
execute and deliver whatever other instruments may be reasonably required for
such purposes. Failure of Tenant to timely execute and deliver such estoppel
certificate or other instruments shall constitute an acceptance of the Premises
and an acknowledgment by Tenant that statements included in the estoppel
certificate are true and correct, without exception.

                                   ARTICLE 18

                                  SUBORDINATION

      This Lease shall be subject and subordinate to all present and future
ground or underlying leases of the Building or Project and to the lien of any
first mortgage or trust deed, now or hereafter in force against the Building or
Project, if any, and to all renewals, extensions, modifications, consolidations
and replacements thereof, and to all advances made or hereafter to be made upon
the security of such mortgages or trust deeds, unless the holders of such
mortgages or trust deeds, or the lessors under such ground lease or underlying
leases, require in writing that this Lease be superior thereto. Tenant covenants
and agrees in the event any proceedings are brought for the foreclosure of any
such mortgage or deed in lieu thereof, to attorn, without any deductions or
set-offs whatsoever, to the purchaser or any successors thereto upon any such
foreclosure sale or deed in lieu thereof if so requested to do so by such
purchaser, and to recognize such purchaser as the lessor under this Lease.
Tenant shall, within five (5) days of request by Landlord, execute such further
instruments or assurances as Landlord may reasonably deem necessary to evidence
or confirm the subordination or superiority of this Lease to any such mortgages,
trust deeds, ground leases or underlying leases. Tenant waives the provisions of
any current statute, rule or law which may give or purport to give Tenant any
right or election to terminate or otherwise adversely affect this Lease and the
obligations of the Tenant hereunder in the event of any foreclosure proceeding
or sale.

                                   ARTICLE 19

                               DEFAULTS: REMEDIES

      19.1 Defaults. The occurrence of any of the following shall constitute a
default of this Lease by Tenant:

            19.1.1 Any failure by Tenant to pay any Rent or any other charge
required to be paid under this Lease, or any part thereof, when due; or

            19.1.2 Any failure by Tenant to observe or perform any other
provision, covenant or condition of this Lease to be observed or performed by
Tenant where such failure continues for fifteen (15) days after written notice
thereof from Landlord to Tenant; or

            19.1.3 Abandonment or vacation of the Premises by Tenant; or

            19.1.4 To the extent permitted by law, a general assignment by
Tenant or any guarantor of the Lease for the benefit of creditors, or the filing
by or against Tenant or any guarantor of any proceeding under an insolvency or
bankruptcy law, unless in the case of a proceeding filed against Tenant or any
guarantor the same is dismissed within sixty (60) days, or the appointment of a
trustee or receiver to take possession of all or substantially all of the assets
of Tenant or any guarantor, unless possession is restored to Tenant or such
guarantor within thirty (30) days, or any execution or other judicially
authorized seizure of all or substantially all of Tenant's assets located upon
the Premises or of Tenant's interest in this Lease, unless such seizure is
discharged within thirty (30) days; or

            19.1.5 The hypothecation or assignment of this Lease or subletting
of the Premises, or attempts at such actions, in violation of Article 14 hereof.

      19.2 Remedies Upon Default. Upon the occurrence of any event of default by
Tenant, Landlord shall have, in addition to any other remedies available to
Landlord 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.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -17-
<PAGE>

            19.2.1 Terminate this Lease, 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;
and Landlord may recover from Tenant the following:

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

                  (ii) 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

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

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

                  (v) 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 19.2 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
19.2.l(i) and (ii), above, the "worth at the time of award" shall be computed by
allowing interest at the rate set forth in Article 25 of this Lease, but in no
case greater than the maximum amount of such interest permitted by law. As used
in Section 19.2.l(iii) 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 one percent (1%).

            19.2.2 Landlord shall have the remedy described in California Civil
Code Section 1951.4 (lessor may continue lease in effect after lessee's breach
and abandonment and recover rent as it becomes due, if lessee has the right to
sublet or assign, subject only to reasonable limitations). Accordingly, if
Landlord does not elect to terminate this Lease on account of any default by
Tenant, Landlord may, from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease, including the right to recover
all Rent as it becomes due.

      19.3 Sublessees of Tenant. Whether or not Landlord elects to terminate
this Lease on account of any default by Tenant as set forth in this Article 19,
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.
In the event of 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.

      19.4 Form of Payment After Default. Following the occurrence of an event
of default by Tenant, Landlord shall have the right to require that any or all
subsequent amounts paid by Tenant to Landlord hereunder, whether in the cure of
the default in question or otherwise, be paid in the form of cash, money order,
cashier's or certified check drawn on an institution acceptable to Landlord, or
by other means approved by Landlord, notwithstanding any prior practice of
accepting payments in any different form.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -18-
<PAGE>

      19.5 Waiver of Default. No waiver by Landlord or Tenant of any violation
or breach of any of the terms, provisions and covenants herein contained shall
be deemed or construed to constitute a waiver of any other or later violation or
breach of the same or any other of the terms, provisions, and covenants herein
contained. Forbearance by Landlord in enforcement of one or more of the remedies
herein provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default. The acceptance of any Rent hereunder by
Landlord following the occurrence of any default, whether or not known to
Landlord, shall not be deemed a waiver of any such default, except only a
default in the payment of the Rent so accepted.

      19.6 Efforts to Relet. For the purposes of this Article 19, Tenant's right
to possession shall not be deemed to have been terminated by efforts of Landlord
to relet the Premises, by its acts of maintenance or preservation with respect
to the Premises, or by appointment of a receiver to protect Landlord's interests
hereunder. The foregoing enumeration is not exhaustive, but merely illustrative
of acts which may be performed by Landlord without terminating Tenant's right to
possession.

                                   ARTICLE 20

                           COVENANT OF QUIET ENJOYMENT

      Landlord covenants that Tenant, on paying the Rent, charges for services
and other payments herein reserved and on keeping, observing and performing all
the other terms, covenants, conditions, provisions and agreements herein
contained on the part of Tenant to be kept, observed and performed, shall,
during the Lease Term, peaceably and quietly have, hold and enjoy the Premises
subject to the terms, covenants, conditions, provisions and agreements hereof
without interference by any persons lawfully claiming by or through Landlord.
The foregoing covenant is in lieu of any other covenant express or implied.

                                   ARTICLE 21

                                SECURITY DEPOSIT

      Concurrent with Tenant's execution of this Lease, Tenant shall deposit
with Landlord a security deposit (the "SECURITY DEPOSIT") in the amount set
forth in Section 8 of the Summary. The Security Deposit shall be held by
Landlord as security for the faithful performance by Tenant of all the terms,
covenants, and conditions of this Lease to be kept and performed by Tenant
during the Lease Term. If Tenant defaults with respect to any provisions of this
Lease, including, but not limited to, the provisions relating to the payment of
Rent, Landlord may, but shall not be required to, use, apply or retain all or
any part of the Security Deposit for the payment of any Rent or any other sum in
default, or for the payment of any amount that Landlord may spend or become
obligated to spend by reason of Tenant's default, or to compensate Landlord for
any other loss or damage that Landlord may suffer by reason of Tenant's default.
If any portion of the Security Deposit is so used or applied, Tenant shall,
within five (5) days after written demand therefor, deposit cash with Landlord
in an amount sufficient to restore the Security Deposit to its original amount,
and Tenant's failure to do so shall be a default under this Lease. If Tenant
shall fully and faithfully perform every provision of this Lease to be performed
by it, 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 sixty (60) days following the expiration of the Lease Term.
Tenant shall not be entitled to any interest on the Security Deposit. Tenant
hereby waives the provisions of Section 1950.7 of the California Civil Code, and
all other provisions of 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 acts or omissions of Tenant
or any officer, employee, agent, contractor or invitee of Tenant.

                                   ARTICLE 22

                              INTENTIONALLY OMITTED

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -19-
<PAGE>

                                   ARTICLE 23

                                      SIGNS

      Tenant's identifying signage shall be provided by Landlord, at Tenant's
cost, and such signage shall be comparable to that used by Landlord for other
similar tenants in the Building and shall comply with Landlord's Building
standard signage program. If applicable, Tenant shall also be entitled to have
Tenant's name be listed, at Tenant's sole cost and expense, on a directory sign
in the main lobby of the Building, and Tenant shall be entitled to a maximum of
three (3) lines on the building directory, at Tenant's sole cost and expense.
Any signs, notices, logos, pictures, names or advertisements which are installed
and that have not been separately approved by Landlord may be removed without
notice by Landlord at the sole expense of Tenant. Except as provided herein,
Tenant may not install any signs on the exterior or roof of the Project or the
Common Areas. Notwithstanding any contrary provision, Tenant may place any and
all safety-related signage as required by law. Any signs (even if the same are
located behind the Landlord-approved window coverings for the Building), or
other items visible from the exterior of the Premises or Building, shall be
subject to the prior approval of Landlord, in its sole discretion.

      Landlord agrees that, for so long as Structural GenomiX, Inc., as the
original Tenant under this Lease, leases and occupies at least 24,960 rentable
square feet of the Building, Structural GenomiX, Inc. may place its name on the
Building; and provided that: (1) such signage is not prohibited by any
applicable code, ordinance, statute, rule or regulation or by any action or rule
of any landmark commission having jurisdiction, (2) all consents necessary from
all governmental authorities and landmark commissions having jurisdiction are
reasonably obtainable and are first obtained and (3) the exact design, copy,
location, color, construction, and size of the proposed signage shall be
previously approved, in writing, by Landlord.

      Tenant will bear the costs associated with creating, designing,
manufacturing, and installing the signage set forth in the paragraph above.
Tenant shall bear the cost of illuminating said signage and all costs of
operating and maintaining said illumination (including bulbs and ballasts)
("Lighting Costs"). If any Lighting Cost is invoiced to Landlord, such cost
shall become additional rent due upon invoice therefor from Landlord. Landlord
shall otherwise insure and maintain the signage, the costs of which will be
includable in Project Expenses.

      Upon termination or expiration of this Lease or of Tenant's right to
possession of the Premises or if Tenant does not lease and occupy at least
24,960 rentable square feet in the Building, Tenant shall, at Tenant's sole
expense, remove such signage and restore and repair all parts of the Building
affected by the installation or removal of said signage, to the condition
existing prior to its installation or to a condition acceptable to Landlord.

      Landlord shall be permitted to grant to other Tenants of the Building the
right to install signage on the exterior of the Building.

                                   ARTICLE 24

                               COMPLIANCE WITH LAW

      Tenant shall not do anything or suffer anything to be done in or about the
Premises which will in any way conflict with any law, statute, ordinance or
other governmental rule, regulation or requirement now in force or which may
hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall
promptly comply with all such governmental measures, other than the making of
structural changes or changes to the Building's life safety system. Should any
standard or regulation now or hereafter be imposed on Landlord or Tenant by a
state, federal or local governmental body charged with the establishment,
regulation and enforcement of occupational, health or safety standards for
employers, employees, landlords or tenants, then Tenant agrees, at its sole cost
and expense, to comply promptly with such standards or regulations. The judgment
of any court of competent jurisdiction or the admission of Tenant in any
judicial action, regardless of whether Landlord is a party thereto, that Tenant
has violated any of said governmental measures, shall be conclusive of that fact
as between Landlord and Tenant.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -20-
<PAGE>

                                   ARTICLE 25

                                  LATE CHARGES

      If any installment of Rent or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within three (3) days after said
amount is due, then Tenant shall pay to Landlord a late charge equal to five
percent (5%) of the overdue amount plus any attorneys' fees incurred by Landlord
by reason of Tenant's failure to pay Rent and/or other charges when due
hereunder. The late charge shall be deemed Additional Rent and the right to
require it shall be in addition to all of Landlord's other rights and remedies
hereunder or at law and shall not be construed as liquidated damages or as
limiting Landlord's remedies in any manner. In addition to the late charge
described above, any Rent or other amounts owing hereunder which are not paid
within three (3) days after the date they are due shall bear interest from the
date when due until paid at a rate per annum equal to the lesser of (i) eighteen
percent (18%) per annum or (ii) the highest rate permitted by applicable law.

                                   ARTICLE 26

                        LANDLORD'S RIGHT TO CURE DEFAULT;
                               PAYMENTS BY TENANT

      26.1 Landlord's Cure. All covenants and agreements to be kept or performed
by Tenant under this Lease shall be performed by Tenant at Tenant's sole cost
and expense and without any reduction of Rent. If Tenant shall fail to perform
any of its obligations under this Lease, within a reasonable time after such
performance is required by the terms of this Lease, Landlord may, but shall not
be obligated to, after reasonable prior notice to Tenant (except in the case of
an emergency), make any such payment or perform any such act on Tenant's part
without waiving its rights based upon any default of Tenant and without
releasing Tenant from any obligations hereunder.

