LEASE

Exhibit 10.3

LEASE

THIS INDENTURE OF LEASE (“Lease”) made and entered into as of July 1, 2005, by and between T.K.J. ASSOCIATES, L.L.C. , a Connecticut limited liability company having an address at No. 1 Selden Avenue, Branford, Connecticut 06405, hereinafter referred to as Landlord; and CURAGEN CORPORATION , a Delaware corporation having an office at 322 East Main Street, Branford, Connecticut 06405, hereinafter referred to as Tenant.

WITNESSETH :

WHEREAS, Landlord and Tenant are parties to that certain lease dated May 29, 1998, amended October 12, 1999 and further amended April 23, 2002 (the “Amended Lease”), pursuant to which Amended Lease Tenant is leasing space on the first, second and third floors of Landlord’s building located at 322 East Main Street, Branford, Connecticut (the “Building”), and warehouse space at 10 Sylvia Street, Branford, Connecticut (the “Warehouse”) collectively the leased space is sometimes referred to herein as the “leased premises” or “Demised Premises”; and

WHEREAS, the current term of the Lease including all options to renew expires on May 31, 2006, and Landlord and Tenant have agreed to modify the term of the lease; and

WHEREAS, Landlord and Tenant desire and intend that the terms and provisions of this Lease shall hereafter apply to and govern the leasing of all the space at 322 East Main Street and 10 Sylvia Street, Branford, Connecticut, and replace and supersede the Amended Lease;

NOW, THEREFORE, the parties hereto, and for their successors and assigns, hereby covenant and agree as follows:

1. Lease . Landlord and Tenant hereby agree that the terms and provisions of this Lease replace and supersede the terms and provisions of the Amended Lease, that the leasing of all space at 322 East Main Street and 10 Sylvia Street, Branford, Connecticut is and shall be governed by this Lease from July 1, 2005 forward and the Amended Lease is hereby canceled in its entirety as of midnight June 30, 2005. Notwithstanding the foregoing, each party shall continue to remain liable for all payments past due and the performance of any obligations remaining unperformed under the Amended Lease as of the date of this Lease and continuing through June 30, 2005.

2. Leased Premises . In consideration of the rent and covenants herein reserved and contained on the part of the Tenant to be paid, performed and observed, the Landlord does hereby lease, demise, and let unto the Tenant and the Tenant does hereby hire from the Landlord upon the terms, provisions, covenants and conditions hereinafter set forth: (a) the entire first (1 ^st ) and second (2 ^nd ) floors of the Building, as more particularly depicted on Exhibits “A” and “B” attached hereto but subject to the right of access by the tenant occupying the space currently occupied by the Canavan Corporation described in (b) below; (b) approximately 16,548 square feet of space on the third (3 ^rd ) floor of the building excluding the space currently occupied by Canavan Corporation more particularly depicted on Exhibit “C” attached hereto; and (c) approximately 2,474 space feet of space in the Warehouse located at 10 Sylvia Street, more particularly depicted on Exhibit “D” attached hereto.

3. Length of Term . The term of this Lease shall commence on July 1, 2005 and continue until June 30, 2008, both inclusive.

4. Rent . The total rent payable during the term hereof shall be Two Million Four Hundred Seventy Nine Thousand, Six Hundred Sixty Nine and 20/100 Dollars ($2,479,669.20) payable in equal monthly installments in the amount of Sixty Eight Thousand, Eight Hundred Seventy Nine and 70/100 Dollars ($68,879.70) per month. Said rent to be paid in advance without demand on the first (1 ^st ) day of the month commencing July 1, 2005 and continuing to and including June 1, 2008.

5. Additional Rent, Taxes, Sewer, Insurance & Maintenance :

(a) Taxes : Tenant shall pay to Landlord as additional rent an amount equal to One Hundred Percent (100%) of the real estate taxes payable with respect to the Building and the Warehouse in which the Demised Premises are located and/or on the land on which said buildings are located in any tax year, or portion thereof, in which this Lease shall be in effect. Any additional rent due hereunder shall be pro-rated for the period of time during the tax year in question that the Tenant occupies the Demised Premises herein. For purposes of this Lease, the “tax year” shall be the payment year in effect in the Town of Branford, July 1 through June 30.

The Tenant shall be responsible for and shall pay when due any and all taxes attributable to leasehold improvements made by Tenant at its expense.

(b) Sewer : IN THE event that the Town of Branford or any subdivision thereof levies or has levied a sanitary sewer assessment or similar use charge against the building and land within which the Demised Premises are located, it is recognized that the Tenant shall be responsible and shall pay to the Landlord, as additional rent, an amount equal to One Hundred Percent (100%) of the assessment installment, including interest, and the use charge or installments thereof due and/or apportioned during the term of this Lease. It is expressly understood that the Tenant is liable for One Hundred Percent (100%) of said assessment installment, including interest, and the use charge falling due during the term of its tenancy, and said obligations to so pay shall cease with the expiration of its tenancy.

