Document:

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                                      LEASE

                              DATED: AUGUST 4, 2000

                  MASSACHUSETTS INSTITUTE OF TECHNOLOGY, LESSOR

                      TRANSKARYOTIC THERAPIES, INC., LESSEE

                   28 OSBORN STREET, CAMBRIDGE, MASSACHUSETTS

                                TABLE OF CONTENTS

<TABLE>

<S>     <C>                                                           <C>
1.0      REFERENCE DATA..............................................  5

2.0      PREMISES; COMMON AREAS......................................  6
         2.1      PREMISES...........................................  6
         2.2      COMMON AREAS.......................................  7
         2.3      FUTURE IMPROVEMENTS BY LANDLORD....................  7

3.0      TERM; COMMENCEMENT DATE; EXTENSION OPTIONS..................  7
         3.1      TERM; COMMENCEMENT DATE............................  7
         3.2      EXTENSION OPTIONS..................................  7

4.0      RENT........................................................  8
         4.1      PAYMENT OF RENT....................................  8
         4.2      DETERMINATION OF FAIR MARKET RENT..................  9
         4.3      ADJUSTMENT TO BASE RENT............................ 10

5.0      PERMITTED USES.............................................. 10

6.0      TAXES; OPERATING EXPENSES; ELECTRICITY...................... 10
         6.1      TAXES.............................................. 10
         6.2      OPERATING EXPENSES................................. 11
         6.3      PAYMENT OF OPERATING EXPENSES...................... 14
         6.4      PAYMENT OF TAXES................................... 15
         6.6      ABATEMENTS BY LESSOR; ALLOCATIONS.................. 16

7.0      INSURANCE................................................... 16
         7.1      COMMERCIAL GENERAL LIABILITY INSURANCE............. 16
         7.2      PROPERTY INSURANCE................................. 16
         7.3      CERTIFICATE OF INSURANCE........................... 17

</TABLE>

<PAGE>

<TABLE>

<S>     <C>                                                          <C>
         7.4      LESSOR'S INSURANCE................................. 17
         7.5      WAIVER OF SUBROGATION.............................. 17
         7.6      WAIVER OF RIGHTS................................... 18

8.0      ASSIGNMENT AND SUBLETTING................................... 18

9.0      PARKING..................................................... 21

10.0     LATE PAYMENT OF RENT........................................ 22

11.0     LESSEE'S COVENANTS.......................................... 22

12.0     CONSTRUCTION................................................ 27

13.0     CASUALTY AND EMINENT DOMAIN................................. 27

14.0     DEFAULTS; REMEDIES.......................................... 29
         14.1     DEFAULTS; EVENTS OF DEFAULT........................ 29
         14.2     TERMINATION........................................ 30
         14.3     SURVIVAL OF COVENANTS.............................. 30
         14.7     FURTHER REMEDIES................................... 32

15.0     REAL ESTATE BROKER.......................................... 33

16.0     NOTICES..................................................... 33

17.0     NO WAIVERS.................................................. 34

18.0     MANAGEMENT OF THE BUILDING.................................. 34

19.0     SIGNS....................................................... 34

</TABLE>

                                       2
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<TABLE>

<S>     <C>                                                          <C>
20.0     LESSEE'S RIGHT TO TERMINATE EXISTING LEASE.................. 35

21.0     CONDITION PRECEDENT......................................... 35

22.0     QUIET ENJOYMENT; GROUND LEASES; MORTGAGES................... 35
         22.1     QUIET ENJOYMENT.................................... 35
         22.2     RIGHTS OF GROUND LESSORS AND MORTGAGEES............ 35
         22.3     LEASE SUBORDINATE.................................. 35

23.0     SECURITY DEPOSIT............................................ 36

24.0     NOTICE OF LEASE; ESTOPPEL CERTIFICATES...................... 38

25.0     HOLDING OVER................................................ 38

26.0     LESSOR'S AGREEMENTS REGARDING ENVIRONMENTAL MATTERS......... 38

27.0     FORCE MAJEURE............................................... 38

28.0     ENTIRE AGREEMENT............................................ 39

29.0     APPLICABLE LAW, SEVERABILITY AND CONSTRUCTION............... 39

30.0     SUCCESSORS AND ASSIGNS...................................... 39

31.0     AUTHORITY................................................... 39

</TABLE>

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EXHIBIT A:  Plan of the Premises

EXHIBIT B:  Description of the Land

EXHIBIT C:  Work Letter

EXHIBIT D:  Lessor's Services

EXHIBIT E:  Lessee's Services

EXHIBIT F:  Permitted Floor Load

EXHIBIT G:  Schedule of Lessor's Working Drawings Approved by Lessee

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<PAGE>

                                      LEASE

Dated:  August 4, 2000

        THIS LEASE is made as of this 4th day of August, 2000 by and between
MASSACHUSETTS INSTITUTE OF TECHNOLOGY, a Massachusetts educational corporation
with a place of business at 238 Main Street, Cambridge, Massachusetts 02142
("LESSOR"), and TRANSKARYOTIC THERAPIES, INC., a Delaware corporation with a
principal place of business at 195 Albany Street, Cambridge, Massachusetts 02139
("LESSEE").

1.0     REFERENCE DATA.  The following terms shall have the definitions set
                         forth in this Section 1.0:

PREMISES:                 The entire Building located at 28 Osborn Street,
                          Cambridge Massachusetts

RENTAL AREA OF
PREMISES:                 180,807 square feet of Rental Area shown as Tenant
                          Area A containing 139,900 square feet and Tenant Area
                          B containing 40,907 square feet on EXHIBIT A hereto.
                          As used herein the term "Rental Area" shall mean space
                          available for rental in the Building.

RENTAL AREA OF
BUILDING:                 180,807 square feet of Rental Area as shown on EXHIBIT
                          A hereto

LAND:                     The parcel of land on which the Building is located,
                          as described on EXHIBIT B attached hereto

TERM:                     A term commencing on the Commencement Date (as defined
                          in the Work Letter attached as Exhibit C) and
                          terminating at midnight on the day immediately
                          preceding the tenth anniversary of the Commencement
                          Date, with two (2) options to extend for an additional
                          five (5) Lease Years

ESTIMATED
COMMENCEMENT DATE:        The fourth quarter of calendar 2001

BASIC RENT:               For each Lease Year as follows:

                          For the first five years of the Term: $37.00 per
                          square foot of Rental Area per Lease Year ($6,689,859
                          per Lease Year)

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                          For the second five years of the Term: $42.00 per
                          square foot of Rental Area per Lease Year ($7,593,894
                          per lease year)

                          Basic Rent may be pro rated as set forth in Section
                          4.1 and may be adjusted as set forth in Section 4.3.

EXTENSION TERM:           As provided in Section 3.2

LESSEE'S SHARE:
(OPERATING EXPENSES)      100%

LESSEE'S SHARE
(TAXES)                   100%

SECURITY DEPOSIT:         $7,680,000 as provided in Section 23.0

PERMITTED USE:            Office, Laboratory, Research and Development

LESSEE'S
REPRESENTATIVE:           Michael Astrue

2.0      PREMISES; COMMON AREAS.

         2.1      PREMISES. Lessor hereby LEASES unto Lessee, the Premises
                  together with the benefit of, and subject to (as the case may
                  be) all rights, easements, covenants, conditions,
                  encumbrances, encroachments and restrictions of record as of
                  the date of this Lease. Lessor shall have the right, without
                  the necessity of obtaining Lessee's consent thereto or joinder
                  therein (but subject to the terms of Section 22.3 below), to
                  grant, permit, or enter into during the term of this Lease
                  such additional rights, easements, covenants, conditions,
                  encumbrances, encroachments and restrictions with respect to
                  the Land as Lessor may deem appropriate, PROVIDED THAT no such
                  rights, easements, covenants, conditions, encumbrances,
                  encroachments or restrictions shall materially adversely
                  affect Lessee's use of the Premises for the Permitted Use. At
                  any time during which Lessee is not the lessee of the entire
                  Building, Lessor hereby reserves the right to maintain, use,
                  repair and replace pipes, ducts, wires, meters and any other
                  equipment, machinery, apparatus and fixtures located within
                  the Premises. Lessee, its employees and invitees shall have
                  access to the Premises at all times; provided that, if Lessor
                  recaptures a portion of the Premises, such access shall be
                  subject to Lessor's reasonable security procedures. Lessee
                  shall be permitted to operate its business in the Premises
                  outside of the Building hours (as set forth in Paragraph 1 of
                  EXHIBIT D attached hereto), but if Lessor is managing the
                  Building, Lessee shall pay to Lessor, as Additional Rent,

                                      6
<PAGE>

                  the cost of supplying services to the Premises, as described
                  on Exhibit D, at times other than such Building hours, such
                  payment to be due and payable no later than thirty (30) days
                  after Lessor gives written notice to Lessee of the amount of
                  such charges.

         2.2      COMMON AREAS. Lessor also grants to Lessee, and Lessee's
                  invitees, the right, in common with others entitled thereto,
                  to use for the purposes for which they were designed, the
                  common facilities of the Building, including but not limited
                  to, all entrances, hallways, elevator foyers, air shafts,
                  elevator shafts and elevators, stairwells and stairs,
                  restrooms, passenger elevators, freight elevator, loading
                  bays, and the "Parking Area" referred to in Section 9.0 below
                  (collectively, the "COMMON AREAS"). The parties acknowledge
                  that unless Lessor recaptures a portion of the Premises during
                  the Term in which event control of the Common Areas will
                  revert to Lessor, this provision shall apply only to the
                  Parking Area.

         2.3      FUTURE IMPROVEMENTS BY LANDLORD. Lessor has informed Lessee
                  that Lessor may construct one or more buildings on the Land in
                  addition to the Building in a manner which will not
                  unreasonably interfere with Lessee's enjoyment of the Premises
                  except for the relocation of parking spaces as provided for in
                  Section 9.0.

3.0      TERM; COMMENCEMENT DATE; EXTENSION OPTIONS.

         3.1      TERM; COMMENCEMENT DATE. The initial term of this Lease (the
                  "INITIAL TERM") shall commence on the "COMMENCEMENT DATE" (as
                  defined in the Work Letter attached hereto as EXHIBIT C), and
                  expire on the day immediately preceding the tenth (10th)
                  anniversary thereof, unless sooner terminated as hereinafter
                  provided. For purposes of this Lease, the phrase "Term" shall
                  mean collectively (a) the Initial Term, and (b) if Lessee duly
                  exercises the "Extension Option," the "Extension Term" (as
                  these phrases are defined in Section 3.2 below). As used in
                  this Lease, "LEASE YEAR" means the twelve (12) month period
                  commencing on the Commencement Date, or a successive twelve
                  (12) month period included in the Term commencing on an
                  anniversary of that date, except that if this Lease is
                  terminated prior to the expiration of the Term, the last Lease
                  Year shall consist of less than twelve (12) months and shall
                  end on the effective date of such termination.

         3.2      EXTENSION OPTIONS. Provided that both (i) an "EVENT OF
                  DEFAULT" (as defined in Section 14.1 below) is not outstanding
                  on the day on which Lessee purports to exercise the Extension
                  Option or prior to the first day of each Extension Term, and
                  (ii) the Lessee named herein and any Lessee Affiliates (as
                  defined in Section 8.0(i)) are actually occupying at least 25%
                  of the Rental Area of the Building as of each of said dates,
                  Lessee shall have the option ("EXTENSION OPTION") to extend
                  the Lease Term of this Lease for two additional periods of
                  five (5) years each (the "EXTENSION TERM(S)"), unless sooner
                  terminated as hereinafter provided, subject to all the terms

                                      7
<PAGE>

                  of this Lease except for the change in Basic Rent as provided
                  in Section 4.2 of this Lease. Lessee shall exercise each
                  Extension Option, if at all, by giving written notice of
                  exercise to Lessor not earlier than twenty (20) months prior
                  to, nor later than eighteen (18) months prior to, the last day
                  of the Initial Lease Term or the first Extension Term as
                  applicable. If Lessee fails to give such notice to Lessor
                  within such time, Lessee shall be deemed to have waived the
                  right to exercise the Extension Option.

4.0      RENT.

         4.1      PAYMENT OF RENT. Lessee shall pay Lessor, without offset or
                  deduction and without previous demand therefor, as items
                  constituting rent (collectively, "RENT"):

                  (a)      Basic rent ("BASIC RENT") at the following rates, in
                           equal monthly installments, in advance, commencing on
                           the Commencement Date, and continuing thereafter on
                           the first day of each calendar month or portion
                           thereof during the Term :

                           (i)      For the Initial Term: as stated in Section
                                    1.0 above; and

                           (ii)     for each Lease Year in an Extension Term, an
                                    amount equal to the "Fair Market Rent" (as
                                    defined in Section 4.2 below) of the
                                    Premises as of the first day of the
                                    Extension Term, but in no event shall Basic
                                    Rent during an Extension Term be less than
                                    $42 per square foot of Rental Area.

                           Basic Rent shall be PRO-RATED for partial months
                           occurring at the beginning or the end of the Term;
                           and shall also be PRO-RATED if a partial occupancy
                           occurs as described in the Work Letter attached
                           hereto as Exhibit C.

                  (b)      All other costs, charges, or expenses which Lessee in
                           this Lease agrees to pay, or which Lessor pays or
                           incurs as the result of a default by Lessee
                           hereunder, including any penalty or interest which
                           may be added for nonpayment or late payment thereof
                           as provided in this Lease (collectively, "ADDITIONAL
                           RENT"). All recurring payments of Additional Rent,
                           such as payment on account of "Taxes" and "Operating
                           Expenses" (as these terms are hereinafter defined),
                           shall be due and payable on the same day on which
                           Basic Rent is due. Unless otherwise specifically
                           provided in this Lease, all non-recurring items
                           constituting Additional Rent shall be due and payable
                           within twenty (20) days after demand therefor by
                           Lessor.

                  All payments shall be made to Lessor or such agent, and at
                  such place, as Lessor shall, from time to time, in writing
                  designate, the following being now so designated:

                                      8
<PAGE>

                                Meredith & Grew, Inc.
                                160 Federal Street
                                Boston, MA 02110-1701
                                Attention:  John Sullivan

         4.2      DETERMINATION OF FAIR MARKET RENT. As used in this Lease,
                  "Fair Market Rent" means the effective fair market rent for
                  the Premises in its "as is" condition as of the day with
                  respect to which such determination is being made, for a term
                  of five (5) years. Fair Market Rent shall be based upon the
                  rents generally in effect for similar first-class office,
                  laboratory and research and development space in similar
                  buildings in the Cambridge, Massachusetts area in which the
                  Premises is located, taking into account all facts and
                  circumstances customarily taken into account by prudent and
                  commercial reasonable lessors and lessees.

                  Within twenty (20) days after Lessor receives Lessee's notice
                  of exercise of the Extension Option, Lessor shall provide to
                  Lessee Lessor's good faith determination of Fair Market Rent.
                  If Lessor and Lessee are unable to agree on the Fair Market
                  Rent within twenty (20) days thereafter, then, Lessee may,
                  within ten (10) days after the expiration of such twenty (20)
                  day period, elect either to withdraw its notice of exercise,
                  in which event its right to extend the Term shall terminate,
                  or to request that the Fair Market Rent be determined by
                  appraisal. If Lessee elects the appraisal option, Lessor and
                  Lessee shall, not later than ten (10) days after Lessor
                  receives Lessee's notice electing its appraisal right, each
                  retain a real estate professional with at least ten (10)
                  years' continuous experience in the business of appraising or
                  marketing commercial real estate in the Cambridge,
                  Massachusetts vicinity, who shall, within thirty (30) days of
                  his or her selection, prepare a written report summarizing his
                  or her conclusion as to Fair Market Rent. Lessor and Lessee
                  shall simultaneously exchange such reports; PROVIDED, HOWEVER,
                  that if one party has not obtained such a report within
                  forty-five (45) days after receipt of the report of the other
                  party's appraiser, then the determination set forth in the
                  other party's report shall be final and binding upon the
                  parties. If both parties receive reports within such time and
                  the lesser of the two determinations is within ten (10%)
                  percent of the higher determination, then the average of these
                  determinations shall be deemed to be Fair Market Rent. If
                  these determinations differ by more than ten (10%) percent,
                  then Lessor and Lessee shall mutually select a person with the
                  qualifications stated above (the "Final Professional") to
                  resolve the dispute as to Fair Market Rent. If Lessor and
                  Lessee cannot agree upon the designation of the Final
                  Professional within twenty (20) days of the exchange of the
                  first valuation reports, either party may apply to the
                  American Arbitration Association, the Greater Boston Real
                  Estate Board, or any successor thereto for the designation of
                  a Final Professional. Within ten (10) days of the selection of
                  the Final Professional, Lessor and Lessee shall each submit to
                  the Final Professional a copy of their respective real

                                      9
<PAGE>

                  estate professional's determination of Fair Market Rent.
                  The Final Professional shall not perform his or her own
                  valuation but rather shall, within thirty (30) days after
                  such submissions, select the submission which is closest to
                  the determination of Fair Market Rent which the Final
                  Professional would have made acting alone. The Final
                  Professional shall give notice of his or her selection to
                  Lessor and Lessee and such decision shall be final and
                  binding upon Lessor and Lessee. Each party shall pay the
                  fees and expenses of its real estate professional and
                  counsel, if any, in connection with any proceeding under
                  this paragraph, and the losing party shall pay the fees and
                  expenses of the Final Professional.