      26.2 Tenant's Reimbursement. Except as may be specifically provided to the
contrary in this Lease, Tenant shall pay to Landlord, within thirty (30) days
after delivery by Landlord to Tenant of statements therefor: (i) sums equal to
expenditures reasonably made and obligations incurred by Landlord in connection
with the remedying by Landlord of Tenant's defaults pursuant to the provisions
of Section 26.1; (ii) sums equal to all losses, costs, liabilities, damages and
expenses referred to in Article 10 of this Lease; and (iii) sums equal to all
expenditures made and obligations incurred by Landlord in collecting or
attempting to collect the Rent or in enforcing or attempting to enforce any
rights of Landlord under this Lease or pursuant to law, including, without
limitation, all legal fees and other amounts so expended. Tenant's obligations
under this Section 26.2 shall survive the expiration or sooner termination of
the Lease Term.

                                   ARTICLE 27

                                ENTRY BY LANDLORD

      Landlord and its representatives and independent contractors reserve the
right at all reasonable times and upon reasonable notice to Tenant (except in
the case of an emergency) to enter the Premises with a representative of Tenant
to (i) inspect them; (ii) show the Premises to prospective purchasers,
mortgagees or tenants, or to the ground or underlying lessors; (iii) inspect
and/or maintain the monitoring well(s) located inside the Premises and in the
Common Area or parking area serving the Premises (the "MONITORING Well(s)") and
for purposes of servicing the extraction unit located in the parking area (the
"EXTRACTION UNIT"); (iv) post notices of nonresponsibility; or (v) alter,
improve or repair the Premises or the Building if necessary to comply with
current building codes or other applicable laws, or for structural alterations,
repairs or improvements to the Building. Notwithstanding anything to the
contrary contained in this Article 27, Landlord may enter the Premises at any
time to (A) perform services required of Landlord; (B) take possession due to
any breach of this Lease in the manner provided herein; and (C) perform any
covenants of Tenant which Tenant fails to perform. Tenant hereby acknowledges
that the Monitoring Well(s) and Extraction Unit have been placed within the
Project for the purposes of monitoring and assessing the Existing Hazardous
Materials, as the same is hereinafter defined, and Tenant has approved of the
location of the same and of Landlord's access to the same throughout the Lease
Term. Landlord may make any such entries without the abatement of Rent and may
take such reasonable steps as required to accomplish the stated purposes. Tenant
hereby waives any claims for damages or for any injuries or inconvenience to or
interference with

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -21-
<PAGE>

Tenant's business, lost profits, any loss of occupancy or quiet enjoyment of the
Premises, and any other loss occasioned thereby. For each of the above purposes,
Landlord shall at all times have a key with which to unlock all the doors in the
Premises, excluding Tenant's vaults, safes and special security areas designated
in advance by Tenant. In an emergency, Landlord shall have the right to use any
means that Landlord may deem proper to open the doors in and to the Premises.
Any entry into the Premises by Landlord in the manner hereinbefore described
shall not be deemed to be a forcible or unlawful entry into, or a detainer of,
the Premises, or an actual or constructive eviction of Tenant from any portion
of the Premises.

                                   ARTICLE 28

                                 TENANT PARKING

      Tenant hereby rents from Landlord, commencing on the Lease Commencement
Date, a pro-rata share of the parking spaces, on a monthly basis throughout the
Lease Term, which parking spaces shall pertain to the Project parking facility.
Such rental shall permit Tenant and its employees to use, on a nonexclusive,
as-available basis, together with other tenants and their respective employees,
any undesignated, unreserved spaces available in such parking facility from time
to time. Tenant shall pay to Landlord for automobile parking spaces on a monthly
basis the prevailing rate charged from time to time for parking spaces in the
Project, which shall be $0 per pass per month for the initial Lease Term.
Landlord specifically reserves the right to change the size, configuration,
design, layout and all other aspects of the Project parking facility at any time
and Tenant acknowledges and agrees that Landlord may, without incurring any
liability to Tenant and without any abatement of Rent under this Lease, from
time to time, close-off or restrict access to the Project parking facility for
purposes of permitting or facilitating any such construction, alteration or
improvements. The parking spaces rented by Tenant pursuant to this Article 28
are provided to Tenant solely for use by Tenant's own personnel and such spaces
may not be transferred, assigned, subleased or otherwise alienated by Tenant
without Landlord's prior approval. Tenant's invitees and guests may use parking
spaces in such parking facility which are not allocated or reserved for Tenant
or other occupants or visitors of the Building or Project on a first-come,
first-serve basis, upon payment of Landlord's then prevailing parking rate. The
parking passes allocated to Tenant are not for long term storage of automobiles,
or for short or long term storage of boats, trailers, recreational vehicles,
motorcycles or other vehicles or equipment.

                                   ARTICLE 29

                      EARLY TERMINATION AND CONFIDENTIALITY

      29.1 Termination of Lease. Should Landlord not acquire insurable fee title
to the Project from the current owner ("SELLER") (and insurable leasehold
interests as to any ground leasehold portions of the Project) prior to sixty
(60) days after the Effective Date of this Lease, Landlord and Tenant shall have
the right to terminate this Lease by written notice (the "EARLY TERMINATION
NOTICE") from the party electing to terminate to the other party. If either
Landlord or Tenant exercises its right to terminate, the Lease Term shall
terminate on the date of the delivery of the Early Termination Notice (the
"EARLY TERMINATION DATE"). If either party exercises such right to terminate,
then Landlord shall reimburse Tenant for its actual out-of-pocket costs incurred
in connection with the negotiation and or upon reasonable reliance upon this
Lease; provided, however, such reimbursement shall not exceed $100,000.

      29.2 Confidentiality. The parties acknowledge and agree that the terms and
provisions of this Lease are confidential and such confidentiality shall remain
in effect before, on and after the execution and delivery of this Lease. In
furtherance of the foregoing, any documents, instruments, records or other
information delivered by one party to the other shall be deemed confidential
information. The provisions of this Section shall survive the expiration or
termination of this Lease. Without limiting the generality of the foregoing,
Tenant and its management, members, officers, directors and employees shall not
contact, disclose, discuss, or negotiate with the Seller in connection with any
matter relating to the Project.

      29.3 Existing Tenant. Landlord shall use commercially reasonable efforts
to obtain an early termination of the Lazer Armortech lease which expires on
December 31, 2002 and is not renewable at Lazer Armortech's option; provided,
however, Landlord shall not be required to offer concessions or consideration in
connection with such efforts.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -22-
<PAGE>

                                   ARTICLE 30

                             RIGHT OF FIRST REFUSAL

      30.1. Right of First Refusal. For so long as Structural GenomiX, Inc., as
the original Tenant under this Lease, or its Affiliates, leases and occupies at
least 24,000 rentable square feet, Structural GenomiX, Inc. shall retain a right
of first offer with respect to any and all additional available rentable area
located in the Project (the "FIRST OFFER SPACE"). Notwithstanding the foregoing,
such first offer right shall commence only following the expiration or earlier
termination of any existing lease (including renewals) in the First Offer Space,
Tenant's right of first offer shall be on the terms and conditions set forth in
this Article 30.

      30.2 Procedure. Landlord shall notify Tenant (the "FIRST OFFER NOTICE")
from time to time when the First Offer Space or any portion thereof becomes
available for lease to third parties. Pursuant to such First Offer Notice,
Landlord shall offer to lease to Tenant the then available First Offer Space for
the remainder of the term under this Lease for the existing Premises. The First
Offer Notice shall describe the space so offered to Tenant and shall set forth
the "First Offer Rent," as that term is defined below. The First Offer Space
shall be offered to Tenant on substantially the same material economic terms per
square foot as Tenant is then paying under this Lease, taking into account,
among other factors, the amount of time then remaining in the Lease Term and the
then unamortized portion of the Tenant Improvements for the Premises (the "FIRST
OFFER RENT"). The First Offer Rent shall be reasonably determined by Landlord
and, at Landlord's election, may include (i) a tenant improvement allowance per
square foot, or, alternatively, (ii) a lesser rent per square foot with no
tenant improvement allowance.

      30.3 Procedure for Acceptance. If Tenant wishes to exercise Tenant's right
of first refusal with respect to the space described in the First Offer Notice,
then within five (5) business days of delivery of the First Offer Notice to
Tenant, Tenant shall deliver notice to Landlord of Tenant's intention to
exercise its right of first offer with respect to the entire space described in
the First Offer Notice on the terms contained in such notice ("TENANT NOTICE").
If Tenant does not so notify Landlord within the five (5) business day period,
then Landlord shall be free to lease the space described in the First Offer
Notice to anyone to whom Landlord desires on any terms Landlord desires.
Notwithstanding anything to the contrary contained herein, Tenant must elect to
exercise its right of first refusal, if at all, with respect to all of the space
offered by Landlord to Tenant at any particular time, and Tenant may not elect
to lease only a portion thereof.

      30.4 Intentionally Omitted.

      30.5 Construction In First Offer Space. Unless Landlord agrees to
construct tenant improvements, Tenant shall take the First Offer Space in its
"as is" condition.

      30.6 Amendment to Lease. If Tenant timely exercises Tenant's right to
lease the First Offer Space as set forth herein, Landlord and Tenant shall
within fifteen (15) days thereafter execute a separate lease for such First
Offer Space upon the terms and conditions as set forth in the First Offer Notice
and this Article 30. Tenant shall commence payment of Rent for the First Offer
Space, and the term of the First Offer Space shall commence upon the date of
delivery of the First Offer Space to Tenant (the "FIRST OFFER COMMENCEMENT
DATE") and terminate on the date set forth in the First Offer Notice.

      30.7 Termination of Right of First Offer. The rights contained in this
Article 30 shall be personal to the Tenant named in the Summary, and its
Affiliates, and may only be exercised by Tenant and its Affiliates (and not any
assignee, sublessee or other transferee of Tenant's interest in this Lease) if
Tenant occupies the entire Premises. The right of first offer granted herein
shall terminate as to particular First Offer Space upon the failure by Tenant to
exercise its right of first offer with respect to such First Offer Space as
offered by Landlord. Tenant shall not have the right to lease First Offer Space,
as provided in this Article 30, if, as of the date of the attempted exercise of
any right of first offer by Tenant, or as of the scheduled date of delivery of
such First Offer Space to Tenant, Tenant is in default under this Lease or
Tenant has previously been in default under this Lease more than once.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -23-
<PAGE>

                                   ARTICLE 31

                            MISCELLANEOUS PROVISIONS

      31.1 Binding Effect. Subject to all other provisions of this Lease, each
of the provisions of this Lease shall extend to and shall, as the case may
require, bind or inure to the benefit not only of Landlord and of Tenant, but
also of their respective successors or assigns, provided this clause shall not
permit any assignment by Tenant contrary to the provisions of Article 14 of this
Lease.

      31.2 Modification of Lease. Should any current or prospective mortgagee or
ground lessor for the Building or Project require a modification or
modifications of this Lease, which modification or modifications will not cause
an increased cost or expense to Tenant or in any other way materially and
adversely change the rights and obligations of Tenant hereunder, then and in
such event, Tenant agrees that this Lease may be so modified and agrees to
execute whatever documents are reasonably required therefor and to deliver the
same to Landlord within ten (10) days following a request therefor. Should
Landlord or any such prospective mortgagee or ground lessor require execution of
a short form of Lease for recording, containing, among other customary
provisions, the names of the parties, a description of the Premises and the
Lease Term, Tenant agrees to execute and deliver such short form of Lease to
Landlord within ten (10) days following the request therefor.

      31.3 Transfer of Landlord's Interest. Tenant acknowledges that Landlord
has the right to transfer all or any portion of its interest in the Project or
Building and in this Lease, and Tenant agrees that in the event of any such
transfer, Landlord shall automatically be released from all liability under this
Lease and Tenant agrees to look solely to such transferee for the performance of
Landlord's obligations hereunder after the date of transfer. Tenant further
acknowledges that Landlord may assign its interest in this Lease to the holder
of any mortgage or deed of trust as additional security, but agrees that an
assignment shall not release Landlord from its obligations hereunder and Tenant
shall continue to look to Landlord for the performance of its obligations
hereunder.

      31.4 Prohibition Against Recording. Except as provided in Section 31.2 of
this Lease, neither this Lease, nor any memorandum, affidavit or other writing
with respect thereto, shall be recorded by Tenant or by anyone acting through,
under or on behalf of Tenant, and the recording thereof in violation of this
provision shall make this Lease null and void at Landlord's election.