(c) Insurance : Tenant shall pay to Landlord, as additional rent, an amount equal to One Hundred Percent (100%) of Landlord’s expense for fire and extended coverage, public liability and similar insurance for the buildings and the land on which the Demised Premises are located, in effect during the term the Tenant occupies the Demised Premises.

(d) Maintenance - Common Charges : Tenant shall pay to Landlord, during each month of the term of this Lease, as additional rent, an amount equal to One Hundred Percent (100%) of Landlord’s operating expenses with respect to the buildings in which the Demised Premises are located and/or on the land on which said buildings are located. Operating expense shall include, without limitation, all utilities, gardening and landscaping, lawn mowing, lighting, snow removal, sanding, trash, rubbish and garbage removal, parking lot maintenance and repair and all maintenance, repairs and replacements of the heating, air conditioning and ventilating systems.

(e) Payment : The additional rent payable by Tenant as described in Sections (a)  Taxes , (b)  Sewer , (c)  Insurance and (d)  Maintenance – Common Charges of this Article shall be paid in advance without demand by Tenant to Landlord in Twelve (12) equal monthly installments of Thirteen Thousand Two Hundred Sixty-Five and 72/100 Dollars ($13,265.72), commencing on the first (1 ^st ) day of July 2005 and on the first (1 ^st ) day of each month during the term hereof to and including June, 2008.

On or before August 1, 2006 and August 1, 2007, Landlord shall submit to Tenant an itemized summary of all expenses, described in this Section 5 paid by Landlord for the previous lease year – July 1 through June 30. In the event Landlord’s actual expenses exceed the amount paid by Tenant, Tenant shall pay to the Landlord within thirty (30) days of Landlord’s submission of the itemized summary, the difference between the amount paid by Landlord during the previous lease year and the amount actually paid by Tenant pursuant to this Section 5 during the previous lease year.

In the event that Landlord’s actual expenses are less than the amount actually paid by Tenant pursuant to this Section 5 during the previous lease year, Landlord shall apply the difference between the Tenant’s payments and Landlord’s actual expenses to the Tenant’s payments of Additional Rent coming due after the date of Landlord’s submission of its itemized summary or in the event of the end of the term of this Lease, Landlord shall pay the difference to Tenant within thirty (30) days of August 1, 2008.

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The monthly amount to be paid by Tenant in the second (2 ^nd ) and third (3 ^rd) ) years of this Lease shall be adjusted to reflect the Landlord’s actual expenses as shown on Landlord’s itemized summary; provided, however, if Tenant disputes the adjusted amount Tenant shall continue to pay the amount of Thirteen Thousand Two Hundred Sixty-five and 72/100 Dollars ($13,265.72) per month subject to payment or credit for any actual differences as provided herein.

In the event Tenant fails to pay the additional rent when the same shall become due, Landlord may pay the Tenant’s proportionate share and/or the taxes attributable to the Tenant’s leasehold improvements and add the amount so paid to the next month’s rent accruing hereunder. Landlord shall have the right to collect the same from Tenant as additional rent and Landlord shall have the same remedy for the non-payment hereof as for the non-payment of rent as herein provided.

6. Quiet Enjoyment . The Landlord covenants with the Tenant that it has good right to lease said premises and that it will suffer and permit the Tenant (it keeping all of the covenants on its part as herein contained) to occupy, possess and quietly enjoy said premises during the term hereof, without hindrance from Landlord or any person claiming by, from or under it, subject, nevertheless, to the terms of this Lease and any mortgage, ground lease or agreements to which this Lease is subordinated.

7. Tenant’s Covenants . The Tenant covenants with the Landlord to hire said leased premises and to pay rent and all other charges and payments to be made herein, and to keep all of its covenants as contained herein, that it will commit no waste, nor suffer the same to be committed thereon. Tenant shall promptly comply with all present and future laws, orders and regulations of all state, federal, municipal and local governments, departments, commissions and boards and any direction of any public officers pursuant to law. Notwithstanding any provision to the contrary herein, Tenant shall not be liable to Landlord for any violation of any environmental law or regulation that is determined to have been caused directly or indirectly by any person or entity other than Tenant and its employees, agents, contractors, licensees, successors and assigns.

8. No Representations . The Tenant accepts the building improvements and personalty on the leased premises in their present state and without any representation or warranty by the Landlord or its agents as to the condition of such property or as to the use which may be made thereof. The Landlord shall not be responsible for any latent defect or change of condition in such building improvements and personalty and the rent hereunder shall in no case be withheld or diminished on account of any defect in such property or in the change of the condition thereof, any damage occurring thereto or the existence with respect thereto of any violations of the laws or regulations of any governmental authority.