                  In the event that Fair Market Rent has not been finally
                  determined in the manner provided above as of the first day of
                  any Extension Term, then Basic Rent shall be due and payable
                  at the rate stated by Lessor as its good faith estimate of
                  Fair Market Rent, and Lessor and Lessee shall make such
                  adjustment (and payment or credit as necessary) within thirty
                  (30) days after Fair Market Rent is finally determined.

         4.3      ADJUSTMENT TO BASE RENT. If Lessee exercises its option to
                  defer improving up to 20,000 square feet of Rental Area of the
                  Premises as permitted in the Work Letter attached hereto as
                  Exhibit C, Basic Rent shall be reduced by $3.00 per square
                  foot of unimproved area for a period of up to two years after
                  which Lessee will pay the full Basic Rent as set forth in
                  Section 1.0 without reduction. Lessee will pay Additional Rent
                  throughout the Term without reduction. In addition, if when
                  Lessor's work has been completed, the Building has not been
                  constructed in accordance with Lessor's Working Drawings (as
                  defined in the Work Letter) so that the Rental Area of the
                  Building is not as shown on Lessors' Working Drawings, Basic
                  Rent shall be adjusted based on the rates per square foot set
                  forth in Section 1.0.

5.0      PERMITTED USES. The Premises shall be occupied continuously be Lessee
         and used for the Permitted Use only and for no other use.

6.0     TAXES; OPERATING EXPENSES; ELECTRICITY

        6.1     TAXES. Lessee shall pay as Additional Rent, "Lessee's Share
                (Taxes)" (as defined below) of the real estate taxes, special or
                general assessments, water rents, rates and charges, sewer rents
                and other impositions and charges imposed by governmental
                authorities of every kind and nature whatsoever, extraordinary
                as well as ordinary (provided that in no event shall Taxes
                include any linkage or other development charges or
                contributions paid to any government agency in connection with
                rehabilitation or construction of any improvements on the Land),
                and each and every installment thereof which shall or may during
                the Term be charged, levied, laid, assessed, imposed, become due
                and payable or become liens upon or for or with respect to the
                Land or the Building or any appurtenances or equipment owned by
                Lessor thereon or therein, or any part thereof, or on this
                Lease, and any tax

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                based on a percentage fraction or capitalized value of the
                Rent (whether in lieu of or in addition to the taxes
                hereinbefore described) (collectively, "TAXES"). Taxes shall
                not include inheritance, estate, excise, succession,
                transfer, gift, franchise, income, gross receipt, or profit
                taxes except to the extent such are in lieu of or in
                substitution for Taxes as now imposed on the Building, the
                Land, the Premises or this Lease. "LESSEE'S SHARE (TAXES)"
                shall be computed on the basis of a fraction whose numerator
                is the Rental Area of the Premises and whose denominator is
                the Rental Area (the "TAXABLE SQUARE FOOTAGE") of the entire
                Building (including the Premises) recognized by the City of
                Cambridge as being used for purposes which are not exempt
                from real estate taxation as of the date on which the
                assessment is made for the tax year in question. As of the
                date of this Lease, Lessee's Share (Taxes) is as set forth in
                Section 1.0 above. Lessee acknowledges that Lessee's Share
                (Taxes) may vary from year to year depending upon whether the
                use of portions of the Building or the Land changes from
                exempt to non-exempt uses or vice-versa. If Lessor elects to
                construct a new building on the Land as mentioned in Section
                2.3, thereafter Taxes assessed against the Land and the
                buildings thereon shall be equitably apportioned so that
                Lessee is not made responsible for any increase in Taxes
                attributable to Lessor's further development of the Land.

        6.2     OPERATING EXPENSES. Lessee shall pay as Additional Rent Lessee's
                Share of the "OPERATING EXPENSES" (as defined below) for the
                Land and Building above the Operating Expense Base ("LESSEE'S
                SHARE (OPERATING EXPENSES)"). "OPERATING EXPENSES" shall
                include, without limitation, all commercially reasonable
                expenses, costs, and disbursements of every kind and nature
                which Lessor shall pay or become obligated to pay in connection
                with the ownership, operation and maintenance of the Building or
                the Land, including all facilities in operation on the
                Commencement Date and such additional facilities in subsequent
                years as may be determined by Lessor to be necessary or
                beneficial for the operation of the Building or the Land or the
                provision of services to lessees, including, but not limited to:

                (a)      all salaries, wages, fringe benefits, payroll taxes and
                         workmen's compensation insurance premiums related
                         thereto of and for employees engaged in the operation
                         of the Building and the Land (or a reasonable
                         allocation thereof for personnel who work in multiple
                         buildings);

                (b)      painting, repairs, maintenance and cleaning of all
                         Common Areas;

                (c)      utilities (including, without limitation, electricity,
                         water, sewer, gas and steam) which are not separately
                         chargeable to other lessees, including, without
                         limitation, lighting of exterior areas and the parking
                         area;

                (d)      maintenance and repair of the Building heating and
                         cooling systems, the

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                         plumbing systems, the fire detection and suppression
                         systems, the electrical system and the elevators;

                (e)      all maintenance, janitorial, and service agreements;

                (f)      all insurance, including the cost of casualty and
                         liability insurance applicable to the parking area, the
                         Land, the Building and Lessor's personal property used
                         in connection therewith;

                (g)      maintenance of landscaped areas and paved areas, and
                         snow removal;

                (h)      maintenance of the Building security system;

                (i)      commercially reasonable management fees; provided that
                         so long as Lessee assumes responsibility for management
                         of the Building as permitted by Section 18.1, the
                         management fee for each Lease Year shall not exceed
                         0.5% of Basic Rent and Additional Rent for such Lease
                         Year;

                (j)      if Lessee is not the lessee of the entire Building, the
                         fair market value of office space for the manager of
                         the Building;

                (k)      capital items which are for the purpose of reducing
                         Operating Expenses or upgrading services or which are
                         at any time required by a governmental authority or the
                         provisions of any insurance policy applicable to the
                         Premises, the Building or the Land, together with an
                         interest factor equal to ten percent (10%) per annum
                         amortized over the reasonable life of the capital items
                         on a straight line basis with the reasonable life being
                         determined by Lessor in accordance with generally
                         accepted accounting principles;

                (l)      reasonable expenses incurred in pursuing an application
                         for an abatement of Taxes, to the extent not deducted
                         from the abatement, if any, received;

                (m)      legal (excluding legal fees with respect to lease
                         negotiations or disputes with other lessees,
                         permitting, construction or other legal costs related
                         to the rehabilitation or construction of improvements
                         on the Land), accounting and other professional fees
                         and disbursements (excluding leasing commissions); and

                (n)      services to be provided by Lessor as set forth on
                         EXHIBIT "D" attached if Lessee does not elect to self
                         manage the Building and, if Lessee does so elect, to
                         the extent provided by Lessor.

                                      12
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                  Operating Expenses shall not include the following:

                  (A)    amounts paid as interest on, or amortization of, any
                         mortgage on the Land or the Building;

                  (B)    the cost of providing services to other lessees of
                         the Building which are not also provided to Lessee;

                  (C)    all expenses incurred by Lessor for Lessor's Work as
                         described in the Work Letter;

                  (D)    salaries, wages, benefits and other expenses of
                         executive personnel of Lessor, or employees of Lessor
                         EXCEPT to the extent provided for in clause (a)
                         above, or any of Lessor's general administrative
                         expenses not specifically included above;

                  (E)    capital expenditures which are not specifically
                         provided for above;

                  (F)    utilities or services used or consumed in the
                         premises of other lessees of the Building but not in
                         the Premises;

                  (G)    depreciation of the Building;

                  (H)    repairs and replacements arising out of an exercise of
                         the power of eminent domain;

                  (I)    costs or expenses resulting from Lessor's breach or
                         violation of a law, lease or other obligation
                         relating to the Land or the Building, including
                         fines, penalties and attorneys' fees;

                  (J)    environmental testing, remediation or compliance
                         except (i) to the extent provided in Section 11.0(m)
                         below, or (ii) to the extent resulting from Lessee's
                         breach of Section 11.0(m) below, or (iii) relating to
                         indoor air quality; and

                  (K)    any item for which, and to the extent that, Lessor is
                         compensated through the proceeds of insurance or
                         other payment by a third party.

                As of the date of this Lease, Lessee's Share Operating Expenses
                is as set forth in Paragraph 1.0.

                  Lessor further agrees that since one of the purposes of
                  Operating Expenses is to allow Lessor to require Lessee to pay
                  for the costs attributable to its Premises,

                                      13
<PAGE>

                  Lessor agrees that (i) Lessor will not collect or be
                  entitled to collect Operating Expenses from all of its
                  lessees in an amount which is in excess of one hundred
                  percent (100%) of the Operating Expenses actually paid by
                  Lessor in connection with the operation of the Building,
                  and (ii) Lessor shall make no profit from Lessor's
                  collection of Operating Expenses. Lessor shall keep
                  complete books and records regarding Operating Expenses and
                  Taxes ("Charges"). All records shall be retained for at
                  least three (3) years. Lessee shall have the right to audit
                  such records at Lessee's expense at any time on reasonable
                  written notice to Lessor. If such audit reveals that
                  Lessee's pro rata share of any Charges has been overstated,
                  the Lessor shall immediately refund the overpayment.

                In the event that the average occupancy rate for the Building is
                less than ninety-five (95%) percent for any fiscal year, then
                for purposes of calculating Operating Expenses, the Operating
                Expenses for such fiscal year shall be increased by the
                additional costs and expenses that Lessor reasonably estimates
                would have been incurred if the average occupancy rate had been
                ninety-five (95%) percent for such fiscal year. It is not the
                intent of this provision to permit Lessor to charge Lessee for
                any Operating Expenses attributable to unoccupied space, or to
                seek reimbursement from Lessee for costs Lessor never incurred.
                Rather, the intent of this provision is to allow Lessor to
                recover only those increases in Operating Expenses properly
                attributable to occupied space in the Building and this
                provision is designed to calculate the actual cost of providing
                a variable operating expense service to the portions of the
                Building receiving such service. This "GROSS-UP" treatment shall
                be applied only with respect to variable Operating Expenses
                arising from services provided to Common Areas or to space in
                the Building being occupied by lessees (which services are not
                provided to vacant space or may be provided only to some
                lessees) in order to allocate equitably such variable Operating
                Expenses to the lessees receiving the benefits thereof.

                Lessor acknowledges that so long as Lessee is the lessee of the
                entire Building and is managing the Building, Lessee shall only
                pay Additional Rent with respect to the foregoing items to the
                extent incurred by Lessor which are expected to be limited to:
                (1) the 0.5% management fee referred to in (i) above, (2)
                insurance expense under Section 7.4 (to the extent MIT does not
                self insure), (3) expenses to obtain an abatement under Section
                6.6 and (4) snow removal under Section 18.1.

        6.3     PAYMENT OF OPERATING EXPENSES. Within a reasonable time after
                the Commencement Date, and thereafter within a reasonable time
                after the end of each fiscal year (or portion thereof) included
                in the Term, Lessor shall deliver to Lessee (i) a statement of
                actual Operating Expenses for the fiscal year just ended, and
                (ii) a budget of Operating Expenses for the then-current fiscal
                year based on the actual Operating Expenses for the preceding
                year and projected increases or decreases reasonably anticipated
                by Lessor together with documentation in reasonable detail

                                      14

<PAGE>

                which evidence such Operating Expenses. Commencing on the
                first day of the first calendar month after the delivery to
                Lessee of such budget, Lessee shall pay to Lessor, as
                Additional Rent, on account of its share of anticipated
                Operating Expenses for the then-current year 1/12th of the
                projected Operating Expenses. Upon delivery to Lessee of the
                statement of actual Operating Expenses for the preceding
                fiscal year, Lessor shall adjust Lessee's account
                accordingly. If the total amount paid by Lessee on account of
                the preceding fiscal year is less than the amount due
                hereunder, Lessee shall pay the balance due within twenty
                (20) days after delivery by Lessor of such statement. If the
                total amount paid by Lessee on account of the preceding
                fiscal year exceeds the amount due hereunder, such excess
                shall be credited by Lessor against the monthly installments
                of Additional Rent next falling due or refunded to Lessee
                upon the expiration or termination of this Lease (unless such
                expiration or termination is the result of an Event of
                Default). Lessor reserves the right to revise the budget
                during any fiscal year to cause it to more accurately reflect
                the actual Operating Expenses being paid or incurred by
                Lessor, and upon any such revision the parties shall make
                adjustments in the same time and manner as hereinafter
                provided for fiscal year-end adjustments. Lessor's current
                fiscal year is July 1 - June 30, but Lessor reserves the
                right to change the fiscal year at any time during the Term.

         6.4.   PAYMENT OF TAXES. Lessee shall pay to Lessor as Additional Rent,
                within ten (10) days after receipt of each semi-annual (or
                quarterly if applicable) tax bill for the Land and Building,
                Lessee's Share (Taxes) of the amount of Taxes shown on the tax
                bill in accordance with Section 6.1.

         6.5    ABATEMENT OF TAXES. Lessee shall be privileged to seek a
                reduction in the valuation of the Building and the Land
                assessed for tax purposes and to contest in good faith by
                appropriate proceedings, at Lessee's expense, the amount or
                validity in whole or in part of any Imposition, provided that:

                (a)   Lessee shall provide Lessor with security satisfactory to
                      Lessor to assure payment of contested items (which at
                      Lessor's discretion may mean making deposits under Section
                      6.3 which would enable Lessor to pay the contested items
                      in full);

                (b)   Lessee shall immediately pay to Lessor any additional
                      amounts needed to enable Lessor to pay such contested item
                      or items if the protection of the Premises or of Lessor's
                      interest therein from any lien or claim shall, in the
                      reasonable judgment of Lessor, require such payment;

                (c)   Lessor shall not be required to join in any proceedings
                      referred to herein unless the provisions of any law, rule
                      or regulation at the time in effect shall require that
                      such proceedings be brought by or in the name of Lessor.

                                       15
<PAGE>

                      Lessor shall not be subjected to any liability for the
                      payment of any costs or expenses in connection with any
                      such proceedings, and Lessee shall indemnify and save
                      harmless Lessor from any such costs and expenses.

                  Subject to the foregoing, and without cost to it, Lessor
                  shall execute and deliver any appropriate papers which
                  may be necessary to permit Lessee so to contest any valuation
                  or Taxes and shall further cooperate with Lessee in such
                  contest, as Lessee may from time to time reasonably request.

         6.6.     ABATEMENTS BY LESSOR; ALLOCATIONS. Lessor shall have a right
                  to seek a reduction in the valuation of the Land and Building
                  assessed for tax purposes and to prosecute any action or
                  proceeding theretofore commenced by Lessee, if such assessed
                  valuation or valuations shall in whole or in part relate and
                  pertain to any period of time during which Lessee is not
                  responsible for the payment of all Taxes hereunder. Lessee
                  shall be entitled to any refund of any Taxes, including any
                  penalties or interest thereon received by Lessor which have
                  been paid by Lessee, or which have been paid by Lessor but
                  previously reimbursed in full by Lessee.