      31.5 Captions. The captions of Articles and Sections are for convenience
only and shall not be deemed to limit, construe, affect or alter the meaning of
such Articles and Sections.

      31.6 Time of Essence. Time is of the essence of this Lease and each of its
provisions.

      31.7 Partial Invalidity. If any term, provision or condition contained in
this Lease shall, to any extent, be invalid or unenforceable, the remainder of
this Lease, or the application of such term, provision or condition to persons
or circumstances other than those with respect to which it is invalid or
unenforceable, shall not be affected thereby, and each and every other term,
provision and condition of this Lease shall be valid and enforceable to the
fullest extent possible permitted by law.

      31.8 No Warranty. In executing and delivering this Lease, Tenant has not
relied on any representations, including, but not limited to, any representation
as to the amount of any item comprising Additional Rent or the amount of the
Additional Rent in the aggregate or that Landlord is furnishing the same
services to other tenants, at all, on the same level or on the same basis, or
any warranty or any statement of Landlord which is not set forth herein or in
one or more of the exhibits attached hereto.

      31.9 Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease and
any side letter or separate agreement executed by Landlord and Tenant in
connection with this Lease and dated of even date herewith, contain all of the
terms, covenants, conditions, warranties and agreements of the parties relating
in any manner to the rental, use and occupancy of the Premises and shall be
considered to be the only agreements between the parties hereto and their
representatives and agents. None of the

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -24-
<PAGE>

terms, covenants, conditions or provisions of this Lease can be modified,
deleted or added to except in writing signed by the parties hereto.

      31.10 Right to Lease. Landlord reserves the absolute right to effect such
other tenancies in the Project as Landlord in the exercise of its sole business
judgment shall determine to best promote the interests of the Building or
Project. Tenant does not rely on the fact, nor does Landlord represent, that any
specific tenant or type or number of tenants shall, during the Lease Term,
occupy any space in the Building or Project.

      31.11 Force Majeure. Any prevention, delay or stoppage due to strikes,
lockouts, labor disputes, acts of God, inability to obtain services, labor, or
materials or reasonable substitutes therefor, governmental actions, civil
commotions, fire or other casualty, and other causes beyond the reasonable
control of the party obligated to perform, except with respect to the
obligations imposed with regard to Rent and other charges to be paid by Tenant
pursuant to this Lease (collectively, the "FORCE MAJEURE"), notwithstanding
anything to the contrary contained in this Lease, shall excuse the performance
of such party for a period equal to any such prevention, delay or stoppage and,
therefore, if this Lease specifies a time period for performance of an
obligation of either party, that time period shall be extended by the period of
any delay in such party's performance caused by a Force Majeure.

      31.12 Notices. All notices, demands, statements, designations, approvals
or other communications (collectively, "NOTICES") given or required to be given
by either party to the other hereunder shall be in writing, shall be sent by
United States certified or registered mail, postage prepaid, return receipt
requested, or delivered personally (i) to Tenant at the appropriate address set
forth in Section 11 of the Summary, or to such other place as Tenant may from
time to time designate in a Notice to Landlord; or (ii) to Landlord at the
following addresses, or to such other firm or to such other place as Landlord
may from time to time designate in a Notice to Tenant:

                         BRS TORREY I, LLC
                         c/o Mr. Matt Root
                         The Shidler Group
                         4660 La Jolla Village Drive, Suite 800
                         San Diego, CA 92122

                         with copies to:

                         Teel, Palmer & Roeper, LLP
                         8910 University Center Lane, Suite 630
                         San Diego, California 92122
                         Attn:  Dean E. Roeper, Esq.

Any Notice will be deemed given on the date it is mailed as provided in this
Section 31.12 or upon the date personal delivery is made. If Tenant is notified
of the identity and address of the holder of any deed of trust or ground or
underlying lessor, Tenant shall give to such mortgagee or ground or underlying
lessor written notice of any default by Landlord under the terms of this Lease
by registered or certified mail, and such mortgagee or ground or underlying
lessor shall be given a reasonable opportunity to cure such default prior to
Tenant's exercising any remedy available to Tenant.

      31.13 Joint and Several. If there is more than one Tenant, the obligations
imposed upon Tenant under this Lease shall be joint and several.

      31.14 Authority. If Tenant is a corporation or partnership, each
individual executing this Lease on behalf of Tenant hereby represents and
warrants that Tenant is a duly formed and existing entity qualified to do
business in California and that Tenant has full right and authority to execute
and deliver this Lease and that each person signing on behalf of Tenant is
authorized to do so.

      31.15 Governing Law. This Lease shall be construed and enforced in
accordance with the laws of the State of California.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -25-
<PAGE>

      31.16 Submission of Lease. Submission of this instrument for examination
or signature by Tenant does not constitute a reservation of or an option for
lease, and it is not effective as a lease or otherwise until execution and
delivery by both Landlord and Tenant.

      31.17 Brokers. Landlord and Tenant hereby warrant to each other that they
have had no dealings with any real estate broker or agent in connection with the
negotiation of this Lease, excepting only the real estate brokers or agents
specified in Section 10 of the Summary (the "BROKERS"), and that they know of no
other real estate broker or agent who is entitled to a commission in connection
with this Lease. Each party agrees to indemnify and defend the other party
against and hold the other party harmless from any and all claims, demands,
losses, liabilities, lawsuits, judgments, and costs and expenses (including,
without limitation, reasonable attorneys' fees) with respect to any leasing
commission or equivalent compensation alleged to be owing on account of any
dealings with any real estate broker or agent, other than the Brokers, occurring
by, through, or under the indemnifying party.

      31.18 Independent Covenants. This Lease shall be construed as though the
covenants herein between Landlord and Tenant are independent and not dependent
and Tenant hereby expressly waives the benefit of any statute to the contrary
and agrees that if Landlord fails to perform its obligations set forth herein,
Tenant shall not be entitled to make any repairs or perform any acts hereunder
at Landlord's expense or to any setoff of the Rent or other amounts owing
hereunder against Landlord; provided, however, that the foregoing shall in no
way impair the right of Tenant to commence a separate action against Landlord
for any violation by Landlord of the provisions hereof so long as notice is
first given to Landlord and any holder of a mortgage or deed of trust covering
the Building or Project or any portion thereof, whose address has theretofore
been given to Tenant, and an opportunity is granted to Landlord and such holder
to correct such violations as provided above.

      31.19 Project or Building Name and Signage. Landlord shall have the right
at any time to change the name of the Project or Building and to install, affix
and maintain any and all signs on the exterior and on the interior of the
Project or Building as Landlord may, in Landlord's sole discretion, desire.

      31.20 Transportation Management. Tenant shall fully comply with all
present or future programs intended to manage parking, transportation or traffic
in and around the Project or Building, and in connection therewith, Tenant shall
take responsible action for the transportation planning and management of all
employees located at the Premises by working directly with Landlord, any
governmental transportation management organization or any other
transportation-related committees or entities. Such programs may include,
without limitation: (i) restrictions on the number of peak-hour vehicle trips
generated by Tenant; (ii) increased vehicle occupancy; (iii) implementation of
an in-house ridesharing program and an employee transportation coordinator; (iv)
working with employees and any Project, Building or area-wide ridesharing
program manager; (v) instituting employer-sponsored incentives (financial or
in-kind) to encourage employees to rideshare; and (vi) utilizing flexible work
shifts for employees.

      31.21 No Discrimination. Tenant covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
Tenant, and this Lease is made and accepted upon and subject to the following
conditions: that there shall be no discrimination against or segregation of any
person or group of persons, on account of race, color, creed, sex, religion,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, or enjoyment of the Premises, nor shall Tenant itself, or any
person claiming under or through Tenant, establish or permit such practice or
practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy, of tenants, lessees, sublessees, subtenants
or vendees in the Premises.

      31.22 Environmental Matters.

            31.22.1 Hazardous Material. As used herein, the term "HAZARDOUS
MATERIAL" means any hazardous or toxic substance, material or waste which is or
becomes regulated by, or is dealt with in, any local governmental authority, the
State of California or the Unites States Government. Tenant acknowledges that
Landlord may incur costs (i) for complying with laws, codes, regulations or
ordinances relating to Hazardous Material, or (ii) otherwise in connection with
Hazardous Material including, without limitation, the following: (a) Hazardous
Material present in soil or ground water, (b) Hazardous Material that migrates,
flows, percolates, diffuses or in any way moves onto or under the Project, (c)
Hazardous Material present on or under the Project as a result of any discharge,
dumping or spilling (whether accidental or otherwise) on the Project by other
tenants of the Project or their agents, employees, contractors or invitees, or
by others, and (d) material which becomes Hazardous

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -26-
<PAGE>

Material due to a change in laws, codes, regulations or ordinances which relate
to hazardous or toxic material, substances or waste. Tenant agrees that the
costs incurred by Landlord with respect to, or in connection with, the Project
for complying with laws, codes, regulations or ordinances relating to Hazardous
Material shall be an Operating Expense, unless the cost of such compliance, as
between Landlord and Tenant, is made the responsibility of Tenant under this
Lease. To the extent any such Operating Expense relating to Hazardous Material
is subsequently recovered or reimbursed through insurance, or recovery from
responsible third parties, or other action, Tenant shall be entitled to a
proportionate share of such Operating Expense to which such recovery or
reimbursement relates.

            31.22.2 Representation and Warranties of Tenant.

                  31.22.2.1 Tenant has received and reviewed the environmental
documents listed in Exhibit "F" ("ENVIRONMENTAL DOCUMENTS"). Tenant acknowledges
that hazardous substances, hazardous materials, wastes, pollutants or
contaminants of the type and nature identified in the Environmental Documents,
or similar or related types or organic and or inorganic substances have been
used and are present or potentially present at the Project at the locations
identified in the Environmental Documents and, potentially, at other locations
at the Project that have not been identified (hereinafter referred to as
"SUBSTANCES").

                  31.22.2.2 Tenant shall inform and/or disclose, prior to the
commencement of Tenant Work under this Lease and the Tenant Work Letter attached
as Exhibit "E", in a manner reasonably approved by Landlord, to its employees,
contractors, subcontractors and anyone else conducting Tenant Work on the
Project under contract or the supervision or direction of the Tenant or its
Contractor, as defined in Exhibit "E" ("WORKER" or "WORKERS"), the content of
the Environmental Documents, including, without limitation, the type, location,
extent and magnitude and hazards associated with the Substances, present or
potentially present at the Project.

            31.22.3 Tenant Release and Indemnification of Landlord. Tenant shall
release, waive and forever discharge Landlord, and indemnify, defend and hold
Landlord and its owners, officers, directors, employees, agents, successors and
assigns ("LANDLORD INDEMNITEES") harmless from and against all losses, claims,
demands, liabilities, obligations, causes of actions, damages, costs, fees,
expenses, fines or penalties including, without limitation, reasonable attorney
fees and the cost and expense to the Landlord Indemnitees of enforcing the
foregoing indemnity obligation (collectively, "LOSSES") asserted against any
Landlord Indemnitee, or incurred by Landlord Indemnitee, arising from or related
to:

                  31.22.3.1 the performance of the Tenant Work by Tenant,
Contractor or Workers and their owner's officers, directors, employees, agents,
successors and assigns;

                  31.22.3.2 Tenant's breach of any representation or warranty
under this Subsection 31.22.3;

                  31.22.3.3 any personal injury or property damage attributable
to the presence of or exposure to Substances suffered by Tenant, Contractor or
any Worker and their owner's officers, directors, employees, agents, successors
and assigns;

                  31.22.3.4 any exacerbation of existing environmental
conditions, whether or not identified in the Environmental Documents, caused by
Tenant, Contractor or any Worker and their owner's officers, directors,
employees, agents, successors and assigns;

                  31.22.3.5 creation of environmental conditions not identified
in the Environmental Documents caused by Tenant, Contractor or Worker and their
owner's officers, directors, employees, agents, successors and assigns.

                  Notwithstanding anything contrary herein, Tenant's obligations
under this Section shall not extend to losses attributable to the negligence or
willful misconduct of Landlord. The foregoing indemnification obligations shall
survive the expiration or termination of this Lease.

            31.22.4 Baseline Environmental Report. Sixty (60) days prior to the
Lease Expiration Date or earlier termination hereof, Tenant shall, at its sole
cost and expense, perform such environmental site assessment of

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -27-
<PAGE>

environmental conditions in connection with the Project as may be reasonably
required by Landlord, specifically including both a Phase I and/or Phase II
Environmental Report, to confirm to Landlord if any violation of the terms and
conditions of this Article 31 have occurred ("VIOLATIONS") (including, but not
limited to, sampling, testing and analysis of soil, water, air, building
materials and other materials and substances whether solid, liquid or gas), and
share with Landlord the reports and other results thereof, and Landlord shall be
entitled to rely on such reports and other results thereof. Tenant shall, at its
sole cost and expense, comply with all reasonable written requests of Landlord
to reasonably effectuate remediation of any condition (including, but not
limited to, a release of a Hazardous Material) in, on, under or from the Project
arising from or in connection with a Violation.