9. Alterations . Tenant shall make no changes in or to the leased premises of any nature without Landlord’s prior written consent, which consent shall not unreasonably be withheld or delayed. Notwithstanding the foregoing sentence, Tenant may make alterations or improvements to the leased premises which do not exceed the sum of $5,000.00 in cost (materials and labor), so long as such alterations and improvements are interior and non-structural, and are commensurate and compatible with the architecture, design, style and of the same quality of material and construction, as the other portions of the leased premises and the Building. Tenant shall provide Landlord, upon its request, final and complete drawings and specifications as may be necessary to obtain required building permits for all work to be done in connection with any build-out of the leased premises and any alterations made by the Tenant. Landlord shall approve or disapprove Tenant’s plans within a reasonable time thereafter. In the event Landlord disapproves Tenant’s plans, Landlord shall set forth the reasons therefor. Any revised plans shall correct any deficiencies and conform to any objections set forth by Landlord. It is specifically agreed herein that, in the event that any utility services, facilities, equipment, electrical lines or duct-work need to be altered in any respect in the

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course of Tenant’s build-out of or changes or alterations to, the Demised Premises, all costs and expenses of the same shall be paid by Tenant.

Upon receipt of Landlord’s written consent, Tenant, at Tenant’s expense, may make alterations, installations, additions or improvements which are non-structural and which do not affect utility services or plumbing and electrical lines, in or to the interior of the leased premises by using contractors and mechanics first approved by Landlord. Tenant shall, before making any alterations, additions, installations or improvements, at its expense, obtain all permits, approvals and certificates required by any governmental or quasi-governmental bodies and (upon completion) certificates of final approval thereof and shall deliver promptly duplicates of all such permits, approvals and certificates to Landlord. Tenant agrees to carry and will cause Tenant’s contractors and sub-contractors to carry such workman’s compensation, general liability, personal and property damage insurance as Landlord may require. If any mechanic’s lien is filed against the leased premises or the Building for work claimed to have been done for, or materials furnished to, Tenant, the same shall be discharged by Tenant within thirty (30) days thereafter, at Tenant’s expense, or by the filing of a bond required by law. Unless otherwise agreed by Landlord in writing prior to installation, all fixtures, paneling, partitions and like installations, installed in the leased premises at any time, either by Tenant or by Landlord in Tenant’s behalf, shall, upon installation become the property of Landlord and shall remain upon and be surrendered with the leased premises unless Landlord, by notice to Tenant no later than sixty (60) days prior to the date fixed as the termination of this Lease, elects to relinquish Landlord’s right thereto and to have them removed by Tenant, in which event the same shall be removed from the premises by Tenant prior to the expiration of the Lease, at Tenant’s expense. All property permitted or required to be removed by Tenant at the end of the term remaining in the leased premises after Tenant’s removal, shall be deemed abandoned and may, at the election of Landlord, either be retained as Landlord’s property or may be removed from the premises by Landlord at Tenant’s expense.

Notwithstanding any provision or term of this Lease to the contrary, Tenant acknowledges Landlord’s concerns regarding the conversion of laboratory space in the building to office space. In the event Landlord consents in writing to the conversion of laboratory space to office space, all utility and mechanical systems, including but not limited to plumbing, electricity, HVAC, phone, data, security, alarm and sprinkler, that require modification or capping, shall be completed in accordance with a plan approved by Landlord in writing prior to the work being performed which plan shall allow for the space to be easily converted back to laboratory space. Existing tile flooring, if covered, shall be covered in a manner, approved by Landlord in writing prior to the work, that provides for the removal of the covering without damage, stain, discoloration, residue, or alteration of the existing tile floors.

10. Damage, Injury. Insurance . (a) Tenant shall indemnify and save harmless Landlord from and against any and all liability, damage, penalties or judgments arising from injury to person or property sustained by anyone in and about the leased premises resulting from any act or acts or omission or omissions of Tenant, or Tenant’s officers, agents, servants, employees, contractors, or sublessees. Tenant shall, at its own cost and expense, defend any and all suits or actions (just or unjust) which may be brought against Landlord or in which Landlord may be impleaded with others upon any such above-mentioned matter, claim or claims.

(b) The Landlord shall not be liable for any damage or injury to the leased premises, or to any property of the Tenant of any other person thereon, from water, rain, snow, ice, sewerage, steam, gas or electricity which may leak into or issue or flow from any part of the Building of which the leased premises are a part, or from the bursting, breaking, obstruction, leaking or any defect of any of the pipes or plumbing, appliances or from electric wiring or other fixtures in the Building, or from the condition of the premises or Building or any part thereof, from the street or subsurface, unless caused by Landlord’s negligence or willful neglect.