7.0     INSURANCE

        7.1     COMMERCIAL GENERAL LIABILITY INSURANCE. Lessee shall take out
                and maintain in force throughout the Term (and for so long
                thereafter as Lessee remains in occupancy) commercial general
                liability insurance naming Lessor and persons claiming by,
                through or under them, if any, as additional insureds against
                all claims and demands for any injury to persons or property
                which may be claimed to have occurred on the Premises, the
                Building, the Land or on the ways adjoining the Land, in an
                amount which at the beginning of the Term shall not be less than
                $1,000,000 for personal injury or death of one person,
                $5,000,000 in the aggregate for personal injury or death or more
                than one person in a single occurrence, and $1,000,000 for
                property damage, or such higher amounts as Lessor thereafter
                determines to be consistent with sound commercial practice in
                Cambridge, Massachusetts. Such policy shall also include
                contractual liability coverage covering Lessee's liability
                assumed under this Lease.

        7.2     PROPERTY INSURANCE. Lessee shall take out and maintain
                throughout the Term a policy of fire, vandalism, malicious
                mischief, extended coverage and so-called all risk coverage
                insurance insuring (i) all items or components of "LESSEE'S
                WORK" (as defined in the Work Letter attached hereto as EXHIBIT
                C) or "ALTERATIONS" (as defined in paragraph (f) of Section 11.0
                below) which Lessee is by this Lease either entitled to or
                required to remove upon the expiration or earlier termination of
                this Lease, and (ii) "LESSEE'S PROPERTY" (as defined in
                paragraph (i) of Section 11.0 below) for the benefit of Lessor
                and Lessee, as their respective interests may appear, in an
                amount equal to the replacement value thereof. Lessor shall be
                named

                                       16
<PAGE>

                as a certificate holder on such policy.

        7.3     CERTIFICATE OF INSURANCE. The insurance required by Sections 7.1
                and 7.2 above shall be placed with insurers authorized to do
                business in Massachusetts, with a rating of not less than
                "A-VIII" in the current BEST'S INSURANCE REPORTS, and otherwise
                reasonably satisfactory to Lessor. Such insurance shall provide
                that it shall not be amended or canceled with respect to the
                additional insureds or certificate holders without thirty (30)
                days' prior written notice to each of them. Lessee shall furnish
                to Lessor certificates of insurance for all insurance required
                to be maintained by Lessee under this Lease, together with
                evidence satisfactory to Lessor of the payment of all premiums
                for such policies. Lessee, at Lessor's request, shall also
                deliver such certificates and evidence of payment of premiums to
                the holder of any mortgage affecting the Land and Building. If
                at any time Massachusetts Institute of Technology ("MIT") is no
                longer the Lessor, Lessor shall comply with this Section and
                provide certificates to Lessee with respect to Lessor's
                Insurance under Section 7.4.

        7.4     LESSOR'S INSURANCE. Lessor shall take out and maintain in
                force throughout the Term, in a company or companies
                authorized to do business in Massachusetts, property
                insurance on the Building (exclusive of "LESSEE'S PROPERTY"
                (as defined in paragraph (i) of Section 11.0 below) and all
                items or components of "LESSEE'S WORK" (as defined in the
                Work Letter attached hereto as EXHIBIT C) or "ALTERATIONS"
                (as defined in paragraph (f) of Section 11.0 below) which
                Lessee is by this Lease either entitled to or required to
                remove upon the expiration or earlier termination of this
                Lease, as to which Lessee is required to maintain insurance
                pursuant to Section 7.2 above) in an amount equal to the full
                replacement value of the Building (exclusive of foundations
                and those items set forth in the preceding parenthetical in
                this sentence), covering all risks of direct physical loss or
                damage and so-called "EXTENDED COVERAGE" risks. This
                insurance may be maintained in the form of a blanket policy
                covering the Building as well as other properties owned by
                Lessor. Notwithstanding the foregoing provisions of this
                Section 7.4, Lessor shall have the right, at any time during
                the Term, to self-insure all or any portion of the coverages
                required by this Section for so long as the Lessor is MIT.

        7.5     WAIVER OF SUBROGATION. To the extent to which a waiver of
                subrogation clause is available, Lessor and Lessee shall obtain
                a provision in all insurance policies carried by such party
                covering the Premises, including but not limited to contents,
                fire and casualty insurance, expressly waiving any right on the
                part of the insurer against the other party. If extra cost is
                chargeable for such provision, then Lessee shall pay such extra
                charge. Notwithstanding the foregoing, with respect to such
                portion of the Term during which Lessor elects to self-insure
                under Section 7.4 above, then for purposes of this Section 7.5,
                Lessor shall be deemed to have maintained fire and all-risk
                coverage in an amount equal to one hundred (100%) percent of the
                replacement

                                       17
<PAGE>

                value of the Building (subject to the exceptions and
                exclusions set forth in Section 7.4 above) with a waiver of
                subrogation clause contained therein.

        7.6.    WAIVER OF RIGHTS. All claims, causes of action and rights of
                recovery for any damage to or destruction of persons,
                property or business which shall occur on or about the
                Premises, the Building or the Land, which result from any of
                the perils insured under any and all policies of insurance
                maintained by Lessor or Lessee, are waived by each party as
                against the other party, and the officers, directors,
                employees, contractors, servants and agents thereof,
                regardless of cause, including the negligence of the other
                party and its respective officers, directors, employees,
                contractors, servants and agents, but only to the extent of
                recovery, if any, under such policy or policies of insurance;
                PROVIDED, HOWEVER, that (i) this waiver shall be null and
                void to the extent that any such insurance shall be
                invalidated by reason of this waiver, and (ii) with respect
                to such portion of the Term during which Lessor elects to
                self-insure under Section 7.4 above, then for purposes of
                this Section 7.6, Lessor shall be deemed to have maintained
                fire and all-risk coverage in an amount equal to the full
                insurable value of the Building.

8.0     ASSIGNMENT AND SUBLETTING

        (a)     Except as set forth in paragraph (i) below, Lessee shall not
                mortgage, pledge, hypothecate, grant a security interest in, or
                otherwise encumber this Lease or any sublease hereinafter
                entered into by Lessee, or assign this Lease, or sublease the
                Premises or any portion thereof (the term "SUBLEASE" shall be
                deemed to include any arrangement pursuant to which a third
                party is permitted by Lessee to occupy all or any portion of the
                Premises) without obtaining, on each occasion, the prior written
                consent of Lessor, which consent shall not be unreasonably
                withheld or delayed; provided that Lessor may withhold its
                consent in its entire discretion if, as the result of such
                assignment or sublease, Lessee would no longer occupy fifty-one
                percent (51%) of the Rental Area in Tenant Area A.

        (b)     If Lessee wishes to assign this Lease or sublease all or any
                portion of the Premises, Lessee shall so notify Lessor in
                writing and request Lessor's consent thereto. Such notice shall
                include (i) the name of the proposed assignee or sublessee, (ii)
                a general description of the types of business conducted by the
                proposed assignee or sublessee and a reasonably detailed
                description of the business operations proposed to be conducted
                in the Premises by such person or entity, (iii) such financial
                information concerning the proposed assignee or sublessee as
                Lessor may reasonably require, and (iv) all terms and provisions
                upon which such assignment or sublease is proposed to be made,
                including a copy of the assignment or sublease agreement which
                Lessee proposes to execute. Lessor shall have fifteen (15)
                business days from the day on which it receives Lessee's notice
                and such required information to give notice to Lessee that
                either (i) Lessor consents to such

                                       18
<PAGE>

                assignment or sublease, or (ii) Lessor withholds its consent
                to such assignment or sublease (together with a statement of
                reasons for withholding of consent), or (iii) where
                applicable, Lessor is exercising its right of recapture
                pursuant to paragraph (e) below.

        (c)     If Lessor consents to an assignment or sublease: (i) Lessee
                shall promptly deliver to Lessor a fully executed copy of said
                assignment or sublease, which shall be in the form previously
                submitted to Lessor for review; (ii) after any such assignment
                or sublease, Lessee shall remain primarily liable to Lessor
                hereunder (which liability shall be joint and several with the
                assignee or sublessee); and (iii) if the aggregate rent and
                other amounts payable to Lessee under or in connection with a
                sublease, after deduction of the costs reasonably incurred by
                Lessee in entering into such sublease (including, without
                limitation, reasonable attorneys' fees and expenses and
                brokerage commissions amortized on a straight line basis over
                the term of the sublease and alteration costs amortized on a
                straight-line basis over a term of ten (10) years) exceeds the
                Rent payable hereunder with respect to the portion of the
                Premises subject to such sublease, Lessee shall pay to Lessor,
                as Additional Rent, one-half (1/2) of such excess immediately
                upon receipt thereof by Lessee. In the event Lessee shall assign
                its rights under this Lease, Lessee shall pay to Lessor as
                Additional Rent, one half (1/2) of any net profit realized by
                Lessee as the result of such assignment after deduction of the
                costs reasonably incurred by Lessee in entering into such
                assignment (including, without limitation, reasonable attorneys'
                fees and expenses and brokerage commissions amortized on a
                straight line basis over the remaining term of the Lease and
                alteration costs amortized on a straight-line basis over a term
                of ten (10) years). Lessee's obligation to pay Additional Rent
                under this paragraph (c) shall not apply with respect to any
                sublease of space in Tenant Area B during the first four (4)
                years of the Term.

        (d)     If Lessor withholds its consent to such assignment or sublease
                in accordance with its rights under this Lease, Lessee shall not
                enter into the proposed assignment or sublease with such person
                or entity.

        (e)     If Lessor elects, it shall have the right to consider Lessee's
                request for Lessor's consent to any assignment of the Lease, or
                a request for Lessor's consent to a sublease which (i) has a
                proposed term (including extension options) of one year or more,
                and (ii) together with any existing subleases would cause fifty
                (50%) percent of the Rental Area of the Premises or more to be
                occupied by lessees other than the Lessee and any Lessee
                Affiliates (as defined in paragraph (i) below), as an offer to
                Lessor to release from this Lease the portion of the Premises
                which is proposed to be the subject of such sublease as well as
                all other space occupied by tenants other than the Lessee (but
                subject to such prior sublease agreements) or, in the case of a
                proposed assignment of this Lease, the entire Premises for the
                remainder of the term of this Lease. If Lessor accepts such
                offer, then (i) in the case of a proposed

                                       19
<PAGE>

                sublease, this Lease shall be deemed to be amended as of the
                proposed effective date of such sublease so as to delete from
                the Premises all space proposed to be or presently occupied
                by lessees other than the Lessee (with a commensurate
                adjustment in Rent and Lessee's Share) for the proposed term
                of sublease, or (ii) in the case of a proposed assignment,
                this Lease shall terminate as of the proposed effective date
                of such assignment as if such date was the last day of the
                Term. Notwithstanding the foregoing, if Lessor elects to
                recapture, Lessee shall have the option to rescind its
                proposal to assign or sublet this Lease, such option to be
                exercised within fifteen (15) days after its receipt of
                Lessor's notice of recapture.

        (f)     Regardless of whether Lessor grants such consent, Lessee shall
                reimburse Lessor on demand, as Additional Rent, for all
                out-of-pocket costs and expenses (including, without limitation,
                reasonable attorneys' fees) reasonably incurred by Lessor in
                responding to a request for such consent.

        (g)     Lessee shall not be entitled to enter into any assignment or
                sublease, or to request Lessor's consent thereto, during the
                continuance of an Event of Default hereunder by Lessee.

        (h)     Any assignment or sublease entered into pursuant to this Section
                8.0 shall be subject to all of the terms and provisions of this
                Lease, including without limitation this Section 8.0. If Lessee
                enters into any such assignment or sublease, Lessor may, at any
                time and from time to time after the occurrence of an Event of
                Default hereunder, collect rent from such assignee or sublessee,
                and apply the net amount collected against Lessee's obligations
                hereunder, but no such assignment or sublease or collection
                shall be deemed an acceptance by Lessor of such assignee or
                sublessee as a lessee hereunder or as a release of the original
                named Lessee hereunder.

        (i)     In the event that Lessee desires to assign this Lease or to
                sublease the Premises (or any portion thereof) to any
                corporation, partnership, association or other business
                organization directly or indirectly controlling or controlled by
                Lessee or under common control with Lessee, or to any successor
                by merger, consolidation or purchase of all or substantially all
                of the assets of Lessee (a "Lessee Affiliate"), Lessee shall
                give at least fifteen (15) business days' prior written notice
                thereof to Lessor (unless Lessee is prohibited by applicable
                laws, codes, rules or regulations, or by the terms of the
                operative merger agreement or purchase and sale agreement from
                providing notice to Lessor at such time, in which event such
                notice shall be provided to Lessor as soon as Lessee is no
                longer subject to such prohibition). No consent of Lessor shall
                be required for any such assignment or sublease. Any assignee or
                sublessee which claims an interest in this Lease pursuant to a
                transfer of the type described in this paragraph (i) shall be
                bound by all of the terms and conditions of this Lease. For the
                purpose of this Lease, the sale of Lessee's capital stock
                through any public exchange shall not be deemed an assignment or
                sublease of

                                       20
<PAGE>

                the Lease or of the Premises.

        (j)     Notwithstanding anything contained in this Lease, Lessee shall
                not, either voluntarily or by operation of law, make any
                transfer of this Lease or the Premises (or any portion thereof)
                which results in Lessee (or anyone claiming by, through or under
                Lessee) collecting in connection with the Premises any rental or
                other charge based on the net income or on the profits of any
                person so as to render any part of the Rent due hereunder
                "UNRELATED BUSINESS TAXABLE INCOME" of Lessor as described in
                Section 512 of the Internal Revenue Code of 1986, as amended,
                and any such transfer shall be void AB INITIO.

9.0      PARKING. Lessee shall have the right to lease in the parking area on
         the Land (the "PARKING AREA") up to one and one-half (1 1/2) spaces per
         1,000 square feet of Rental Area of Premises (the "ON-SITE PARKING
         SPACES") by giving written notice to Lessor of the number of parking
         spaces desired by Lessee not later than the Commencement Date.
         Availability of the foregoing parking spaces is subject to reduction if
         mandated by zoning and parking ordinances and regulations of the City
         of Cambridge; provided that Lessor shall use all reasonable efforts to
         maximize parking on the Land.

         Lessee shall pay for each parking space leased hereunder, as Additional
         Rent, in advance on the first calendar day of each month, (i) $160 per
         month for the first Lease Year, and (ii) thereafter, an amount equal to
         the Fair Market Rent of such parking spaces, as determined annually.
         Fair Market Rent shall be determined in the manner provided in Section
         4.2 above except that, if Lessor and Lessee are unable to agree on Fair
         Market Rent, it shall be determined by one real estate professional
         (rather than by two or three as provided in Section 4.2) who shall have
         the qualifications stated in said Section and shall be mutually
         acceptable to Lessor and Lessee.

         Lessee agrees to comply with the following City of Cambridge
         Transportation Demand Management practices if made applicable to the
         Land: provision of MBTA passes for its employees and payment to Lessor
         of an equitable share of the cost of providing shared shuttle services
         and bicycle storage facilities for the Building; provided that such
         compliance shall not result in a loss of parking spaces by Lessee or
         adversely affect its use of such spaces.

         If Lessor elects to construct one or more new buildings on the Parking
         Area, Lessor shall have the right during the construction of the new
         building to provide alternate parking spaces to Lessee which are not
         located on the Land but are located within 1,000 feet of the Land in
         satisfaction of its obligations under this Section 9.0. Upon completion
         of such construction, Lessee shall again have the right to lease the On
         Site Parking Spaces on the Land which may be located in the Parking
         Area or may be located in a parking garage. The Additional Rent due for
         parking spaces provided under this subparagraph shall be Fair Market
         Rent, determined as set forth above in this Section 9.0, taking into
         account the nature and location

                                       21
<PAGE>

         of the spaces. This subparagraph shall not affect the number of
         spaces which Lessee is entitled to lease under this Section 9.0.
         Lessor agrees that it will not relocate spaces off of the Land more
         than twice during the Term and that the aggregate duration of any
         such periods will not exceed two (2) years for 50% of the spaces to
         which Lessee is entitled nor three (3) years for all of such spaces.
         If Lessor breaches its agreement set forth in the preceding
         sentence, Lessee shall not be required to pay parking fees for the
         off site parking spaces which are in excess of these limits. During
         the construction of any additional improvements on the Land, Lessor
         shall take all reasonable measures in order to minimize disturbance
         of Lessee's peaceful occupancy of the Building including, without
         limitation, any disturbance thereof by construction noise, dust or
         vibration so that Lessee's occupancy shall not be materially
         adversely affected.