            31.22.5 Environmental Insurance; Assignment of Indemnity. In the
event Landlord acquires environmental insurance coverage insuring Landlord
against loss or damage caused by the contamination of the Project and arising
out of the presence of Hazardous Material, then Landlord shall add Tenant as an
additional insured to such policy of insurance but only for loss or injury
caused by the presence of Hazardous Material existing on the Project or the
Premises as of the Commencement Date (the "EXISTING HAZARDOUS MATERIALS"). Such
coverage shall insure Tenant against loss or damage caused by such Existing
Hazardous Material, but only to the extent that proceeds are available to
compensate Tenant after compensating Landlord for any of its losses. In other
words, Tenant's rights to any proceeds under such insurance shall be subrogated
and subordinated to Landlord's rights to such proceeds. In addition, if Landlord
acquires a contractual indemnity for loss or damage arising out of the presence
of any Existing Hazardous Material, from either the previous owner of the
Project or the prior tenant of the Project, then and only to the extent that
such indemnification obligation is assignable, Landlord shall, by execution of
such documents as Landlord may reasonably deem commercially reasonable, assign
the benefits of such indemnity to Tenant, but only to the extent that the
proceeds from such indemnity are available to compensate Tenant after
compensating Landlord for any of its losses. In other words, Tenant's rights to
any proceeds under such indemnity shall be subrogated and subordinated to
Landlord's rights to such proceeds.

            31.22.6 Landlord Release of Tenant. Landlord shall release, waive
and forever discharge Tenant for any responsibility for Losses arising from or
related to the Existing Hazardous Materials, provided that such Losses are not
as a result, in whole or in part, of any of the actions or inactions of Tenant
or other parties as described in Subsection 31.22.3 above or are otherwise
covered by the Tenant's obligation to indemnify Landlord.

      31.23 Development of the Project.

            31.23.1 Subdivision. Tenant acknowledges that the Project has been
subdivided. Landlord reserves the right to further subdivide all or a portion of
the buildings and Common Areas in the Project. Tenant agrees to execute and
deliver, upon demand by Landlord and in the form requested by Landlord, any
additional documents needed to conform this Lease to the circumstances resulting
from a subdivision and any all maps in connection therewith. Notwithstanding
anything to the contrary set forth in this Lease, the separate ownership of any
buildings and/or Common Areas of the Project by an entity other than Landlord
shall not affect the calculation of Project Expenses or Tenant's payment of
Tenant's Share of Project Expenses.

            31.23.2 The Other Improvements. If portions of the Project or
property adjacent to the Project (collectively, the "OTHER IMPROVEMENTS") are
owned by an entity other than Landlord, Landlord, at its option, may enter into
an agreement with the owner or owners of any of the Other Improvements to
provide (i) for reciprocal rights of access, use and/or enjoyment of the Project
and the Other Improvements, (ii) for the common management, operation,
maintenance, improvement and/or repair of all or any portion of the Project and
all or any portion of the Other Improvements, (iii) for the allocation of a
portion of the Project Expenses to the Other Improvements and the allocation of
a portion of the operating expenses and taxes for the Other Improvements to the
Project, (iv) for the use or improvement of the Other Improvements and/or the
Project in connection with the improvement, construction, and/or excavation of
the Other Improvements and/or the Project, and (v) for any other matter which
Landlord deems necessary. Nothing contained herein shall be deemed or construed
to limit or otherwise affect Landlord's right to sell all or any portion of the
Project or any other of Landlord's rights described in this Lease.

            31.23.3 Construction of Project and Other Improvements. Tenant
acknowledges that portions of the Project and/or the Other Improvements may be
under construction following Tenant's occupancy of -the Premises, and that such
construction may result in levels of noise, dust, obstruction of access, etc.,
which are in excess of that present in a fully constructed project. Tenant
hereby waives any and all rent offsets or claims of constructive eviction which
may arise in connection with such construction.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -28-
<PAGE>

      31.24 Landlord Exculpation. It is expressly understood and agreed that
notwithstanding anything in this Lease to the contrary, and notwithstanding any
applicable law to the contrary, the liability of Landlord hereunder (including
any successor landlord hereunder) and any recourse by Tenant against Landlord
shall be limited solely and exclusively to the lesser of (a) the equity interest
of Landlord in the Building or (b) the equity interest Landlord would have in
the Building if the Building were encumbered by third-party debt in an amount
equal to eighty percent (80%) of the value of the Building (as such value is
determined by Landlord), and neither Landlord, nor any of its constituent
partners or subpartners, shall have any personal liability therefor, and Tenant,
on behalf of itself and all persons claiming by, through or under Tenant, hereby
expressly waives and releases Landlord and such partners and subpartners from
any and all personal liability.

      31.25 Waiver of Redemption by Tenant. Tenant hereby waives for Tenant and
for all those claiming under Tenant, all rights now or hereafter existing to
redeem by order or judgment of any court or by any legal process or writ,
Tenant's right of occupancy of the Premises after any termination of this Lease.

      31.26 Attorneys' Fees. If either party commences litigation against the
other for the specific performance of this Lease, for damages for the breach
hereof or otherwise for enforcement of any remedy hereunder, the parties hereto
agree to and hereby do waive any right to a trial by jury and, in the event of
any such commencement of litigation, the prevailing party shall be entitled to
recover from the other party such costs and reasonable attorneys' fees as may
have been incurred, including any and all costs incurred in enforcing,
perfecting and executing such judgment.

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -29-
<PAGE>

      IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed the day and date first above written.

            "LANDLORD":                BRS TORREY I, LLC,
                                       a Delaware limited liability company

                                       By:         /s/ [Illegible]
                                            ------------------------------------
                                            ____________________________________

                                       Its:              Member

                                            By:
                                                 _______________________________
                                            Its:
                                                 _______________________________

            "TENANT":                  STRUCTURAL GENOMIX, INC.,
                                       a Delaware corporation

                                       By:            /s/ Tim Harris
                                            ------------------------------------
                                            Name:         T. Harris
                                            Title:        Pres & CEO

                                       By:            /s/ [Illegible]
                                            ------------------------------------
                                            Name:      [Illegible]
                                            Title:          EVP

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                                      -30-
<PAGE>

                                   EXHIBIT "A"

                        TORREY SORRENTO I BUSINESS PARK,
               (10575/10581 Roselle Street, San Diego, California)

                               OUTLINE OF PREMISES

                                  [FLOOR PLAN]

                              EXHIBIT "A" - Page 1

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                                   EXHIBIT "B"

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                           NOTICE OF LEASE TERM DATES

To:
      _________________________________
      _________________________________
      _________________________________

      Re:   Lease dated ________________________, 2001 between BRS TORREY I,
            LLC, a Delaware limited liability company ("LANDLORD"), and
            STRUCTURAL GENOMIX, INC., a Delaware corporation ("TENANT")
            concerning Suite _________ on floor(s) ___________ of the office
            building located at 10575/10581 Roselle Street, San Diego,
            California.

Gentlemen:

      In accordance with the referenced Lease (the "LEASE"), we wish to advise
you and/or confirm as follows:

      1. The Substantial Completion of the Premises has occurred, and the Lease
Term shall commence on or has commenced on ________________________ for a term
of ____________________________ ending on ________________________________.

      2. Rent commenced to accrue on ________________________________, in the
amount of ________________________________.

      3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

      4. Your rent checks should be made payable to _________________________ at
________________________________________________________________.

      5. The exact number of rental square feet within the Premises is
_________________________ square feet.

      6. Base Rent, as adjusted based upon the exact number of rentable square
feet within the Premises, is as follows:
_______________________________________________________________________________.

                              EXHIBIT "B" - Page 1

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

      7. Tenant's Share, as adjusted based upon the exact number of rentable
square feet within the Premises, is ________%.

      "LANDLORD":                      BRS TORREY I, LLC,
                                       a Delaware limited liability company

                                       By: _____________________________________

                                       Its: ____________________________________

                                       By: _____________________________________

                                                Its: ___________________________

Agreed to and Accepted as
of ___________________, 2001

"TENANT":

STRUCTURAL GENOMIX, INC.,
a Delaware corporation

By: ______________________________

    Its: _________________________

                              EXHIBIT "B" - Page 2

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                                   EXHIBIT "C"

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                              RULES AND REGULATIONS

      Tenant shall faithfully observe and comply with the following Rules and
Regulations. Landlord shall not be responsible to Tenant for the nonperformance
of any of said Rules and Regulations by or otherwise with respect to the acts or
omissions of any other tenants or occupants of the Project.

      1. Tenant shall not alter any lock or install any new or additional locks
or bolts on any doors or windows of the Premises without obtaining Landlord's
prior written consent. Tenant shall bear the cost of any lock changes or repairs
required by Tenant. Two keys will be furnished by Landlord for the Premises, and
any additional keys required by Tenant must be obtained from Landlord at a
reasonable cost to be established by Landlord.

      2. All doors opening to public corridors shall be kept closed at all times
except for normal ingress and egress to the Premises.

      3. Any requests of Tenant shall be directed to the management office for
the Project or at such office location designated by Landlord. Employees of
Landlord shall not perform any work or do anything outside their regular duties
unless under special instructions from Landlord.

      4. Tenant shall not disturb, solicit, or canvas any occupant of the
Project and shall cooperate with Landlord and its agents to prevent such
activities.

      5. The toilet rooms, urinals, wash bowls and other apparatus shall not be
used for any purpose other than that for which they were constructed, and no
foreign substance of any kind whatsoever shall be thrown therein. The expense of
any breakage, stoppage or damage resulting from the violation of this rule shall
be borne by the tenant who, or whose employees or agents, shall have caused it.

      6. Tenant shall not without the prior written consent of Landlord use any
method of heating or air conditioning other than that supplied by Landlord.

      7. Tenant shall not allow to escape any foul or noxious gas or substance
in or on the Premises, or permit or allow the Premises to be occupied or used in
a manner offensive or objectionable to Landlord or other occupants of the
Project by reason of noise, odors, or vibrations, or interfere in any way with
other tenants or those having business therein.

      8. No cooking shall be done or permitted on the Premises, nor shall the
Premises be used for the storage of merchandise, for lodging or for any
improper, objectionable or immoral purposes. Notwithstanding the foregoing,
Underwriters' laboratory-approved equipment and microwave ovens may be used in
the Premises for heating food and brewing coffee, tea, hot chocolate and similar
beverages for employees and visitors, provided that such use is in accordance
with all applicable federal, state and city laws, codes, ordinances, rules and
regulations.

      9. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the influence
of liquor or drugs, or who shall in any manner do any act in violation of any of
these Rules and Regulations.

      10. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any governmental agency.

      11. Tenant shall assume any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which includes keeping doors locked
and other means of entry to the Premises closed.

                              EXHIBIT "C" - Page 1

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

      12. No awnings or other projection shall be attached to the outside walls
of the Building without the prior written consent of Landlord. All electrical
ceiling fixtures hung in offices or spaces along the perimeter of the Building
must be fluorescent and/or of a quality, type, design and bulb color approved by
Landlord. Tenant shall abide by Landlord's regulations concerning the opening
and closing of window coverings which are attached to the windows in the
Premises, if any, which have a view of any interior portion of the Building or
Building Common Areas.

      Landlord reserves the right at any time to change or rescind any one or
more of these Rules and Regulations, or to make such other and further
reasonable Rules and Regulations as in Landlord's judgment may from time to time
be necessary for the management, safety, care and cleanliness of the Premises,
Building, the Common Areas and the Project, and for the preservation of good
order therein, as well as for the convenience of other occupants and tenants
therein. Tenant shall be deemed to have read these Rules and Regulations and to
have agreed to abide by them as a condition of its occupancy of the Premises.
Landlord may waive any one or more of these Rules and Regulations for the
benefit of any particular tenants, but no such waiver by Landlord shall be
construed as a waiver of such Rules and Regulations in favor of any other
tenant, nor prevent Landlord from thereafter enforcing any such Rules or
Regulations against any or all tenants of the Project.

                              EXHIBIT "C" - Page 2

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                                   EXHIBIT "D"

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                      FORM OF TENANT'S ESTOPPEL CERTIFICATE

      The undersigned as Tenant under that certain Lease (the "LEASE") made and
entered into as of ______________, 2001 by and between BRS TORREY I, LLC, a
Delaware limited liability company, as Landlord, and the undersigned, as Tenant,
for Premises on the ________________ (______) floor(s) of the office building
located at 10575/10581 Roselle Street, San Diego, California, certifies as
follows:

      1. Attached hereto as Exhibit A is a true and correct copy of the Lease
and all amendments and modifications thereto. The documents contained in Exhibit
A represent the entire agreement between the parties as to the Premises.