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(c) Tenant shall provide at its expense, and keep in force during the term of this lease, general liability insurance in a good and solvent insurance company or companies licensed to do business in the State of Connecticut, selected by Tenant, and reasonably satisfactory to the Landlord, in the amount of at least One Million ($1,000,000.00) Dollars combined single limit in respect to any one occurrence with respect to injury or death to any one or more than one person and One Million ($1,000,000.00) Dollars with respect to damages to property. Such policy or policies shall include Landlord and any mortgagee named by Landlord as assureds. Tenant agrees to deliver certificates of such insurance to Landlord prior to the beginning of the term of this Lease and thereafter not less than ten (10) days prior to the expiration of any such policy. Such insurance shall be noncancellable without ten (10) days’ written notice to Landlord, and to each such mortgagee.

(d) If by reason of any act or omission or negligence on the part of Tenant or any employee or agent of Tenant, whether or not Landlord has consented to the same, the rate of fire or other property insurance of Landlord or of any other Tenant in the Building shall be higher than it otherwise would be, Tenant shall reimburse Landlord, and all such other Tenants, on demand, for that part of the premiums for such insurance paid by Landlord or such other Tenants, because of such act or omission or negligence on the part of Tenant or any employee or agent of Tenant. Tenant shall also pay any increase in premiums on any rent insurance carried by Landlord for its protection against rent loss and fire or other casualty if such increase shall result from any of the foregoing events.

(e) All insurance policies carried by Tenant covering the leased premises, as required herein, shall expressly waive any right on the part of the insurer or the insured against the Landlord, except as otherwise specifically provided herein.

11. Assignment and Subletting . Tenant, for itself, its successors and assigns, expressly covenants that it shall not assign, mortgage or encumber this Lease, nor sublet, or suffer or permit the leased premises or any part thereof to be used by others, without the prior written consent of Landlord in each instance. Any merger or consolidation of Tenant or the transfer of more than fifty (50%) percent of the stock of Tenant shall be deemed an assignment. Notwithstanding the foregoing sentence, any trading of Tenant’s stock on a nationally-recognized security exchange will not be deemed an assignment. If this Lease be assigned, or if the leased premises or any part thereof be sublet or occupied by anyone other than Tenant, Landlord may, after default by Tenant, collect from the assignee, subtenant or occupant, and apply the net amount collected to the rent herein reserved, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of this covenant, or the acceptance of the assignee, subtenant or occupant as Tenant, or a release of Tenant from the further performance by Tenant of covenants on the part of Tenant herein contained. Notwithstanding the foregoing, Tenant shall be permitted to sublet the leased premises provided that:

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The consent by Landlord to any assignment or subletting shall not constitute a waiver of the necessity for such consent to any subsequent assignment or subletting. This prohibition against assigning or subletting shall be construed to include a prohibition against any assignment or subletting by operation of law. Notwithstanding any provision to the contrary in this paragraph 12, Landlord shall not unreasonably withhold or delay its consent to any assignment of this Lease provided that the conditions set forth in this paragraph 12 have been satisfied. Any rentals and other consideration paid or payable to Tenant by any subtenant or assignee in excess of the rentals and other payments due under this Lease from Tenant to Landlord shall be paid by Tenant as and when received by Tenant to Landlord in addition to the rental and other payments otherwise due hereunder.

12. Condemnation . It is expressly agreed that if the entire leased premises shall be taken by public or quasi-public authority under the power of eminent domain or condemnation, this Lease shall terminate on the date of such taking and the rights of the Tenant shall forthwith cease, with rent to be apportioned as of the date of such taking. No part of any award for such taking shall belong to Tenant. If any part of the leased premises shall be taken as aforesaid, and such partial taking shall render that portion not so taken unsuitable for the business of Tenant, then this Lease and the term herein shall cease and terminate as aforesaid. If such partial taking is not extensive enough to render the leased premises unsuitable for the business of Tenant, then this Lease shall continue in effect except that the rent shall be reduced in the same proportion that the floor area of the leased premises taken bears to the original floor area demised and Landlord shall, upon receipt of the award in condemnation, make all necessary repair or alterations to the Building in which the leased premises are located, but such work shall not exceed the scope of the work done in the original construction of said Building, nor shall Landlord in any event be required to spend for such work an amount in excess of the amount received by the Landlord as damages for part of the leased premises so taken. “Amount received by the Landlord” shall mean that part of the award in condemnation which is free and clear to Landlord of any collection by mortgagees for the value of the diminished fee. Notwithstanding the foregoing, if more than twenty (20%) percent of the floor area of the Building shall be taken as aforesaid, Landlord may, by written notice to Tenant, terminate this Lease, such termination to be effective as aforesaid. If this Lease is terminated as provided in this paragraph, the rent shall be paid up t