10.0    LATE PAYMENT OF RENT. Lessee agrees that in the event that any payment
        of Basic Rent or Additional Rent shall remain unpaid at the close of
        business on the tenth business day after the same is due and payable
        hereunder (without reliance on any applicable grace period), there shall
        become due to Lessor from Lessee, as Additional Rent, as compensation
        for Lessor's extra administrative costs in investigating the
        circumstances of late Rent, a late charge of two (2%) percent of the
        amount overdue per calendar month (or portion thereof) during which such
        amount remains outstanding. The assessment or collection of such a
        charge shall not be deemed to be a waiver by Lessor of any default by
        Lessee arising out of such failure to pay Rent when due. The foregoing
        charge shall not be imposed with respect to Operating Expense charges
        under dispute between Lessor and Lessee where Lessee has a reasonable
        basis for its claim.

11.0     LESSEE'S COVENANTS. Lessee covenants, at its sole cost and expense,
         during the Term and such further time as Lessee occupies any part of
         the Premises:

         (a)      to pay when due the Basic Rent and all Additional Rent, and,
                  for so long as Lessee is the lessee of the entire Building or
                  if electricity and other utilities are separately metered at
                  any time during the Term, all charges for electricity and
                  other utilities;

         (b)      damage by fire or casualty and reasonable wear and tear
                  only excepted, to keep the Premises (including window and
                  entry glass) in as good order, repair and condition as the
                  same are in at the commencement of the Term, or may be put
                  in thereafter, Lessee acknowledging that as of the date of
                  this Lease the Premises are in good and satisfactory order,
                  repair and condition;

          (c)     not to injure, overload or deface the Premises or the
                  Building, nor to suffer or commit any waste therein, nor to
                  place a load upon any floor which exceeds the floor load
                  which the floor was designed to carry as disclosed on
                  Exhibit F (which may be subject to change from time to
                  time), nor to connect any equipment or apparatus to any
                  Building system (e.g., electrical, plumbing, mechanical)
                  which exceeds the capacity of such system, nor to permit on
                  the Premises any auction

                                       22
<PAGE>

                  sale or any nuisance or the emission therefrom of any
                  objectionable vibration, noise, or odor, nor to permit the
                  use of the Premises for any purpose other than the
                  Permitted Use, nor any use thereof which is improper,
                  offensive, or contrary to any laws, ordinances, codes,
                  rules and regulations, or the provisions of any license,
                  permit or other governmental consent required for or
                  applicable now or at any time during the Term to the Land,
                  the Building, the Premises or Lessee's use thereof
                  (collectively, "LEGAL REQUIREMENTS"), or which is liable to
                  invalidate or increase the premiums for any insurance on
                  the Building or its contents, or liable to render necessary
                  any alterations or additions to the Building;

         (d)      not to obstruct in any manner any portion of the Building not
                  leased, or the sidewalks or approaches to the Building, or the
                  Parking Area, or any hallways or Common Areas, and to conform
                  to all reasonable rules now or hereafter made by Lessor for
                  the care and use of the Building, its facilities and
                  approaches;

         (e)      to comply with all Legal Requirements and all recommendations
                  of Lessor's fire insurance rating organization now or
                  hereafter in effect, to keep the Premises equipped with all
                  safety appliances, and to procure (and maintain in full force
                  and effect) all licenses and permits required by any Legal
                  Requirement or by the provisions of any applicable insurance
                  policy because of the use made of the Premises by Lessee
                  without hereby intending to vary the Permitted Use), and, if
                  requested by Lessor, to make all repairs, alterations,
                  replacements or additions so required in and to the Premises;

         (f)      not, without on each occasion obtaining the prior written
                  consent of Lessor, which consent will not be unreasonably
                  withheld or delayed, to make any alterations, renovations,
                  improvements and/or additions to the Premises (collectively,
                  "Alterations") except (i) those made pursuant to the Work
                  Letter attached hereto as EXHIBIT C, (ii) nonstructural
                  Alterations which, in the aggregate, cost less than $50,000
                  and do not affect the exterior of the Building, or (iii)
                  cosmetic items such as painting or carpet replacement
                  regardless of cost. Lessee shall not permit the making of
                  any holes in any part of the Building or the painting or
                  placing of any signs, awnings, or the like, visible from
                  outside of the Premises. Prior to commencing any
                  Alterations, Lessee shall: secure all necessary licenses,
                  permits and other governmental consents and approvals;
                  obtain the written approval of Lessor as to the plans and
                  specifications for such work; obtain the written approval of
                  Lessor as to the general contractor (or as to each trade
                  contractor if there is no general contractor); cause each
                  contractor and subcontractor to carry workmen's
                  compensation insurance in statutory amounts covering all of
                  the contractor's and subcontractor's employees; and cause
                  each general contractor (or each trade contractor if there
                  is no general contractor) and subcontractor to carry
                  comprehensive public liability insurance in amounts
                  reasonably satisfactory to Lessor (such insurance to be
                  written by companies reasonably satisfactory to Lessor

                                       23
<PAGE>

                  and insuring Lessee and Lessor as well as the contractors
                  and subcontractors). All Alterations (other than Lessee's
                  removable personal property and trade fixtures) and all
                  "Lessee's Work" (as defined in the Work Letter) shall
                  remain part of the Premises and shall not be removed upon
                  the expiration or earlier termination of the Term EXCEPT
                  for those items which Lessor designates for removal in a
                  notice given to Lessee at the time that Lessee requests
                  Lessor's approval of such Alteration and those items
                  designated for removal under the Work Letter. Lessee shall
                  pay promptly when due the entire cost of such work. Lessee
                  shall not cause or permit any liens for labor or materials
                  performed or furnished in connection therewith to attach to
                  the Land or the Building, and shall discharge or bond any
                  such liens which may be filed or recorded against the
                  Premises within fifteen (15) days after the filing or
                  recording thereof. All such work shall be performed in a
                  good and workmanlike manner and in compliance with all
                  Legal Requirements and the provisions of all applicable
                  insurance policies. Promptly after the completion of any
                  Alterations, Lessee shall provide an as-built plan thereof
                  to Lessor. Lessee shall indemnify and hold Lessor harmless
                  from and against any and all suits, demands, causes of
                  action, claims, losses, debts, liabilities, damages,
                  penalties or judgments, including, without limitation,
                  reasonable attorneys' fees, arising from injury to any
                  person or property occasioned by or growing out of such
                  work, which indemnity shall survive the expiration or
                  termination of this Lease;

         (g)      to save Lessor harmless and indemnified from any loss, cost
                  and expense (including, without limitation, reasonable
                  attorneys' fees) arising out of or relating to (i) a claim
                  of injury to any person or damage to any property while on
                  the Premises, if not due to the negligence or willful
                  misconduct of Lessor or its officers, agents, employees,
                  servants or contractors, or the breach of Lessor's
                  obligations under this Lease; or to (ii) a claim of injury
                  to any person or damage to any property anywhere alleged to
                  be occasioned by any omission, neglect or default of Lessee
                  or of anyone claiming by, through, or under Lessee, or any
                  officer, agent, employee, servant, contractor or invitee of
                  any of the foregoing. Lessor agrees to indemnify and hold
                  harmless Lessee from and against all loss, cost and expense
                  (including, without limitation, reasonable attorneys' fees)
                  arising out of or relating to a claim for personal injury or
                  property damage resulting from the negligence or willful
                  misconduct of Lessor or its officers, agents, employees,
                  servants or contractors, or from the breach of Lessor's
                  obligations or representations under this Lease. The
                  provisions of this clause (g) shall survive the expiration
                  or termination of this Lease;

         (h)      to permit Lessor and Lessor's agents to examine the Premises
                  at reasonable times, subject to Lessee's reasonable security
                  regulations (provided 24 hours' notice is given to Lessee,
                  except in case of emergency), and if, at any time (subject
                  to the foregoing notice requirement) when Lessee is not the
                  lessee of the entire Building, Lessor shall so elect
                  (without hereby imposing any obligation on Lessor to do so),
                  to permit Lessor to make any repairs or additions Lessor may
                  deem necessary, provided that

                                       24

<PAGE>

                  the same do not materially adversely affect Lessee's use of
                  the Premises for the Permitted Use; and at Lessee's expense
                  to remove any Alterations, signs, awnings, aerials,
                  flagpoles or the like not consented to in writing; and to
                  permit Lessor to show the Premises to prospective
                  purchasers and lessees and to keep affixed to any suitable
                  part of the Premises, during the nine (9) months preceding
                  the expiration of the Term, appropriate notices for letting
                  or selling;

         (i)      that all equipment, furniture, furnishings, fixtures and
                  property of every kind of Lessee and of all persons claiming
                  by, through or under Lessee which may be on the Premises from
                  time to time (collectively, "LESSEE'S PROPERTY") shall be at
                  the sole risk of Lessee, and Lessor shall not be liable if the
                  whole or any part thereof shall be destroyed or damaged by
                  fire, water or otherwise, or by the leakage or bursting of
                  water pipes, steam pipes, or other pipes, or by theft or from
                  any other cause unless caused by the negligence or willful
                  misconduct of Lessor;

         (j)      to pay promptly when due, all taxes of any kind levied,
                  imposed or assessed on Lessee's Property, which taxes shall be
                  the sole obligation of Lessee, whether the same is assessed to
                  Lessee or to any other person and whether the property on
                  which such tax is levied, imposed or assessed shall be
                  considered part of the Premises or personal property;

         (k)      by the end of business on the last day of the Term (or the
                  effective date of any earlier termination of this Lease as
                  herein provided), to remove (i) all of Lessee's Property,
                  and (ii) the items or components of Alterations designated
                  for removal as provided in clause (f) above and (iii) the
                  items or components of "LESSEE'S WORK" (as defined in the
                  Work Letter) designated for removal as provided in the Work
                  Letter (the items described in the foregoing clauses (i),
                  (ii) and (iii) are sometimes referred to, collectively, as
                  "Lessee's Removal Items"), in each case whether the same be
                  permanently affixed to the Premises or not, and to repair
                  any damage caused by any such removal to Lessor's reasonable
                  satisfaction; and peaceably to yield up the Premises clean
                  and in good order, repair and condition (reasonable wear and
                  tear, and damage by fire or other casualty or taking only
                  excepted); and to deliver the keys to the Premises to
                  Lessor. Any of Lessee's Removal Items which are not removed
                  by such date shall be deemed abandoned and may be removed
                  and disposed of by Lessor in such manner as Lessor may
                  determine, and Lessee shall pay to Lessor on demand, as
                  Additional Rent, the entire cost of such removal and
                  disposition, together with the costs and expenses incurred
                  by Lessor in making any incidental repairs and replacements
                  to the Premises necessitated by Lessee's failure to remove
                  any of Lessee's Removal Items, or by any other failure of
                  Lessee to comply with the terms of this Lease, and for use
                  and occupancy during the period after the expiration of the
                  Term and prior to Lessee's performance of its obligations
                  under this clause (k). Lessee shall further indemnify and
                  hold Lessor harmless from and against any and all suits,

                                    25
<PAGE>

                  demands, causes of action, claims, losses, debts,
                  liabilities, damages, penalties or judgments, including,
                  without limitation, reasonable attorneys' fees, resulting
                  from Lessee's failure or delay in surrendering the Premises
                  as above provided (such indemnity to survive the expiration
                  or termination of this Lease);

         (l)      to pay Lessor's reasonable expenses, including reasonable
                  attorneys' fees, incurred in enforcing any obligations of
                  Lessee under this Lease;

         (m)      not to generate, store or use any "HAZARDOUS  MATERIALS" (as
                  hereinafter defined) in or on the Premises or elsewhere in
                  the Building or on the Land (except in compliance with any
                  and all applicable Legal Requirements), or dispose of
                  Hazardous Materials from the Premises to any other location,
                  except a properly approved disposal facility and then only
                  in compliance with any and all Legal Requirements regulating
                  such activity, nor permit any occupant of the Premises to do
                  so. Lessee agrees to provide to Lessor copies of all
                  disclosures made to governmental authorities regarding the
                  presence of Hazardous Materials on the Premises. As used in
                  this Lease, "HAZARDOUS MATERIALS" means and includes any
                  chemical, substance, waste, material, gas or emission which
                  is radioactive or deemed hazardous, toxic, a pollutant, or a
                  contaminant under any statute, ordinance, by-law, rule,
                  regulation, executive order or other administrative order,
                  judgment, decree, injunction or other judicial order of or
                  by any governmental authority, now or hereafter in effect,
                  relating to pollution or protection of human health or the
                  environment. By way of illustration and not limitation,
                  "HAZARDOUS MATERIALS" INCLUDES "OIL", "HAZARDOUS MATERIALS",
                  "HAZARDOUS WASTE", AND "HAZARDOUS SUBSTANCE" as defined in
                  the Comprehensive Environmental Response, Compensation and
                  Liability Act, 42 U.S.C. Section 9601 ET SEQ., as amended,
                  the Resource Conservation and Recovery Act of 1976, 42
                  U.S.C. Section 6902 ET SEQ., as amended, and the Toxic
                  Substances Control Act, 15 U.S.C. 8601 et SEQ., as amended,
                  the regulations promulgated thereunder, and Massachusetts
                  General Laws, Chapter 21C and Chapter 21E and the
                  regulations promulgated thereunder. If any lender or
                  governmental authority requires testing to determine whether
                  there has been any release of Hazardous Materials and such
                  testing is required as a result of the acts or omissions of
                  Lessee in violation of this paragraph (m), then Lessee shall
                  reimburse Lessor upon demand, as Additional Rent, for the
                  reasonable costs thereof. Lessee shall execute affidavits,
                  certifications and the like, as may be reasonably requested
                  by Lessor from time to time concerning Lessee's best
                  knowledge and belief concerning compliance by Lessee with
                  the requirements of this Section 11.0(m). Lessor reserves
                  the right to enter the Premises at reasonable times subject
                  to Lessee's reasonable security regulations (provided
                  twenty-four (24) hours' notice is given to Lessee, except in
                  case of emergency) to inspect the same for Hazardous
                  Materials. Lessee shall indemnify, defend, and hold harmless
                  Lessor, and the holder of any mortgage on the Building or
                  the Land, from and against any claim, cost, expense,
                  liability,

                                 26
<PAGE>

                  obligation or damage, including, without limitation,
                  attorneys' fees and the cost of litigation, arising from or
                  relating to the breach by Lessee or anyone claiming by,
                  through or under Lessee of the provisions of this clause
                  (m), and shall immediately discharge or cause to be
                  discharged any lien imposed upon the Building or the Land
                  in connection with any such claim. The provisions of this
                  clause (m) shall survive the expiration or termination of
                  this Lease;

         (n)      in case Lessee takes possession of the Premises prior to the
                  Commencement Date, to perform and observe all of Lessee's
                  covenants from and after the date upon which Lessee takes
                  possession except that no Rent shall accrue prior to the
                  beginning of the Term;

         (o)      not to permit any officer, agent, employee, servant,
                  contractor or visitor of Lessee, or of anyone claiming by,
                  through or under Lessee, to violate any covenant or obligation
                  of Lessee hereunder;

         (p)      to provide and pay for the services described in EXHIBIT E
                  attached hereto and, for any portion of the Term during which
                  Lessee is managing the Building as permitted by Section 18, to
                  operate and maintain the Building at all times as a first
                  class office, laboratory and research and development building
                  in Cambridge, Massachusetts and to provide and pay for the
                  services described in EXHIBIT D; and

         (q)      to remove all radioactive materials from the Premises or any
                  portion thereof prior to vacating such space during or at the
                  end of the Term in compliance with all Legal Requirements.

12.0     CONSTRUCTION. Lessor will finish the Premises in accordance with the
         provisions of the work letter attached hereto as EXHIBIT C (the "WORK
         LETTER").