      2. The undersigned currently occupies the Premises described in the Lease.

      3. The Lease Term commenced on ____________________________, and the Lease
Term expires on _________________________________.

      4. Base Rent became payable on __________________.

      5. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Exhibit A.

      6. Tenant has not transferred, assigned, or sublet any portion of the
Premises nor entered into any license or concession agreements with respect
thereto except as follows:

      7. Tenant shall not modify the documents contained in Exhibit A without
the prior written consent of the holder of the first deed of trust on the
Premises.

      8. All monthly installments of Base Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through __________________. The current monthly installment of Base Rent is
$________.

      9. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder.

      10. The current amount of the Security Deposit held by Landlord is
$________.

      11. No rental has been paid more than thirty (30) days in advance and no
security has been deposited with Landlord except as provided in the Lease.

      12. As of the date hereof, there are no existing defenses or offsets that
the undersigned has against Landlord nor have any events occurred that with the
passage of time or the giving of notice, or both, would constitute a default on
the part of Landlord under the Lease.

      13. The undersigned acknowledges that this Estoppel certificate may be
delivered to Landlord or to a prospective mortgagee, or a prospective purchaser,
and acknowledges that said prospective mortgagee or prospective purchaser will
be relying upon the statements contained herein in making the loan or acquiring
the property of which the Premises are a part and that receipt by it of this
certificate is a condition of making of such loan or acquisition of such
property.

      14. If Tenant is a corporation or partnership, each individual executing
this Estoppel Certificate on behalf of Tenant hereby represents and warrants
that Tenant is a duly formed and existing entity qualified to do

                              EXHIBIT "D" - Page 1

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

business in California and that Tenant has full right and authority to execute
and deliver this Estoppel Certificate and that each person signing on behalf of
Tenant is authorized to do so.

      Executed at __________________ on the _____ day of __________________,
2001.

      "TENANT":                         STRUCTURAL GENOMIX, INC.,
                                        a Delaware corporation

                                        By: ____________________________________
                                            Name: ______________________________
                                            Title:

                                        By: ____________________________________
                                            Name: ______________________________
                                            Title: _____________________________

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

                              EXHIBIT "D" - Page 2

<PAGE>

                                   EXHIBIT "E"

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                               TENANT WORK LETTER

      This Tenant Work Letter shall set forth the terms and conditions relating
to the construction of the tenant improvements in the Premises. This Tenant Work
Letter is essentially organized chronologically and addresses the issues of the
construction of the Premises, in sequence, as such issues will arise during the
actual construction of the Premises. All capitalized terms used but not defined
herein shall have the meanings given such terms in the Lease. All references in
this Tenant Work Letter to Articles or Sections of "this Lease" shall mean the
relevant portion of Articles 1 through 31 of this Lease to which this Tenant
Work Letter is attached as Exhibit "E" and of which this Tenant Work Letter
forms a part, and all references in this Tenant Work Letter to Sections of "this
Tenant Work Letter" shall mean the relevant portion of Sections 1 through 6 of
this Tenant Work Letter.

                                    SECTION 1

                   DELIVERY OF THE PREMISES AND BASE BUILDING

      Upon the full execution and delivery of this Lease by Landlord and Tenant,
Landlord shall deliver the Premises and "Base Building," as that term is defined
below, to Tenant, and Tenant shall accept the Premises and Base Building from
Landlord in their presently existing, "as-is" condition ("DELIVERY DATE");
provided, however, Landlord shall (i) paint the exterior of the Building, (ii)
repair and/or replace certain portions of the roofing system, (iii) install
glass in all truck doors along the back of the Building, and (iv) repair certain
portions of the parking lot (collectively, the "LANDLORD'S WORK"). The "BASE
BUILDING" shall consist of those portions of the Premises which were in
existence prior to the construction of the Tenant Work. Landlord shall obtain a
bid from the Contractor, defined below, to construct the Landlord's Work. If
such bid is not competitive with Landlord's other bids for the Landlord Work, at
Tenant's option, Tenant may pay the difference between the Contractor's bid and
the most competitive bid for the Landlord's Work to Landlord, and Landlord shall
retain the Contractor to construct the Landlord's Work.

                                    SECTION 2

                               TENANT IMPROVEMENTS

      2.1 Tenant Improvement Allowance. Tenant shall be entitled to a one-time
tenant improvement allowance (the "TENANT IMPROVEMENT ALLOWANCE") in the amount
of up to One Million Eight Hundred Eighty-Five Thousand One Hundred Eighty
Dollars ($1,885,180.00) for reimbursement to Tenant for the costs relating to
the initial design and construction of Tenant's improvements which are
permanently affixed to the Premises (the "TENANT IMPROVEMENTS"). In no event
shall Landlord be obligated to make disbursements pursuant to this Tenant Work
Letter in a total amount which exceeds the Tenant Improvement Allowance.

      2.2 Disbursement of the Tenant Improvement Allowance. Except as otherwise
set forth in this Tenant Work Letter, the Tenant Improvement Allowance shall be
disbursed by Landlord (each of which disbursements shall be made pursuant to
Landlord's disbursement process) only for the following items and costs
(collectively, the "TENANT IMPROVEMENT ALLOWANCE ITEMS").

            2.2.1 Payment of the fees of the "Space Planner," "Architect" and
the "Engineers," as those terms are defined in Section 3.1 of this Tenant Work
Letter and payment of the fees incurred by, and the cost of documents and
materials supplied by, Landlord and Landlord's consultants in connection with
the preparation and review of the "Construction Drawings," as that term is
defined in Section 3.1 of this Tenant Work Letter;

            2.2.2 The payment of plan check, permit and license fees relating to
construction of the Tenant Improvements;

                              EXHIBIT "E" - Page 1

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

            2.2.3 The cost of construction of the Tenant Improvements,
including, without limitation, testing and inspection costs, freight elevator
usage, hoisting and trash removal costs, and contractors' fees and general
conditions;

            2.2.4 The cost of any changes in the Base, Shell and Core work or
the Landlord Work when such changes are required by the Construction Drawings
(including if such changes are due to the fact that such work is prepared on an
unoccupied basis), such cost to include all direct architectural and/or
engineering fees and expenses incurred in connection therewith;

            2.2.5 The cost of any changes to the Construction Drawings, Tenant
Improvements or Landlord's Work required by Code;

            2.2.6 Sales and use taxes and Title 24 fees;

            2.2.7 "Landlord Consulting Fee", as that term is defined in Section
4.3 of this Tenant Work Letter; and

            2.2.8 All other costs to be expended by Landlord in connection with
the construction of the Tenant Improvements.

      2.3 Tenant Work. Any and all work performed by Tenant to the Premises or
the Building or Project shall be defined as "Tenant Improvements." Tenant shall
use its good faith efforts to complete the construction of the Tenant
Improvements on or before October 1, 2001. The Tenant Work shall also be
considered "Tenant Improvements" for purposes of this Tenant Work Letter.

      Any failure of Tenant to so complete the Tenant Work or otherwise comply
with the terms and provisions of this Tenant Work Letter shall be a default
under this Lease. Landlord and Tenant shall use commercially reasonable efforts
to concurrently construct the Landlord's Work and the Tenant Work.

                                    SECTION 3

                              CONSTRUCTION DRAWINGS

      3.1 Selection of Architect/Construction Drawings. Tenant shall retain an
architect reasonably acceptable to Landlord (the "ARCHITECT") to prepare any
"Construction Drawings," as that term is defined in this Section 3.1. Tenant
shall retain engineering consultants reasonably acceptable to and approved by
Landlord (the "ENGINEERS") to prepare any plans and engineering working drawings
relating to the structural, mechanical, electrical, plumbing, HVAC, lifesafety,
and sprinkler work in the Premises or otherwise, which work is not part of the
Base Building. The plans and drawings to be prepared by Architect and the
Engineers hereunder shall be known collectively as the "CONSTRUCTION DRAWINGS."
All Construction Drawings shall comply with the drawing format and
specifications determined by Landlord, and shall be subject to Landlord's
approval which will not be unreasonably withheld. Tenant and Architect shall
verify, in the field, the dimensions and conditions as shown on the relevant
portions of the base building plans, and Tenant and Architect shall be solely
responsible for the same, and Landlord shall have no responsibility in
connection therewith. Landlord's review of the Construction Drawings as set
forth in this Section 3, shall be for its sole purpose and shall not imply
Landlord's review of the same, or obligate Landlord to review the same, for
quality, design, Code compliance or other like matters. Accordingly,
notwithstanding that any Construction Drawings are reviewed by Landlord or its
space planner, architect, engineers and consultants, and notwithstanding any
advice or assistance which may be rendered to Tenant by Landlord or Landlord's
space planner, architect, engineers, and consultants, Landlord shall have no
liability whatsoever in connection therewith and shall not be responsible for
any omissions or errors contained in the Construction Drawings, and Tenant's
waiver and indemnity set forth in this Lease shall specifically apply to the
Construction Drawings.

      3.2 Approved Plans. Landlord shall approve or reasonably disapprove by
written notice to Tenant (with a detailed description of Landlord's reasons for
such disapproval) of any draft of the Construction Drawings within three (3)
business days after Landlord's receipt thereof. Landlord's failure to approve or
reasonably disapprove any draft of the Construction Drawings by written notice
to Tenant within said three (3) business day period shall be deemed to
constitute Landlord's approval thereof. If Landlord so notifies Tenant of its
disapproval

                              EXHIBIT "E" - Page 2

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

of any draft of the Construction Drawings, Tenant shall cause the Architect to
revise the Construction Drawings and to resubmit the Construction Drawings for
Landlord's approval. This process shall continue until the Construction Drawings
have been approved or are deemed to have been approved by Landlord. The final
Construction Drawings shall be approved by Landlord (the "APPROVED PLANS") prior
to the commencement of construction of the Tenant Work by Tenant. After approval
by Landlord of the final Approved Plans, which consent may not be unreasonably
withheld or delayed, Tenant shall submit the same and shall acquire all
applicable permits and shall deliver a copy of all permits to Landlord. Tenant
hereby agrees that neither Landlord nor Landlord's consultants shall be
responsible for obtaining any permit regarding the Tenant Work and that
obtaining the same shall be Tenant's responsibility; provided, however, that
Landlord shall cooperate with Tenant in executing permit applications and
performing other ministerial acts reasonably necessary to enable Tenant to
obtain any such permit. No material, substantive changes, modifications or
alterations in the Approved Plans may be made without the prior written consent
of Landlord, which consent may not be unreasonably withheld or delayed. The
failure of Tenant to acquire all permits that are required by any governmental
agency shall be a default of Tenant hereunder.

                                    SECTION 4

                     CONSTRUCTION OF THE TENANT IMPROVEMENTS

      4.1 Tenant's Selection of Contractors.

            4.1.1 The Contractor. A contractor shall be retained by Tenant to
construct the Tenant Improvements. Such contractor ("CONTRACTOR") shall be
selected by Tenant from a list of contractors acceptable to Landlord, and Tenant
shall deliver to Landlord notice of its selection of the Contractor upon such
selection.

            4.1.2 Tenant's Agents. All subcontractors, laborers, materialmen,
and suppliers used by Tenant (such subcontractors, laborers, materialmen, and
suppliers, and the Contractor to be known collectively as "TENANT'S AGENTS")
must be approved in writing by Landlord, which approval shall not be
unreasonably withheld or delayed. If Landlord does not approve any of Tenant's
proposed subcontractors, laborers, materialmen or suppliers within three (3)
business days after Landlord's receipt thereof, Tenant shall submit other
proposed subcontractors, laborers, materialmen or suppliers for Landlord's
written approval.

      4.2 Construction of Tenant Improvements by Tenant's Agents.

            4.2.1 Construction Contract; Cost Budget. Prior to Tenant's
execution of the construction contract and general conditions with Contractor
(the "CONTRACT"), Tenant shall submit the Contract to Landlord for its approval,
which approval shall not be unreasonably withheld or delayed.

            4.2.2 Tenant's Agents.

                  4.2.2.1 Landlord's General Conditions for Tenant's Agents and
Tenant Improvement Work. Tenant's and Tenant's Agent's construction of the
Tenant Improvements shall comply with the following: (i) the Tenant Improvements
shall be constructed in strict accordance with the Approved Plans; (ii) Tenant's
Agents shall submit schedules of all work relating to the Tenant's Improvements
to Contractor and Contractor shall, within five (5) business days of receipt
thereof, inform Tenant's Agents of any changes which are necessary thereto, and
Tenant's Agents shall adhere to such corrected schedule; and (iii) Tenant shall
abide by all rules made by Landlord's Building manager with respect to the use
of freight, loading dock and service elevators, storage of materials,
coordination of work with the contractors of other tenants, and any other matter
in connection with this Tenant Work Letter, including, without limitation, the
construction of the Tenant Improvements.

                  4.2.2.2 Indemnity. Tenant's indemnity of Landlord as set forth
in this Lease shall also apply with respect to any and all costs, losses,
damages, injuries and liabilities related in any way to any act or omission of
Tenant or Tenant's Agents, or anyone directly or indirectly employed by any of
them, or in connection with Tenant's non-payment of any amount arising out of
the Tenant Improvements and/or Tenant's disapproval of all or any portion of any
request for payment. Such indemnity by Tenant, as set forth in this Lease, shall
also apply with respect to any and all costs, losses, damages, injuries and
liabilities related in any way to Landlord's performance of any ministerial acts
reasonably necessary (i) to permit Tenant to complete the Tenant Improvements,
and (ii) to enable Tenant to obtain any building permit or certificate of
occupancy for the Premises.

                              EXHIBIT "E" - Page 3

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                  4.2.2.3 Requirements of Tenant's Agents. Each of Tenant's
Agents shall guarantee to Tenant and for the benefit of Landlord that the
portion of the Tenant Improvements for which it is responsible shall be free
from any defects in workmanship and materials for a period of not less than one
(1) year from the date of completion thereof. Each of Tenant's Agents shall be
responsible for the replacement or repair, without additional charge, of all
work done or furnished in accordance with its contract that shall become
defective within one (1) year after the later to occur of (i) completion of the
work performed by such contractor or subcontractors and (ii) the Lease
Commencement Date. The correction of such work shall include, without additional
charge, all additional expenses and damages incurred in connection with such
removal or replacement of all or any part of the Tenant Improvements, and/or the
Building and/or common areas that may be damaged or disturbed thereby. All such
warranties or guarantees as to materials or workmanship of or with respect to
the Tenant Improvements shall be contained in the Contract or subcontract and
shall be written such that such guarantees or warranties shall inure to the
benefit of both Landlord and Tenant, as their respective interests may appear,
and can be directly enforced by either. Tenant covenants to give to Landlord any
assignment or other assurances which may be necessary to effect such right of
direct enforcement.

                  4.2.2.4 Insurance Requirements.

                        4.2.2.4.1 General Coverages. All of Tenant's Agents
shall carry worker's compensation insurance covering all of their respective
employees, and shall also carry public liability insurance, including property
damage, all with limits, in form and with companies as are required to be
carried by Tenant as set forth in this Lease.

                        4.2.2.4.2 Special Coverages. Tenant shall carry
"Builder's All Risk" insurance in an amount approved by Landlord covering the
construction of the Tenant Improvements, and such other insurance as Landlord
may require, it being understood and agreed that the Tenant Improvements shall
be insured by Tenant pursuant to this Lease immediately upon completion thereof.
Such insurance shall be in amounts and shall include such extended coverage
endorsements as may be reasonably required by Landlord including, but not
limited to, the requirement that all of Tenant's Agents shall carry excess
liability and Products and Completed Operation Coverage insurance, each in
amounts not less than $1,000,000 per incident, $3,000,000 in aggregate, and in
form and with companies as are required to be carried by Tenant as set forth in
this Lease.

                        4.2.2.4.3 General Terms. Certificates for all insurance
carried pursuant to this Section 4.2.2.4 shall be delivered to Landlord before
the commencement of construction of the Tenant Improvements and before the
Contractor's equipment is moved onto the site. All such policies of insurance
must contain a provision that the company writing said policy will give Landlord
thirty (30) days prior written notice of any cancellation or lapse of the
effective date or any reduction in the amounts of such insurance. In the event
that the Tenant Improvements are damaged by any cause during the course of the
construction thereof, Tenant shall immediately repair the same at Tenant's sole
cost and expense. Tenant's Agents shall maintain all of the foregoing insurance
coverage in force until the Tenant Improvements are fully completed and accepted
by Landlord, except for any Products and Completed Operation Coverage insurance
required by Landlord, which is to be maintained for ten (10) years following
completion of the work and acceptance by Landlord and Tenant. All policies
carried under this Section 4.2.2.4 shall insure Landlord and Tenant, as their
interests may appear, as well as Contractor and Tenant's Agents. All insurance,
except Workers' Compensation, maintained by Tenant's Agents shall preclude
subrogation claims by the insurer against anyone insured thereunder. Such
insurance shall provide that it is primary insurance as respects the owner and
that any other insurance maintained by owner is excess and noncontributing with
the insurance required hereunder. The requirements for the foregoing insurance
shall not derogate from the provisions for indemnification of Landlord by Tenant
under Section 4.2.2.2 of this Tenant Work Letter. Landlord may, in its
discretion, require Tenant to obtain a lien and completion bond or some
alternate form of security satisfactory to Landlord in an amount sufficient to
ensure the lien-free completion of the Tenant Improvements and naming Landlord
as a co-obligee.

            4.2.3 Governmental Compliance. The Tenant Improvements shall comply
in all respects with the following: (i) the Code and other state, federal, city
or quasi-governmental laws, codes, ordinances and regulations, as each may apply
according to the rulings of the controlling public official, agent or other
person; (ii) applicable standards of the American Insurance Association
(formerly, the National Board of Fire Underwriters) and the National Electrical
Code; and (iii) building material manufacturer's specifications.

                              EXHIBIT "E" - Page 4

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

            4.2.4 Inspection by Landlord. Landlord shall have the right to
inspect the Tenant Improvements at all times, provided however, that Landlord's
failure to inspect the Tenant Improvements shall in no event constitute a waiver
of any of Landlord's rights hereunder nor shall Landlord's inspection of the
Tenant Improvements constitute Landlord's approval of the same. Should Landlord
disapprove any portion of the Tenant Improvements, Landlord shall notify Tenant
in writing of such disapproval and shall specify the items disapproved. Any
defects or deviations in, and/or disapproval by Landlord of, the Tenant
Improvements shall be rectified by Tenant at no expense to Landlord, provided
however, that in the event Landlord determines that a defect or deviation exists
or disapproves of any matter in connection with any portion of the Tenant
Improvements and such defect, deviation or matter might adversely affect the
mechanical, electrical, plumbing, heating, ventilating and air conditioning or
life-safety systems of the Building, the structure or exterior appearance of the
Building or any other tenant's use of such other tenant's leased premises,
Landlord may, take such action as Landlord deems necessary, at Tenant's expense
and without incurring any liability on Landlord's part, to correct any such
defect, deviation and/or matter, including, without limitation, causing the
cessation of performance of the construction of the Tenant Improvements until
such time as the defect, deviation and/or matter is corrected to Landlord's
satisfaction.

      4.3 Landlord Consulting Fee. Tenant shall pay (as part of the Tenant
Improvement Allowance) a construction consulting fee (the "LANDLORD CONSULTING
FEE") to Landlord in an amount equal to Forty Thousand Dollars ($40,000.00).

      4.4 Notice of Completion; Copy of "As Built" Plans. Within ten (10) days
after completion of construction of the Tenant Improvements, Tenant shall cause
a Notice of Completion to be recorded in the office of the county recorder's
office in accordance with Section 3093 of the Civil Code of the State of
California or any successor statute, and shall furnish a copy thereof to
Landlord upon such recordation. If Tenant fails to do so, Landlord may execute
and file the same on behalf of Tenant as Tenant's agent for such purpose, at
Tenant's sole cost and expense. At the conclusion of construction, (i) Tenant
shall cause the Architect and Contractor (A) to update the Approved Plans as
necessary to reflect all changes made to the Approved Plans during the course of
construction, (B) to certify to the best of their knowledge that the
"record-set" of as-built drawings are true and correct, which certification
shall survive the expiration or termination of this Lease, and (C) to deliver to
Landlord two (2) sets of copies of such as-built drawings within ninety (90)
days following issuance of a certificate of occupancy for the Premises, and (ii)
Tenant shall deliver to Landlord a copy of all warranties, guaranties, and
operating manuals and information relating to the improvements, equipment, and
systems in the Premises.

                                    SECTION 5

                                  MISCELLANEOUS

      5.1 Tenant's Representative. Tenant has designated Geneva Davis as its
sole representative with respect to the matters set forth in this Tenant Work
Letter, who shall have full authority and responsibility to act on behalf of the
Tenant as required in this Tenant Work Letter.

      5.2 Landlord's Representative. Landlord has designated Mr. Matt Root as
its sole representatives with respect to the matters set forth in this Tenant
Work Letter, who, until further notice to Tenant, shall have full authority and
responsibility to act on behalf of the Landlord as required in this Tenant Work
Letter.

      5.3 Time or the Essence in This Tenant Work Letter. Unless otherwise
indicated, all references herein to a "NUMBER OF DAYS" shall mean and refer to
calendar days. If any item requiring approval is timely disapproved by Landlord,
the procedure for preparation of the document and approval thereof shall be
repeated until the document is approved by Landlord.

      5.4 Tenant's Lease Default. Notwithstanding any provision to the contrary
contained in this Lease, if an event of default as described in this Lease or
this Tenant Work Letter has occurred at any time on or before the Substantial
Completion of the Premises, then (i) in addition to all other rights and
remedies granted to Landlord pursuant to this Lease, Landlord shall have the
right to cause Contractor to cease the construction of the Tenant Improvements
(in which case, Tenant shall be responsible for any delay in the substantial
completion of the Tenant Improvements caused by such work stoppage), and (ii)
all other obligations of Landlord under the terms of this Tenant Work Letter
shall be forgiven until such time as such default is cured pursuant to the terms
of this Lease (in which case, Tenant shall be responsible for any delay in the
substantial completion of the Tenant Improvements caused by such inaction by
Landlord).

                              EXHIBIT "E" - Page 5

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                                   EXHIBIT "F"

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 Roselle Street, San Diego, California)

                             ENVIRONMENTAL DOCUMENTS

1.    Geosyntec Consultants Report entitled "Preliminary Risk Assessment" dated
      May 11, 2001

                              EXHIBIT "F" - Page 1

                                                      10581/10575 Roselle Street
                                                      [Structural GenomiX, Inc.]

<PAGE>

                          TORREY SORRENTO BUSINESS PARK

                  NOTICE OF EXPANSION PREMISES LEASE TERM DATES

To:   Structural Genomix, Inc.
      10505 Roselle Street
      San Diego, CA 92121
      Attn: Ms. Geneva Davis

      Re:   Second Amendment to Lease dated November 5, 2002 between BRS TORREY
            I, LLC, a Delaware limited liability company ("LANDLORD"), and
            STRUCTURAL GENOMIX, INC., a Delaware corporation ("TENANT")
            concerning 10581 Roselle Street, San Diego, California.

Gentlemen:

      In accordance with the referenced Second Amendment to Lease (the "LEASE"),
we wish to advise you and/or confirm as follows:

      1. The Substantial Completion of the Premises has occurred, and the
Expansion Premises Commencement Date has commenced on February 15, 2003 and will
expire September 30, 2008.

      2. Rent commences to accrue on February 15, 2003, in the amount of
$4,537.50 per month.

      3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

      4. Your rent checks should be made payable to BRS Torrey I, LLC c/o CB
Bank & Trust - Lockbox, 9775 Clairmont Mesa Boulevard, San Diego, CA 92124.

      5. The exact number of rentable square feet within the Premises is 2,750
square feet.

      6. Base Rent, as adjusted based upon the exact number of rentable square
feet within the Premises, is as follows:

<TABLE>
<C>                       <C>               <C>
2/15/03-3/14/03           $4,537.50

3/15/03-3/31/03           $2,268.75         Prorated

4/1/03-2/28/04            $4,537.50

3/1/04-2/28/05            $4,702.50

3/1/05-2/28/06            $4,867/50

3/1/06-2/28/07            $5,032.50

3/1/07-2/28/08            $5,197.50

3/1/08-9/30/08            $5,390.00
</TABLE>

<PAGE>

      7. Tenant's Share, as adjusted based upon the exact number of rentable
square feet within the Premises, is 73.37%.

      "LANDLORD":                      BRS TORREY I, LLC
                                       a Delaware limited liability company

                                       By:  JCR Manager, LLC
                                            a Delaware limited liability company
                                       Its: Manager

                                            By: /s/ Jim Reynolds
                                                --------------------------------
                                                Name: Jim Reynolds
                                                Title: Manager

Agreed to and Accepted as
of 3/13, 2003.