13.0     CASUALTY AND EMINENT DOMAIN.

         (a)      In the event that the entire Premises or Building, or any
                  substantial part thereof, shall be taken by any exercise of
                  the right of eminent domain or shall receive any direct or
                  consequential or substantial damages for which Lessor or
                  Lessee or either of them shall be entitled to compensation
                  by reason of anything lawfully done in pursuance of any
                  public or other authority during the Term, then this Lease
                  shall terminate at the election of Lessor, which election
                  may be made notwithstanding Lessor's entire interest may not
                  have been divested. If such taking or damage substantially
                  reduces the floor space of the Premises so as to render the
                  Premises unusable for the Permitted Use after such taking,
                  Lessee shall have the right, effective when its possession
                  is disturbed, to terminate this Lease by notice in writing
                  to Lessor delivered within thirty (30) days of the first day
                  on which Lessee's possession is so disturbed. Lessor
                  reserves and excepts all rights to

                                    27
<PAGE>

                  damage to the Premises and Building and the leasehold
                  hereby created, now accrued or hereafter accruing by reason
                  of any exercise of eminent domain, or by reason of anything
                  lawfully done in pursuance of any public or other authority
                  (except for damages for Lessee's Property and moving
                  expenses) and by way of confirmation, Lessee grants to
                  Lessor all of Lessee's rights to such damages (except as
                  aforesaid) and covenants to execute and deliver such
                  further instruments of assignment thereof as Lessor may
                  from time to time request.

         (b)      If the Building or any part thereof shall be damaged by fire
                  or other casualty to the extent that substantial alteration
                  or reconstruction of the Building shall, in Lessor's sole
                  opinion, be required (whether or not the Premises shall have
                  been damaged) or if as a result any mortgagee of the
                  Building requires that insurance proceeds payable in
                  connection with such casualty be used to retire the mortgage
                  debt, Lessor may, at its option, terminate this Lease by
                  notifying Lessee in writing of such termination within
                  thirty (30) days after the date of such damage, in which
                  event this Lease shall terminate on the date set forth in
                  such notice, and Lessor shall allow Lessee a fair diminution
                  of Rent from and after the date of such damage to the date
                  of such termination of this Lease to the extent the Premises
                  are unusable for the permitted uses hereunder.

         (c)      If the Premises shall be substantially damaged by fire or
                  other casualty such that Lessee reasonably determines that the
                  Premises are unusable for the Permitted Use, then Lessee may
                  terminate this Lease as of the date of the occurrence of such
                  damage by written notice thereof to Lessor within 30 days
                  after the date of such damage, in which event this Lease shall
                  terminate on the date set forth in such notice, and Lessor
                  shall allow Lessee a fair diminution of Rent from and after
                  the date of such damage to the date of such termination of
                  this Lease to the extent the Premises are unusable for the
                  permitted uses hereunder.

         (d)      In the case of damage to or taking of any portion of the
                  Premises or any portion of the Building, if this Lease is
                  not terminated as a result thereof, Lessor shall thereafter
                  diligently act to restore the Building and the Premises (or,
                  in case of taking, what remains thereof) to substantially
                  the condition in which they existed prior to the occurrence
                  of such taking or casualty, provided, however, that: (i) the
                  scope of work to be done by Lessor shall be limited to (a)
                  that set forth as "LESSOR'S WORK" in the Work Letter, and
                  (b) the contribution of "LESSOR'S CONTRIBUTION" towards the
                  performance of "LESSEE'S WORK" (as these terms are defined
                  in the Work Letter), but in no event shall Lessor be
                  required to spend in connection with the work described in
                  this clause (i) more than the amount of insurance proceeds
                  (provided that Lessor has maintained the required insurance
                  under Section 7.4 if MIT is not the Lessor under this Lease)
                  or taking award actually received and allocable thereto
                  (except that this limitation concerning the amount of
                  insurance proceeds shall not apply for such time as MIT
                  self-insures,

                                    28
<PAGE>

                  partially or totally, pursuant to Section 7.4 above); (ii)
                  Lessor shall not be required to restore any Alterations or
                  any of Lessee's Work which Lessee is by this Lease either
                  entitled to or required to remove upon the expiration or
                  earlier termination of this Lease; (iii) Lessor shall not
                  be required to restore or replace any of Lessee's Property;
                  and (iv) promptly upon completion of such work by Lessor,
                  Lessee shall diligently act to restore and/or replace all
                  Alterations and Lessee's Work, and to restore or replace
                  all of Lessee's Property, to substantially the same
                  condition they were in prior to the occurrence of such
                  taking or casualty. In the event that Lessor fails to
                  substantially complete such restoration within six (6)
                  months of the occurrence of such taking or casualty, Lessee
                  shall have the option to terminate this Lease by giving
                  written notice to Lessor within forty-five (45) days after
                  the expiration of such 6-month period; PROVIDED, HOWEVER,
                  that if Lessor substantially completes such restoration
                  within such 45-day period then Lessee's termination notice
                  shall be deemed of no force or effect and this Lease shall
                  continue in full force and effect.

         (e)      Lessor shall not be liable for any inconvenience or annoyance
                  to Lessee or injury to the business of Lessee resulting in any
                  way from such taking or damage or the repair thereof, provided
                  that Lessor uses reasonable efforts to minimize inconvenience
                  and disruption to Lessee during such repair or restoration,
                  except that (i) Lessor shall allow Lessee a fair diminution of
                  Rent during the time and to the extent the Premises are
                  unusable for the Permitted Use, and (ii) in the event of a
                  partial taking, a just proportion of Rent, similarly
                  determined, shall be abated for the remainder of the Term.

14.0     DEFAULTS; REMEDIES

         14.1     DEFAULTS; EVENTS OF DEFAULT. The following shall, if any
                  requirement for notice or lapse of time or both has not been
                  met, constitute defaults hereunder, and, if such conditions
                  have been met, constitute "EVENTS OF DEFAULT" hereunder:

                  (a)      The failure of Lessee to perform or observe any of
                           Lessee's covenants or agreements hereunder concerning
                           the payment of money for a period of ten (10) days
                           after written notice thereof, PROVIDED, HOWEVER, that
                           Lessee shall not be entitled to such notice if Lessor
                           has given notice to Lessee of one or more previous
                           such failures within a twelve-month period, in which
                           event such failure shall constitute an Event of
                           Default hereunder upon the expiration of ten (10)
                           days after such payment was due;

                  (b)      The failure of Lessee, without the necessity of any
                           notice from Lessor to Lessee, either (i) to maintain
                           the insurance required hereunder in full force and
                           effect, or (ii) to deliver an estoppel certificate to
                           Lessor within the time provided in Section 24.0
                           below);

                                      29
<PAGE>

                  (c)      The execution by Lessee of any assignment, sublease
                           or other agreement without the prior written approval
                           of Lessor as required by Section 8.0;

                  (d)      The failure of Lessee to perform or observe any of
                           Lessee's other covenants or agreements hereunder for
                           a period of thirty (30) days after written notice
                           thereof (provided that, in the case of defaults not
                           curable in thirty (30) days through the exercise of
                           reasonable diligence, such 30-day period shall be
                           extended so long as Lessee commences cure within such
                           30-day period and thereafter prosecutes such cure to
                           completion with reasonable diligence, but such
                           extended cure period shall not in any event exceed
                           ninety (90) days after Lessor's initial notice to
                           Lessee); and

                  (e)      if the leasehold hereby created shall be taken on
                           execution, or by other process of law, or if any
                           assignment shall be made of Lessee's property for the
                           benefit of creditors, or if a receiver, guardian,
                           conservator, trustee in bankruptcy or similar officer
                           shall be appointed to take charge of all or any part
                           of Lessee's assets by a court of competent
                           jurisdiction; or if a petition is filed by Lessee
                           under any bankruptcy or insolvency law; or if a
                           petition is filed against Lessee under any
                           bankruptcy or insolvency law and the same shall not
                           be dismissed within sixty (60) days from the date
                           upon which it is filed, or a lien or other
                           involuntary encumbrance is filed against Lessee's
                           leasehold (or against the Premises, the Building or
                           the Land based on a claim against Lessee) and is not
                           discharged or bonded within thirty (30) days after
                           the filing thereof.

         14.2     TERMINATION. If an Event of Default shall occur, Lessor may,
                  at its option, immediately or any time thereafter and without
                  demand or notice, enter upon the Premises or any part thereof
                  in the name of the whole and repossess the same as of Lessor's
                  former estate and dispossess Lessee and those claiming through
                  or under Lessee and remove their effects, forcibly if
                  necessary, without being deemed guilty of any manner of
                  trespass and without prejudice to any remedies which might
                  otherwise be used for arrears of rent or preceding breach of
                  covenant, and upon such entry this Lease shall terminate. In
                  lieu of making such entry, Lessor may terminate this Lease
                  upon three (3) business days' prior written notice to Lessee.
                  Upon any termination of this Lease as the result of an Event
                  of Default, Lessee shall quit and peacefully surrender the
                  Premises to Lessor.

         14.3     SURVIVAL OF COVENANTS.

                  (a)      No such termination of this Lease shall relieve
                           Lessee of its liability and obligations under this
                           Lease and such liability and obligations shall
                           survive any such termination. Lessee shall indemnify
                           and hold Lessor harmless

                                   30
<PAGE>

                           from all loss, cost, expense, damage or liability
                           arising out of or in connection with such
                           termination.

                  (b)      In the event of any such termination Lessee shall pay
                           to Lessor the Rent up to the time of such
                           termination. Lessee shall remain liable for, and
                           shall pay on the days originally fixed for such
                           payment hereunder, the full amount of all Basic Rent
                           and Additional Rent as if this Lease had not been
                           terminated; PROVIDED, HOWEVER, if Lessor relets the
                           Premises, there shall be credited against such
                           obligation the amount actually received by Lessor
                           each month from such lessee after first deducting all
                           costs and expenses incurred by Lessor in connection
                           with releting the Premises.

                  (c)      At the option of Lessor at any time after such
                           termination, in lieu of damages pursuant to paragraph
                           (b) above, Lessee shall pay to Lessor, on demand, as
                           and for liquidated and agreed damages for Lessee's
                           default, the present value, discounted at the prime
                           rate, of amount by which:

                           (i)      the aggregate Rent which would have been
                                    payable under this Lease by Lessee from the
                                    date of such termination until what would
                                    have been the last day of the Term but for
                                    such termination, EXCEEDS

                           (ii)     the fair and reasonable rental value of the
                                    Premises for the same period, less Lessor's
                                    reasonable estimate of expenses to be
                                    incurred in connection with releting the
                                    Premises, including, without limitation, all
                                    repossession costs, brokerage commissions,
                                    legal expenses, reasonable attorneys' fees,
                                    alteration costs, and expenses of
                                    preparation for such releting.

                           There shall be credited against Lessee's obligation
                           under this paragraph (c) all amounts actually
                           received by Lessor from Lessee pursuant to paragraph
                           (b) above or actually received by Lessor from
                           releting the Premises.

                  (d)      If the Premises or any part thereof are relet by
                           Lessor for the period prior to what would have been
                           the last day of the Term but for such termination, or
                           any portion thereof, the amount of rent reserved upon
                           such releting shall be, PRIMA FACIE, the fair and
                           reasonable rental value for the part or the whole of
                           the Premises so relet during the term of the
                           releting.

                  (e)      Nothing herein contained shall limit or prejudice the
                           right of Lessor to prove and obtain as liquidated
                           damages by reason of such termination, an amount
                           equal to the maximum allowed by any statute or rule
                           of law in effect at the time when, and governing the
                           proceedings in which, such damages are to be proved,
                           whether or not such amount be greater, equal to,

                                    31
<PAGE>

                           or less than the amount of the difference referred to
                           above.

         14.4     RIGHT TO RELET. At any time or from time to time after any
                  such termination, Lessor may relet the Premises or any part
                  thereof for such a term (which may be greater or less than the
                  period which would otherwise have constituted the balance of
                  the Term) and on such conditions (which may include
                  concessions or free rent) as Lessor, in its reasonable
                  discretion, may determine, and may collect and receive the
                  rents therefor. Lessor shall in no way be responsible or
                  liable for any failure to relet the Premises or any part
                  thereof, or for any failure to collect any rent due upon any
                  such releting; provided that Lessor shall have used reasonable
                  efforts to mitigate damages.

         14.5     RIGHT TO EQUITABLE RELIEF. In the event there shall occur a
                  default or threatened default hereunder, Lessor shall be
                  entitled to enjoin such default or threatened default and
                  shall have the right to invoke any right and remedy allowed at
                  law or in equity or by statute or otherwise as though re-entry
                  and other remedies were not provided for in this Lease.

         14.6     PERFORMANCE BY LESSOR. In the event of a default by Lessee
                  hereunder which continues beyond the expiration of the
                  applicable grace period, Lessor shall have the right to
                  perform such defaulted obligation of Lessee, including the
                  right to enter upon the Premises to do so. Lessor shall, as a
                  courtesy only, notify Lessee of its intention to perform such
                  obligation. In the event of a default by Lessee hereunder
                  which has not yet continued beyond the expiration of the
                  applicable grace period but which Lessor determines
                  constitutes an emergency threatening imminent injury to
                  persons or damage to property or a violation of law or an
                  ordinance or regulation, Lessor shall have the right to
                  perform such defaulted obligation of Lessee (including the
                  right to enter upon the Premises to do so) after giving Lessee
                  such notice (if any) as is reasonable under the circumstances.
                  In either event, the aggregate of (i) all sums so paid by
                  Lessor, (ii) interest (at the rate of 1-1/2% per month or the
                  highest rate permitted by law, whichever is less) on such sum,
                  and (iii) all necessary incidental costs and expenses in
                  connection with the performance of any such act by Lessor,
                  shall be deemed to be Additional Rent under this Lease and
                  shall be payable to Lessor immediately upon demand. Lessor may
                  exercise its rights under this Section 14.6 without waiving
                  any other of its rights or releasing Lessee from any of its
                  obligations under this Lease.

         14.7     FURTHER REMEDIES. Nothing in this Lease contained shall
                  require Lessor to elect any remedy for a default or Event of
                  Default by Lessee hereunder, and all rights herein provided
                  shall be cumulative with one another and with any other rights
                  and remedies which Lessor may have at law or in equity in the
                  case of such a default or Event of Default.

                                    32
<PAGE>

15.0     REAL ESTATE BROKER. Lessor and Lessee each represent to the other that
         they have dealt with no broker in connection with this Lease other than
         the Trammell Crow Company ("Broker"). Lessor shall pay the Broker as
         part of a separate agreement. Lessee agrees to indemnify and hold
         Lessor harmless from and against any claims for commissions or fees by
         any person other than the Broker by reason of any act of Lessee or its
         representatives. Lessor agrees to indemnify and hold Lessee harmless
         from and against any claims for commissions or fees by any person other
         than the Broker by reason of any act of Lessor or its representatives.

16.0     NOTICES. All notices, demands, or other communications hereunder shall
         or may be given either to Lessor or to Lessee, the same shall be in
         writing and shall be sent by hand delivery, or by registered or
         certified mail, postage prepaid, or by Federal Express or other similar
         overnight delivery service:

         Lessor:                    Massachusetts Institute of Technology
                                    238 Main Street - Suite 200
                                    Cambridge, Massachusetts  02142
                                    Attention:  Steven C. Marsh, Managing
                                    Director of Real Estate

         with a copy to:            Meredith & Grew, Inc.
                                    238 Main Street
                                    Cambridge, Massachusetts  02142
                                    Attention:  John Sullivan

         and to:                    Stuart T. Freeland
                                    Rackemann, Sawyer & Brewster
                                    One Financial Center
                                    Boston, Massachusetts 02111

         Lessee:                    Transkaryotic Therapies, Inc.
                                    195 Albany Street
                                    Cambridge, Massachusetts 02139-4213
                                    Attn:  Senior Vice President of
                                           Administration/General Counsel

         with a copy to:            Katharine E. Bachman, Esq.
                                    Hale and Dorr LLP
                                    60 State Street
                                    Boston, Massachusetts  02109

         Any notice, demand or other communication shall be effective upon
         receipt by or tender

                                    33
<PAGE>

for delivery to the intended recipient thereof.

17.0     NO WAIVERS. Failure of Lessor to complain of any act or omission on the
         part of Lessee, no matter how long the same may continue, shall not be
         deemed to be a waiver by Lessor of any of its rights hereunder. No
         waiver by Lessor at any time, expressed or implied, of any breach of
         any provision of this Lease shall be deemed a waiver of a breach of any
         other provision of this Lease or a consent to any subsequent breach of
         the same or any other provision. No acceptance by Lessor of any partial
         payment shall constitute an accord or satisfaction but shall only be
         deemed a partial payment on account; nor shall any endorsement or
         statement on any check or any letter accompanying any check or payment
         be deemed an accord and satisfaction, and Lessor may accept such check
         or payment without prejudice to Lessor's right to recover the balance
         of such installment or pursue any other remedy available to Lessor in
         this Lease or at law or in equity.