"TENANT":

STRUCTURAL GENOMIX, INC.
a Delaware corporation

By: /s/ Herbert G. Mutter
    -----------------------------------
    Its: Vice President, Finance

<PAGE>

                            FIRST AMENDMENT TO LEASE

      THE FIRST AMENDMENT TO LEASE (the "First Amendment") is effective as of
April 23, 2002 (the "Effective Date"), by and between BRS TORREY I, L.L.C., a
Delaware limited liability company ("Landlord"), and STRUCTURAL GENOMIX, INC, a
Delaware corporation ("Tenant").

                                   WITNESSETH:

      WHEREAS, Landlord and Tenant entered into that certain Lease Agreement
(the "Original Lease"), dated June 1, 2001, covering premises commonly known as
10581 Roselle Street (the "Building") located at 10575/10581 Roselle Street, San
Diego, California 92121 ("Project");

      WHEREAS, Landlord and Tenant entered into that certain Acknowledgement of
Lease Term Dates and Agreement Regarding Performance of Landlord's Work dated
September 28, 2001;

      WHEREAS, Tenant currently occupies premises in the Building, which
consists of 24,805 rentable square feet;

      WHEREAS, Landlord desires to increase the tenant improvement allowance for
additional Landlord's work to the roof (plywood, coping, downspouts, crickets
and contractor's fees);

      NOW, THEREFORE, for and in consideration of the mutual terms and
conditions set forth herein and for Ten Dollars ($10.00) and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant agree as follows:

      1. Tenant Improvement Allowance. Landlord has agreed to increase the
amount of the Tenant Improvement Allowance, as provided under Exhibit E of the
Original Lease and Paragraph 8 of the Acknowledgement of Lease Term Dates and
Agreement Regarding Performance of Landlord's Work by $10.041.81 for additional
costs associated with Landlord's Work. The total amended Tenant Improvement
Allowance is $2,067,964.31.

      2. No Termination, Cancellation, Contraction, or Similar Rights.
Notwithstanding anything to the contrary contained in the Lease or this
Amendment, Tenant hereby agrees and acknowledges that Tenant has no termination
rights (except Article 11.2 Option to Repair or Terminate, Article 11.4 Damage
Near End of Term and Article 13.1 Permanent Taking), cancellation rights,
contraction rights, expense cap, first opportunity space, first refusal (except
Article 30 Right of First Refusal), or similar rights under the Lease or this
Amendment. Any and all provisions contained in the Lease regarding Tenant's
termination rights (except Article 11.2 Option to Repair or Terminate, Article
11.4 Damage Near End of Term and Article 13.1 Permanent Taking), cancellation
rights, contraction rights, expense cap, first opportunity or first refusal
(except Article 30 Right of First Refusal) or similar rights, if any, are hereby
deleted from the Lease and shall be of no further force or effect.

      3. Tenant Certification. By its execution of this First Amendment, Tenant
hereby certifies that as of the date of such execution, and to the best of
Tenant's knowledge, Landlord is not in default of the performance of its
obligations pursuant to the Lease, and Tenant has no offsets, claims against
Landlord or the rent payable by Tenant under the Lease and no defenses with
respect to the Lease.

      4. Continuing Effect. The Lease as amended by the Acknowledgement of Lease
Term Dates and Agreement Regarding Performance of Landlord's Work, and as
amended herein is hereby ratified and confirmed and shall continue in full force
and effect.

<PAGE>

      5. Counterparts. This First Amendment may be executed in multiple
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall constitute
one and the same instrument.

      6. Authority. Tenant hereby warrants and represents that it has the
requisite authority and ability to enter into this First Amendment and to fully
perform all obligations of Tenant hereunder. Landlord hereby warrants and
represents that it has the requisite authority and ability to enter into this
First Amendment and to fully perform all obligations of Landlord hereunder.

      7. Defined Terms. All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to those terms in the Lease.

      8. Conflicts; Incorporation by Reference. In the event of any conflict
between the terms of this First Amendment and either the Lease or the
Acknowledgement of Lease Term Dates and Agreement Regarding Performance of
Landlord's Work, the terms of this First Amendment shall control. All of the
exhibits attached to this First Amendment, if any, are by this reference
incorporated herein and made a part hereof for all purposes.

      9. Effect of Submission. Submission of this First Amendment for
examination does not constitute an offer, right of first refusal, reservation
of, or option for, the Building or any other premises at the Project. This First
Amendment shall become effective only upon the execution and delivery by both
Landlord and Tenant.

      IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
as of the date or dates set forth below but effective for all purposes as of the
Effective Date.

                                    LANDLORD:

                                    BRS TORREY I, L.L.C.,
                                    a Delaware limited liability company

                                    By: Shidler West Investment Corporation
                                        Its: Authorized Agent

                                        By: /s/ Jim Ingebritsen
                                            ------------------------------------
                                        Name: Jim Ingebritsen
                                        Title:     C.F.O.

                                    TENANT:

                                    STRUCTURAL GENOMIX, INC,
                                    a Delaware corporation,

                                    By: /s/ Herbert G. Mutter
                                        ----------------------------------------
                                    Name: Herbert G. Mutter
                                    Title: Vice President, Finance

                                    By: /s/ Tim Harris
                                        ----------------------------------------
                                    Name: T. Harris
                                    Title: Pres & CEO

                                      -2-
<PAGE>

                            SECOND AMENDMENT TO LEASE

      This SECOND AMENDMENT TO LEASE (this "SECOND AMENDMENT") is entered into
as of the 5th day of November , 2002 (the "EFFECTIVE DATE"), by and between BRS
TORREY I, LLC, a Delaware limited liability company ("LANDLORD"), and STRUCTURAL
GENOMIX, INC., a Delaware corporation ("TENANT").

                                    RECITALS:

      A. Landlord and Tenant are parties to that certain Lease (the "ORIGINAL
LEASE") dated June 1, 2001, as amended by that certain First Amendment to Lease
(the "FIRST AMENDMENT"), dated April 23, 2002 (the First Amendment and Original
Lease will hereinafter be referred to collectively as the "ORIGINAL LEASE"),
regarding certain premises in the buildings commonly known as the Torrey
Sorrento I Business Park located in San Diego, California (the "ORIGINAL
PREMISES"). Initially capitalized terms used in this Second Amendment that are
defined in the Original Lease shall have the same meaning and definition when
used in this Second Amendment unless specifically set forth in this Second
Amendment.

      B. The provisions of the Original Lease grant to the Tenant a right of
first refusal to the First Offer Space. Consistent with such rights, the Tenant
and Landlord desire to amend the Original Lease to reflect the expansion of the
Premises to include a portion of the First Offer Space.

      C. Landlord and Tenant also desire to modify the additional terms and
provisions of the Original Lease as set forth herein.

      NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as set
forth below.

                                   AGREEMENT:

      1. Expansion Premises. Subject to the terms and conditions of this Second
Amendment, Landlord hereby leases to Tenant and Tenant leases from Landlord an
additional 2,750 rentable square feet of space, as the same is depicted on
EXHIBIT A to this Second Amendment (the "EXPANSION PREMISES"). Subject to the
existing environmental matters provisions in the Original Lease, including, but
not limited to, Sections 31.22.5 and 31.22.6, the Expansion Premises shall be
delivered to the Tenant in its "as-is" condition, it being agreed that the
Landlord shall have no obligation to perform, or pay for any alterations,
improvements or modifications to the Expansion Premises. The date that the
Landlord has delivered the Expansion Premises to the Tenant in the condition
required by this Paragraph is called the "EXPANSION PREMISES COMMENCEMENT DATE".
From and after the Expansion Premises Commencement Date, the Tenant will occupy
the Expansion Premises for the balance of the Lease Term on the terms and
conditions set forth in the Lease (as hereinafter defined).

      2. Delivery of the Expansion Premises. The Landlord will endeavor to cause
the Expansion Premises Commencement Date to occur on January 1, 2003 (the
"ESTIMATED DELIVERY DATE"). The Tenant acknowledges that, on the Effective Date,
the Expansion Premises is leased to another occupant. As a result, the Tenant
understands that the Expansion Premises Commencement Date may be delayed in the
event the current occupant fails to vacate the Expansion Premises and deliver
the same to the Landlord in time for the Landlord to deliver the same to the
Tenant on the Estimated Delivery Date. The parties agree that the failure of the
Landlord to deliver the Expansion Premises to the Tenant on the Estimated
Delivery Date shall not subject the Landlord to any liability provided such
failure is due to the current occupant failing to vacate and surrender the space
to the Landlord. In such case, the parties agree that the Landlord shall
endeavor to deliver the Expansion Premises to the Tenant as soon as reasonably
practicable after the Estimated Delivery Date, however in the event that the
Expansion Premises Commencement Date does not occur on or before April 1, 2003
(the "DELIVERY DEADLINE"), then the Tenant shall have the right to terminate
this Second Amendment and its obligation to lease the Expansion Premises by
providing written notice of the same to the Landlord on or before the date that
is ten (10) business days after the Delivery Deadline (such date being referred
to as the "NOTICE DEADLINE"). The failure of the Tenant to exercise its
foregoing termination right on or before the Notice Deadline, shall be deemed to
be a waiver by the Tenant of its termination right.

<PAGE>

      3. Right of First Refusal. Nothing in this Second Amendment shall affect
Tenant's right of first refusal under Article 30 of the Original Lease. Tenant's
right of first refusal shall remain in effect and unimpaired with respect to any
and all rental spaces which may become available at the expiration or
termination of any lease in the Project including, but not limited to, any
future leases for the 10575 Roselle Street Building.

      4. Amendments to the Original Lease. From and after the Expansion Premises
Commencement Date, the Original Lease is amended in the following respects:

            (a) All references in the Original Lease to the term "Lease" or
"this Agreement" or to terms such as "herein", shall refer to the Original Lease
as amended by this Second Amendment.

            (b) All references in the Lease to the term "Premises" shall be
deemed to refer collectively to the Original Premises and the Expansion
Premises.

            (c) All references to the term "Base Rent" shall be deemed to refer
collectively to the Base Rent set forth in the Original Lease, and the Base Rent
For the Expansion Premises (as hereinafter defined).

            (d) All references to the term "Tenant's Share" shall mean 73.37%.

      5. Base Rent for Expansion Premises. Concurrent with the execution of this
Second Amendment, Tenant shall pay to Landlord the amount of $4,537.50
representing payment of the first (1st) month's Base Rent for the Expansion
Premises. Tenant shall otherwise pay to Landlord Base Rent for the Expansion
Premises in accordance with the schedule and in the amounts set forth below:

<TABLE>
<CAPTION>
EXPANSION PREMISES                                          MONTHLY BASE RENT
    LEASE YEAR*     ANNUAL BASE RENT  MONTHLY BASE RENT  PER RENTABLE SQUARE FOOT
------------------  ----------------  -----------------  ------------------------
<S>                 <C>               <C>                <C>
         1             $54,450.00         $4,537.50              $1.65
         2             $56,430.00         $4,702.50              $1.71
         3             $58,410.00         $4,867.50              $1.77
         4             $60,390.00         $5,032.50              $1.83
         5             $62,370.00         $5,197.50              $1.89
         6             $64,680.00         $5,390.00              $1.96
</TABLE>

* The term "EXPANSION PREMISES LEASE YEAR" when used in this chart refers to
periods which contain twelve (12) consecutive months; however, notwithstanding
anything herein to the contrary, the final Expansion Premises Lease Year will
expire on the earlier of (i) the expiration of the Lease Term; or (ii) such
earlier date that this Lease is terminated in accordance with its terms. The
first Expansion Premises Lease Year shall commence on the Expansion Premises
Commencement Date. Each subsequent Expansion Premises Lease Year shall commence
on the annual anniversary of the Expansion Premises Commencement Date.

      6. Security Deposit. Concurrent with the execution of this Second
Amendment, Tenant shall increase the Security Deposit by an additional
$5,390.00. This amount shall be held by Landlord as the Security Deposit (in
accordance with Article 21 the Lease) for Tenant's obligations under the Lease.

      7. Tenant Certification. By its execution of this Second Amendment, Tenant
hereby certifies that as of the date of such execution, and to the best of
Tenant's knowledge, Landlord is not in default of the performance of its
obligations pursuant to the Lease, and Tenant has no offsets, claims against
Landlord or the rent payable by Tenant under the Lease and no defenses with
respect to the Lease.

      8. Brokers. Landlord and Tenant both represent and warrant to Landlord
that neither has dealt with any brokers in connection with the terms of this
Second Amendment. Each party agrees to indemnify, save, and hold the other party
harmless from and against any and all claims or demands made upon such party for
any commissions, fees or other compensation by any broker, agent or salesman in
connection with this Second Amendment. The provisions of this paragraph shall
survive the expiration or any earlier termination of the Lease.

                                       -2-
<PAGE>

                         TORREY SORRENTO I BUSINESS PARK
               (10575/10581 ROSELLE STREET, SAN DIEGO, CALIFORNIA)

                ACKNOWLEDGEMENT OF LEASE TERM DATES AND AGREEMENT
                    REGARDING PERFORMANCE OF LANDLORD'S WORK

To:   Ms. Geneva Davis
      Structural Genomix. Inc.
      10505 Roselle Street
      San Diego, CA 92121

      Re:   Lease dated June 1, 2001 between BRS TORREY I, LLC, a Delaware
            limited liability company ("LANDLORD"), and STRUCTURAL GENOMIX,
            INC., a Delaware corporation ("TENANT") concerning 10581 Roselle
            Street, San Diego, California.

Ladies and Gentlemen:

      In accordance with the referenced Lease (the "LEASE"), we wish to advise
you and/or confirm, and request that you acknowledge as follows:

      1. The Lease Term shall commence on or has commenced on October 1, 2001
for a term of seven (7) years ending on September 30, 2008.

      2. Base monthly rent commenced to accrue on October 1, 2001, in the amount
of $58,291.75.

      3. If the Lease Commencement Date is other than the first day of the
month, the first billing will contain a pro rata adjustment. Each billing
thereafter, with the exception of the final billing, shall be for the full
amount of the monthly installment as provided for in the Lease.

      4. Your rent checks should be made payable to BRS Torrey I, LLC at c/o CB
Bank &Trust - Lockbox, 9775 Clairmont Mesa Boulevard, San Diego, CA 92124.

      5. The exact number of rentable square feet within the Premises is 24,805
square feet.

      6. Base Rent, as adjusted based upon the exact number of rentable square
feet within the Premises, is as follows: No adjustment necessary.

      7. Tenant's Share, as adjusted based upon the exact number of rentable
square feet within the Premises, is 65.94%.

      8. Tenant has elected to have its Contractor complete the Landlord's Work,
as defined in Exhibit E of the Lease, rather than have Landlord perform
Landlord's Work, and Tenant has agreed to (i) assume the responsibility
therefore, (ii) to complete the Landlord's Work, and (iii) to release Landlord
from its obligations to complete the same. Landlord has agreed to allow Tenant
to perform the Landlord's Work and has agreed to increase the amount of the
Tenant Improvement Allowance, as provided under Exhibit E, by the amount of
$172,742.50 (the "Additional Tenant Improvement Allowance") in consideration of
Tenant's completion of the Landlord's Work by Tenant's Contractor, and Tenant
has agreed to accept the Additional Tenant Improvement Allowance in
consideration thereof. The Additional Tenant Improvement Allowance Amount shall
be deemed to be part of the "Tenant Improvement Allowance" for purposes of the
Lease and Exhibit E and shall be disbursed as provided in Exhibit E.

                                       -1-
<PAGE>

      "LANDLORD":                      BRS TORREY I, LLC
                                       a Delaware limited liability company

                                       By: JCR Manager, LLC
                                           -------------------------------------
                                       Its: Manager

                                            By: /s/ [Illegible]
                                                --------------------------------
                                                Its: Manager

Agreed to and Accepted as
of 9/28/01, 2001.

"TENANT":

STRUCTURAL GENOMIX, INC.
a Delaware corporation

By: /s/ Herbert G. Mutter
    -----------------------------------
    Its: Vice President, Finance

                                       -2-
<PAGE>

      9. Continuing Effect. The Lease as amended herein is hereby ratified and
confirmed and shall continue in full force and effect.

      10. Counterparts. This Second Amendment may be executed in multiple
counterparts with the same effect as if all parties hereto had signed the same
document. All such counterparts shall be construed together and shall constitute
one and the same instrument.

      11. Authority. Tenant hereby warrants and represents that it has the
requisite authority and ability to enter into this Second Amendment and to fully
perform all obligations of Tenant hereunder. Landlord hereby warrants and
represents that it has the requisite authority and ability to enter into this
Second Amendment and to fully perform all obligations of Landlord hereunder.

      12. Defined Terms. All capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to those terms in the Lease.

      13. Conflicts; Incorporation by Reference. In the event of any conflict
between the terms of this Second Amendment and the Lease, the terms of this
Second Amendment shall control. All of the exhibits attached to this Second
Amendment are by this reference incorporated herein and made a part hereof for
all purposes.

      14. Effect of Submission. Submission of this Second Amendment for
examination does not constitute an offer, right of first refusal, reservation
of, or option for, the Premises or any other premises in the Building. This
Second Amendment shall become effective only upon the execution and delivery by
both Landlord and Tenant.

      15. Facsimile Signatures. Landlord and Tenant each (a) have agreed to
permit the use, from time to time where appropriate, of telecopied signatures in
order to expedite the transaction contemplated by this Second Amendment, (b)
intend to be bound by their respective telecopied signatures, (c) are aware that
the other will rely upon the telecopied signature, and (d) acknowledge such
reliance and waive any defense to the enforcement of the documents affecting
this transaction based on the fact that a signature was sent by telecopy only.

      IN WITNESS WHEREOF, the parties hereto have executed this Second Amendment
as of the date or dates set forth below but effective for all purposes as of the
Effective Date.

      "LANDLORD":                      BRS TORREY I, LLC,
                                       a Delaware limited liability company

                                       By: JCR Manager, LLC
                                           a  Delaware limited liability company
                                       Its: Manager

                                              By: /s/ [Illegible]
                                                  ------------------------------
                                                  Its: Manager

      "TENANT":                        STRUCTURAL GENOMIX, INC.
                                       a Delaware corporation

                                       By: /s/ Tim Harris
                                           -------------------------------------
                                           Name: Dr. Tim Harris
                                           Title: President - CEO

                                       By: /s/ Herbert G. Mutter
                                           -------------------------------------
                                           Name: Herbert G. Mutter
                                       Its: Vice President, Finance

                                       -3-
<PAGE>

                                    EXHIBIT F

                              ESTOPPEL CERTIFICATE

      THIS TENANT ESTOPPEL CERTIFICATE ("CERTIFICATE"), dated as of 9 July ,
2002, is executed by STRUCTURAL GENOMIX, INC, a Delaware corporation ("TENANT")
in favor of ALEXANDRIA REAL ESTATE EQUITIES, INC., a Maryland corporation,
together with its nominees, designees and assigns (collectively, "BUYER").

                                    RECITALS

      A. Buyer and BRS Torrey I, LLC, a Delaware limited liability company
("LANDLORD"), have entered into that certain Purchase and Sale Agreement and
Joint Escrow Instructions, dated as of May 30, 2002 (the "PURCHASE AGREEMENT"),
whereby Buyer has agreed to purchase, among other things, the improved real
property located in the City of San Diego, County of San Diego, State of
California, 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 June 1, 2001 (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 Buyer will rely on
the representations and agreements below in acquiring the Property and
Landlord's interest under the Lease.

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

      SECTION 1. LEASE. Attached hereto as Exhibit 1 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
thereof: Acknowledgement of Lease Terms and Agreement Regarding Performance of
Landlord Work dated 9/28/01; First Amendment to Lease dated 4/23/02; Connecting
Equipment License Agreement dated 9/27/01.
(If none, please state "None.")

      SECTION 2. LEASED PREMISES. Pursuant to the Lease, Tenant leases those
certain premises (the "LEASED PREMISES") consisting of approximately 24,805
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 its prorata share of parking spaces located on the
Property during the term of the Lease.

      SECTION 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.

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

<PAGE>

      SECTION 5. ACCEPTANCE OF LEASED PREMISES. Tenant has accepted possession
and is currently occupying the Leased Premises.(1)

      SECTION 6. LEASE TERM. The term of the Lease commenced on October 1, 2001
and ends on September 30, 2008, subject to the following options to extend:
NONE. (If none, please state "None.")

      SECTION 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 Leased Premises or all or any portion of, or interest in, the Property,
except as follows: NONE.
(If none, please state "None.")

      SECTION 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 right, title, or interest in the Leased Premises, other than as
Tenant under the Lease.

      SECTION 9. RENT.

      (a) The obligation to pay rent under the Lease commenced on July 5, 2001.
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
$58,291.75 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: NONE.
(If none, please state "None.")

      (c) Tenant's estimated share of operating expenses, common area charges,
insurance, real estate taxes and administrative and overhead expenses is 65.94%
and is currently being paid at the rate of $5,854.62 per month, payable to: BRS
Torrey I, LLC.

      (d) There are no existing defenses or offsets against rent due or to
become due under the terms of the Lease, and 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 Leased 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: NONE.
(If none, please state "None.")

      SECTION 10. SECURITY DEPOSIT. The amount of Tenant's security deposit held
by Landlord under the Lease is $349,750.50.

      SECTION 11. PREPAID RENT. The amount of prepaid rent separate from the
security deposit is $0, covering the period from N/A.

(1) For Structural Genomix: Upon completion of the following work to be
performed under the Lease, there shall be no more obligations or conditions
under the Lease that would prevent Tenant from accepting possession and
occupying the Leased Premises: NONE. Landlord's sole remaining obligation under
the Lease is to fund $1,175,227.07 toward the cost of such work. If none, Tenant
has accepted possession and is currently occupying the Leased Premises.

<PAGE>

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

      SECTION 13. PENDING ACTIONS. There is not pending or, to the knowledge of
Tenant, threatened against or contemplated by the Tenant, any petition in
bankruptcy, whether voluntary or otherwise, any assignment for the benefit of
creditors, or any petition seeking reorganization or arrangement under the
federal bankruptcy laws or those of any state.

      SECTION 14. 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: NONE.
(If none, please state "None.")

      SECTION 15. 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 leases and rents to be
executed by Landlord to Buyer in connection with the acquisition of the Property
by Buyer and acknowledges that said assignment docs not violate the provisions
of the Lease.

      SECTION 16. ASSIGNMENTS BY TENANT. Tenant has not sublet or assigned the
Leased Premises or the Lease or any portion thereof to any sublessee or
assignee. No one except Tenant and its employees will occupy the Leased
Premises. The address for notices to be sent to Tenant is as set forth in the
Lease.

      SECTION 17. ENVIRONMENTAL MATTERS. The operation and use of the Leased
Premises does not involve the generation, treatment, storage, disposal or
release into the environment of any hazardous materials, regulated materials
and/or solid waste, except: ATTACHED LIST , which are used in accordance with
all applicable laws.

      SECTION 18. SUCCESSION OF INTEREST. Tenant agrees that, in the event Buyer
succeeds to interest of Landlord under the Lease:

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

      (b) Buyer shall not be liable for the return of any security deposit
unless such security deposit has been transferred to Buyer;

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

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

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

      SECTION 19. NOTICE OF DEFAULT. Tenant agrees to give Buyer a copy of any
notice of default under the Lease served upon Landlord at the same time as such
notice is given to the Landlord. Tenant

<PAGE>

further agrees that if Landlord shall fail to cure such default within the
applicable grace period, if any, provided in the Lease, then Buyer shall have an
additional 60 days within which to cure such default, or if such default cannot
be cured within such 60-day period, such 60-day period shall be extended so long
as Buyer 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.

      SECTION 20. NOTIFICATION BY TENANT. From the date of this Certificate and
continuing until on August 2, 2002, Tenant agrees to immediately notify Buyer at
the following address, in writing personally, by reputable overnight delivery
service or by facsimile transmission (with in the case of a facsimile
transmission, confirmation by reputable overnight delivery service) at the
following addresses, on the occurrence of any event or the discovery of any fact
that would make any representation contained in this Certificate inaccurate.

      If To Buyer:      Alexandria Real Estate Equities, Inc.
                        135 N. Los Robles Avenue
                        Suite 250
                        Pasadena, California 91101
                        Attention: Corporate Secretary
                                       RE: TORREY-SORRENTO INDUSTRIAL PARK
                        Telephone:     (626) 578-0777
                        Facsimile:     (626) 578-0770

      With A Copy To:   Mayer, Brown, Rowe & Maw
                        350 South Grand Avenue
                        25th Floor
                        Los Angeles, California 90071
                        Attention:     Todd Evan Stark, Esq.
                        Telephone:     (213) 229-9500
                        Facsimile:     (213) 625-0248

      Tenant makes this Certificate with the knowledge that it will be relied
upon by Buyer 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.

TENANT:                      STRUCTURAL GENOMIX, INC.,
                             a Delaware corporation

                             By: /s/ Herbert G. Mutter
                             Name: Herbert G. Mutter
                             Its: Vice President, Finance

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