18.0     MANAGEMENT OF THE BUILDING.

         18.1. So long as Lessee is lessee of the entire Building (whether or
         not Lessee has sublet any portion thereof), Lessee shall have the right
         to manage the Building in which event it shall be fully responsible for
         the operation, maintenance and repair of the Building and the Land,
         including the responsibility to provide the services described on
         Exhibit D subject however to Lessor's obligations under the Work
         Letter. Notwithstanding the foregoing, Lessor shall retain
         responsibility for snow removal from the Land and from the sidewalks
         adjacent to the Land.

         18.2. If Lessee does not elect to manage the Building, Lessor shall
         furnish the services described on EXHIBIT D attached hereto, the cost
         of which shall be included in Operating Expenses. Lessor shall not be
         liable in damages, nor in default hereunder, for any failure or delay
         in furnishing any service rendered customarily to the Premises or
         Building or agreed to by the terms of this Lease, due to any accident,
         to the making of repairs, alterations or improvements, or to the
         occurrence of an event of "Force Majeure" as defined in Section 27
         below, or to any act or default of Lessee hereunder. No such failure
         shall be held or pleaded as an eviction or disturbance in any manner
         whatsoever of Lessee's possession or give Lessee any right to terminate
         this Lease or give rise to any claim for set-off or any abatement of
         Rent or of any of Lessee's obligations under this Lease.

19.0     SIGNS. So long as Lessee is, itself, physically occupying 95,000 square
         feet of the Rental Area of the Building, Lessee shall have exclusive
         right to control the placement of signs on the exterior of the Building
         subject to the following requirements. All signs must be located on the
         Building and must comply with all municipal regulations. Lessee must
         obtain Lessor's approval of the location, size and appearance of all
         signs prior to their placement on the Building. Lessee shall be
         responsible, at its own expense, to obtain all permits and approvals
         for signs. The rights granted to Lessee under this Section 19 will

                                      34
<PAGE>

         terminate and revert to Lessor if at any time Lessee no longer occupies
         at least 95,000 square feet of the Rental Area of the Building.

20.0     LESSEE'S RIGHT TO TERMINATE EXISTING LEASE. Upon the execution and
         delivery of this Lease Agreement by both parties and satisfaction of
         the conditions set forth in Section 21, Lessee shall have the right to
         notify Lessor of its election to terminate its existing lease of space
         at 230 Albany Street, Cambridge, Massachusetts (the "Albany Street
         Lease"), such termination to be effective not sooner than nine months
         after the Commencement Date under this Lease. This right shall be
         exercised by written notice to Landllord stating the date on which the
         Albany Street Lease will terminate in compliance with the preceding
         sentence.

21.0     CONDITION PRECEDENT. Lessor's obligations under this Agreement are
         hereby made subject to the condition that Lessor shall have obtained
         all permits made necessary by requirements specific to Lessee's Work or
         Lessee's use of the Premises, Lessor hereby representing that it has
         obtained a Building Permit for Lessor's Work.

22.0     QUIET ENJOYMENT; GROUND LEASES; MORTGAGES

         22.1 QUIET ENJOYMENT. Lessor covenants that, provided that an Event of
         Default has not occurred and is not then continuing, Lessee shall
         quietly have and enjoy the Premises during the Term, without hindrance
         or molestation from any person lawfully claiming by, through or under
         Lessor.

         22.2 RIGHTS OF GROUND LESSORS AND MORTGAGEES. No act or failure to act
         on the part of Lessor which would entitle Lessee under the terms of
         this Lease, or by law, to be relieved of Lessee's obligations hereunder
         or to terminate this Lease, shall result in a release or termination of
         such obligations or a termination of this Lease unless (i) Lessee shall
         have first given written notice to Lessor's ground lessors and
         mortgagees of record of the act or failure to act on the part of Lessor
         which Lessee claims as the basis of Lessee's rights; and (ii) such
         ground lessors and mortgagees, after receipt of such notice, have
         failed or refused to correct or cure the condition within a reasonable
         time thereafter, but nothing in this Lease shall be deemed to impose
         any obligation on any such ground lessor or mortgagee to correct or
         cure any such condition. No ground lessor shall be liable for the
         failure to perform any of the obligations of Lessor hereunder unless
         and until such ground lessor terminates its ground lease and takes
         possession of the Premises, nor shall any mortgagee be liable for the
         failure to perform any of the obligations of Lessor hereunder unless
         and until such mortgagee enters upon and takes possession of the
         Premises for purposes of foreclosure.

         22.3 LEASE SUBORDINATE. This Lease is and shall be subject and
         subordinate to any ground lease or mortgage hereafter on the Premises,
         and to all advances under any such mortgage and to all renewals,
         amendments, extensions and consolidations thereof,

                                    35
<PAGE>

         provided that Lessor shall obtain from such ground lessor or
         mortgagee an agreement (a "NON-DISTURBANCE AGREEMENT") in
         commercially reasonable form whereby such ground lessor or mortgagee
         agrees not to disturb the possession of Lessee under this Lease or
         to join Lessee in summary or foreclosure proceedings in the event
         such ground lessor terminates its ground lease or such mortgagee
         forecloses its interest against the Premises under its mortgage so
         long as Lessee duly and promptly keeps and performs all of its
         obligations hereunder, and Lessee shall enter into such agreement
         and agree to attorn to such ground lessor or mortgagee as its
         landlord under this Lease in the event of such foreclosure. In
         confirmation of such subordination, Lessee shall execute and deliver
         promptly a certificate in recordable form that Lessor or any ground
         lessor or any mortgagee may request. Notwithstanding the foregoing
         provisions of this Section, the holder of any mortgage on the
         Premises may at any time subordinate its mortgage to this Lease by
         written notice to Lessee. Lessor hereby represents that there is no
         mortgage or ground lease of the Premises as of the date of this
         Lease.

  23.0   SECURITY DEPOSIT. Lessee shall, deposit with Lessor the Security
         Deposit, of which not less than $680,000 shall be in the form of cash
         (the "Cash Security") and the balance of which may be in the form of a
         Letter of Credit as described in this Section (the "Letter of Credit"),
         as security for the full and faithful payment and performance by Lessee
         of its obligations under this Lease, and not as a prepayment of Rent.
         The Cash Security shall be deposited with Lessor simultaneously with
         the execution and delivery of this Lease and, if Lessee elects to
         deliver a portion of the Security Deposit in the form of a Letter of
         Credit, such letter shall be deposited with Lessor within two weeks
         thereafter. For purposes of this Lease, the term "Security Deposit"
         shall mean and include all Cash Security and any Letter of Credit
         deposited with Lessor pursuant to this Section.

         If Lessee elects to deliver a Letter of Credit, it shall be an
         irrevocable standby letter of credit, in form and content and issued by
         a commercial bank satisfactory to Lessor (in its sole discretion),
         which Letter of Credit shall provide that it may be drawn upon in
         Boston, Massachusetts (i) in part, upon the presentation of a sight
         draft accompanied by a certificate signed by either the Managing
         Director of Real Estate or the Treasurer of Lessor or the designee of
         either, setting forth the amount due to Lessor by reason of the
         occurrence of an Event of Default by Lessee hereunder, and (ii) in
         whole, upon the presentation of a sight draft accompanied by a
         certificate signed by either the Managing Director of Real Estate or
         the Treasurer of Lessor or the designee of either, stating either that
         (a) Lessor has terminated this Lease by reason of the occurrence of an
         Event of Default by Lessee hereunder, or (b) the Lease Term has more
         than thirty (30) days remaining and such Letter of Credit will expire
         within thirty (30) days of such certificate and Lessee has not
         deposited a substitute Letter of Credit in the form, amount and issued
         by a bank as required by this Section. Lessee shall deposit the
         original Letter of Credit with Lessor.

         So long as MIT is the Lessor, any Cash Security held by Lessor pursuant
         to this section

                                   36
<PAGE>

         may be commingled with Lessor's other funds, provided that, at any
         time MIT is not the Lessor, any Cash Security shall be held in a
         segregated interest bearing account. Lessor shall pay interest on
         the Cash Security to Lessee annually at the rate of 4% per year
         within ninety (90) days after the end of each fiscal year of the
         Lessor. Unless Lessee elects to deliver to Lessor the entire
         Security Deposit in the form of Cash Security, then during the Lease
         Term (including the Extension Term, if any) Lessee will keep the
         Letter of Credit in full force and in compliance with the provisions
         of this Lease.

         Lessor shall assign the Security Deposit to any transferee of the
         Building from Lessor who takes title to the Building subject to this
         Lease (or, in the case of the Letter of Credit, assign and deliver the
         original Letter of Credit to such transferee) and thereafter Lessor
         shall have no further responsibility therefor. Upon the expiration (or
         earlier termination) of the Term of this Lease, Lessor shall inspect
         the Premises, make such deductions from the Security Deposit as may be
         required to cure any default by Lessee hereunder, and, if Lessee is not
         then in default hereunder, pay the balance of the Cash Security (or
         return the original Letter of Credit, as the case may be) to Lessee
         within twenty (20) days of such expiration or termination. If Lessee is
         in default at the time of such expiration or termination, the Lessor
         shall be entitled to retain so much of the Security Deposit as Lessor
         reasonably estimates to be Lessee's liability to Lessor under this
         Lease and shall pay the balance, if any, to Lessee within such 20-day
         period.

         In the event that Lessor transfers the Premises to any transferee who
         takes title to the Premises subject to this Lease and the bank issuing
         the Letter of Credit does not consent to the transfer of any beneficial
         interest in the Letter of Credit to such transferee or issue a
         replacement Letter of Credit in identical form to such transferee, then
         Lessor may draw on the Letter of Credit and the proceeds shall be held
         and applied as Cash Security under this Section.

         In the event that Lessor draws upon and applies or retains any portion
         or all of the proceeds of the Letter of Credit, or applies all or any
         portion of the Cash Security, towards the cure of an Event of Default
         by Lessee hereunder or towards damages payable by Lessee to Lessor by
         reason of the occurrence of an Event of Default by Lessee hereunder,
         Lessee shall pay to Lessor, as Additional Rent, the amount so expended
         by Lessor within ten (10) business days of notice given by Lessor so
         that at all times (subject to the 10-business day grace period herein
         referenced) Lessor shall be entitled to draw down upon the full
         aggregate amount of the Letter of Credit (or hold the full Cash
         Security, or some combination thereof) required to be deposited with
         Lessor hereunder. Any failure of Lessee to deliver to Lessor the Cash
         Security or Letter of Credit as prescribed herein or to restore any
         amount drawn under the Letter of Credit or expended from the Cash
         Security within the time and manner specified in this Section shall
         constitute an Event of Default under the Lease and entitle Lessor to
         immediately draw down the Letter of Credit then in force or effect and
         Lessor shall retain such cash amounts (or the Cash Security, as
         appropriate) as a Security Deposit pursuant to the provisions of

                                     37
<PAGE>

         this Section.

         Lessee shall be solely responsible for the payment of all costs
         associated with obtaining, replacing (as necessary), transferring,
         extending and maintaining the Letter of Credit in accordance with the
         terms of this Section.

24.0     NOTICE OF LEASE; ESTOPPEL CERTIFICATES. Lessor and Lessee agree that
         this Lease shall not be recorded. However, upon the request of either
         party, Lessor and Lessee shall execute and acknowledge a Notice of
         Lease in mutually acceptable and recordable form. Furthermore, at such
         time as the Commencement Date has been established, upon the request of
         either party Lessor and Lessee shall execute and acknowledge an
         appropriate amendment to such Notice of Lease (specifying the
         Commencement Date) in recordable form.

         From time to time during the Term, and without charge, either party
         shall, within fifteen (15) business days of request by the other party,
         certify by written instrument duly executed and acknowledged, to such
         other party or to any person specified in the request by such other
         party, regarding (a) the existence of any amendments or supplements to
         this Lease; (b) the validity and force and effect of this Lease; (c)
         the existence of any default; (d) the existence of any offsets,
         counterclaims or defenses; (e) the Commencement Date and the expiration
         date of the Term; (f) the amount of Rent due and payable and the date
         to which Rent has been paid; and (g) any other matter reasonably
         requested.

25.0     HOLDING OVER. If Lessee occupies the Premises after the day on which
         the Term expires (or the effective date of any earlier termination as
         herein provided) without having entered into a new lease thereof with
         Lessor, Lessee shall be a Lessee-at-sufferance only, subject to all of
         the terms and provisions of this Lease at 150% of the rate of the Basic
         Rent in effect on the last day of the Term. Such a holding over, even
         if with the consent of Lessor, shall not constitute an extension or
         renewal of this Lease.

26.0     LESSOR'S AGREEMENTS REGARDING ENVIRONMENTAL MATTERS. Lessor agrees to
         provide to Lessee copies of information presently in its possession and
         which it hereafter obtains regarding the compliance of the Land and
         Building with Legal Requirements relating to Hazardous Materials;
         provided that Lessor makes no representation concerning the accuracy of
         completeness of such information. Lessor agrees to remediate in
         compliance with Legal Requirements any release of Hazardous Materials
         on the Land or in the Building existing prior to the Commencement Date
         unless caused by the actions of the Lessee or its agents.

27.0     FORCE MAJEURE. Neither Lessor nor Lessee shall be deemed to be in
         default hereunder (and the time for performance of any of their
         respective obligations hereunder other than the payment of money shall
         be postponed) for so long as the performance of such obligation

                                     38
<PAGE>

         is prevented by strike, lock-out, act of God, absence of materials or
         any other matter not reasonably within the control of the party which
         must perform the obligation (collectively, "Force Majeure").

28.0     ENTIRE AGREEMENT. No oral statement or prior written matter shall have
         any force or effect. This Agreement shall not be modified or canceled
         except by writing subscribed to by all parties.

29.0     APPLICABLE LAW, SEVERABILITY AND CONSTRUCTION. This Lease shall be
         governed by and construed in accordance with the laws of Massachusetts
         and, if any provisions of this Lease shall to any extent be invalid,
         the remainder of this Lease, and the application of such provisions in
         other circumstances, shall not be affected thereby. The titles of the
         several Sections contained herein are for convenience only and shall
         not be considered in construing this Lease. Whenever the singular is
         used and when required by the context it shall include the plural, and
         the neuter gender shall include the masculine and feminine. The
         Exhibits attached to this Lease are incorporated into this Lease by
         reference. This Lease may be executed in several counterparts, each of
         which shall be an original, but all of which shall constitute one and
         the same instrument. The term "LESSOR" whenever used herein, shall mean
         only the owner at the time of Lessor's interest herein, and no covenant
         or agreement of Lessor, express or implied, shall be binding upon any
         person except for defaults occurring during such person's period of
         ownership nor binding individually upon any agent, fiduciary,
         shareholder, officer, director or partner of Lessor, and the liability
         of Lessor, in any event, shall be limited to Lessor's interest in the
         Building. If more than one person or entity executes this Lease as
         Lessee, the Lessee's obligations hereunder shall be the joint and
         several obligation of such persons or entities. Unless repugnant to the
         context, "LESSOR" and "LESSEE" mean the person or persons, natural or
         corporate, named above as Lessor and as Lessee respectively, and their
         respective heirs, executors, administrators, successors and assigns.

30.0     SUCCESSORS AND ASSIGNS. The terms, covenants and conditions of this
         Lease shall run with the Land, and be binding upon and inure to the
         benefit of Lessor and Lessee and their respective successors and
         permitted assigns.

31.0     AUTHORITY. Contemporaneously with the signing of this Lease, Lessee
         shall furnish to Lessor a certified copy of the resolution of the Board
         of Directors or Managers of Lessee authorizing Lessee to enter into
         this Lease and authorizing the person executing this Lease on behalf of
         Lessee to do so.

         WITNESS the execution hereof under seal as of the day and year first
above written.

         LESSOR:                        MASSACHUSETTS INSTITUTE OF
                                        TECHNOLOGY

                                      39
<PAGE>

                                        By:
                                           --------------------------------
                                           Steven C. Marsh, its
                                           Managing Director of Real Estate

         LESSEE:                           Transkaryotic Therapies, Inc.

                                        By:
                                           --------------------------------
                                           Daniel E. Geffken,
                                           Vice President Finance and
                                           Chief Financial Officer

                                   40
<PAGE>

                                    EXHIBIT A

                              PLAN OF THE PREMISES

                                 (see attached)

                   (Plan of the premises atached depicts the
                         physical plan of the premises)

                                       41
<PAGE>

                                    EXHIBIT B

                             DESCRIPTION OF THE LAND

         The land in Cambridge Massachusetts known as 28 Osborn Street more
fully described as follows:

         PARCEL NO. 1. A certain parcel of vacant land situated in said
Cambridge on the southerly side of Main Street bounded as follows: Beginning at
a point on the southerly side of Main Street distant westerly from the junction
of said southerly side of Main Street with the westerly side of Portland Street,
89.4 feet; thence running westerly and bounded northerly by said Main Street,
172 feet; thence turning and running southerly bounded westerly by a right of
way as shown on a plan hereinafter referred to, 300 feet; thence turning and
running easterly, bounded southerly by land now or formerly of the Allen &
Endicott Building Company, 172 feet; thence turning and running northerly by the
center line of a certain spur track as shown on said plan and bounded easterly
by land now or formerly of the H.B. Smith Company, 300 feet; containing
approximately 51,600 square feet of land; all as shown on a land entitled "Plan
of Premises sold from the estate of the Allen & Endicott Building Co.", E.E.
Bowker, Engineer and Surveyor, dated September 13, 1919, and duly recorded with
Middlesex South District Registry of Deeds, Plan Book 276, Plan 32.

         PARCEL NO. 2. A certain parcel of vacant land situated in said
Cambridge on the northwesterly side of Albany Street, being marked "Lot B" on a
plan of land in said Cambridge, dated November 25, 1927, and recorded with said
Deeds, Book of Plans 407, Page 5, on December 2, 1927, bounded and described as
follows: Southeasterly by said Albany Street, by two lines forty-three and
20/100 (43.20) feet and two hundred twelve and 66/100 (212.66) feet; and
Westerly by land now or formerly of Isaac Kaplan, Trustee, one hundred
seventy-one and 20/100 (171.20) feet; Northerly by lot marked "A" on said plan,
being in part by the end of a twenty (20) foot passageway, thirty-two and 66/100
(32.66) feet; Westerly again by said lot marked "A", being the easterly line of
said passageway, one hundred twenty-seven and 10/100 (127.10) feet; Northerly by
land now or formerly of Midvale Cambria Company, one hundred seventy-two (172)
feet; and Easterly by the center line of a spur track, at land now or formerly
of H.B. Smith Company, one hundred forty-four and 04/100 (144.04) feet;
containing approximately 41,365 square feet of land.

         PARCEL NO. 3. A certain parcel of land situated at 640 Main Street,
Cambridge, Massachusetts, bounded and described as follows:

         NORTHERLY         by said Main Street, eighty-nine and 40/100 (89.40);
                           feet;

         EASTERLY and      by Portland Street by two courses two hundred
         SOUTHEASTERLY     thirty and 87/100 (230.87) feet, and two hundred
                           thirty-seven and

                                    42
<PAGE>

                           78/100 (237.78) feet; and

         WESTERLY          by land now or formerly of Allen & Endicott Building
                           Company four hundred forty-four and 52/100 (444.52)
                           feet;

being shown on a plan of premises sold from the estate of Allen & Endicott
Building Company, E.F. Bowker, Engineer and Surveyor, July 7, 1919 and filed in
Plan Book Vol. 302, Page 21 at Middlesex South Registry of Deeds, containing
33,809 square feet of land accordingly to said plan.

         PARCEL NO. 4. The land with the buildings thereon situated in
Cambridge, Middlesex, County, Massachusetts, and being shown as Lot A and the
Lot lying to the South of said Lot A, as shown on plan entitled "Plan of Land in
Cambridge, Mass.", dated November 25, 1927, and recorded with the Middlesex
South District Registry in Book of Plans 407, Plan 5, bounded and described as
follows:

         NORTHERLY         by Main Street, one hundred forty-one and 2/100
                           (141.02) feet;

         WESTERLY          by Osborne Street, six hundred seventy-eight and
                           71/100 (678.71) feet

         SOUTHEASTERLY     by Albany Street, one hundred thirty-five and 13/100
                           (134.13) feet;

         EASTERLY          By Lot B as shown on the aforesaid plan, one hundred
                           seventy-one and 20/100 (171.20) feet;

         SOUTHERLY         by the same, thirty-two and 66/100 (32.66) feet; and

         EASTERLY          again by the same and by land now or formerly of
                           General Latex and Chemical Corp., four hundred
                           twenty-seven and 10/100 (427.10)feet; containing
                           83,178 square feet of land, more or less.

See also a plan entitled "Plan of Premises in Cambridge, surveyed for Alan and
Endicott, Trs." dated December 22, 1924, recorded with said Deeds in Plan Book
346, Plan 50 and refer to a deed recorded with said Deeds in Book 5047, Page
151.

                                 43
<PAGE>

                                    EXHIBIT C

                                   WORK LETTER

         This Work Letter is incorporated by reference into the Lease dated
August 4, 2000, by and between Massachusetts Institute of Technology, as Lessor,
and Transkaryotic Therapies, Inc., as Lessee. Terms defined in or by reference
in the Lease not otherwise defined herein shall have the same meaning herein as
therein.

1.       ADDITIONAL DEFINITIONS.  Each of the following terms shall have the
         meaning stated immediately after it:

                  COMMENCEMENT DATE.  The first to occur of:

                  (i)      six months after the date on which Lessor has
                           "substantially completed" Lessor's Work within the
                           tenantable area of the interior of the Building or a
                           portion thereof as described below and made such area
                           available to Lessee for the completion of Lessee's
                           Work ("Lessor's Delivery Date"), or

                  (ii)     the date on which Lessee first conducts its business
                           in the Premises or a portion thereof, or

                  (iii)    the date determined pursuant to Paragraph 8 of this
                           Work Letter.

                  If Lessor has completed Lessor's Work for a substantial
                  portion but less than all of the Premises and such portion may
                  reasonably be occupied by the Lessee for the Permitted Use
                  independently of the remaining portion, the Commencement Date
                  shall occur six months after such portion has been made
                  available to the Lessee for the completion of Lessee's Work
                  therein, and Basic Rent shall be prorated as set forth in
                  Section 4.1. If the Premises are delivered in two portions,
                  subparagraphs (i) (ii) and (iii) shall apply independently to
                  each portion. For the purposes of determining the expiration
                  date of the Initial Term and the earliest date on which
                  Lessee's existing lease at 230 Albany Street may be
                  terminated, the Commencement Date shall be deemed to be
                  Commencement Date for the portion last delivered.

                  CONSTRUCTION AUTHORIZATIONS. Collectively, all permits,
                  licenses and other consents and approvals required from any
                  governmental authority for the construction of Lessee's Work.

                  LESSEE'S GENERAL CONTRACTOR. A general contractor selected by
                  Lessee and approved in writing by Lessor, who will be engaged
                  by Lessee to construct Lessee's Work.

                                      44
<PAGE>

                  LESSOR'S DELIVERY DATE.  As defined above in this Paragraph 1.

                  LESSOR'S GENERAL CONTRACTOR. A general contractor selected by
                  Lessor engaged to construct Lessor's Work.

                  LESSOR'S WORK. The work shown on the Lessor's Working Drawings
                  to be performed by Lessor in connection with the completion of
                  the Premises as shown on SCHEDULE 1 to this Work Letter
                  entitled "Shell/Core Tenant Improvements Responsibility
                  Matrix" which plans shall be subject to Lessee's review and
                  approval not to be unreasonably withheld. Lessee has approved
                  the plans identified on Exhibit G to the Lease.

                  LESSEE'S WORK. All improvements, alterations and additions
                  which Lessee wishes to make to the Premises as part of the
                  initial preparation thereof for Lessee's occupancy and shall
                  include the items of work for which Lessee is made responsible
                  on SCHEDULE 1.

                  LESSOR'S CONTRIBUTION. The amount to be provided by Lessor to
                  Lessee in reimbursement of costs and expenses incurred by
                  Lessee in performing Lessee's Work, which amount shall not
                  exceed $37.50 per square foot of Rental Area of the Premises.

                  SPACE PLAN. A plan showing the general layout of the Premises,
                  including circulation elements and the location of primary
                  function areas, to be prepared by the Lessee.

                  LESSEE'S WORKING DRAWINGS. The working drawings and
                  specifications for Lessee's Work, to be prepared by Lessee and
                  Lessee's architect in accordance with this Work Letter.
                  Lessee's Working Drawings shall be prepared in compliance with
                  all applicable Legal Requirements and stamped by registered
                  Massachusetts professionals, and shall consist of all
                  architectural and engineering plans and specifications which
                  are required to finish the Premises or to obtain any
                  Construction Authorization required therefor.

                  LESSOR'S WORKING DRAWINGS. The working drawings and
                  specifications for Lessor's Work, to be prepared by Lessor and
                  Lessor's architect in accordance with this Work Letter.
                  Lessor's Working Drawings shall be prepared in compliance with
                  all applicable Legal Requirements and stamped by registered
                  Massachusetts professionals, and shall consist of all
                  architectural and engineering plans and specifications which
                  are required to perform Lessor's Work or to obtain any
                  Construction Authorization required therefor.

2.       PREPARATION OF THE PREMISES. Lessor shall, at its sole cost and
         expense, perform Lessor's

                                      45
<PAGE>

         Work. Lessor shall give written notice to Lessee approximately
         thirty (30) days in advance of Lessor's anticipated substantial
         completion of Lessor's Work, and Lessee shall have the right to
         inspect Lessor's Work to confirm that the same has been completed in
         accordance with the requirements of this Work Letter. Lessee shall
         perform Lessee's Work at Lessee's sole cost and expense, subject to
         the payment by Lessor of Lessor's Contribution as hereinbelow
         provided.

         Lessee shall have the right to defer the performance of Lessee's Work
         for up to twenty thousand square feet of the Premises for a period of
         two years after the Commencement Date without losing its right to
         receive Lessor's Contribution with respect to such space; provided
         however that Lessee shall install window blinds and make such other
         improvements to the unimproved space as may be necessary so that it
         presents the same appearance from the exterior of the Building as the
         space which has been improved and occupied. If Lessee has not directed
         Lessor to commence the improvement of the unimproved space prior to the
         end of the two year period, Lessee's right to receive Lessor's
         contribution with respect to such space shall terminate.

         Lessor shall obtain from Lessor's General Contractor a guaranty against
         construction defects for a period of not less than one (1) year.

         Lessor agrees that, if Lessee is unable to occupy the Premises six (6)
         months after Lessor's Delivery Date has occurred as described in
         Paragraph 1 of this Work Letter because of a failure by Lessor to
         complete one or more items of Lessor's Work reasonably necessary for
         such occupancy, the Commencement Date shall be deferred until the
         completion of such items of Lessor's Work. If the Premises are
         delivered in two portions as described in Paragraph 1, the preceding
         sentence shall apply independently to each portion except as set forth
         in that paragraph. Lessor agrees further that, if Lessor's Work has not
         been completed in its entirety by January 1, 2003, unless caused by a
         Lessee Delay, Lessee shall have the right to terminate this Lease
         without other recourse against the Lessor.

3.       INSURANCE. Prior to the commencement of any design work on Lessee's
         Work, Lessee shall provide to Lessor an original certificate of
         insurance, in customary form, for each architect and engineer retained
         by Lessee in connection with the design and/or construction of Lessee's
         Work, which certificate shall evidence a current "errors and omissions"
         insurance policy as in effect, in an amount reasonably acceptable to
         Lessor. Prior to the commencement of the construction of Lessee's Work,
         Lessee shall provide to Lessor an original certificate of insurance for
         Lessee's General Contractor (or, if no general contractor is used, each
         trade contractor) employed by Lessee in connection with the
         construction of Lessee's Work, which certificate shall evidence a
         current general liability insurance policy as in effect, in an amount
         reasonably acceptable to Lessor, naming Lessor as an additional
         insured.

4.       SPACE PLAN. Within 90 days after the execution and delivery of this
         Lease Agreement, Lessee shall prepare and deliver the Space Plan to
         Lessor. Lessor shall review the Space

                                      46
<PAGE>

         Plan and meet with Lessee within 15 days of Lessor's receipt
         thereof. In the event that Lessor determines the Space Plan to be
         incomplete or inconsistent with the base building design, Lessor
         will return the Space Plan to Lessee for corrections and/or
         revisions. Lessee shall deliver a corrected Space Plan to Lessor at
         Lessee's sole cost and expense within 15 days after return thereof
         by Lessor. Upon mutual approval of the Space Plan, Lessee will cause
         the preparation of Lessee's Working Drawings to commence.

5.       LESSEE'S WORKING DRAWINGS. Lessee shall select an architect to prepare
         architectural working drawings, which architect shall be subject to
         Lessor's reasonable approval. Lessee shall use the MEP engineers
         designated by Lessor to prepare those portions of the Lessee's Working
         Drawings. Lessee shall deliver the schematic design component of
         Lessee's Working Drawings to Lessor not later than December 1, 2000 and
         the design development component of Lessee's Working Drawings not later
         than March 1, 2001. Lessor shall review Lessee's Working Drawings and
         give Lessee written notice within ten (10) days of receipt thereof
         either that (i) it approves the Working Drawings, or (ii) it
         disapproves the Working Drawings, together with a written list of
         required modifications. If Lessor desires that all or any components of
         Lessee's Work be removed upon the expiration or earlier termination of
         the Term, Lessor shall so inform Lessee in such written notice. Lessee
         shall be solely responsible for the preparation and completion of all
         preliminary and final Lessee's Working Drawings.

         Lessee shall revise the preliminary Lessee's Working Drawings to
         incorporate the corrections and modifications requested by Lessor and
         shall submit final Working Drawings to Lessor for its approval within
         thirty (30) days after its receipt of the list of corrections and
         modifications from Lessor. Lessor shall review the final Working
         Drawings and, within fifteen (15) business days after receipt thereof,
         Lessor shall either (a) notify Lessee that Lessor has approved the
         final Working Drawings, or (b) provide to Lessee a list of corrections
         and modifications which Lessor requires to be made to the Working
         Drawings. Lessor shall also provide to Lessee within such 15-business
         day period a supplementary list of those elements of Lessee's Work
         which Lessee must remove at the expiration or earlier termination of
         this Lease (if any). In the event Lessor returns the final Working
         Drawings to Lessee for further correction or modification, Lessee shall
         diligently correct the Working Drawings and re-submit them to Lessor
         for approval pursuant to the preceding provisions of this paragraph
         including the period of time within which the Working Drawings must be
         submitted. No work shall be performed until final Lessee's Working
         Drawings have been approved in writing by Lessor.

         The review and/or approval by Lessor or its architect or engineers of
         any plans, sketches or Working Drawings submitted by Lessee relating to
         Lessee's Improvements shall not (i) constitute an opinion or
         representation by Lessor that the same are in compliance with all
         applicable Legal Requirements and the provisions of all applicable
         insurance policies or as to the feasibility of constructing the work
         shown thereon, or (ii) impose on Lessor any responsibility for a design
         defect, it being agreed that all such responsibility shall remain

                                      47
<PAGE>

         solely with Lessee.

         Lessee shall reimburse Lessor, promptly upon demand therefor, for all
         costs and expenses reasonably incurred by Lessor in reviewing any
         plans, drawings and specifications submitted by Lessee pursuant to this
         Work Letter, which reimbursement shall be due and payable as Additional
         Rent.

6.       LESSEE'S GENERAL CONTRACTOR. Lessee shall obtain the prior reasonable
         written approval of Lessor as to Lessee's General Contractor.

7.       LESSEE'S WORK. Lessee shall be solely responsible for obtaining all
         Construction Authorizations required for Lessee's Work. Lessee shall
         apply for and maintain in full force and effect (or cause Lessee's
         General Contractor to apply for and so maintain) all Construction
         Authorizations required for the construction of Lessee's Work, and upon
         completion of Lessee's Work shall obtain a certificate of occupancy for
         the Premises from the appropriate governmental authority. Lessee shall
         deliver to Lessor a copy of said certificate of occupancy promptly
         after receiving the same.

         Promptly after receiving all Construction Authorizations required for
         Lessee's Work, Lessee shall cause Lessee's General Contractor to
         commence construction and diligently to proceed to completion thereof.
         All construction shall be performed in a good and workmanlike manner,
         using new materials and in compliance with the Working Drawings, the
         Construction Authorizations, all Legal Requirements, and the provisions
         of all applicable insurance policies.

         Lessee shall pay promptly for all labor and materials supplied to
         Lessee in connection with Lessee's Work, shall not cause or permit any
         liens for such labor or materials to attach to the Premises, and shall
         bond or discharge any such lien which may be filed or recorded within
         fifteen (15) days after Lessee receives actual notice of such filing or
         recording.

         The construction of Lessee's Work shall be subject to the requirements
         set forth in Section 11.0(f) of the Lease. Lessor may inspect such work
         at any time or times and shall promptly give notice to Lessee of any
         observed defects. Lessee shall indemnify, defend and hold harmless
         Lessor from and against any and all liability, damage, penalties or
         judgments and from and against any claims, actions, proceedings and
         expenses and costs in connection therewith, including reasonable
         attorneys' fees, arising out of or resulting from the design or
         construction of Lessee's Work.

         Lessee shall obtain from Lessee's General Contractor a guaranty against
         construction defects for a period of not less than one (1) year.

8.       LESSEE'S DELAYS. Notwithstanding the definition of "Commencement Date"
         set forth in Paragraph 1 above, if Lessor is delayed in substantially
         completing the Premises as the

                                      48
<PAGE>

         result of the occurrence of any one or more of the following
         (collectively, "Lessee's Delays"):

                  (a)      delay in delivery by Lessee or its agents,
                           contractors, or consultants of the Space Plan or
                           Lessee's Working Drawings, or any other information,
                           plans, design work and detailed drawing beyond the
                           dates herein provided for such delivery, or

                  (b)      Lessee's changes to Lessee's Working Drawings
                           (notwithstanding Lessor's approval of such changes),
                           or

                  (c)      delays in performance by Lessee or any person
                           employed by Lessee which causes delays in the
                           completion of any work to be done by Lessor or which
                           shall otherwise delay the "substantial completion" of
                           the Premises, or

                  (d)      any fault, negligence, omission, or failure to act on
                           the part of Lessee or its agents, contractors,
                           workmen, mechanics or suppliers,

                  then the Commencement Date shall be the date on which Lessor
                  reasonably estimates the Premises would have been
                  "substantially complete" but for such occurrence.

9.       PAYMENT OF LESSOR'S CONTRIBUTION. Lessor shall make progress payments
         towards the cost of Lessee's work pro rata with payments made to
         Lessee's contractors by Lessee based on the estimated cost to complete
         Lessee's Work determined from time to time during the construction of
         Lessee's Work. (Thus, if the estimated cost of Lessee's Work is $60 per
         square foot of Rental Area, Lessor's share of each progress payment
         would be 62.5%) As a condition to Lessor's obligation to make a payment
         of Lessor's Contribution, Lessee shall furnish to Lessor: (i) a
         certificate from Lessee's architect on form AIA G702 indicating the
         portion of Lessee's Work completed as of the date stated in Lessee's
         request for payment is in accordance with the Working Drawings and
         indicating that the construction of the work is progressing in
         accordance with the applicable schedule and the estimated cost of
         completion of Lessee's Work (Architect's Certificate") and (ii) partial
         lien waivers from Lessee's General Contractor and any major
         subcontractors covering all work completed and requisitioned as of the
         date of Lessee's request for payment, subject to payment for all unpaid
         and requisitioned work ("Lien Waivers"). Payment will be made within
         ten (10) days of Lessee's request for payment together with the
         Architect's Certificate and Lien Waivers.

10.      LESSEE'S ACCESS TO THE PREMISES. Lessee and Lessee's agents, at
         Lessee's sole risk, may, with Lessor's prior consent (which consent
         shall not be unreasonably withheld or delayed), enter the Premises
         prior to the completion of Lessor's Work in order to do such

                                      49
<PAGE>

         work as may be required to make the Premises ready for Lessee's use and
         occupancy thereof. If Lessor permits such entry, such permission shall
         be conditioned upon Lessee and Lessee's agents, contractors, workmen,
         mechanics, suppliers and invitees, working in harmony with Lessor and
         the general contractor and with other Lessees and occupants of the
         Building. If at any time such entry shall cause or threaten to cause
         disharmony or otherwise interfere with the orderly completion or
         operation of the Building, Lessor shall have the right to withdraw such
         permission upon twenty-four (24) hours written notice to Lessee. Any
         such entry into and occupation of the Premises shall be deemed to be
         under all of the terms, covenants, conditions and provisions of this
         Lease except the covenant to pay Rent. Lessor shall not be liable in
         any way for any injury, loss or damage which may occur to any of
         Lessee's work and installations made in the Premises or to properties
         placed therein during construction of the Premises, the same being at
         Lessee's sole risk.

11.      LESSOR'S AND LESSEE'S REPRESENTATIVES. Prior to the commencement of any
         design work for the Premises, each party hereto shall designate in
         writing to the other a person as "Lessor's Representative" and
         "Lessee's Representative" respectively. Each party may rely on the
         other's Representative with respect to all matters which pertain to
         this Work Letter (including, but not limited to, authorizing changes in
         the work or the use of overtime, or interpreting the Working Drawings),
         each party having authorized its Representative to make decisions
         binding upon such party with respect to such matters.

12.      POSSESSION BY LESSEE. Subject to Lessee's right to bring claims under
         the warranty of the General Contractor referred to in Section 2 of this
         Work Letter and any warranties provided by subcontractors which Lessor
         agrees to assign to Lessee as lessee of the entire building, all of
         Lessor's Work shall be deemed to be accepted by Lessee except for such
         items as are specified in a written notice given by Lessee to Lessor
         not later than thirty (30) days after the date on which Lessee takes
         possession of the Premises except for (i) latent defects not reasonably
         discoverable within such 30-day period, and (ii) defects which are not
         reasonably discoverable during such 30-day period because of the
         seasonal impact of the defect. Lessor shall correct the items set forth
         in such notice as soon as practicable, and in all events within thirty
         (30) days after such notice.

13.      UNION CONTRACTORS AND SUBCONTRACTORS REQUIRED. All general contractors
         and subcontractors selected to perform work under this Work Letter must
         be union contractors.

14.      GENERAL. A breach by Lessee of any provision of this Work Letter shall
         constitute a default under the Lease, for which Lessor shall have all
         remedies therein provided.

                                      50
<PAGE>

                                    EXHIBIT D

                      SERVICES PROVIDED BY BUILDING MANAGER

This Exhibit is incorporated by reference into the Lease dated August 4, 2000,
by and between Massachusetts Institute of Technology, as Lessor, and
Transkaryotic Therapies, Inc., as Lessee. Terms defined in or by reference in
the Lease not otherwise defined herein shall have the same meaning herein as
therein.

Lessor shall provide the following services at the Building unless Lessee elects
to manage the Building as permitted by Section 21 of the Lease Agreement in
which event Lessee shall be responsible to provide such services to itself and
any sublessees.:

1.       Heating and air conditioning services for the Premises as demised at
         the start of the Term for normal office operations between the hours of
         8:00 a.m. and 6:00 p.m., Monday through Friday, except on national or
         state holidays. Excluded from such services are air conditioning
         requirements for computers or other exceptional office machinery. If
         Lessee requires air conditioning or heating services at hours other
         than those set forth above, Lessor shall provide such service, and
         Lessee shall pay Lessor's costs to furnish such service as Additional
         Rent.

2.       Maintenance of the following: all Building heating equipment,
         electrical equipment, and plumbing systems in public areas only; all
         Building air conditioning equipment, excluding special air conditioning
         equipment; all window frames and glass, unless the damage to any of the
         above is caused by the willful neglect or misuse by Lessee.

3.       Nightly (Monday-Friday) cleaning of the public corridors, stairwells,
         lobbies, bathrooms; and cleaning of the windows, both inside and out,
         two (2) times per year.

4.       Extermination of all public and tenanted areas of the Building, as the
         management of the Building deems necessary.

5.       Structural maintenance of the Premises including repairs to the roof,
         exterior walls of the building and structural damage to the floors.

6.       landscaping maintenance, maintenance of the Parking Area (except for
         snow removal), and other services as deemed necessary by Lessor for the
         normal operation of the Building and the Land

7.       Security for the Building as reasonably determined by Lessor.

                                      51
<PAGE>

                                    EXHIBIT E

                           SERVICES PROVIDED BY LESSEE

         This Exhibit is incorporated by reference into the Lease dated August
4, 2000, by and between Massachusetts Institute of Technology, as Lessor, and
Transkaryotic Therapies, Inc., as Lessee. Terms defined in or by reference in
the Lease not otherwise defined herein shall have the same meaning herein as
therein.

         Lessee shall provide and pay for all maintenance of and repairs to the
Premises necessary to keep the Premises in good condition or in as good a
condition as the Premises were at the beginning of the Term or may be put in
thereafter (damage from taking or casualty or reasonable wear and tear only
excepted). Such repairs and maintenance shall include but not be limited to the
following:

         A.       The maintenance and repair of any plumbing systems within the
                  Premises (and serving solely the Premises), and the repair of
                  any damage to the Premises or to the Building caused by the
                  malfunction of such plumbing systems;

         B.       The maintenance and repair of all electrical wiring, outlets,
                  switches and light fixtures within the Premises (and serving
                  solely the Premises);

         C.       The maintenance and repair of all hardware within the
                  Premises;

         D.       The maintenance and repair of all walls, doors, ceilings, and
                  floors.

         E.       The replacement of fluorescent light tubes and ballasts. This
                  service is available through Building management on a time and
                  materials basis.

                                      52
<PAGE>

                                    EXHIBIT F

                              PERMITTED FLOOR LOAD

                     (Sheet attached depicts the permitted
                          floor load of the Premises)

                                      53

<PAGE>

                                    EXHIBIT G

            SCHEDULE OF LESSOR'S WORKING DRAWINGS APPROVED BY LESSEE

                                 (see attached)

                (Schedule attached depicts the Lessor's working
                         drawings as approved by Lessee)

                                       54<PAGE>

                                                                    Exhibit 10.6

                       FIRST AMENDMENT TO RIGHTS AGREEMENT
             AND CERTIFICATION OF COMPLIANCE WITH SECTION 27 THEREOF

         This Amendment, dated as of October 28, 2000 (the "AMENDMENT"), to the
Rights Agreement, dated as of February 24, 1996 (the "AGREEMENT"), between Basin
Exploration, Inc., a Delaware corporation (the "COMPANY"), and Corporate Stock
Transfer, Inc. (the "RIGHTS AGENT"). Capitalized terms used in this Amendment
without definition shall have the respective meanings ascribed to them in the
Agreement.

         Pursuant to Section 27 of the Agreement, this Amendment is being
executed by the Company and the Rights Agent for the purpose of amending the
Agreement as set forth below:

         The Agreement is hereby amended as follows:

         1.       Section 1(a) shall be amended by inserting "(i)" following the
phrase "Notwithstanding the foregoing," and inserting the following at the end
of the sentence beginning with such phrase::

                  "and (ii) neither Stone Energy Corporation, a Delaware
                  corporation ("ACQUIROR"), or Partner Acquisition Corp., a
                  Delaware corporation ("MERGER SUB"), or any Affiliates or
                  Associates of Acquiror or Merger Sub, shall be an Acquiring
                  Person solely by virtue of (A) the execution of the Agreement
                  and Plan of Merger, dated as of October 28, 2000 (the "MERGER
                  AGREEMENT"), by and among Acquiror, Merger Sub and the
                  Company, (B) the acquisition of Common Shares of the Company
                  pursuant to the Merger (as defined in the Merger Agreement),
                  (C) the execution of the Company Voting Agreement, dated the
                  date of the Merger Agreement, among the Company, Acquiror and
                  the Company stockholders signatory thereto (the "COMPANY
                  VOTING AGREEMENT") or the Acquiror Voting Agreement, dated the
                  date of the Merger Agreement, among the Company, Acquiror and
                  the Acquiror stockholders signatory thereto (the "ACQUIROR
                  VOTING AGREEMENT"), or (D) the consummation of the Merger (as
                  defined in the Merger Agreement) or of the other transactions
                  contemplated in the Merger Agreement, the Company Voting
                  Agreement or the Acquiror Voting Agreement."

         2.       Section 1(s) shall be amended by inserting the following at
the end of the definition of "Shares Acquisition Date":

                  "Notwithstanding the foregoing, no Shares Acquisition Date
                  shall occur solely by reason of (A) the execution of the
                  Merger Agreement, (B) the acquisition of Common Shares of the
                  Company pursuant to the Merger (as defined in the Merger
                  Agreement), (C) the execution of the Company Voting Agreement
                  or the Acquiror Voting Agreement, or (D) the consummation of
                  the Merger (as defined in the Merger Agreement) or of the
                  other transactions contemplated in the Merger Agreement, the
                  Company Voting Agreement or the Acquiror Voting Agreement."

<PAGE>

         3.       Section 3(a) shall be amended by inserting the following at
the end of the subsection:

                  "Notwithstanding the foregoing or any provision to the
                  contrary in this Agreement, a Distribution Date shall not
                  occur solely by reason of (A) the execution of the Merger
                  Agreement, (B) the acquisition of Common Shares of the Company
                  pursuant to the Merger (as defined in the Merger Agreement),
                  (C) the execution of the Company Voting Agreement or the
                  Acquiror Voting Agreement, or (D) the consummation of the
                  Merger (as defined in the Merger Agreement) or of the other
                  transactions contemplated in the Merger Agreement, the Company
                  Voting Agreement or the Acquiror Voting Agreement."

         4.       Section 7(a) shall be amended by deleting the word "or"
immediately preceding clause (iii) thereto and replacing all of clause (iii) and
the text following clause (iii), with "(iii) at the Effective Time (as defined
in the Merger Agreement) or (iv) the time at which such Rights are exchanged as
provided in Section 24 hereof. The Company, upon having knowledge thereof, will
promptly notify the Rights Agent of the anticipated Effective Time."

         5.       Section 11(a)(ii) shall be amended by inserting the following
in the first parenthetical following the phrase "Flip In Event":

                  "; provided, however, that no Flip In Event shall occur solely
                  by reason of (A) the execution of the Merger Agreement, (B)
                  the acquisition of Common Shares of the Company pursuant to
                  the Merger (as defined in the Merger Agreement), (C) the
                  execution of the Company Voting Agreement or the Acquiror
                  Voting Agreement, or (D) the consummation of the Merger (as
                  defined in the Merger Agreement) or of the other transactions
                  contemplated in the Merger Agreement, the Company Voting
                  Agreement or the Acquiror Voting Agreement."

         6.       Section 13 shall be amended by inserting the following
subsection at the end thereof:

                  "(f) No event as described in Section 13(a)(i), (ii) or (iii)
                  shall occur solely by reason of (A) the execution of the
                  Merger Agreement, (B) the acquisition of Common Shares of the
                  Company pursuant to the Merger (as defined in the Merger
                  Agreement), (C) the execution of the Company Voting Agreement
                  or the Acquiror Voting Agreement, or (D) the consummation of
                  the Merger (as defined in the Merger Agreement) or of the
                  other transactions contemplated in the Merger Agreement, the
                  Company Voting Agreement or the Acquiror Voting Agreement."

         7.       This Amendment shall be deemed effective as of October 28,
2000 as if executed by both parties hereto on such date.

                                       2

<PAGE>

         8.       This Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.

         9.       This Amendment may be executed in any number of counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

         10.      Except as amended hereby, the Agreement shall remain in full
force and effect.

         The undersigned officer of the Company, being an appropriate officer of
the Company and authorized to do so by resolution of the Board of Directors of
the Company dated as of October 25, 2000, hereby certifies to the Rights Agent
that these amendments are in compliance with the terms of Section 27 of the
Agreement.

                                       3

<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and attested, all as of the day and year first above written.

                                            BASIN EXPLORATION, INC.

                                            By:  _______________________________
                                                 Name:
                                                 Title:

ATTEST:

By:  _________________________________________
     Name:  Howard L. Boigon
     Title: Vice President, General Counsel
            And Secretary

                                            CORPORATE STOCK TRANSFER, INC., as
                                            Rights Agent

                                            By:  _______________________________
                                                 Name:
                                                 Title:

ATTEST:

By:  _______________________________________
     Name:
     Title:

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